EXHIBIT 4.1
SECOND AMENDED AND RESTATED
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REVOLVING CREDIT AGREEMENT
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Dated as of October 31, 1997
among
GENESEE & WYOMING INC.,
AS BORROWER
THE SUBSIDIARIES OF GENESEE & WYOMING INC. LISTED ON
SCHEDULE I HERETO,
AS GUARANTORS
BANKBOSTON, N.A. AND
THE OTHER LENDING INSTITUTIONS LISTED
ON SCHEDULE II HERETO,
AS BANKS
LASALLE NATIONAL BANK AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS CO-AGENTS
and
BANKBOSTON, N.A., AS ISSUING BANK AND AGENT
with
BANCBOSTON SECURITIES, INC.
AS ARRANGER
TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION.................................. 2
1.1. Definitions....................................................... 2
1.2. Rules of Interpretation........................................... 18
2. THE REVOLVING CREDIT FACILITY............................................ 19
2.1. Commitment to Lend................................................ 19
2.2. Commitment Fees................................................... 19
2.3. Reduction of Total Commitment..................................... 19
2.4. The Revolving Credit Notes........................................ 20
2.5. Interest on Loans................................................. 20
2.6. Requests for Loans................................................ 20
2.7. Conversion Options................................................ 21
2.7.1. Conversion to Different Type of Loan....................... 21
2.7.2. Continuation of Type of Loan............................... 21
2.7.3. Eurodollar Rate Loans...................................... 22
2.8. Funds for Loans................................................... 22
2.8.1. Funding Procedures......................................... 22
2.8.2. Advances by Agent.......................................... 22
3. MANDATORY PREPAYMENT OF LOANS............................................ 23
3.1. Maturity of Loans................................................. 23
3.2. Mandatory Payments of Loans....................................... 23
3.2.1. Mandatory Repayments of Loans.............................. 23
3.2.2. Mandatory Prepayments from Asset Sales..................... 23
3.2.3. Mandatory Prepayments from New Equity...................... 23
3.2.4. Mandatory Prepayments from Debt Offerings.................. 24
3.2.5. Application of Proceeds.................................... 24
3.3. Optional Prepayments of Loans..................................... 24
4. LETTERS OF CREDIT........................................................ 25
4.1. Letter of Credit Commitments...................................... 25
4.1.1. Commitment to Issue Letters of Credit...................... 25
4.1.2. Letter of Credit Applications.............................. 25
4.1.3. Terms of Letters of Credit................................. 25
4.1.4. Reimbursement Obligations of Banks......................... 26
4.1.5. Participations of Banks.................................... 26
4.2. Reimbursement Obligation of the Borrower.......................... 26
4.3. Letter of Credit Payments......................................... 27
4.4. Obligations Absolute.............................................. 28
4.5. Reliance by Issuer................................................ 28
4.6. Letter of Credit Fee.............................................. 29
5. CERTAIN GENERAL PROVISIONS............................................... 29
5.1. Agent's Fees...................................................... 29
5.2. Funds for Payments................................................ 29
5.2.1. Payments to Agent.......................................... 29
5.2.2. No Offset, etc............................................. 30
5.2.3. Currency Matters........................................... 30
5.2.3.1........................................................ 30
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5.2.3.1. Currency of Account................................. 30
5.2.3.2. Currency Fluctuations............................... 31
5.3. Computations...................................................... 32
5.4. Inability to Determine Eurodollar Rate............................ 32
5.5. Illegality........................................................ 32
5.6. Additional Costs, etc............................................. 33
5.7. Capital Adequacy.................................................. 34
5.8. Certificate....................................................... 35
5.9. Indemnity......................................................... 35
5.10. Interest After Default........................................... 35
5.10.1. Overdue Amounts........................................... 35
5.10.2. Amounts Not Overdue....................................... 35
6. GUARANTY................................................................. 35
6.1. Guaranty of Payment and Performance............................... 36
6.2. Guarantors' Agreement to Pay Enforcement Costs, etc............... 36
6.3. Waivers by Guarantors; Banks' Freedom to Act...................... 36
6.4. Unenforceability of Obligations Against Borrower.................. 37
6.5. Subrogation; Subordination........................................ 38
6.5.1. Waiver of Rights Against Borrower.......................... 38
6.5.2. Subordination.............................................. 38
6.5.3. Provisions Supplemental.................................... 39
6.6. Security; Setoff.................................................. 39
6.7. Further Assurances................................................ 39
6.8. Termination; Reinstatement........................................ 39
6.9. Successors and Assigns............................................ 40
7. REPRESENTATIONS AND WARRANTIES........................................... 40
7.1. Corporate Authority............................................... 40
7.1.1. Incorporation; Good Standing............................... 40
7.1.2. Authorization.............................................. 40
7.1.3. Enforceability............................................. 41
7.2. Governmental Approvals............................................ 41
7.3. Title to Properties; Leases....................................... 41
7.4. Financial Statements and Projections.............................. 41
7.4.1. Financial Statements....................................... 41
7.4.2. Projections................................................ 42
7.5. No Material Changes, etc.; Solvency............................... 42
7.5.1. Changes.................................................... 42
7.5.2. Solvency................................................... 42
7.6. Franchises, Patents, Copyrights, etc.............................. 42
7.7. Litigation........................................................ 43
7.8. No Materially Adverse Contracts, etc.............................. 43
7.9. Compliance with Other Instruments, Laws, etc...................... 43
7.10. Tax Status....................................................... 43
7.11. No Event of Default.............................................. 43
7.12. Holding Company and Investment Company Acts...................... 44
7.13. Absence of Financing Statements, etc............................. 44
7.14. Certain Transactions............................................. 44
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7.15. Employee Benefit Plans........................................... 44
7.15.1. In General................................................ 44
7.15.2. Terminability of Welfare Plans............................ 44
7.15.3. Guaranteed Pension Plans.................................. 45
7.15.4. Multiemployer Plans....................................... 45
7.16. Use of Proceeds; Regulations U and X............................. 45
7.17. Environmental Compliance......................................... 46
7.18. Subsidiaries, etc................................................ 47
7.19. Capitalization................................................... 48
7.20. Fiscal Year...................................................... 48
7.21. Operation of Railroads........................................... 48
7.22. Disclosure....................................................... 48
8. AFFIRMATIVE COVENANTS OF THE BORROWER.................................... 49
8.1. Punctual Payment.................................................. 49
8.2. Maintenance of Office............................................. 49
8.3. Records and Accounts.............................................. 49
8.4. Financial Statements, Certificates and Information................ 49
8.5. Notices........................................................... 51
8.5.1. Defaults................................................... 51
8.5.2. Environmental Events....................................... 51
8.5.3. Notice of Litigation and Judgments......................... 51
8.5.4. Notification of Derailments................................ 51
8.6. Corporate Existence; Maintenance of Properties.................... 52
8.7. Insurance......................................................... 52
8.8. Taxes............................................................. 52
8.9. Inspection of Properties and Books, etc........................... 53
8.9.1. General.................................................... 53
8.9.2. Communications with Accountants............................ 53
8.10. Compliance with Laws, Contracts, Licenses, and Permits........... 53
8.11. Employee Benefit Plans........................................... 54
8.12. Use of Proceeds.................................................. 54
8.13. Further Assurances............................................... 54
8.14. Additional Restricted Subsidiaries............................... 54
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER............................... 54
9.1. Restrictions on Indebtedness...................................... 55
9.2. Restrictions on Liens............................................. 56
9.3. Restrictions on Investments....................................... 58
9.4. Distributions and Restricted Payments............................. 61
9.5. Merger, Acquisitions and Disposition of Assets.................... 61
9.5.1. Mergers and Acquisitions................................... 61
9.5.2. Disposition of Assets...................................... 61
9.6. Sale and Leaseback................................................ 62
9.7. Compliance with Environmental Laws................................ 62
9.8. CSX Remaining Debt................................................ 62
9.9. Employee Benefit Plans............................................ 63
9.10. Business Activities.............................................. 63
9.11. Capitalization................................................... 63
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9.12. Fiscal Year...................................................... 63
9.13. Negative Pledges................................................. 64
9.14. Transactions with Affiliates..................................... 64
10. FINANCIAL COVENANTS OF THE BORROWER..................................... 64
10.1. Funded Debt to EBITDA............................................ 64
10.2. Cash Flow Coverage............................................... 64
10.3. EBITDA less Capital Expenditures to Interest Ratio............... 65
10.4. Calculation of Financial Covenants............................... 65
11. CLOSING CONDITIONS...................................................... 65
11.1. Loan Documents................................................... 65
11.2. Certified Copies of Charter and Partnership Documents............ 65
11.3. Corporate or Other Action........................................ 66
11.4. Incumbency Certificate........................................... 66
11.5. Opinion of Counsel............................................... 66
11.6. Delivery of Agreements........................................... 66
11.7. Payment of Fees.................................................. 66
11.8. Certain Assignments.............................................. 66
11.9. Disbursement Instructions........................................ 67
12. CONDITIONS TO ALL BORROWINGS............................................ 67
12.1. Representations True; No Event of Default........................ 67
12.2. No Legal Impediment.............................................. 67
12.3. Governmental Regulation.......................................... 67
12.4. Proceedings and Documents........................................ 67
13. EVENTS OF DEFAULT; ACCELERATION; ETC.................................... 68
13.1. Events of Default and Acceleration............................... 68
13.2. Termination of Commitments....................................... 71
13.3. Remedies......................................................... 71
14. SETOFF.................................................................. 72
15. THE AGENT............................................................... 73
15.1. Authorization.................................................... 73
15.2. Employees and Agents............................................. 73
15.3. No Liability..................................................... 73
15.4. No Representations............................................... 74
15.4.1. General................................................... 74
15.4.2. Closing Documentation, etc................................ 74
15.5. Payments......................................................... 75
15.5.1. Payments to Agent......................................... 75
15.5.2. Distribution by Agent..................................... 75
15.5.3. Delinquent Banks.......................................... 75
15.6. Holders of Revolving Credit Notes................................ 76
15.7. Indemnity........................................................ 76
15.8. Agent as Bank.................................................... 76
15.9. Resignation...................................................... 76
15.10. Notification of Defaults and Events of Default.................. 77
15.11. Duties of Co-Agents............................................. 77
16. EXPENSES................................................................ 77
17. INDEMNIFICATION......................................................... 78
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18. SURVIVAL OF COVENANTS, ETC.............................................. 79
19. ASSIGNMENT AND PARTICIPATION............................................ 79
19.1. Conditions to Assignment by Bank................................. 79
19.2. Certain Representations and Warranties; Limitations; Covenants... 80
19.3. Register......................................................... 81
19.4. New Revolving Credit Notes....................................... 82
19.5. Participations................................................... 82
19.6. Disclosure....................................................... 82
19.7. Assignee or Participant Affiliated with the Borrower............. 83
19.8. Miscellaneous Assignment Provisions.............................. 83
19.9. Assignment by Borrower........................................... 84
20. NOTICES, ETC............................................................ 84
21. GOVERNING LAW........................................................... 84
22. HEADINGS................................................................ 85
23. COUNTERPARTS............................................................ 85
24. ENTIRE AGREEMENT, ETC................................................... 85
25. WAIVER OF JURY TRIAL, ETC............................................... 85
26. CONSENTS, AMENDMENTS, WAIVERS, ETC...................................... 86
27. SEVERABILITY............................................................ 86
28. TRANSITIONAL ARRANGEMENTS............................................... 86
28.1. Prior Credit Agreement Superseded................................. 86
28.2. Return and Cancellation of Notes; Release of Collateral.......... 87
28.3. Interest and Fees under Superseded Agreement..................... 87
EXHIBITS AND SCHEDULES
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*Exhibit A Form of Revolving Credit Note
*Exhibit B Form of Loan Request
*Exhibit C Form of Compliance Certificate
*Exhibit D Form of Instrument of Adherence (Guaranty)
*Exhibit E Form of Assignment and Acceptance
*Schedule I Guarantors
*Schedule II Banks and Commitments
*Schedule 7.3 Titles to Properties; Leases
*Schedule 7.7 Litigation
*Schedule 7.17 Environmental Compliance
*Schedule 7.18 Subsidiaries; Joint Ventures
*Schedule 7.21 Operating Locations
*Schedule 8.7 Insurance
*Schedule 9.1 Existing Indebtedness
*Schedule 9.2 Existing Liens
*Schedule 9.3 Existing Investments
*OMITTED EXHIBITS AND SCHEDULES
UPON WRITTEN REQUEST, THE REGISTRANT WILL PROVIDE COPIES OF ANY OF THE
REFERENCED OMITTED EXHIBITS AND SCHEDULES.
SECOND AMENDED AND RESTATED
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REVOLVING CREDIT AGREEMENT
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This SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of
October 31, 1997 by and among (a) GENESEE & WYOMING INC., a Delaware corporation
("GWI" or the "Borrower"), (b) the Subsidiaries of the Borrower listed on
Schedule I hereto, (c) BANKBOSTON, N.A. (f/k/a The First National Bank of
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Boston), a national banking association and the other lending institutions
listed on Schedule II hereto, (d) LASALLE NATIONAL BANK and THE FIRST NATIONAL
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BANK OF CHICAGO, as co-agents for such lending institutions, (e) BANKBOSTON,
N.A. (f/k/a The First National Bank of Boston) as Issuing Bank and (f)
BANKBOSTON, N.A. (f/k/a The First National Bank of Boston), as agent for itself
and such other lending institutions.
WHEREAS, pursuant to that certain Amended and Restated Revolving Credit and
Term Loan Agreement dated as of February 8, 1996 (as heretofore amended, the
"Prior Credit Agreement"), certain Banks which are party to this Credit
Agreement and certain other lenders have made loans to the Borrower and its
Subsidiaries for the purposes described therein; and
WHEREAS, the Prior Credit Agreement amended and restated in their entirety
each of that certain Revolving Credit Agreement dated as of June 2, 1995 among
the Borrower, its Subsidiaries, certain of the Banks and the Agent (as
heretofore amended, the "Original Credit Agreement") and that certain Revolving
Credit Agreement dated as of April 10, 1991 between Chicago & Illinois Midland
Railway Company and BKB (the "CIMR Credit Agreement"); and
WHEREAS, GWI has requested the Banks and the Agent amend and restate the
Prior Credit Agreement in its entirety to, among other things,
(a) increase the Commitments of the Banks from $32,000,000 to $65,000,000;
(b) convert the loans under the Prior Credit Agreement into Loans
hereunder;
(c) make GWI the sole Borrower hereunder and certain of its Subsidiaries
Guarantors hereunder;
(d) release the security interests granted in accordance with the Prior
Credit Agreement; and
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(e) make certain other changes to the terms and provisions of the Prior
Credit Agreement;
NOW THEREFORE, the Borrower, all of the Banks, the Co-Agents, the Issuing
Bank and the Agent hereby agree that the Prior Credit Agreement (including all
the schedules and exhibits thereto) is hereby amended and restated in its
entirety and remains in force and effect only as set forth herein (including the
schedules and exhibits attached hereto) and the Loans and Letters of Credit
(each as defined in the Prior Credit Agreement) shall constitute Loans and
Letters of Credit hereunder.
1. DEFINITIONS AND RULES OF INTERPRETATION.
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1.1 DEFINITIONS.
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The following terms shall have the meanings set forth in this (S)1 or
elsewhere in the provisions of this Credit Agreement referred to below:
Adjustment Date. Each April 1, June 1, September 1 and December 1 of each
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calendar year.
Affiliate. Any Person that would be considered to be an affiliate of the
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Borrower under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
Agent. BankBoston, N.A. acting as agent for the Banks.
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Agent's Fees. See (S)5.1.
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Agent's Head Office. The Agent's head office located at 100 Federal
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Street, Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time.
Agent's Special Counsel. Bingham Dana LLP or such other counsel as may be
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approved by the Agent.
Applicable Margin. For each period commencing on an Adjustment Date
-----------------
through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin shall be the applicable margin set
forth below with respect to the Borrower's Funded Debt to EBITDA Ratio, as
determined for the fiscal period of the Borrower and its Restricted Subsidiaries
ending immediately prior to the applicable Rate Adjustment Period (except for
any Rate Adjustment Period beginning on April 1 of any calendar year for which
the Applicable Margin will be determined by reference to the Borrower's and its
Restricted Subsidiaries Funded Debt to EBITDA Ratio for the fiscal period ending
on the immediately preceding December 31).
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Base Eurodollar Letter of Credit Commitment
Rate Rate Applicable Fee
Funded Debt to EBITDA Applicable Applicable Margin Applicable
Level Ratio Margin Margin ----------------- Margin
- ----------- ------------------------------------------- ----------- ----------- -----------
- -----------------------------------------------------------------------------------------------------------------
I Greater than or equal to 3.00 to 1.00 0% 1.50% 1.50% 0.375%
- -----------------------------------------------------------------------------------------------------------------
II 0% 1.25% 1.25% 0.375%
Less than 3.00 to 1.00 but greater than or
equal to 2.50 to 1.00
- -----------------------------------------------------------------------------------------------------------------
III 0% 1.00% 1.00% 0.300%
Less than 2.50 to 1.00 but greater than or
equal to 1.50 to 1.00
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IV 0% 0.75% 0.75% 0.250%
Less than 1.50 to 1.00
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Notwithstanding the foregoing, (a) for Loans outstanding and commitment fees
incurred during the period commencing on the Closing Date through April 1, 1998,
the Applicable Margin shall be the Applicable Margin set forth as Level III
above, (b) if the Borrower fails to deliver any Compliance Certificate pursuant
to (S)8.4(c) hereof by the next occurring Adjustment Date then, for the period
commencing on the next Adjustment Date to occur subsequent to such failure
through the date immediately following the date on which such Compliance
Certificate is delivered, the Applicable Margin shall be the highest Applicable
Margin set forth above.
Apus Railcar Lease. The Master Lease dated as of March 31, 1997 between
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Apus Rail One, Inc., as Lessor and Leasing, as Lessee, with respect to certain
open top hoppers, gondolas and box cars, in substantially the form delivered to
the Agent prior to the date hereof, the present value of the obligations in
respect of which will not exceed $13,000,000 at any time.
Assignment and Acceptance. See (S)19.1.
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Australian Dollars or Aus. $. Dollars in lawful currency of Australia.
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Balance Sheet Date. December 31, 1996.
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Banks. BKB and the other lending institutions listed on Schedule II hereto
----- -----------
and any other Person who becomes an assignee of any rights and obligations of a
Bank pursuant to (S)19.
Base Rate. The higher of (i) the annual rate of interest announced from
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time to time by BKB at its head office in Boston, Massachusetts, as its "base
rate" and (ii) one-half of one percent (1/2%) above the Federal Funds Effective
Rate.
Base Rate Loans. Revolving Credit Loans bearing interest calculated by
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reference to the Base Rate.
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BKB. BankBoston, N.A. (f/k/a The First National Bank of Boston), a
---
national banking association, in its individual capacity.
Borrower. See preamble.
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BPR. Buffalo & Pittsburgh Railroad, Inc., a Delaware corporation.
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Bridge Rehabilitation Loan Agreement. The Track Rehabilitation Loan and
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Security Agreement dated as of July 3, 1996 between IMR and the State of
Illinois, acting through its Department of Transportation, providing for loans
from the State of Illinois, acting through its Department of Transportation, in
aggregate principal amount of not more than $900,000, having an interest rate of
three percent (3%) per annum and a term of ten years, in substantially the form
delivered to the Agent prior to the date hereof.
Bridge Rehabilitation Project. The replacement by IMR of the Pecan Creek
-----------------------------
Bridge (Bridge 532) on the rail line between Havana, Illinois and Springfield,
Illinois, the full costs and expenses of which have been financed pursuant to
the Bridge Rehabilitation Loan Agreement.
Business Day. Any day on which banking institutions in Boston,
------------
Massachusetts are open for the transaction of banking business and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.
Canadian Dollars or Cdn. $. Dollars in lawful currency of Canada.
---------------- ------
Capital Assets. Fixed assets, both tangible (such as land, buildings,
--------------
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
--------
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
Capital Expenditures. Amounts paid or indebtedness incurred by the
--------------------
Borrower or any of its Restricted Subsidiaries in connection with the purchase
or lease by the Borrower or any of its Restricted Subsidiaries of Capital Assets
that would be required to be capitalized and shown on the balance sheet of such
Person in accordance with generally accepted accounting principles.
Capitalized Leases. Leases under which the Borrower or any of its
------------------
Restricted Subsidiaries is the lessee or obligor, the discounted future rental
payment obligations under which are required to be capitalized on the balance
sheet of the lessee or obligor in accordance with generally accepted accounting
principles.
CCTR. Corpus Christi Terminal Railroad, Inc., a Delaware corporation.
----
CERCLA. See (S)7.17.
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Closing Date. The first date on which the conditions set forth in (S)11
------------
and (S)12 have been satisfied and any Loans are to be converted or made or any
Letter of Credit is to be issued hereunder.
Co-Agents. Collectively, LaSalle National Bank, a national banking
---------
association, and The First National Bank of Chicago, a national banking
association.
Code. The Internal Revenue Code of 1986.
----
Commitment. With respect to each Bank the amount set forth in Schedule II
---------- -----------
hereto as the amount of such Bank's commitment to make Loans to the Borrower, as
the same may be reduced from time to time; or if such commitment is terminated
pursuant to the provisions hereof, zero.
Commitment Percentage. With respect to each Bank, the percentage set forth
---------------------
on Schedule II hereto as such Bank's percentage of the aggregate Commitments of
-----------
all of the Banks.
Compliance Certificate. See (S)8.4(c).
----------------------
Consolidated or consolidated. With reference to any term defined herein,
----------------------------
shall mean that term as applied to the accounts of the Borrower and its
Restricted Subsidiaries, consolidated in accordance with generally accepted
accounting principles.
Consolidated Cash Flow. For any fiscal period of the Borrower and its
----------------------
Restricted Subsidiaries, an amount equal to the sum of (a) Consolidated EBITDA
for such fiscal period, minus (b) cash tax payments made during such period,
-----
minus (c) the amount of Capital Expenditures made by the Borrower and its
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Restricted Subsidiaries during such period, excluding those Capital Expenditures
(i) reimbursed by third parties, (ii) in respect of the Bridge Rehabilitation
Project, (iii) relating to Permitted Acquisitions or (iv) in respect of the
Oregon Rail Acquisition.
Consolidated EBITDA. For any fiscal period of the Borrower and its
-------------------
Restricted Subsidiaries, an amount equal to the sum of (a) Consolidated Net
Income for such fiscal period, plus in each case, to the extent deducted in
----
computing Consolidated Net Income and without duplication, (b) Consolidated
Total Interest Expense for such fiscal period, (c) income tax expense for such
fiscal period, and (d) the aggregate amount of depreciation and amortization for
such fiscal period minus (e) to the extent included in computing Consolidated
-----
Net Income, all gains from the sale of assets of the Borrower and its Restricted
Subsidiaries.
Consolidated Funded Debt. As at any date of determination, an amount equal
------------------------
to the aggregate amount of Indebtedness of the Borrower and its Restricted
Subsidiaries, determined on a consolidated basis, related to the
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borrowing of money or the obtaining of credit (which the parties hereto agree
for the purposes of this definition does not include Indebtedness permitted
under (S)(S)9.1(b), (c), (d), (e), (g), (j) and (l) hereof) whether absolute or
contingent, including, to the extent not included in such Indebtedness, all
Capitalized Leases, the net present value (using a discount rate of 8% per
annum) of all operating leases with a non-cancellable term of longer than one
year and all Indebtedness guaranteed by the Borrower or its Restricted
Subsidiaries.
Consolidated Net Income. The consolidated net income of the Borrower and
-----------------------
its Restricted Subsidiaries, after deduction of all expenses, taxes, and other
proper charges, determined in accordance with generally accepted accounting
principles, after eliminating therefrom all extraordinary nonrecurring items of
income.
Consolidated Total Interest Expense. For any period, the aggregate amount
-----------------------------------
of interest required to be paid or accrued by the Borrower and its Restricted
Subsidiaries during such period on all Indebtedness of the Borrower and its
Restricted Subsidiaries related to the borrowing of money or the obtaining of
credit outstanding during all or any part of such period, whether such interest
was or is required to be reflected as an item of expense or capitalized,
including payments consisting of interest in respect of Capitalized Leases and
including commitment fees, agency fees, facility fees, balance deficiency fees
and similar fees or expenses in connection with the borrowing of money (other
than non-cash interest or fees) solely to the extent that such fees are properly
included as interest expense in accordance with generally accepted accounting
principles.
Conversion Request. A notice given by the Borrower to the Agent of the
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Borrower's election to convert or continue a Loan in accordance with (S)2.7.
Corpus Christi Lease. The Lease Agreement dated as of July 25, 1997
--------------------
between Port of Corpus Christi Authority of Nueces County, Texas, as Lessor and
CCTR as Lessee, with respect to certain railroad property and facilities, in
substantially the form delivered to the Agent on or prior to the date hereof
Credit Agreement. This Second Amended and Restated Revolving Credit
----------------
Agreement, including the Schedules and Exhibits hereto.
CSX. CSX Transportation, Inc., a Virginia corporation.
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CSX Mortgages. Collectively, the Mortgage and Assignment of Leases, Rents,
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Issues and Profits (New York), dated as of October 7, 1991, from BPR to CSX with
respect to BPR right of way and associated property from BPR's milepost 2.0 near
Buffalo, New York and south to the New York/Pennsylvania state line and the
Mortgage and Assignment of Leases, Rents, Issues and Profits (Pennsylvania),
dated as of October 7, 1991, from BPR to CSX with respect to BPR right of way
and associated property from the New York/Pennsylvania
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state line south to BPR's mile post 221.0 near Punxsutawney, Pennsylvania and
securing the CSX Remaining Debt.
CSX Security Agreements. Collectively, the Security Agreement
-----------------------
(Pennsylvania) dated as of October 7, 1991 between BPR and CSX and the Security
Agreement (New York) dated as of October 7, 1991 between BPR and CSX.
CSX Remaining Debt. Indebtedness of BPR to CSX under the Promissory Note
------------------
dated as of October 7, 1991, executed by BPR in favor of CSX in the form
delivered to the Agent prior to the Closing Date, in an aggregate outstanding
principal amount not to exceed $8,922,105, or any refinancing or replacement
thereof on terms satisfactory to the Majority Banks.
Dansville. The Dansville and Mount Morris Railroad Company, a New York
---------
corporation.
Dayton. GWI Dayton, Inc., a Delaware corporation.
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Default. See (S)13.1.
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Distribution. The declaration or payment of any dividend on or in respect
------------
of any shares of any class of capital stock or other equity interests of any
Person, other than dividends payable solely in shares of common stock or similar
non-preferred equity interests of such Person; the purchase, redemption, or
other retirement of any shares of any class of capital stock or other equity
interests of any Person, directly or indirectly through a Subsidiary of such
Person or otherwise; the return of capital by any Person to its shareholders or
equity holders as such; or any other distribution on or in respect of any shares
of any class of capital stock or other equity interests of any Person.
Dollar Equivalent. On any date of determination, with respect to an amount
-----------------
denominated in Dollars, such amount of Dollars, and with respect to an amount
denominated in a currency other than Dollars, the amount (as conclusively
ascertained by the Agent absent manifest error) which could be purchased by the
Agent with that amount such currency at the spot rate of exchange quoted by the
Agent in the applicable foreign exchange market at or about 11:00 a.m. (local
time) on the date of determination for the purchase of Dollars with such
currency.
Dollars or $. Dollars in lawful currency of the United States of America.
------- -
Domestic Lending Office. Initially, the office of each Bank designated as
-----------------------
such in Schedule II hereto; thereafter, such other office of such Bank, if any,
-----------
located within the United States that will be making or maintaining Base Rate
Loans.
-8-
Drawdown Date. The date on which any Loan is made or is to be made, and
-------------
the date on which any Loan is converted or continued in accordance with (S)2.7.
Eligible Assignee. Any of (i) a commercial bank organized under the laws
-----------------
of the United States, or any State thereof or the District of Columbia, and
having total assets in excess of $1,000,000,000; (ii) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof or the District of Columbia, and having a net worth of at
least $100,000,000, calculated in accordance with generally accepted accounting
principles; (iii) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development (the "OECD"), or a political subdivision of any such country, and
having total assets in excess of $1,000,000,000, provided that such bank is
--------
acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (iv) the
central bank of any country which is a member of the OECD; and (v) if, but only
if, any Event of Default has occurred and is continuing, any other bank,
insurance company, commercial finance company or other financial institution or
other Person approved by the Agent, such approval not to be unreasonably
withheld.
Employee Benefit Plan. Any employee benefit plan within the meaning of
---------------------
(S)3(3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
Environmental Laws. See (S)7.17(a).
------------------
ERISA. The Employee Retirement Income Security Act of 1974.
-----
ERISA Affiliate. Any Person which is treated as a single employer with the
---------------
Borrower under (S)414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
----------------------
Pension Plan within the meaning of (S)4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Eurocurrency Interbank Market. Any lawful recognized market in which
-----------------------------
deposits of Dollars and the relevant Optional Currencies are offered by
international banking units of United States banking institutions and by foreign
banking institutions to each other and in which foreign currency and exchange
operations or eurocurrency funding operations are customarily conducted.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar Rate
-------------------------
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against
-9-
"Eurocurrency Liabilities" (as that term is used in Regulation D), if such
liabilities were outstanding. The Eurocurrency Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in the Eurocurrency
Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
-----------------------
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank designated
-------------------------
as such in Schedule II hereto; thereafter, such other office of such Bank, if
-----------
any, that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar Rate
---------------
Loan, the rate of interest equal to (i) the arithmetic average of the rates per
annum for the Reference Bank (rounded upwards to the nearest 1/16 of one
percent) of the rate at which the Reference Bank's Eurodollar Lending Office is
offered Dollar deposits two Eurodollar Business Days prior to the beginning of
such Interest Period in the interbank eurodollar market where the eurodollar and
foreign currency and exchange operations of such Eurodollar Lending Office are
customarily conducted, for delivery on the first day of such Interest Period for
the number of days comprised therein and in an amount comparable to the amount
of the Eurodollar Rate Loan of the Reference Bank to which such Interest Period
applies, divided by (ii) a number equal to 1.00 minus the Eurocurrency Reserve
Rate, if applicable.
Eurodollar Rate Loans. Loans bearing interest calculated by reference to
---------------------
the Eurodollar Rate.
Event of Default. See (S)13.1.
----------------
Exchange Agreement. The Rolling Stock Acquisition and Exchange Cooperation
------------------
Agreement dated in March 1997, between Leasing and Apus Rail One, Inc., in the
form delivered to the Agent prior to the date hereof.
Federal Funds Effective Rate. For any day, the rate per annum equal to the
----------------------------
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
funds brokers of recognized standing selected by the Agent.
Fee Letter. See (S)5.1
----------
-10-
FRA. The United States of America, represented by the Secretary of
---
Transportation acting through the Administrator of Federal Railroad
Administration or the Federal Railroad Administrator's designee.
Fuller Immediate Family. Mortimer B. Fuller, III, his interest in his
-----------------------
father's estate and/or any of his children or grandchildren and any trust or
other Person controlled by, and a majority of the beneficial ownership interest
of which is owned by, any of such individuals, singly or jointly.
Funded Debt to EBITDA Ratio. At any date as of which such ratio shall be
---------------------------
determined, the ratio of (a) the aggregate outstanding amount of Consolidated
Funded Debt on such date to (b) the sum of (i) Consolidated EBITDA for the
period of four consecutive fiscal quarters most recently ended, plus (ii) rental
----
payments made during such period by the Borrower or any of its Restricted
Subsidiaries in respect of operating leases.
generally accepted accounting principles. (i) When used in (S)10, whether
----------------------------------------
directly or indirectly through reference to a capitalized term used therein,
means (A) principles that are consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, in
effect for the fiscal year ended on the Balance Sheet Date, and (B) to the
extent consistent with such principles, the accounting practice of the Borrower
reflected in its financial statements for the year ended on the Balance Sheet
Date, and (ii) when used in general, other than as provided above, means
principles that are (A) consistent with the principles promulgated or adopted by
the Financial Accounting Standards Board and its predecessors, as in effect from
time to time, and (B) consistently applied with past financial statements of the
Borrower adopting the same principles, provided that in each case referred to in
this definition of "generally accepted accounting principles" a certified public
accountant would, insofar as the use of such accounting principles is pertinent,
be in a position to deliver an unqualified opinion (other than a qualification
regarding changes in generally accepted accounting principles) as to financial
statements in which such principles have been properly applied.
GRO. Genesee Rail-One Inc., a Canadian corporation.
---
Guaranteed Pension Plan. Any employee pension benefit plan within the
-----------------------
meaning of (S)3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Guarantors. Each of the Restricted Subsidiaries, including, without
----------
limitation, those Subsidiaries set forth on Schedule I hereto.
----------
Guaranty. The Guaranty made by each of the Guarantors in favor of the
--------
Banks and the Agent pursuant to (S)6 hereof, pursuant to which each Guarantor
-11-
guaranties to the Banks and the Agent the payment and performance of the
Obligations.
GWI. See preamble.
---
GWIA. Genesee & Wyoming Australia Pty Ltd., an Australian corporation.
----
GWI Canada. GWI Canada, Inc., a Delaware corporation.
----------
Hazardous Substances. See (S)7.17(b).
--------------------
IMR. Illinois & Midland Railroad, Inc., a Delaware corporation.
---
Indebtedness. All obligations, contingent and otherwise, that in
------------
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including in any event and whether or not so
classified: (i) all debt and similar monetary obligations, whether direct or
indirect; (ii) all liabilities secured by any mortgage, pledge, security
interest, lien, charge or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (iii) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including any obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase indebtedness, or to assure the
owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit.
Instrument of Adherence (Guaranty). See (S)8.14.
----------------------------------
Interest Payment Date. (i) As to any Base Rate Loan, the last day of the
---------------------
calendar quarter; and (ii) as to any Eurodollar Rate Loan in respect of which
the Interest Period is (A) 3 months or less, the last day of such Interest
Period and (B) more than 3 months, the date that is 3 months from the first day
of such Interest Period and, in addition, the last day of such Interest Period.
Interest Period. With respect to each Loan (i) initially, the period
---------------
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrower in a Loan Request
(A) for any Base Rate Loan, the last day of the calendar quarter; and (B) for
any Eurodollar Rate Loan, 1, 2, 3 or 6 months; and (ii) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Loan and ending on the last day of one of the periods set forth above, as
selected by the Borrower in a Conversion Request; provided that all of the
--------
foregoing provisions relating to Interest Periods are subject to the following:
-12-
(a) if any Interest Period with respect to a Eurodollar Rate Loan
would otherwise end on a day that is not a Eurodollar Business Day, that
Interest Period shall be extended to the next succeeding Eurodollar
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Eurodollar Business Day;
(b) if any Interest Period with respect to a Base Rate Loan would end
on a day that is not a Business Day, that Interest Period shall end on the
next succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in (S)2.7,
the Borrower shall be deemed to have requested a conversion of the affected
Eurodollar Rate Loan to a Base Rate Loan and the continuance of all Base
Rate Loans as Base Rate Loans on the last day of the then current Interest
Period with respect thereto;
(d) any Interest Period relating to any Eurodollar Rate Loan that
begins on the last Eurodollar Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Eurodollar
Business Day of a calendar month; and
(e) any Interest Period relating to any Eurodollar Rate Loan that
would otherwise extend beyond the Maturity Date shall end on the Maturity
Date.
Investors. Genesee & Wyoming Investors, Inc., a Delaware corporation.
---------
Investments. All expenditures made and all liabilities incurred
-----------
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (i) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (ii) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(iii) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (iv) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (ii) may be
deducted when paid; and (v) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
-13-
Issuing Bank. BKB, in its capacity as issuer of Letters of Credit pursuant
------------
to (S)4, or, in the event that BKB is unable to issue a Letter of Credit, any
other Bank selected by the Agent to issue such Letter of Credit with the consent
of the Borrower and such Bank.
Kittanning. Kittanning Equipment Leasing Company, a Pennsylvania
----------
corporation and wholly owned Subsidiary of PSR.
Leasing. GWI Leasing Corporation, a Delaware corporation.
-------
Letter of Credit. See (S)4.1.1.
----------------
Letter of Credit Application. See (S)4.1.1.
----------------------------
Letter of Credit Fee. See (S)4.6.
--------------------
Letter of Credit Obligations. As of any date, the sum of the Maximum
----------------------------
Drawing Amount as of such date and all Unpaid Reimbursement Obligations as of
such date.
Letter of Credit Participation. See (S)4.1.4.
------------------------------
Loan Documents. This Credit Agreement, the Revolving Credit Notes, the
--------------
Letter of Credit Applications, the Letters of Credit, the Guaranty and the Fee
Letter.
Loan Request. See (S)2.6.
------------
Loans. Revolving credit loans made or to be made by the Banks to the
-----
Borrowers pursuant to (S)2.
Majority Banks. As of any date, the Banks holding at least fifty-one
--------------
percent (51%) of the principal amount of the Revolving Credit Notes on such date
(including the unfunded portion of the Commitments); and if no such principal is
outstanding, the Banks whose aggregate Commitment constitutes at least fifty-one
percent (51%) of the Total Commitment.
Management. GWI Rail Management Corporation, a Delaware corporation.
----------
Maturity Date. October 31, 2002.
-------------
Maximum Drawing Amount. The maximum aggregate amount that the
----------------------
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
-14-
Multiemployer Plan. Any multiemployer plan within the meaning of (S)3(37)
------------------
of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate.
Net Cash Proceeds. With respect to any sale of any assets of the Borrower
-----------------
or any of its Restricted Subsidiaries or the issuance and sale of equity
securities or debt of the Borrower or any of its Restricted Subsidiaries, the
gross consideration received by the Borrower or any of its Restricted
Subsidiaries (in cash) from such sale of equity or debt issuance, net of
commissions, direct sales costs, normal closing adjustments, the amount used to
repay any Indebtedness permitted by (S)9.1 secured by such assets, income taxes
attributable to such sale and professional fees and expenses incurred directly
in connection therewith, to the extent the foregoing are actually paid in
connection with such sale or equity or debt issuance.
Obligations. All indebtedness, obligations and liabilities of the Borrower
-----------
and its Restricted Subsidiaries to any of the Banks and the Agent, individually
or collectively, existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under this
Credit Agreement or any of the other Loan Documents or in respect of any of the
Loans made or Reimbursement Obligations incurred or any of the Revolving Credit
Notes, Letter of Credit Applications, Letters of Credit, or other instruments at
any time evidencing any thereof.
Optional Currency. Any currency other than Dollars which is freely
-----------------
convertible into Dollars and which is traded or any recognized Eurocurrency
Interbank Market selected by the Agent in good faith; provided, however, that in
-------- -------
the event the Borrower requests an Optional Currency for a Letter of Credit
consisting of a currency other than Australian dollars or Canadian dollars, the
issuance of such Letter of Credit shall be subject to the consent of the Agent.
Oregon Rail Acquisition. The acquisition by WPR from A&K Railroad
-----------------------
Materials, Inc., a California corporation, of 18 miles of continuous welded rail
and related assets on terms and conditions and subject to documentation
satisfactory to the Agent for an aggregate purchase price not to exceed
$1,840,500.
Original Credit Agreement. See preamble.
-------------------------
outstanding. With respect to the Loans, the aggregate unpaid principal
-----------
thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by (S)4002 of ERISA
----
and any successor entity or entities having similar responsibilities.
Permitted Acquisition(s). See (S)9.3(k).
------------------------
-15-
Permitted Liens. Liens, security interests and other encumbrances
---------------
permitted by (S)9.2.
Person. Any individual, corporation, limited liability company,
------
partnership, trust, unincorporated association, business, or other legal entity,
and any government or any governmental agency or political subdivision thereof.
Prior Credit Agreement. See preamble.
----------------------
Pro Forma Basis. In connection with any proposed Permitted Acquisition
---------------
after the Closing Date, the calculation of compliance with the financial
covenants described in (S)9.3(k) hereof by the Borrower and its Restricted
Subsidiaries (including the Person to be acquired) with reference to the audited
historical financial results of such Person and the Borrower and its Restricted
Subsidiaries for the applicable Test Period after giving effect on a pro forma
--- -----
basis to such Permitted Acquisition in the manner described in (i), (ii) and
(iii) below; and, following a Permitted Acquisition, the calculation of
compliance with the financial covenants set forth in (S)10 for the fiscal
quarter in which such Permitted Acquisition occurred and each of the three
fiscal quarters immediately following such Permitted Acquisition with reference
to the audited historical financial results of the Person so acquired and the
Borrower and its Restricted Subsidiaries for the applicable Test Period after
giving effect on a pro forma basis to such Permitted Acquisition in the manner
--- -----
described in (i), (ii) and (iii) below, provided, however, that, in each case,
-------- -------
in the event that no historical financial results are available with respect to
the Person or assets to be acquired, such calculations shall be made with
reference to reasonable estimates of such past performance made by the Borrower
based on existing data and other available information, such estimates to be
agreed upon by the Borrower and the Agent and, with respect to Permitted
Acquisitions for which the total consideration therefor exceeds $10,000,000, the
Majority Banks:
(i) all Indebtedness (whether under this Credit Agreement or
otherwise) and any other balance sheet adjustments incurred or made in
connection with the Permitted Acquisition shall be deemed to have been
incurred or made on the first day of the Test Period, and all Indebtedness
of the Person acquired or to be acquired in such Permitted Acquisition
which was or will have been repaid in connection with the consummation of
the Permitted Acquisition shall be deemed to have been repaid concurrently
with the incurrence of the Indebtedness incurred in connection with the
Permitted Acquisition;
(ii) all Indebtedness assumed to have been incurred pursuant to
the preceding clause (i) shall be deemed to have borne interest at the sum
of (a) the arithmetic mean of (x) the Eurodollar Rate for Eurodollar Rate
Loans having an Interest Period of one month in effect on the first day of
the Test Period and (y) the Eurodollar Rate for Eurodollar Rate Loans
having an Interest Period of one month in effect
-16-
on the last day of the Test Period plus (b) the Applicable Margin then in
----
effect (after giving effect to the Permitted Acquisition on a Pro Forma
--- -----
Basis); and
(iii) other reasonable cost savings, expenses and other income
statement or operating statement adjustments which are attributable to the
change in ownership and/or management resulting from such Permitted
Acquisition as may be approved by the Agent in writing (which approval
shall not be unreasonably withheld) shall be deemed to have been realized
on the first day of the Test Period.
PSR. Pittsburg & Shawmut Railroad, Inc., a Delaware corporation.
---
Purchase Price. With respect to any Permitted Acquisition, all
--------------
consideration payable by the Borrower or any of its Restricted Subsidiaries in
connection with such Permitted Acquisition, including, without limitation, cash
payments, the principal amount of any promissory notes issued by the Borrower or
any of its Restricted Subsidiaries, any amounts payable by the Borrower or any
of its Restricted Subsidiaries in consideration for any non-compete covenant,
deferred purchase price, earn-out or similar payment and the amount of any
Indebtedness assumed by the Borrower or any of its Restricted Subsidiaries.
Rate Adjustment Period. See the definition of Applicable Margin.
----------------------
Real Estate. All real property at any time owned or leased (as lessee or
-----------
sublessee) by the Borrower or any of its Restricted Subsidiaries.
Record. The grid attached to a Revolving Credit Note, or the continuation
------
of such grid, or any other similar record, including computer records,
maintained by any Bank with respect to any Loan referred to in such Revolving
Credit Note.
Reference Bank. BKB.
--------------
Reimbursement Obligation. The Borrower's obligation to reimburse the
------------------------
Issuing Bank and the Banks on account of any drawing under any Letter of Credit
as provided in (S)4.2.
Restricted Payments. In relation to the Borrower and its Restricted
-------------------
Subsidiaries, (a) any Distribution or (b) any payment or prepayment by the
Borrower or its Restricted Subsidiaries to any Affiliate of the Borrower or any
of its Restricted Subsidiaries other than payments to Affiliates for goods and
services in the ordinary course of business on terms equivalent to those
obtainable in arms length transactions.
Restricted Subsidiaries. Any Subsidiary which is not an Unrestricted
-----------------------
Subsidiary. The Borrower shall not have the right to change the status of an
-17-
Unrestricted Subsidiary to a Restricted Subsidiary unless such Unrestricted
Subsidiary becomes a Guarantor hereunder.
Revolving Credit Notes. See (S)2.4.
----------------------
RSI. Genesee & Wyoming Railroad Services, Inc. (f/k/a Railroad Services,
---
Inc.), a Delaware corporation.
Solvent. See (S)7.5.2.
-------
STB. The Surface Transportation Board (the entity which succeeded to the
---
function and duties of the Interstate Commerce Commission) or any governmental
authority(ies) which succeeds to the function or duties of the Surface
Transportation Board or any portion thereof.
Subsidiary. Any corporation, association, trust, or other business entity
----------
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes) of
the outstanding Voting Stock.
Switching. GWI Switching Services, L.P., a Texas limited partnership.
---------
Test Period. (a) In connection with the calculation of financial covenant
-----------
compliance on a Pro Forma Basis as required by (S)9.3(k) with respect to any
proposed Permitted Acquisition, the period of four fiscal quarters most recently
ended prior to such Permitted Acquisition, and (b) in connection with the
calculation of the financial covenants set forth in (S)10 hereof following any
Permitted Acquisition, the period of all fiscal quarters (and any portion of a
fiscal quarter) prior to the date of such Permitted Acquisition included in the
calculation of such financial covenant.
Total Commitment. The sum of the Commitments of the Banks, as in effect
----------------
from time to time. On the Closing Date, the Total Commitment shall equal
$65,000,000.
Type. As to any Loan its nature as a Base Rate Loan or a Eurodollar Rate
----
Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform Customs
---------------
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by the
Issuing Bank in the ordinary course of its business as a letter of credit issuer
and in effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
-------------------------------
the Borrower does not reimburse the Issuing Bank and the Banks on the date
specified in, and in accordance with, (S)4.2.
Unrestricted Subsidiaries. GWIA, GRO and Kittanning.
-------------------------
-18-
Voting Stock. Stock or similar interests, of any class or classes (however
------------
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
Willamette Valley Note. The Installment Note dated as of February 5, 1997
----------------------
between WPR and Valley Development Initiatives providing for a loan from Valley
Development Initiatives in an aggregate principal amount of not more than
$400,000, having an interest rate of five percent (5%) per annum and a term of
ten years, in substantially the form delivered to the Agent and the Banks.
WPR. Willamette & Pacific Railroad, Inc., a New York corporation.
---
1.2 RULES OF INTERPRETATION.
-----------------------
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have the
meanings assigned to them therein, with the term "instrument" being that
defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "(S)" refers to that section of this
Credit Agreement unless otherwise indicated.
-19-
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not
to any particular section or subdivision of this Credit Agreement.
2. THE REVOLVING CREDIT FACILITY.
------------------------------
2.1. Commitment to Lend. Subject to the terms and conditions set
------------------
forth in this Credit Agreement, each of the Banks severally agrees (i) on the
Closing Date, to convert the loans outstanding under the Prior Credit Agreement,
if any, to Loans under this Credit Agreement and (ii) to lend to the Borrower
and the Borrower may borrow, repay, and reborrow from time to time between the
Closing Date and the Maturity Date upon notice by the Borrower to the Agent
given in accordance with ss.2.6, such sums as are requested by the Borrower up
to a maximum aggregate amount outstanding (after giving effect to all amounts
requested) at any one time equal to such Bank's Commitment minus such Bank's
Commitment Percentage of the Dollar Equivalent of the aggregate Letter of Credit
Obligations provided that the sum of the outstanding amount of the Loans (after
giving effect to all amounts requested) plus the Dollar Equivalent of the
aggregate Letter of Credit Obligations shall not at any time exceed the Total
Commitment. The Loans shall be made pro rata in accordance with each Bank's
Commitment Percentage. Each request for a Loan hereunder shall constitute a
representation and warranty by the Borrower that the conditions set forth in
ss.11 and ss.12, in the case of the initial Loans to be made or converted on the
Closing Date, and ss.12, in the case of all other Loans, have been satisfied on
the date of such request.
2.2. Commitment Fees. The Borrower agrees to pay to the Agent for the
---------------
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee calculated at the rate per annum equal to the Applicable Margin
with respect to commitment fees multiplied by the average daily amount during
each calendar quarter or portion thereof from the Closing Date to the Maturity
Date by which the Total Commitment minus the Dollar Equivalent of the aggregate
Letter of Credit Obligations exceeds the outstanding amount of Loans during such
calendar quarter. The commitment fee shall be payable quarterly in arrears on
the last day of each calendar quarter for such calendar quarter then ending
commencing on the first such date following the date hereof, with a final
payment on the Maturity Date or any earlier date on which the Commitments shall
terminate.
2.3. Reduction of Total Commitment. The Borrower shall have the right
-----------------------------
at any time and from time to time upon five (5) Business Days prior written
notice to the Agent to reduce by $500,000 or an integral multiple thereof or
terminate entirely the Total Commitment, whereupon the Commitments of the Banks
shall be reduced pro rata in accordance with their respective Commitment
Percentages of the amount specified in such notice or, as the case may be,
terminated. Promptly after receiving any notice of the Borrower delivered
pursuant to this ss.2.3, the Agent will notify the Banks of the substance
thereof. Upon the effective date of any such reduction or termination, the
-20-
Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of any commitment fee then accrued on the amount of the reduction.
No reduction or termination of the Commitments may be reinstated.
2.4. The Revolving Credit Notes. The Loans shall be evidenced by
--------------------------
promissory notes of the Borrower in substantially the form of Exhibit A hereto
(each a "Revolving Credit Note"), dated as of the Closing Date (or other such
date on which a Bank may become a party hereto in accordance with ss.19 hereof)
and completed with appropriate insertions. One Revolving Credit Note shall be
payable to the order of each Bank in a principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Loans made by such Bank,
plus interest accrued thereon, as set forth below. The Borrower irrevocably
authorizes each Bank to make or cause to be made, at or about the time of the
Drawdown Date of any Loan or at the time of receipt of any payment of principal
on such Bank's Revolving Credit Note, an appropriate notation on such Bank's
Note Record reflecting the making of such Loan or (as the case may be) the
receipt of such payment. The outstanding amount of the Revolving Credit Loans
set forth on such Bank's Note Record shall be prima facie evidence of the
principal amount thereof owing and unpaid to such Bank, but the failure to
record, or any error in so recording, any such amount on such Bank's Note Record
shall not limit or otherwise affect the obligations of the Borrower hereunder or
under any Revolving Credit Note to make payments of principal of or interest on
any Revolving Credit Note when due.
2.5. Interest on Loans. Except as otherwise provided in ss.5.10,
-----------------
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day
of the Interest Period with respect thereto at a rate per annum equal
to the Base Rate plus the Applicable Margin with respect to Base Rate
Loans as in effect from time to time.
(b) Each Eurodollar Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the
last day of the Interest Period with respect thereto at a rate per
annum equal to the Eurodollar Rate determined for such Interest
Period plus the Applicable Margin with respect to Eurodollar Rate
Loans as in effect from time to time.
(c) The Borrower promises to pay interest on each Loan in
arrears on each Interest Payment Date with respect thereto.
2.6. Requests for Loans. The Borrower shall give to the Agent written
------------------
notice in the form of Exhibit B hereto (or telephonic notice confirmed in a
writing in the form of Exhibit B hereto) of each Loan requested hereunder (a
"Loan Request") no less than (i) one (1) Business Day prior to the proposed
Drawdown Date of any Base Rate Loan and (ii) two (2) Eurodollar Business Days
prior to the proposed Drawdown Date of any Eurodollar Rate Loan. Each
-21-
such notice shall specify (A) the principal amount of the Loan requested, (B)
the proposed Drawdown Date of such Loan, (C) the Interest Period for such Loan
and (D) the Type of such Loan. Promptly upon receipt of any such notice, the
Agent shall notify each of the Banks thereof. Each Loan Request shall be
irrevocable and binding on the Borrower and shall obligate the Borrower to
accept the Loan requested from the Banks on the proposed Drawdown Date. Each
Loan Request shall be in a minimum aggregate amount of $500,000 or an integral
multiple thereof.
2.7. Conversion Options.
------------------
2.7.1. Conversion to Different Type of Loan. The Borrower
------------------------------------
may elect from time to time to convert any outstanding Loan to a Loan
of another Type, provided that (i) with respect to any such
conversion of a Loan to a Base Rate Loan, the Borrower shall give the
Agent at least one (1) Business Day prior written notice of such
election; (ii) with respect to any such conversion of a Base Rate
Loan to a Eurodollar Rate Loan, the Borrower shall give the Agent at
least two (2) Eurodollar Business Days prior written notice of such
election; (iii) with respect to any such conversion of a Eurodollar
Rate Loan into a Base Rate Loan, such conversion shall only be made
on the last day of the Interest Period with respect thereto; (iv) no
Base Rate Loan may be converted into a Eurodollar Rate Loan when any
Default or Event of Default has occurred and is continuing; and (v)
no more than five (5) Eurodollar Rate Loans having different Interest
Periods may be outstanding at any time. On the date on which such
conversion is being made each Bank shall take such action as is
necessary to transfer its Commitment Percentage of such Loans to its
Domestic Lending Office or its Eurodollar Lending Office, as the case
may be. All or any part of outstanding Loans of any Type may be
converted into a Loan of another Type as provided herein, provided
that any partial conversion shall be in an aggregate principal amount
of $500,000 or a whole multiple thereof. Each Conversion Request
relating to the conversion of a Loan to a Eurodollar Rate Loan shall
be irrevocable by the Borrower.
2.7.2. Continuation of Type of Loan. Any Loan of any Type
----------------------------
may be continued as a Revolving Credit Loan of the same Type upon the
expiration of an Interest Period with respect thereto by compliance
by the Borrower with the notice provisions contained in ss.2.7.1;
provided that no Eurodollar Rate Loan may be continued as such when
any Default or Event of Default has occurred and is continuing, but
shall be automatically converted to a Base Rate Loan on the last day
of the first Interest Period relating thereto ending during the
continuance of any Default or Event of Default of which officers of
the Agent active upon the Borrower's account have actual knowledge.
In the event that the Borrower fails to provide any such notice with
respect to the continuation of any Eurodollar Rate Loan as such, then
such Eurodollar Rate Loan shall be automatically converted to a Base
Rate Loan on the last day of
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the first Interest Period relating thereto. The Agent shall notify
the Banks promptly when any such automatic conversion contemplated by
this ss.2.7 is scheduled to occur.
2.7.3. Eurodollar Rate Loans. Any conversion to or from
---------------------
Eurodollar Rate Loans shall be in such amounts and be made pursuant
to such elections so that, after giving effect thereto, the aggregate
principal amount of all Eurodollar Rate Loans having the same
Interest Period shall not be less than $500,000 or a whole multiple
of $500,000 in excess thereof.
2.8. Funds for Loans.
---------------
2.8.1. Funding Procedures. Not later than 1:00 p.m. (Boston
------------------
time) on the proposed Drawdown Date of any Loans, each of the Banks
will make available to the Agent, at its Head Office, in immediately
available funds, the amount of such Bank's Commitment Percentage of
the amount of the requested Loans. Upon receipt from each Bank of
such amount, and upon receipt of the documents required by ss.ss.11
and 12 and the satisfaction of the other conditions set forth
therein, to the extent applicable, the Agent will make available to
the Borrower the aggregate amount of such Loans made available to the
Agent by the Banks. The failure or refusal of any Bank to make
available to the Agent at the aforesaid time and place on any
Drawdown Date the amount of its Commitment Percentage of the
requested Loans shall not relieve any other Bank from its several
obligation hereunder to make available to the Agent the amount of
such other Bank's Commitment Percentage of any requested Loans. In
the event that the Agent becomes aware of any Bank's failure to make
available the amount of its Commitment Percentage of any requested
Loan, the Agent shall notify the Borrower of the identity of such
Bank and the amount such Bank has not made available to the Agent.
2.8.2. Advances by Agent. The Agent may, unless notified to
-----------------
the contrary by any Bank prior to a Drawdown Date, assume that such
Bank has made available to the Agent on such Drawdown Date the amount
of such Bank's Commitment Percentage of the Loans to be made on such
Drawdown Date, and the Agent may (but it shall not be required to),
in reliance upon such assumption, make available to the Borrower a
corresponding amount. If any Bank makes available to the Agent such
amount on a date after such Drawdown Date, such Bank shall pay to the
Agent on demand an amount equal to (i) the average computed for the
period referred to in clause (iii) below, of the Federal Funds
Effective Rate, times (ii) the amount of such Bank's Commitment
Percentage of such Loans, times (iii) a fraction, the numerator of
which is the number of days that elapse from and including such
Drawdown Date to the date on which the amount of such Bank's
Commitment Percentage of such Loans shall become immediately
available to the Agent, and the
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denominator of which is 360. A statement of the Agent submitted to
such Bank with respect to any amounts owing under this paragraph
shall be prima facie evidence of the amount due and owing to the
Agent by such Bank. If the amount of such Bank's Commitment
Percentage of such Loans is not made available to the Agent by such
Bank within three (3) Business Days following such Drawdown Date, the
Agent shall be entitled to recover such amount from the Borrower on
demand, with interest thereon at the rate per annum applicable to the
Loans made on such Drawdown Date.
3. MANDATORY PREPAYMENT OF LOANS.
-----------------------------
3.1. Maturity of Loans. The Borrower promises to pay on the Maturity
-----------------
Date, and there shall become absolutely due and payable on the Maturity Date,
all of the Loans outstanding on such date, together with any and all accrued and
unpaid interest thereon.
3.2. Mandatory Payments of Loans.
---------------------------
3.2.1. Mandatory Repayments of Loans. If at any time the
-----------------------------
sum of the outstanding amount of the Loans and the Dollar Equivalent
of the aggregate Letter of Credit Obligations exceeds the Total
Commitment, then the Borrower shall immediately pay the amount of
such excess to the Agent for the respective accounts of the Banks for
application in the order prescribed in ss.3.2.5.
3.2.2. Mandatory Prepayments from Asset Sales. The Borrower
--------------------------------------
shall (a) concurrently with each delivery of its Compliance
Certificate pursuant to ss.8.4(c) hereof, deliver to the Agent and
the Banks a statement certified by the principal financial or
accounting officer of the Borrower setting forth (i) the aggregate
gross consideration for all sales of any of its or its Restricted
Subsidiaries' assets or group of related assets (other than assets
sold in the ordinary course of business) during the most recently
ended fiscal quarter where such asset sale is either permitted
pursuant to ss.9.5.2 or is previously consented to in writing by the
Majority Banks and (ii) in reasonable detail, a computation of the
aggregate Net Cash Proceeds from such assets sales and the deductions
taken to arrive at such Net Cash Proceeds and (b) within two (2)
Business Days of delivery of the statement referred to in clause (a)
hereof, prepay the Loans in an amount equal to the amount by which
the aggregate amount of such Net Cash Proceeds exceeds $6,500,000
during such fiscal year.
3.2.3. Mandatory Prepayments from New Equity. In the event
-------------------------------------
that the Borrower shall after the Closing Date sell or issue any
shares of its stock, options (other than stock options awarded to
employees and directors pursuant to incentive compensation plans
operated by the Borrower involving not more than 15% of the common
-24-
stock of the Borrower) or warrants for the purchase of its stock or
other equity or equity instruments, then as soon as practicable and
in any event within thirty (30) days after the sale of such new
equity, the Borrower shall prepay the Loans in an amount equal to one
hundred percent (100%) of the Net Cash Proceeds to the Borrower of
such sale or issuance of new equity.
3.2.4. Mandatory Prepayments from Debt Offerings. In the
-----------------------------------------
event that the Borrower or any of its Restricted Subsidiaries shall
after the Closing Date incur any Indebtedness for borrowed money not
otherwise permitted under ss.9.1 hereof where the incurrence of such
Indebtedness is previously consented to in writing by the Majority
Banks, then simultaneously with receipt by the Borrower or such
Restricted Subsidiary of the Net Cash Proceeds of such debt issuance,
the Borrower shall prepay the Loans in an amount equal to the Net
Cash Proceeds of such debt issuance.
3.2.5. Application of Proceeds. All mandatory prepayments
-----------------------
of the Loans pursuant to this ss.3.2 shall be applied first, to any
Unpaid Reimbursement Obligations; second to the Loans; and third, to
provide to the Agent cash collateral for Reimbursement Obligations as
contemplated by ss.4.2(b) and (c). Each payment of any Unpaid
Reimbursement Obligations or prepayment of Loans shall be allocated
among the Banks, in proportion, as nearly as practicable, to each
Reimbursement Obligation or (as the case may be) the respective
unpaid principal amount of each Bank's Revolving Credit Note, with
adjustments to the extent practicable to equalize any prior payments
or repayments not exactly in proportion. In addition, the Total
Commitment shall be permanently reduced by the aggregate amount of
all mandatory repayments (other than repayments pursuant to
ss.3.2.1). No amount repaid pursuant to this ss.3.2 with respect to
the Loans may be reborrowed.
3.3. Optional Prepayments of Loans. The Borrower shall have the
-----------------------------
right, at its election, to repay the outstanding amount of the Loans, as a whole
or in part, at any time without penalty or premium, provided that any full or
partial prepayment of the outstanding amount of any Eurodollar Rate Loans
pursuant to this ss.3.3 may be made only on the last day of the Interest Period
relating thereto. The Borrower shall give the Agent, no later than 10:00 a.m.,
Boston time, at least one (1) Business Day prior written notice of any proposed
prepayment pursuant to this ss.3.3 of Base Rate Loans, and two (2) Eurodollar
Business Days notice of any proposed prepayment pursuant to this ss.3.3 of
Eurodollar Rate Loans, in each case specifying the proposed date of prepayment
of Loans and the principal amount to be prepaid. Each such partial prepayment of
the Loans shall be in an integral multiple of $500,000 and shall be applied by
the Agent, in the absence of instruction by the Borrower, first to the principal
of Base Rate Loans and then to the principal of Eurodollar Rate Loans. Each
partial prepayment shall be allocated among the Banks, in proportion, as nearly
as practicable, to the respective unpaid principal amount of each Bank's
-25-
Revolving Credit Note, with adjustments to the extent practicable to equalize
any prior repayments not exactly in proportion.
4. LETTERS OF CREDIT.
-----------------
4.1. Letter of Credit Commitments.
----------------------------
4.1.1. Commitment to Issue Letters of Credit. Subject to
-------------------------------------
the terms and conditions hereof and the execution and delivery by the
Borrower of a letter of credit application on the Issuing Bank's
customary form (a "Letter of Credit Application"), the Issuing Bank
on behalf of the Banks and in reliance upon the agreement of the
Banks set forth in ss.4.1.4 and upon the representations and
warranties of the Borrower contained herein, agrees, in its
individual capacity, to issue, extend and renew for the account of
the Borrower one or more standby or documentary letters of credit
(individually, a "Letter of Credit"), denominated in Dollars or any
Optional Currency in such form as may be requested from time to time
by the Borrower and agreed to by the Issuing Bank; provided, however,
that, after giving effect to such request, (a) the Dollar Equivalent
of the outstanding Letter of Credit Obligations does not exceed
$10,000,000 and (b) the sum of (i) the Dollar Equivalent of the
outstanding Letter of Credit Obligations and (ii) the amount of all
Loans outstanding shall not exceed the Total Commitment.
Notwithstanding the foregoing, the Issuing Bank shall have no
obligation to issue any Letter of Credit to support or secure any
Indebtedness of the Borrower or any of its Subsidiaries to the extent
that such Indebtedness was incurred prior to the proposed issuance
date of such Letter of Credit, unless in any such case the Borrower
demonstrates to the satisfaction of the Issuing Bank that (x) such
prior incurred Indebtedness was then fully secured by a prior
perfected and unavoidable security interest in collateral provided by
the Borrower or such Subsidiary to the proposed beneficiary of such
Letter of Credit or (y) such prior incurred Indebtedness was then
secured or supported by a letter of credit issued for the account of
the Borrower or such Subsidiary and the reimbursement obligation with
respect to such letter of credit was fully secured by a prior
perfected and unavoidable security interest in collateral provided to
the issuer of such letter of credit by the Borrower or such
Subsidiary.
4.1.2. Letter of Credit Applications. Each Letter of Credit
-----------------------------
Application shall be completed to the satisfaction of the Issuing
Bank. In the event that any provision of any Letter of Credit
Application shall be inconsistent with any provision of this Credit
Agreement, then the provisions of this Credit Agreement shall, to the
extent of any such inconsistency, govern.
4.1.3. Terms of Letters of Credit. Each Letter of Credit
--------------------------
issued, extended or renewed hereunder shall, among other things, (i)
provide for the payment of sight drafts for honor thereunder when
presented in
-26-
accordance with the terms thereof and when accompanied by the
documents described therein, (ii) subject to clause (iii) hereof,
shall have a term of not more than one (1) year from the date of
issuance, extension or renewal thereof and (iii) have an expiry date
no later than the date which is fourteen (14) days (or, if the Letter
of Credit is confirmed by a confirmer or otherwise provides for one
or more nominated persons, forty-five (45) days) prior to the
Maturity Date. Each Letter of Credit so issued, extended or renewed
shall be subject to the Uniform Customs.
4.1.4. Reimbursement Obligations of Banks. Each Bank
----------------------------------
severally agrees that it shall be absolutely liable, without regard
to the occurrence of any Default or Event of Default or any other
condition precedent whatsoever, to the extent of such Bank's
Commitment Percentage, to reimburse the Issuing Bank on demand for
the amount of each draft paid by the Issuing Bank under each Letter
of Credit to the extent that such amount is not reimbursed by the
Borrower pursuant to ss.4.2 (such agreement for a Bank being called
herein the "Letter of Credit Participation" of such Bank). Without
limiting the foregoing, each Bank's obligation to purchase Letter of
Credit Participations shall be absolute and unconditional and shall
not be affected by any circumstance, including (i) any set-off,
counterclaim, recoupment, defense or other right which such Bank may
have against the Agent, the Issuing Bank, the Borrower or any other
Person for any reason whatsoever; (ii) the occurrence and
continuation of any Default or Event of Default; (iii) any adverse
change in the condition (financial or otherwise) of the Borrower, any
of its Subsidiaries or any other Bank; (iv) any breach of any of the
Loan Documents by the Borrower, any of its Subsidiaries or any other
Bank; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
4.1.5. Participations of Banks. Each such payment made by a
-----------------------
Bank shall be treated as the purchase by such Bank of a participating
interest in the Borrower's Reimbursement Obligation under ss.4.2 in
an amount equal to such payment. Each Bank shall share in accordance
with its participating interest in any interest which accrues
pursuant to ss.4.2.
4.2. Reimbursement Obligation of the Borrower. In order to induce the
----------------------------------------
Issuing Bank to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Issuing Bank or (as the case may be) the Banks,
with respect to each Letter of Credit issued, extended or renewed by the Issuing
Bank hereunder,
(a) except as otherwise expressly provided in ss.4.2(b) and
(c), on each date that any draft presented under such Letter of
Credit is honored by the Agent, or the Agent otherwise makes a
payment with respect thereto, (i) the Dollar Equivalent of the amount
paid by the Agent under
-27-
or with respect to such Letter of Credit, and (ii) the Dollar
Equivalent of the amount of any taxes, fees, charges or other costs
and expenses whatsoever incurred by the Agent or any Bank in
connection with any payment made by the Agent or any Bank under, or
with respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Dollar Equivalent of the
Maximum Drawing Amount, an amount equal to such difference, which
amount shall be held by the Agent for the benefit of the Banks and
the Issuing Bank as cash collateral for all Reimbursement
Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with ss.13, an amount equal to the
Dollar Equivalent of the then Maximum Drawing Amount on all Letters
of Credit, which amount shall be held by the Agent for the benefit of
the Banks and the Agent as cash collateral for all Reimbursement
Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
Dollars in immediately available funds. Interest on any and all amounts
remaining unpaid by the Borrower under this ss.4.2 at any time from the date
such amounts become due and payable (whether as stated in this ss.4.2, by
acceleration or otherwise) until payment in full (whether before or after
judgment) shall be payable to the Agent on demand at the rate specified in
ss.5.10 for overdue principal on the Loans.
4.3. Letter of Credit Payments. If any draft shall be presented or
-------------------------
other demand for payment shall be made under any Letter of Credit, the Issuing
Bank shall notify the Borrower of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. If the Borrower fails to reimburse the Issuing
Bank as provided in ss.4.2 on or before the date that such draft is paid or
other payment is made by the Issuing Bank, the Issuing Bank shall promptly
thereafter notify the Banks of the amount of any such Unpaid Reimbursement
Obligation and shall specify such amount in Dollars (based upon the actual
exchange rate at which the Issuing Bank anticipates being able to obtain the
applicable Optional Currency on the date payment is to be made by the Banks,
with any excess payment being refunded to the Banks and any deficiency being
payable by the Banks) required from each of the Banks. No later than 3:00 p.m.
(Boston time) on the Business Day next following the receipt of such notice,
each Bank shall make available to the Agent, at its Head Office, in immediately
available funds, such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation, together with an amount equal to (i) the average, computed for the
period referred to in clause (iii) below, of the Federal Funds Effective Rate,
times (ii) the amount equal to such Bank's Commitment Percentage of such Unpaid
Reimbursement Obligation, times (iii) a fraction, the
-----
-28-
numerator of which is the number of days that elapse from and including the date
the Issuing Bank paid the draft presented for honor or otherwise made payment to
the date on which such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation shall become immediately available to the Agent, and the denominator
of which is 360. The responsibility of the Issuing Bank to the Borrower and the
Banks shall be only to determine that the documents (including each draft)
delivered under each Letter of Credit in connection with such presentment shall
be in conformity in all material respects with such Letter of Credit. From and
after such purchase of the applicable Letter of Credit Participations, such
Unpaid Reimbursement Obligations shall be deemed to have been converted into
Base Rate Loans made by the Banks, and all amounts from time to time accruing,
and all amounts from time to time payable, on account of such Unpaid
Reimbursement Obligations shall be payable in Dollars as if such Letter of
Credit had originally been issued in Dollars.
4.4. Obligations Absolute. The Borrower's obligations under this ss.4
--------------------
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Issuing Bank, the Agent, any
Bank or any beneficiary of a Letter of Credit. The Borrower further agrees with
the Issuing Bank and the Banks that the Issuing Bank and the Banks shall not be
responsible for, and the Borrower's Reimbursement Obligations under ss.4.2 shall
not be affected by, among other things, the validity or genuineness of documents
or of any endorsements thereon, even if such documents should in fact prove to
be in any or all respects invalid, fraudulent or forged, or any dispute between
or among the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Issuing Bank and the Banks shall
not be liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit.
4.5. Reliance by Issuer. To the extent not inconsistent with ss.4.4,
------------------
the Issuing Bank shall be entitled to rely, and shall be fully protected in
relying upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document 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, independent accountants and
other experts selected by the Issuing Bank. The Issuing Bank shall be fully
justified in failing or refusing to take any action under this Agreement unless
it shall first have received such advice or concurrence of the Majority Banks as
it reasonably deems appropriate or it shall first be indemnified to its
reasonable 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 Issuing Bank shall in all cases be fully protected in acting, or in
refraining from
-29-
acting, under this Agreement in accordance with a request of the Majority Banks,
and such request and any action taken or failure to act pursuant thereto shall
be binding upon the Banks and all future holders of the Revolving Credit Notes
or of a Letter of Credit Participation.
4.6. Letter of Credit Fee. The Borrower shall, on the date of
---------------------
issuance or any extension or renewal of any Letter of Credit and at such other
time or times as such charges are customarily made by the Issuing Bank, pay a
fee (in each case, a "Letter of Credit Fee") to the Agent in respect of each
Letter of Credit at a rate per annum equal to the Dollar Equivalent of the face
amount of such Letter of Credit multiplied by the Applicable Margin with respect
to Letters of Credit. Such Letter of Credit Fee shall be allocated pro rata
(according to the applicable Commitment Percentages) to each Bank. In addition,
the Borrower shall pay to the Agent, for its own account or the account of the
Issuing Bank, (i) a fee at a rate per annum equal to the Dollar Equivalent of
the Maximum Drawing Amount multiplied by one-tenth of one percent (0.10%), such
fee to be payable quarterly in arrears on the last Business Day of each calendar
quarter for such calendar quarter then ending and (ii) with respect to
documentary letters of credit, standard issuance, extension, renewal,
processing, negotiating, amendment and administration fees, as determined in
accordance with the Issuing Bank's or the Agent's customary fees and charges for
similar facilities.
5. CERTAIN GENERAL PROVISIONS.
--------------------------
5.1. Agent's Fees. The Borrower agrees to pay from time to time to
------------
the Agent, for its own account and the account of BancBoston Securities Inc.
such fees (collectively, the "Agent's Fees") as are set forth in the fee letter
dated as of the date hereof among the Agent, BancBoston Securities Inc. and the
Borrower.
5.2. Funds for Payments.
------------------
5.2.1. Payments to Agent. The Agent shall debit an account
-----------------
of the Borrower with the Agent for all (a) interest payments when due
as provided in ss.2.5 with respect to the Revolving Credit Notes or
otherwise due hereunder, (b) commitment fees when due as provided in
ss.2.2, and (c) Letter of Credit Fees when due as provided in ss.4.6.
The failure of the Agent to debit such account as provided herein
with respect to any such payments shall not constitute a waiver of
any payment due hereunder. The Agent shall notify the Borrower by
telephone or telecopy on or prior to the date of each (i) interest
payment as to the amount of interest due to the Banks on such
interest payment date, (ii) commitment fee payment as to the amount
of the commitment fee due to the Banks on such commitment fee payment
date, and (iii) Letter of Credit Fee payment as to the amount of the
Letter of Credit Fee due to the Issuing Bank and the Banks on such
Letter of Credit Fee payment date. All payments of principal,
Reimbursement Obligations and any other amounts due hereunder or
under any of the other Loan Documents shall be made to
-30-
the Agent, for the respective accounts of the Banks, the Issuing Bank
and the Agent, at the Agent's Head Office or at such other location
in the Boston, Massachusetts, area that the Agent may from time to
time designate, in each case in immediately available funds.
5.2.2. No Offset, etc. All payments by the Borrower
---------------
hereunder and under any of the other Loan Documents shall be made
without setoff or counterclaim and free and clear of and without
deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any
jurisdiction or any political subdivision thereof or taxing or other
authority therein unless the Borrower is compelled by law to make
such deduction or withholding. If any such obligation is imposed upon
the Borrower with respect to any amount payable by it hereunder or
under any of the other Loan Documents, the Borrower will pay to the
Agent, for the account of the Banks, the Issuing Bank or (as the case
may be) the Agent, on the date on which such amount is due and
payable hereunder or under such other Loan Document, such additional
amount in Dollars as shall be necessary to enable the Banks or the
Agent to receive the same net amount which the Banks or the Agent
would have received on such due date had no such obligation been
imposed upon the Borrower. The Borrower will deliver promptly to the
Agent certificates or other valid vouchers for all taxes or other
charges deducted from or paid with respect to payments made by the
Borrower hereunder or under such other Loan Document.
5.2.3. Currency Matters.
----------------
5.2.3.1. Currency of Account. (a) Dollars are the
--------------------
currency of account and payment for each and every sum at
any time due from the Borrower hereunder; provided that:
(i) each payment in respect of costs, expenses
and indemnities shall be made in the currency in which the
same were incurred; and
(ii) any amount expressed to be payable in a
currency other than Dollars shall be paid in that other
currency.
(b) No payment to the Agent, the Issuing Bank or
any Bank (whether under any judgment or court order or
otherwise) shall discharge the obligation or liability in
respect of which it was made unless and until the Agent,
the Issuing Bank or such Bank shall have received payment
in full in the currency in which such obligation or
liability was incurred, and to the extent that the amount
of any such payment shall, on actual conversion into such
currency, fall short of such obligation or liability actual
or contingent expressed in that currency, the Borrower
shall
-31-
indemnify and hold harmless the Agent, the Issuing Bank or
such Bank, as the case may be, with respect to the amount
of the shortfall.
5.2.3.2. Currency Fluctuations.
---------------------
(a) Not later than 1:00 p.m. (Boston time) on the
last Business Day of each calendar month (the "Calculation
Date"), the Agent shall determine the Dollar Equivalent as
of such date. The Dollar Equivalent so determined shall
become effective on the first Business Day immediately
following such determination (a "Reset Date") and shall
remain effective until the next succeeding Reset Date.
(b) If, on any Reset Date and on the Maturity
Date, the aggregate outstanding amount (expressed in
Dollars) of all Loans and Letter of Credit Obligations
exceeds the Total Commitment by more than $100,000, then
(i) the Agent shall give notice thereof to the Borrower and
the Banks and (ii) within two (2) Business Days thereafter,
the Borrower shall repay or prepay the Loans in accordance
with this Agreement in an aggregate principal amount such
that, after giving effect thereto, the aggregate
outstanding amount (expressed in Dollars) of all Loans and
Letter of Credit Obligations no longer exceeds the Total
Commitment (expressed in Dollars).
(c) Without limiting subsection ss.5.2.3.2(b),
if, on any day prior to the Maturity Date, the aggregate
outstanding amount (expressed in Dollars) of all Loans and
Letter of Obligations exceeds the Total Commitment by five
percent (5%) or more, then (i) the Agent shall give notice
thereof to the Borrower and the Banks and (ii) within two
(2) Business Days thereafter, the Borrower shall repay or
prepay the Loans in accordance with this Agreement in an
aggregate principal amount such that, after giving effect
thereto, the aggregate outstanding amount (expressed in
Dollars) of all Loans and Letter of Credit Obligations no
longer exceeds the Total Commitment (expressed in Dollars).
Nothing set forth in this ss.5.2.3.2 shall be construed to
require the Agent to calculate daily compliance under this
ss.5.2.3.2 unless expressly requested to do so by a Bank.
(d) If on any Reset Date, the aggregate
outstanding Letter of Credit Obligations (expressed in
Dollars) exceeds the Letter of Credit sublimit set forth in
ss.4.1 (expressed in Dollars) by more than five percent
(5%), then the Borrower shall immediately upon demand
provide cash collateral to the Agent such that, after
giving effect thereto, the aggregate outstanding Letter of
Credit
-32-
Obligations (expressed in Dollars) no longer exceed the
Letter of Credit sublimit set forth in ss.4.1.
5.3. Computations. All computations of interest on Eurodollar Rate
------------
Loans and of commitment fees, Letter of Credit Fees or other fees shall, unless
otherwise expressly provided herein, be based on a 360-day year and paid for the
actual number of days elapsed. All computations of interest with respect to Base
Rate Loans shall be based on a 365-day or 366-day year, as the case may be, and
paid for the actual number of days elapsed. Except as otherwise provided in the
definition of the term "Interest Period" with respect to Eurodollar Rate Loans,
whenever a payment hereunder or under any of the other Loan Documents becomes
due on a day that is not a Business Day, the due date for such payment shall be
extended to the next succeeding Business Day, and interest shall accrue during
such extension. The outstanding amount of the Loans as reflected on the Note
Records from time to time shall be considered correct and binding on the
Borrower unless within five (5) Business Days after receipt of any notice by the
Agent or any of the Banks of such outstanding amount, the Agent or such Bank
shall notify the Borrower to the contrary.
5.4. Inability to Determine Eurodollar Rate. In the event, prior to
--------------------------------------
the commencement of any Interest Period relating to any Eurodollar Rate Loan,
the Agent shall determine that adequate and reasonable methods do not exist for
ascertaining the Eurodollar Rate that would otherwise determine the rate of
interest to be applicable to any Eurodollar Rate Loan during any Interest
Period, the Agent shall forthwith give notice of such determination (which shall
be conclusive and binding on the Borrower and the Banks) to the Borrower and the
Banks. In such event (i) any Loan Request or Conversion Request with respect to
Eurodollar Rate Loans shall be automatically withdrawn and shall be deemed a
request for Base Rate Loans, (ii) each Eurodollar Rate Loan will automatically,
on the last day of the then current Interest Period relating thereto, become a
Base Rate Loan, and (iii) the obligations of the Banks to make Eurodollar Rate
Loans shall be suspended until the Agent determines that the circumstances
giving rise to such suspension no longer exist, whereupon the Agent shall so
notify the Borrower and the Banks.
5.5. Illegality. Notwithstanding any other provisions herein, if any
----------
present or future law, regulation, treaty or directive or the interpretation or
application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (i) the
commitment of such Bank to make Eurodollar Rate Loans or convert Base Rate Loans
to Eurodollar Rate Loans shall forthwith be suspended and (ii) such Bank's Loans
then outstanding as Eurodollar Rate Loans, if any, shall be converted
automatically to Base Rate Loans on the last day of each Interest Period
applicable to such Eurodollar Rate Loans or within such earlier period as may be
required by law. The Borrower hereby agrees promptly to pay the Agent for the
account of such Bank, upon demand by such
-33-
Bank, any additional amounts necessary to compensate such Bank for any costs
incurred by such Bank in making any conversion in accordance with this ss.5.5,
including any interest or fees payable by such Bank to lenders of funds obtained
by it in order to make or maintain its Eurodollar Rate Loans hereunder.
5.6. Additional Costs, etc. If any present or future applicable law,
---------------------
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank, the Issuing Bank or the Agent by any central bank
or other fiscal, monetary or other authority (whether or not having the force of
law), shall:
(a) subject any Bank, the Issuing Bank or the Agent to any
tax, levy, impost, duty, charge, fee, deduction or withholding of any
nature with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, such Bank's Commitment or the Loans
(other than taxes based upon or measured by the income or profits of
such Bank, the Issuing Bank or the Agent), or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to any Bank of the
principal of or the interest on any Loans or any other amounts
payable to any Bank, the Issuing Bank or the Agent under this Credit
Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to
the extent specifically provided for elsewhere in this Credit
Agreement) any special deposit, reserve, assessment, liquidity,
capital adequacy or other similar requirements (whether or not having
the force of law) against assets held by, or deposits in or for the
account of, or loans by, or letters of credit issued by, or
commitments of an office of any Bank, or the Issuing Bank or
(d) impose on any Bank, the Issuing Bank or the Agent any
other conditions or requirements with respect to this Credit
Agreement, the other Loan Documents, any Letters of Credit, the
Loans, such Bank's Commitment, or any class of loans, letters of
credit or commitments of which any of the Loans or such Bank's
Commitment forms a part, and the result of any of the foregoing is
(i) to increase the cost to any Bank, or the
Issuing Bank of making, funding, issuing, renewing,
extending or maintaining any of the Loans or such Bank's
Commitment or any Letter of Credit, or
-34-
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such
Bank, the Issuing Bank or the Agent hereunder on account of
such Bank's Commitment, any Letter of Credit or any of the
Loans, or
(iii) to require such Bank, the Issuing Bank or
the Agent to make any payment or to forego any interest or
Reimbursement Obligation or other sum payable hereunder,
the amount of which payment or foregone interest or
Reimbursement Obligation or other sum is calculated by
reference to the gross amount of any sum receivable or
deemed received by such Bank, the Issuing Bank or the Agent
from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank,
the Issuing Bank or (as the case may be) the Agent at any time and from time to
time and as often as the occasion therefor may arise, pay to such Bank, the
Issuing Bank or the Agent such additional amounts as will be sufficient to
compensate such Bank, the Issuing Bank or the Agent for such additional cost,
reduction, payment or foregone interest or Reimbursement Obligation or other
sum.
5.7. Capital Adequacy. If after the date hereof any Bank or the Agent
----------------
determines that (i) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (ii) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Loans to a level below that which such Bank or the Agent could
have achieved but for such adoption, change or compliance (taking into
consideration such Bank's or the Agent's then existing policies with respect to
capital adequacy and assuming full utilization of such entity's capital) by any
amount deemed by such Bank or (as the case may be) the Agent to be material,
then such Bank or the Agent may notify the Borrower of such fact. To the extent
that the amount of such reduction in the return on capital is not reflected in
the Base Rate, the Borrower and such Bank shall thereafter attempt to negotiate
in good faith, within thirty (30) days of the day on which the Borrower receives
such notice, an adjustment payable hereunder that will adequately compensate
such Bank in light of these circumstances. If the Borrower and such Bank are
unable to agree to such adjustment within thirty (30) days of the date on which
the Borrower receives such notice, then commencing on the date of such notice
(but not earlier than the effective date of any such increased capital
requirement), the fees payable hereunder shall increase by an amount that will,
in such Bank's reasonable determination, provide adequate
-35-
compensation. Each Bank shall allocate such cost increases among its customers
in good faith and on an equitable basis.
5.8. Certificate. A certificate setting forth any additional amounts
-----------
payable pursuant to ss.ss.5.6 or 5.7 and a brief explanation of such amounts
which are due, submitted by any Bank, the Issuing Bank or the Agent to the
Borrower, shall be conclusive, absent manifest error, that such amounts are due
and owing.
5.9. Indemnity. The Borrower agrees to indemnify each Bank and to
---------
hold each Bank harmless from and against any loss, cost or expense (including
loss of anticipated profits) that such Bank may sustain or incur as a
consequence of (i) default by the Borrower in payment of the principal amount of
or any interest on any Eurodollar Rate Loans as and when due and payable,
including any such loss or expense arising from interest or fees payable by such
Bank to lenders of funds obtained by it in order to maintain its Eurodollar Rate
Loans, (ii) default by the Borrower in making a borrowing or conversion after
the Borrower has given (or is deemed to have given) a Loan Request or a
Conversion Request relating thereto in accordance with ss.2.6 or ss.2.7 or (iii)
the making of any payment of a Eurodollar Rate Loan or the making of any
conversion of any such Loan to a Base Rate Loan on a day that is not the last
day of the applicable Interest Period with respect thereto, including interest
or fees payable by such Bank to lenders of funds obtained by it in order to
maintain any such Loans.
5.10. Interest After Default.
----------------------
5.10.1. Overdue Amounts. During the continuance of an Event
---------------
of Default, overdue principal and (to the extent permitted by
applicable law) interest on the Loans and all other overdue amounts
payable hereunder or under any of the other Loan Documents shall bear
interest compounded monthly and payable on demand at a rate per annum
equal to three percent (3%) above the Base Rate until such amount
shall be paid in full (after as well as before judgment).
5.10.2. Amounts Not Overdue. During the continuance of an
-------------------
Event of Default the principal of the Loans not overdue shall, until
such Event of Default has been cured or remedied or such Event of
Default has been waived by the Majority Banks pursuant to ss.26, bear
interest at a rate per annum equal to one percent (1%) above the rate
of interest otherwise applicable to such Loans.
6. GUARANTY
--------
Whereas, (i) the Borrower and each of the Guarantors are members of a
group of related corporations, the success of any one of which is dependent in
part on the success of the other members of such group, (ii) each Guarantor
expects to receive substantial direct and indirect benefits from the extensions
of
-36-
credit to the Borrower by the Banks pursuant to this Credit Agreement (which
benefits are hereby acknowledged), (iii) it is a condition precedent to the
Banks making any Loans or otherwise extending credit to the Borrower under this
Agreement that each Guarantor execute and deliver to the Banks, the Issuing
Bank, and the Agent a guaranty substantially in the form of this ss.6 and (iv)
each Guarantor wishes to guaranty the Borrower's obligations to the Banks, the
Issuing Bank and the Agent under or in respect of the Credit Agreement, each
Guarantor hereby agrees with the Banks, the Issuing Bank and the Agent as
follows:
6.1. Guaranty of Payment and Performance. Each of the Guarantors
-----------------------------------
hereby jointly and severally guarantees to the Banks, the Issuing Bank and the
Agent the full and punctual payment when due (whether at stated maturity, by
required pre-payment, by acceleration or otherwise), as well as the performance,
of all of the Obligations including all such which would become due but for the
operation of the automatic stay pursuant to ss.362(a) of the Federal Bankruptcy
Code and the operation of ss.ss.502(b) and 506(b) of the Federal Bankruptcy
Code. This Guaranty is an absolute, unconditional and continuing guaranty of the
full and punctual payment and performance of all of the Obligations and not of
their collectibility only and is in no way conditioned upon any requirement that
the Agent, the Issuing Bank or any Bank first attempt to collect any of the
Obligations from the Borrower or resort to any collateral security or other
means of obtaining payment. Should the Borrower default in the payment or
performance of any of the Obligations, the obligations of the Guarantors
hereunder with respect to such Obligations in default shall become immediately
due and payable to the Agent, for the benefit of the Banks, the Issuing Bank and
the Agent, without demand or notice of any nature, all of which are expressly
waived by each of the Guarantors. Payments by the Guarantors hereunder may be
required by the Agent on any number of occasions.
6.2. Guarantors' Agreement to Pay Enforcement Costs, etc. Each of the
---------------------------------------------------
Guarantors further jointly and severally agrees, as the principal obligor and
not as a guarantor only, to pay to the Agent, on demand, all costs and expenses
(including court costs and legal expenses) incurred or expended by the Agent,
the Issuing Bank or any Bank in connection with the Obligations, this Guaranty
and the enforcement thereof, together with interest on amounts recoverable under
this ss.6.2 from the time when such amounts become due until payment, whether
before or after judgment, at the rate of interest for overdue principal set
forth in ss.5.10 hereof, provided that if such interest exceeds the maximum
amount permitted to be paid under applicable law, then such interest shall be
reduced to such maximum permitted amount.
6.3. Waivers by Guarantors; Banks' Freedom to Act. Each of the
---------------------------------------------
Guarantors agrees that the Obligations will be paid and performed strictly in
accordance with their respective terms, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of the Agent, the Issuing Bank or any Bank with respect thereto.
-37-
Each of the Guarantors waives promptness, diligences, presentment, demand,
protest, notice of acceptance, notice of any Obligations incurred and all other
notices of any kind, all defenses which may be available by virtue of any
valuation, stay, moratorium law or other similar law now or hereafter in effect,
any right to require the marshalling of assets of the Borrower, any of the
Guarantors or any other entity or other person primarily or secondarily liable
with respect to any of the Obligations, and all suretyship defenses generally.
Without limiting the generality of the foregoing, each of the Guarantors agrees
to the provisions of any instrument evidencing, securing or otherwise executed
in connection with any Obligation and agrees that the obligations of such
Guarantor hereunder shall not be released or discharged, in whole or in part, or
otherwise affected by (i) the failure of the Agent, the Issuing Bank or any Bank
to assert any claim or demand or to enforce any right or remedy against the
Borrower or any other entity or other person primarily or secondarily liable
with respect to any of the Obligations; (ii) any extensions, compromise,
refinancing, consolidation or renewals of any Obligation; (iii) any change in
the time, place or manner of payment of any of the Obligations or any
rescissions, waivers, compromise, refinancing, consolidation, amendments or
modifications of any of the terms or provisions of this Credit Agreement, the
Revolving Credit Notes, the other Loan Documents or any other agreement
evidencing, securing or otherwise executed in connection with any of the
Obligations; (iv) the addition, substitution or release of any entity or other
person primarily or secondarily liable for any Obligation; (v) the adequacy of
any rights which the Agent, the Issuing Bank or any Bank may have against any
collateral security or other means of obtaining repayment of any of the
Obligations; (vi) the impairment of any collateral securing any of the
Obligations, including without limitation the failure to perfect or preserve any
rights which the Agent, the Issuing Bank or any Bank might have in such
collateral security or the substitution, exchange, surrender, release, loss or
destruction of any such collateral security; or (vii) any other act or omission
which might in any manner or to any extent vary the risk of such Guarantor or
otherwise operate as a release or discharge of such Guarantor, all of which may
be done without notice to such Guarantor. To the fullest extent permitted by
law, each of the Guarantors hereby expressly waives any and all rights or
defenses arising by reason of (A) any "one action" or "anti-deficiency" law
which would otherwise prevent the Agent, the Issuing Bank or any Bank from
bringing any action, including any claim for a deficiency, or exercising any
other right or remedy (including any right of set-off), against such Guarantor
before or after the Agent's, the Issuing Bank's or such Bank's commencement or
completion of any foreclosure action, whether judicially, by exercise of power
of sale or otherwise, or (B) any other law which in any other way would
otherwise require any election of remedies by the Agent, the Issuing Bank or any
Bank.
6.4. Unenforceability of Obligations Against Borrower. If for any
------------------------------------------------
reason the Borrower or any other Guarantor has no legal existence or is under no
legal obligation to discharge any of the Obligations, or if any of the
Obligations have become irrecoverable from the Borrower or any other
-38-
Guarantor by reason of the Borrower's or such other Guarantor's insolvency,
bankruptcy or reorganization or by other operation of law or for any other
reason, this Guaranty shall nevertheless be binding on each of the Guarantors
not affected thereby to the same extent as if such Guarantor at all times had
been the principal obligor on all such Obligations. In the event that
acceleration of the time for payment of any of the Obligations is stayed upon
the insolvency, bankruptcy or reorganization of the Borrower, or for any other
reason, all such amounts otherwise subject to acceleration under the terms of
this Credit Agreement, the Revolving Credit Notes, the other Loan Documents or
any other agreement evidencing, securing or otherwise executed in connection
with any Obligation shall be immediately due and payable by the Guarantors.
6.5. Subrogation; Subordination.
--------------------------
6.5.1. Waiver of Rights Against Borrower. Until the final
---------------------------------
payment and performance in full of all of the Obligations and any and
all other obligations of the Borrower to the Agent, the Issuing Bank,
any Bank or any affiliate of the Agent, the Issuing Bank or any Bank,
none of the Guarantors shall exercise any rights against the Borrower
or any of the other Guarantors arising as a result of payment by any
of the Guarantors hereunder, by way of subrogation, reimbursement,
restitution, contribution or otherwise, and will not prove any claim
in competition with the Agent, the Issuing Bank or any Bank or such
affiliate in respect of any payment hereunder in any bankruptcy,
insolvency or reorganization case or proceedings of any nature; none
of the Guarantors will claim any setoff, recoupment or counterclaim
against the Borrower or any of the other Guarantors in respect of any
liability of any of the Guarantors to the Borrower or such other
Guarantor; and each of the Guarantors waives any benefit of and any
right to participate in any collateral security which may be held by
the Agent, the Issuing Bank, any Bank or any such affiliate.
6.5.2. Subordination. The payment of any amounts due with
-------------
respect to any indebtedness of the Borrower or any Guarantor now or
hereafter owed to any of the Guarantors is hereby subordinated to the
prior payment in full of all of the Obligations and any and all other
obligations of the Borrower and the Guarantors to the Agent, the
Issuing Bank, any Bank or any affiliate of the Agent, the Issuing
Bank or any Bank. Each of the Guarantors agrees that, after the
occurrence of any default the payment or performance of any of the
Obligations, such Guarantor will not demand, sue for or otherwise
attempt to collect any such indebtedness of the Borrower or any other
Guarantor to such Guarantor until all of the Obligations shall have
been paid in full. If, notwithstanding the foregoing sentence, such
Guarantor shall collect, enforce or receive any amounts in respect of
such indebtedness, such amounts shall be collected, enforced and
received by such Guarantor as trustee for the Banks, the Issuing Bank
and the Agent and be paid over to the Agent, for the benefit of the
Banks, the Issuing Bank and the
-39-
Agent on account of the Obligations without affecting in any manner
the liability of such Guarantor under the other provisions of this
Guaranty.
6.5.3. Provisions Supplemental. The provisions of this
-----------------------
ss.6.5.3 shall be supplemental to and not in derogation of any rights
and remedies of the Banks, the Issuing Bank and the Agent or any
affiliate of any Banks, the Issuing Bank and the Agent under any
separate subordination agreement which such Bank, the Issuing Bank
and the Agent or such affiliate may at any time and from time to time
enter into with any of the Guarantors.
6.6. Security; Setoff. Each of the Guarantors grants to the Agent,
----------------
the Issuing Bank and the Banks, as security for the full and punctual payment
and performance of all of such Guarantor's obligations hereunder, a continuing
lien on and security interest in all securities or other property belonging to
such Guarantor now or hereafter held by the Agent, the Issuing Bank or such Bank
and in all deposits (general or special, time or demand, provisional or final)
and other sums credited by or due from the Agent, the Issuing Bank or such Bank
to such Guarantor or subject to withdrawal by such Guarantor. Regardless of the
adequacy of any collateral security or other means of obtaining payment of any
of the Obligations, each of the Agent, the Issuing Bank and the Banks is hereby
authorized at any time and from time to time, without notice to any of the
Guarantors (any such notice being expressly waived by each of the Guarantors)
and to the fullest extent permitted by law, to set off and apply such deposits
and other sums against the obligations of such Guarantors under this Guaranty,
whether or not the Agent, the Issuing Bank or such Bank shall have made any
demand under this Guaranty and although such obligations may be contingent or
unmatured.
6.7. Further Assurances. Each of the Guarantors also agrees to do all
------------------
such things and execute all such documents as the Agent may consider necessary
or desirable to give full effect to this Guaranty and to perfect and preserve
the rights and powers of the Banks, the Issuing Bank and the Agent hereunder.
Each of the Guarantors acknowledges and confirms that such Guarantor itself has
established its own adequate means of obtaining from the Borrower on a
continuing basis all information desired by such Guarantor concerning the
financial condition of the Borrower and that such Guarantor will look to the
Borrower and not to the Agent, the Issuing Bank or any Bank in order for such
Guarantor to keep adequately informed of changes in the Borrower's financial
condition.
6.8. Termination; Reinstatement. This Guaranty shall remain in full
--------------------------
force and effect until all Obligations have been irrevocably paid in full in
cash and all Commitments under this Credit Agreement have been terminated. This
Guaranty shall continue to be effective or be reinstated, if at any time any
payment made or value received with respect to any Obligation is rescinded or
must otherwise be returned by the Agent, the Issuing Bank or any Bank upon
-40-
the insolvency, bankruptcy or reorganization of the Borrower, or otherwise, all
as though such payment had not been made or value received.
6.9. Successors and Assigns. This Guaranty shall be binding upon each
----------------------
of the Guarantors, their successors and assigns, and shall inure to the benefit
of and be enforceable by the Agent, the Issuing Bank and the Banks and its
successors, transferees and assigns. Without limiting the generality of the
foregoing sentence, each Bank may assign or otherwise transfer this Credit
Agreement, the Revolving Credit Notes, the other Loan Documents or any other
agreement or note held by it evidencing, securing or otherwise executed in
connection with the Obligations, or sell participations in any interest therein,
to any other entity or other person, and such other entity or other person shall
thereupon become vested, to the extent set forth in the agreement evidencing
such assignment, transfer or participation, with all the rights in respect
thereof granted to such Bank herein, all in accordance with ss.20 hereof. None
of the Guarantors may assign any of its obligations hereunder.
7. REPRESENTATIONS AND WARRANTIES.
------------------------------
The Borrower represents and warrants to the Banks, the Issuing Bank
and the Agent as follows:
7.1. Corporate Authority.
-------------------
7.1.1. Incorporation; Good Standing. Each of the Borrower
----------------------------
and its Restricted Subsidiaries (i) is a corporation or partnership
duly organized, validly existing and in good standing under the laws
of its state of incorporation or organization, (ii) has all requisite
corporate or other power to own its property and conduct its business
as now conducted and as presently contemplated, and (iii) is in good
standing as a foreign corporation or partnership and is duly
authorized to do business in each jurisdiction where such
qualification is necessary except where a failure to be so qualified
would not have a materially adverse effect on the business, assets or
financial condition of the Borrower or such Restricted Subsidiary.
7.1.2. Authorization. The execution, delivery and
-------------
performance of this Credit Agreement and the other Loan Documents to
which the Borrower or any of its Restricted Subsidiaries is or is to
become a party and the transactions contemplated hereby and thereby
(i) are within the corporate or other authority of such Person, (ii)
have been duly authorized by all necessary corporate or other
proceedings, (iii) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to
which the Borrower or any of its Restricted Subsidiaries is subject
or any judgment, order, writ, injunction, license or permit
applicable to the Borrower or any of its Subsidiaries and (iv) do not
conflict with any provision of the corporate charter, bylaws,
certificate of limited partnership or partnership
-41-
agreement of, or any agreement or other instrument binding upon the
Borrower or any of its Restricted Subsidiaries.
7.1.3. Enforceability. The execution and delivery of this
--------------
Credit Agreement and the other Loan Documents to which the Borrower
or any of its Restricted Subsidiaries is or is to become a party will
result in valid and legally binding obligations of such Person
enforceable against it in accordance with the respective terms and
provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors'
rights and except to the extent that availability of the remedy of
specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be
brought.
7.2. Governmental Approvals. The execution, delivery and performance
----------------------
by the Borrower and any of its Restricted Subsidiaries of this Credit Agreement
and the other Loan Documents to which the Borrower or any of its Restricted
Subsidiaries is or is to become a party and the transactions contemplated hereby
and thereby do not require the approval or consent of, or filing with, any
governmental agency or authority (including without limitation, the STB) other
than those already obtained.
7.3. Title to Properties; Leases. Except as indicated on Schedule
---------------------------
7.3 hereto, the Borrower and its Restricted Subsidiaries own all of the assets
reflected in the consolidated balance sheet of the Borrower and its Restricted
Subsidiaries as at the Balance Sheet Date or acquired since that date (except
property and assets sold or otherwise disposed of in the ordinary course of
business since that date), subject to no rights of others, including any
mortgages, leases, conditional sales agreements, title retention agreements,
liens or other encumbrances except Permitted Liens and the rights of lessees and
other parties lawfully in possession in the ordinary course of business.
7.4. Financial Statements and Projections.
------------------------------------
7.4.1. Financial Statements. There has been furnished to
--------------------
each of the Banks a consolidated balance sheet of the Borrower and
its Restricted Subsidiaries as at the Balance Sheet Date, and a
consolidated statement of income of the Borrower and its Restricted
Subsidiaries for the fiscal year then ended, certified by Arthur
Andersen L.L.P. Such balance sheet and statement of income have been
prepared in accordance with generally accepted accounting principles
and fairly present the financial condition of the Borrower as at the
close of business on the date thereof and the results of operations
for the fiscal year then ended. There are no contingent liabilities
of the Borrower or any of its Restricted Subsidiaries as of such date
involving material amounts, to the best of the knowledge of the
officers of the Borrower, which were not disclosed in such balance
sheet and the notes related thereto.
-42-
7.4.2. Projections. The projections of the Borrower and its
-----------
Restricted Subsidiaries including (i) on an annual basis,
consolidated balance sheets, income and cash flow statements for the
period from January 1, 1998 through December 31, 2002 and (ii)
quarterly calculations of the covenants contained in ss.10 hereof for
the 1998 through 2002 fiscal years, copies of which have been
delivered to each Bank, disclose all assumptions made with respect to
general economic, financial and market conditions used in formulating
such projections. To the best knowledge of the Borrower or any of its
Restricted Subsidiaries, no facts exist that (individually or in the
aggregate) would result in any material change in any of such
projections. The projections are based upon reasonable estimates and
assumptions, have been prepared on the basis of the assumptions
stated therein and reflect the reasonable estimates of the Borrower
and its Restricted Subsidiaries of the results of operations and
other information projected therein.
7.5. No Material Changes, etc.; Solvency.
-----------------------------------
7.5.1. Changes. Since the Balance Sheet Date there has
-------
occurred no materially adverse change in the financial condition or
business of the Borrower and its Restricted Subsidiaries as shown on
or reflected in the consolidated balance sheet of the Borrower and
its Restricted Subsidiaries as at the Balance Sheet Date, or the
consolidated statement of income for the fiscal year then ended,
other than changes in the ordinary course of business that have not
had any materially adverse effect on the business or financial
condition of the Borrower and its Restricted Subsidiaries. Since the
Balance Sheet Date, the Borrower has not made any Restricted Payment
in excess of the amount permitted by ss.9.4 hereof.
7.5.2. Solvency. Both before and after giving effect to the
--------
transactions contemplated by this Credit Agreement and the other Loan
Documents, the Borrower and its Restricted Subsidiaries, on a
consolidated basis, are Solvent. As used herein, "Solvent" shall mean
that the Borrower and its Restricted Subsidiaries (i) have assets
having a fair value in excess of their liabilities, (ii) have assets
having a fair value in excess of the amount required to pay their
liabilities on existing debts as such debts become absolute and
matured, and (iii) have, and expect to continue to have, access to
adequate capital for the conduct of their business and the ability to
pay their debts from time to time incurred in connection with the
operation of their business as such debts mature.
7.6. Franchises, Patents, Copyrights, etc. Each of the Borrower and
-------------------------------------
its Restricted Subsidiaries possesses all franchises, patents, copyrights,
trademarks, trade names, licenses and permits, and rights in respect of the
foregoing, adequate for the conduct of its business substantially as now
conducted without, to the best of their knowledge, conflict with any rights of
others.
-43-
7.7. Litigation. Except as set forth in Schedule 7.7 hereto, there
----------
are no actions, suits, proceedings or investigations of any kind pending or
threatened against the Borrower or any of its Restricted Subsidiaries before any
court, tribunal or administrative agency or board that, if adversely determined,
would materially adversely affect the properties, assets, financial condition or
business of the Borrower and its Restricted Subsidiaries taken as a whole or
materially impair the right of the Borrower and its Restricted Subsidiaries,
considered as a whole, to carry on business substantially as now conducted by
them, or result in any substantial liability not adequately covered by
insurance, or for which adequate reserves are not maintained on the consolidated
balance sheet of the Borrower and its Restricted Subsidiaries, or which question
the validity of this Credit Agreement or any of the other Loan Documents, or any
action taken or to be taken pursuant hereto or thereto.
7.8. No Materially Adverse Contracts, etc. Neither the Borrower nor
-------------------------------------
any of its Restricted Subsidiaries is subject to any charter, corporate or other
legal restriction, or any judgment, decree, order, rule or regulation that has
or is expected in the future to have a materially adverse effect on the
business, assets or financial condition of the Borrower or any of its Restricted
Subsidiaries. Neither the Borrower nor any of its Restricted Subsidiaries is a
party to any contract or agreement that has or is expected, in the judgment of
the Borrower's officers, to have any materially adverse effect on the business
of the Borrower or any of its Restricted Subsidiaries.
7.9. Compliance with Other Instruments, Laws, etc. Neither the
---------------------------------------------
Borrower nor any of its Restricted Subsidiaries is in violation of any provision
of its charter documents, bylaws, or any agreement or instrument to which it may
be subject or by which it or any of its properties may be bound or any decree,
order, judgment, statute, license, rule or regulation, in any of the foregoing
cases in a manner that could result in the imposition of substantial penalties
or materially and adversely affect the financial condition, properties or
business of the Borrower or any of its Restricted Subsidiaries.
7.10. Tax Status. The Borrower and its Restricted Subsidiaries (i)
----------
have made, filed or duly extended all federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to which any of
them is subject, (ii) have paid all taxes and other governmental assessments and
charges shown or determined to be due on such returns, reports and declarations
and all estimated taxes in connection with any extensions, except those being
contested in good faith and by appropriate proceedings and (iii) have set aside
on their books provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the Borrower know of
no basis for any such claim.
7.11. No Event of Default. No Default or Event of Default has
-------------------
occurred and is continuing.
-44-
7.12. Holding Company and Investment Company Acts. Neither the
-------------------------------------------
Borrower nor any of its Restricted Subsidiaries is a "holding company", or a
"subsidiary company" of a "holding company", or an affiliate" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
1935; nor is it an "investment company", or an "affiliated company" or a
"principal underwriter" of an "investment company", as such terms are defined in
the Investment Company Act of 1940.
7.13. Absence of Financing Statements, etc. Except with respect to
-------------------------------------
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Borrower or any of its Restricted Subsidiaries
or any rights relating thereto.
7.14. Certain Transactions. Except for arm's length transactions
--------------------
pursuant to which the Borrower or any of its Restricted Subsidiaries makes
payments in the ordinary course of business upon terms no less favorable than
the Borrower or such Restricted Subsidiary could obtain from third parties, none
of the officers, directors, or employees of the Borrower or any of its
Restricted Subsidiaries or other non-Restricted Subsidiary Affiliates is
presently a party to any transaction with the Borrower or any of its Restricted
Subsidiaries (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the best knowledge of the Borrower, any
corporation, partnership, trust or other entity in which any officer, director,
other non-Restricted Subsidiary Affiliates or any such employee has a
substantial interest or is an officer, director, trustee or partner.
7.15. Employee Benefit Plans.
----------------------
7.15.1. In General. Each Employee Benefit Plan has been
----------
maintained and operated in compliance in all material respects with
the provisions of ERISA and, to the extent applicable, the Code,
including but not limited to the provisions thereunder respecting
prohibited transactions. The Borrower has heretofore delivered to the
Agent the most recently completed annual report, Form 5500, with all
required attachments, and actuarial statement required to be
submitted under ss.103(d) of ERISA, with respect to each Guaranteed
Pension Plan.
7.15.2. Terminability of Welfare Plans. Under each Employee
------------------------------
Benefit Plan which is an employee welfare benefit plan within the
meaning of ss.3(1) or ss.3(2)(B) of ERISA, no benefits are due unless
the event giving rise to the benefit entitlement occurs prior to plan
termination (except as required by Title I, Part 6 of ERISA). Any of
the
-45-
Borrower or an ERISA Affiliate, as appropriate, may terminate each
such Plan at any time (or at any time subsequent to the expiration of
any applicable bargaining agreement) in the discretion of the
Borrower or such ERISA Affiliate without liability to any Person.
7.15.3. Guaranteed Pension Plans. Each contribution
------------------------
required to be made to a Guaranteed Pension Plan, whether required to
be made to avoid the incurrence of an accumulated funding deficiency,
the notice or lien provisions of ss.302(f) of ERISA, or otherwise,
has been timely made. No waiver of an accumulated funding deficiency
or extension of amortization periods has been received with respect
to any Guaranteed Pension Plan. No liability to the PBGC (other than
required insurance premiums, all of which have been paid) has been
incurred by any of the Borrowers or any ERISA Affiliate with respect
to any Guaranteed Pension Plan and there has not been any ERISA
Reportable Event, or any other event or condition which presents a
material risk of termination of any Guaranteed Pension Plan by the
PBGC. Based on the latest valuation of each Guaranteed Pension Plan
(which in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions
employed for that valuation, the aggregate benefit liabilities of all
such Guaranteed Pension Plans within the meaning of ss.4001 of ERISA
did not exceed the aggregate value of the assets of all such
Guaranteed Pension Plans, disregarding for this purpose the benefit
liabilities and assets of any Guaranteed Pension Plan with assets in
excess of benefit liabilities, by more than $200,000.
7.15.4. Multiemployer Plans. Neither the Borrower nor any
-------------------
ERISA Affiliate has incurred any material liability (including
secondary liability) to any Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan under
ss.4201 of ERISA or as a result of a sale of assets described in
ss.4204 of ERISA. Neither the Borrower nor any ERISA Affiliate has
been notified that any Multiemployer Plan is in reorganization or
insolvent under and within the meaning of ss.4241 or ss.4245 of ERISA
or that any Multiemployer Plan intends to terminate or has been
terminated under ss.4041A of ERISA.
7.16. Use of Proceeds; Regulations U and X. The proceeds of the Loans
------------------------------------
shall be used by the Borrower solely to restate and refinance the Loans under
the Prior Credit Agreement, for Permitted Acquisitions and for working capital
and general corporate purposes. The Borrower will obtain Letters of Credit
solely for Permitted Acquisitions and for working capital and general corporate
purposes. No portion of any Loan is to be used, and no portion of any Letter of
Credit is to be obtained, for the purpose of purchasing or carrying any "margin
security" or "margin stock" as such terms are used in Regulations U and X of the
Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
-46-
7.17. Environmental Compliance. The Borrower has taken all reasonable
------------------------
steps to investigate the past and present condition and usage of the Real Estate
and the operations conducted thereon and, based upon such reasonable
investigation, has determined that:
(a) to the best of the Borrower's knowledge and except as
set forth on Schedule 7.17 attached hereto, none of the Borrower, its
-------- ----
Restricted Subsidiaries nor any operator of the Real Estate or any
operations thereon is in violation, or alleged violation, of any
judgment, decree, order, law, license, rule or regulation pertaining
to environmental matters, including without limitation, those arising
under the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("SARA"), the Federal Clean Water Act,
the Federal Clean Air Act, the Toxic Substances Control Act, or any
state or local statute, regulation, ordinance, order or decree
relating to health, safety or the environment (hereinafter
"Environmental Laws"), which violation could have a material adverse
effect on the environment or the business, assets or financial
condition of the Borrower or any of its Restricted Subsidiaries;
(b) except as set forth in Schedule 7.17 attached hereto,
-------- ----
neither the Borrower nor any of its Restricted Subsidiaries has
received notice from any third party including, without limitation,
any federal, state or local governmental authority, (i) that any one
of them has been identified by the United States Environmental
Protection Agency ("EPA") as a potentially responsible party under
CERCLA with respect to a site listed on the National Priorities List,
40 C.F.R. Part 300 Appendix B; (ii) that any hazardous waste, as
defined by 42 U.S.C. ss.6903(5), any hazardous substances as defined
by 42 U.S.C. ss.9601(14), any pollutant or contaminant as defined by
42 U.S.C. ss.9601(33) and any toxic substances, oil or hazardous
materials or other chemicals or substances regulated by any
Environmental Laws ("Hazardous Substances") which any one of them has
generated, transported or disposed of has been found at any site at
which a federal, state or local agency or other third party has
conducted or has ordered that the Borrower or any of its Restricted
Subsidiaries conduct a remedial investigation, removal or other
response action pursuant to any Environmental Law; or (iii) that it
is or shall be a named party to any claim, action, cause of action,
complaint, or legal or administrative proceeding (in each case,
contingent or otherwise) arising out of any third party's incurrence
of costs, expenses, losses or damages of any kind whatsoever in
connection with the release of Hazardous Substances;
(c) except as set forth on Schedule 7.17 attached hereto:
(i) to the best of the Borrower's knowledge, no portion of the Real
Estate has been used for the handling, processing, storage or
disposal of Hazardous
-47-
Substances which would have a material adverse effect on the value of
the Real Estate which in turn would have a material adverse effect on
the business, assets or financial condition of the Borrower or any of
its Restricted Subsidiaries except in accordance with applicable
Environmental Laws; and no underground tank or other underground
storage receptacle for Hazardous Substances which would have a
material adverse effect on the value of the Real Estate which in turn
would have a material adverse effect on the business, assets or
financial condition of the Borrower or any of its Restricted
Subsidiaries is located on any portion of the Real Estate except in
accordance with applicable Environmental Laws; (ii) in the course of
any activities conducted by the Borrower, its Restricted Subsidiaries
or operators of its properties, no Hazardous Substances have been
generated or are being used on the Real Estate except in accordance
with applicable Environmental Laws; (iii) to the best of the
Borrower's knowledge, there have been no releases (i.e. any past or
present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping) or
threatened releases of Hazardous Substances on, upon, into or from
the properties of the Borrower or its Restricted Subsidiaries, which
releases would have a material adverse effect on the value of any of
the Real Estate or adjacent properties or the environment; (iv) to
the best of the Borrower's knowledge, there have been no releases on,
upon, from or into any real property in the vicinity of any of the
Real Estate which, through soil or groundwater contamination, may
have come to be located on, and which would have a material adverse
effect on the value of, the Real Estate; and (v) in addition, to the
best of the Borrower's knowledge, any Hazardous Substances that have
been generated on any of the Real Estate after the effective date of
RCRA and applicable regulations have been transported offsite only by
carriers having an identification number issued by the EPA, treated
or disposed of only by treatment or disposal facilities maintaining
valid permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the
Borrower's knowledge, operating in compliance with such permits and
applicable Environmental Laws; and
(d) except as listed on Schedule 7.17 hereto, none of the
-------- ----
Borrower and its Restricted Subsidiaries, nor any of the Real Estate
is subject to any applicable environmental law requiring the
performance of Hazardous Substances site assessments, or the removal
or remediation of Hazardous Substances, or the giving of notice to
any governmental agency or the recording or delivery to other Persons
of an environmental disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby, or as a
condition to the effectiveness of any other transactions contemplated
hereby.
7.18. Subsidiaries, etc. The Borrower's only Subsidiaries are as set
------------------
forth on Schedule 7.18 hereof and the Borrower holds the ownership interests in
-------- ----
each Subsidiary described on Schedule 7.18. None of the Subsidiaries of the
-------- ----
-48-
Borrower has any other Subsidiaries except as set forth on Schedule 7.18 hereto.
Neither the Borrower nor any of its Restricted Subsidiaries is engaged in any
joint venture or partnership with any other Person, except that Dayton is the
sole general partner and Investors is the sole limited partner in Switching.
7.19. Capitalization. The Borrower is the record and beneficial
--------------
owner, free and clear of all liens of all of the issued and outstanding capital
stock of each of the Restricted Subsidiaries (excluding Switching) except that
the Borrower owns only 454 shares of the 458 shares of the issued and
outstanding capital stock of Dansville. All shares of such capital stock have
been validly issued, are outstanding, fully paid and nonassessable and no
options, warrants or other rights to subscribe to additional shares of the
capital stock of each of the Restricted Subsidiaries (excluding Switching) have
been granted or exist. Dayton and Investors are the record and beneficial
owners, free and clear of all liens of all of the partnership interests of
Switching.
7.20. Fiscal Year. Each of the Borrower and its Restricted
------------
Subsidiaries has a fiscal year which is twelve calendar months ending on
December 31 of each year.
7.21. Operation of Railroads. The Borrower is primarily engaged in
----------------------
the business of providing management and administrative services to rail
carriers and other entities in the transportation business, and holding stock of
its Subsidiaries. The Borrower's Restricted Subsidiaries (other than Leasing,
RSI, Dayton, Management, Investors and GWI Canada) are primarily engaged in the
railroad business in the states set forth below their respective names on
Schedule 7.21 attached hereto. RSI and Management provide management and support
- -------- ----
functions for certain of the other Restricted Subsidiaries. Dayton and Investors
are holding companies engaged solely in the business of holding the partnership
interests of Switching. GWI Canada is a holding company engaged solely in the
business of holding the stock of GRO. Leasing is primarily engaged in the
business of acquiring, rebuilding, leasing and selling locomotives and rolling
stock, and in other activities related to rail transportation. Each of the
Restricted Subsidiaries (other than Leasing, RSI, Dayton, Management, Investors
and GWI Canada) operates railroads in accordance with applicable laws.
7.22. Disclosure. No representation or warranty made by the Borrower
----------
or any Restricted Subsidiary in any Loan Document to which it is a party and no
document or information furnished to the Agent or the Banks by or on behalf of
or at the request of the Borrower or any Restricted Subsidiary in connection
with any of the transactions contemplated by the Loan Documents contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements contained therein not misleading in
light of the circumstances in which they are made.
-49-
8. AFFIRMATIVE COVENANTS OF THE BORROWER.
-------------------------------------
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Revolving Credit Note is
outstanding or any Bank has any obligation to make any Loans or the Issuing Bank
has any obligation to issue, extend or renew any Letters of Credit:
8.1. Punctual Payment. The Borrower will duly and punctually pay or
----------------
cause to be paid the principal and interest on the Loans, all Reimbursement
Obligations, the Letter of Credit Fees, the commitment fees, the Agent's Fees
and all other amounts provided for in this Credit Agreement and the other Loan
Documents to which the Borrower or any of its Restricted Subsidiaries is a
party, all in accordance with the terms of this Credit Agreement and such other
Loan Documents.
8.2. Maintenance of Office. The Borrower will maintain its chief
---------------------
executive office at 71 Lewis Street, Greenwich, CT, or at such other place in
the United States of America as the Borrower shall designate, upon thirty (30)
days prior written notice to the Agent, where notices, presentations and demands
to or upon the Borrower in respect of the Loan Documents to which the Borrower
is a party may be given or made.
8.3. Records and Accounts. The Borrower will (i) keep, and cause each
--------------------
of its Restricted Subsidiaries to keep, true and accurate records and books of
account in which full, true and correct entries will be made in accordance with
generally accepted accounting principles and (ii) maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation, depletion,
obsolescence and amortization of its properties and the properties of its
Restricted Subsidiaries, contingencies, and other reserves.
8.4. Financial Statements, Certificates and Information. The Borrower
--------------------------------------------------
will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of the Borrower,
the consolidated balance sheet of the Borrower and its Restricted
Subsidiaries, as at the end of such year, and the related
consolidated statement of income and consolidated statement of cash
flow, each setting forth in comparative form the figures for the
previous fiscal year, and the partial consolidating (in accordance
with past practices) balance sheet of the Borrower and its Restricted
Subsidiaries, as at the end of such year, and the consolidating
statement of income and consolidating statement of cash flow for such
year, and all such consolidated and consolidating statements to be in
reasonable detail and prepared in accordance with generally accepted
accounting principles, and all such consolidated statements to be
certified without qualification by Arthur Andersen L.L.P. or by other
independent certified public accountants satisfactory to the Agent,
together with a written statement from such accountants to
-50-
the effect that they have read a copy of this Credit Agreement, and
that, in making the examination necessary to said certification, they
have obtained no knowledge of any Default or Event of Default, or, if
such accountants shall have obtained knowledge of any then existing
Default or Event of Default they shall disclose in such statement any
such Default or Event of Default; provided that such accountants
shall not be liable to the Banks for failure to obtain knowledge of
any Default or Event of Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the first three fiscal
quarters of the Borrower and not later than sixty (60) days after the
end of the fourth fiscal quarter of the Borrower, copies of the
unaudited consolidated balance sheet of the Borrower and its
Restricted Subsidiaries as at the end of such quarter, and the
related consolidated statement of income and consolidated statement
of cash flow for the portion of the Borrower's fiscal year then
elapsed, all in reasonable detail and prepared in accordance with
generally accepted accounting principles, together with a
certification by the principal financial or accounting officer of the
Borrower that the information contained in such financial statements
fairly presents the financial position of the Borrower and its
Restricted Subsidiaries on the date thereof (subject to year-end
adjustments);
(c) simultaneously with the delivery of the financial
statements referred to in subsection (a) above and the delivery of
the financial statements referred to in subsection (b) above with
respect to the first three fiscal quarters of the Borrower, a
statement certified by the principal financial or accounting officer
of the Borrower in substantially the form of Exhibit C hereto (a
"Compliance Certificate") and setting forth in reasonable detail
computations evidencing compliance with ss.3.2.2 and the covenants
contained in ss.10 and, in each case, (if applicable) reconciliations
to reflect changes in generally accepted accounting principles since
the Balance Sheet Date;
(d) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed with the
Securities and Exchange Commission or sent to the stockholders of the
Borrower;
(e) no later than January 31 of each fiscal year of the
Borrower, the annual budgets of the Borrower and its Restricted
Subsidiaries, including a projected consolidated and consolidating
balance sheet for the end of such fiscal year, and consolidated and
consolidating statements of income and statements of cash flow for
such fiscal year; and
(f) from time to time such other financial data and
information (including accountants' management letters) as the Agent
or any Bank may reasonably request.
-51-
8.5. Notices.
-------
8.5.1. Defaults. The Borrower will promptly notify the
--------
Agent and each of the Banks in writing of the occurrence of any
Default or Event of Default of which they become aware. If any Person
shall give any notice or take any other action in respect of a
claimed default (whether or not constituting an Event of Default)
under this Credit Agreement or any other note, evidence of
indebtedness, indenture or other obligation to which or with respect
to which the Borrower or any of its Restricted Subsidiaries is a
party or obligor, whether as principal, guarantor, surety or
otherwise, the Borrower shall forthwith give written notice thereof
to the Agent and each of the Banks, describing the notice or action
and the nature of the claimed default.
8.5.2. Environmental Events. The Borrower will within three
--------------------
(3) days of becoming aware thereof, give notice to the Agent and each
of the Banks (i) of any violation of any Environmental Law that the
Borrower or any of its Restricted Subsidiaries reports in writing or
is reportable by such Person in writing (or for which any written
report supplemental to any oral report is made) to any federal, state
or local environmental agency and (ii) upon becoming aware thereof,
of any inquiry, proceeding, investigation, or other action, including
a notice from any agency of potential environmental liability, of any
federal, state or local environmental agency or board, that has the
potential to materially affect the assets, liabilities, financial
conditions or operations of the Borrower or any of its Restricted
Subsidiaries.
8.5.3. Notice of Litigation and Judgments. The Borrower
----------------------------------
will, and will cause each of its Restricted Subsidiaries to, give
notice to the Agent and each of the Banks in writing within fifteen
(15) days of becoming aware of any litigation or proceedings
threatened in writing or any pending litigation and proceedings
affecting the Borrower or any of its Restricted Subsidiaries or to
which the Borrower or any of its Restricted Subsidiaries is or
becomes a party involving an uninsured claim against the Borrower or
any of its Restricted Subsidiaries that could reasonably be expected
to have a materially adverse effect on the Borrower and its
Restricted Subsidiaries taken as a whole and stating the nature and
status of such litigation or proceedings. The Borrower will, and will
cause each of its Restricted Subsidiaries to, give notice to the
Agent and each of the Banks, in writing, in form and detail
satisfactory to the Agent, within ten (10) days of any judgment not
covered by insurance, final or otherwise, against the Borrower or any
of its Restricted Subsidiaries in an amount in excess of $500,000.
8.5.4. Notification of Derailments. The Borrower will, and
---------------------------
will cause each of its Restricted Subsidiaries to, give notice to the
Agent and each of the Banks in writing within three (3) days of
becoming aware thereof of any derailments or other types of accidents
which result (or
-52-
could result) in the incurrence of costs by the Borrower and its
Restricted Subsidiaries reasonably estimated to be or exceed
$1,000,000 and which could reasonably be expected to have a material
adverse effect on the operations of the Borrower or any of its
Restricted Subsidiaries. The Borrower shall deliver to the Agent and
each of the Banks all reports filed with the FRA regarding any
occurrence referred to in this ss.8.5.4.
8.6. Corporate Existence; Maintenance of Properties. The Borrower
----------------------------------------------
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence, rights and franchises and those of its
Restricted Subsidiaries and will not, and will not cause or permit any of its
Restricted Subsidiaries to, convert to a limited liability company or a limited
liability partnership. It (i) will cause all of its properties and those of its
Restricted Subsidiaries used or useful in the conduct of its business or the
business of its Restricted Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment,
(ii) will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Borrower may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (iii) will, and will
cause each of its Restricted Subsidiaries to, continue to engage primarily in
the businesses now conducted by them and in related businesses; provided that
nothing in this ss.8.6 shall prevent the Borrower from discontinuing or reducing
the level of the operation or maintenance of any of its properties or any of
those of its Restricted Subsidiaries if such discontinuance is, in the
reasonable judgment of the Borrower, desirable in the conduct of its or their
business and that do not in the aggregate materially adversely affect the
business of the Borrower and its Restricted Subsidiaries on a consolidated
basis. Specifically, but not in limitation of the foregoing, the Borrower and
each Restricted Subsidiary will maintain such an appropriate FRA Class rating on
its railroad lines as is reasonable and prudent in light of all the relevant
facts and circumstances.
8.7. Insurance. The Borrower will, and will cause each of its
---------
Restricted Subsidiaries to, maintain with financially sound and reputable
insurers insurance with respect to their properties and business against such
casualties and contingencies as shall be in accordance with the general
practices of businesses engaged in similar activities in similar geographic
areas and in amounts, containing such terms, in such forms and for such periods
as described on Schedule 8.7 hereto and as may be reasonable and prudent.
------------
8.8. Taxes. The Borrower will, and will cause each of its Restricted
-----
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; provided that any such tax,
--------
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assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if the Borrower or such Restricted Subsidiary shall have set aside on its
books adequate reserves with respect thereto; and provided further that the
Borrower and each Restricted Subsidiary of the Borrower will pay all such taxes,
assessments, charges, levies or claims forthwith upon the commencement of
proceedings to foreclose any lien that may have attached as security therefor.
8.9. Inspection of Properties and Books, etc.
---------------------------------------
8.9.1. General. The Borrower shall permit the Banks,
-------
through the Agent or any of the Banks' other designated
representatives, to visit and inspect any of the properties of the
Borrower or any of its Restricted Subsidiaries, to examine the books
of account of the Borrower and its Restricted Subsidiaries (and to
make copies thereof and extracts therefrom), and to discuss the
affairs, finances and accounts of the Borrower and its Restricted
Subsidiaries with, and to be advised as to the same by, its and their
officers, all at such reasonable times and intervals as the Agent or
any Bank may reasonably request.
8.9.2. Communications with Accountants. The Borrower
-------------------------------
authorizes the Agent and, if accompanied by the Agent, the Banks to
communicate directly with the Borrower's independent certified public
accountants and authorizes such accountants to disclose to the Agent
and the Banks any and all financial statements and other supporting
financial documents and schedules including copies of any management
letter with respect to the business, financial condition and other
affairs of the Borrower or any of its Restricted Subsidiaries. At the
request of the Agent, the Borrower shall deliver a letter addressed
to such accountants instructing them to comply with the provisions of
this ss.8.9.2.
8.10. Compliance with Laws, Contracts, Licenses, and Permits. The
------------------------------------------------------
Borrower will, and will cause each of its Restricted Subsidiaries to, comply
with (i) the applicable laws and regulations wherever its business is conducted,
including all Environmental Laws, (ii) the provisions of its charter documents
and by-laws, (iii) all material agreements and instruments by which it or any of
its properties may be bound and (iv) all applicable decrees, orders, and
judgments. If any authorization, consent, approval, permit or license from any
officer, agency or instrumentality of any government shall become necessary or
required in order that the Borrower or any of its Restricted Subsidiaries may
fulfill any of its obligations hereunder or any of the other Loan Documents to
which the Borrower or such Restricted Subsidiary is a party, the Borrower will,
or (as the case may be) will cause such Restricted Subsidiary to, immediately
take or cause to be taken all reasonable steps within the power of the Borrower
or such Restricted Subsidiary to obtain such authorization, consent, approval,
permit or license and furnish the Agent and the Banks with evidence thereof.
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8.11. Employee Benefit Plans. The Borrower will (i) within three (3)
----------------------
days of receipt of a written request by the Agent, furnish to the Agent a copy
of the most recent actuarial statement required to be submitted under ss.103(d)
of ERISA and Annual Report, Form 5500, with all required attachments, in respect
of each Guaranteed Pension Plan and (ii) within three (3) days of receipt or
dispatch, furnish to the Agent any notice, report or demand sent or received in
respect of a Guaranteed Pension Plan under ss.ss.302, 4041, 4042, 4043, 4063,
4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan, under
ss.ss.4041A, 4202, 4219, 4242, or 4245 of ERISA.
8.12. Use of Proceeds. The Borrower will use the proceeds of the
---------------
Loans and will obtain Letters of Credit solely for the purposes set forth in
ss.7.16 hereof.
8.13. Further Assurances. The Borrower will, and will cause each of
------------------
its Restricted Subsidiaries to, cooperate with the Banks and the Agent and
execute such further instruments and documents as the Banks or the Agent shall
reasonably request to carry out to their satisfaction the transactions
contemplated by this Credit Agreement and the other Loan Documents. At the
request of the Agent, the Borrower shall deliver to the Agent and the Banks a
legal opinion in form and substance satisfactory to the Agent opining as to the
authorization, validity and enforceability of the Guaranty with respect to
Switching.
8.14. Additional Restricted Subsidiaries. The Borrower shall cause
----------------------------------
each Restricted Subsidiary created or acquired after the Closing Date to execute
and deliver to the Agent for the benefit of the Banks, the Issuing Bank and the
Agent, an Instrument of Adherence (Guaranty), in substantially the form of
Exhibit D hereto (an "Instrument of Adherence (Guaranty)"), whereby such
- ------- -
Subsidiary becomes a party to the Guaranty, together with legal opinions in form
and substance satisfactory to the Agent to be delivered to the Agent and the
Banks opining as to the authorization, validity and enforceability of such
Guaranty, and as to such other matters as the Agent may request. In addition,
the Borrower shall immediately upon the acquisition or creation of any new
Subsidiary, notify the Banks thereof and provide the Agent and the Banks with an
updated Schedule 7.19 hereto to reflect the formation or acquisition of each new
Subsidiary. Notwithstanding the other provisions of this ss.8.14, any Restricted
Subsidiary in which the Borrower or any of its Restricted Subsidiaries have
collectively invested less than $100,000 shall not be required to become a party
to the Guaranty. In the event that Kittanning's assets ever have a fair market
value in excess of $100,000, Kittanning shall become a Restricted Subsidiary
hereunder, the Borrower shall cause Kittanning to become a Guarantor hereunder
and shall cause Kittanning to comply with the provisions of this ss.8.14.
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
-------------------------------------------
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Revolving Credit Note is
-55-
outstanding or any Bank has any obligation to make any Loans or the Issuing Bank
has any obligations to issue, extend or renew any Letters of Credit:
9.1. Restrictions on Indebtedness. The Borrower will not, and will
----------------------------
not permit any of its Restricted Subsidiaries to, create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:
(a) Indebtedness to the Banks, the Issuing Bank and the
Agent arising under any of the Loan Documents;
(b) current liabilities of the Borrower or such Restricted
Subsidiary incurred in the ordinary course of business not incurred
through (i) the borrowing of money, or (ii) the obtaining of credit
except for credit on an open account basis customarily extended and
in fact extended in connection with normal purchases of goods and
services;
(c) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials and
supplies to the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of ss.8.8;
(d) Indebtedness in respect of judgments or awards that
have been in force for less than the applicable period for taking an
appeal so long as execution is not levied thereunder or in respect of
which the Borrower or such Restricted Subsidiary shall at the time in
good faith be prosecuting an appeal or proceedings for review and in
respect of which a stay of execution shall have been obtained pending
such appeal or review;
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
(f) Indebtedness in respect of the CSX Remaining Debt,
provided that the aggregate principal amount of such Indebtedness
shall not exceed $8,922,105;
(g) Indebtedness of the Borrower or any of its Restricted
Subsidiaries to the Borrower or any of the other Restricted
Subsidiaries consisting of rights of reimbursement, contribution,
subrogation and the like in connection with the joint and several
obligations of the Restricted Subsidiaries under the Loan Documents;
(h) Indebtedness incurred or assumed in connection with the
acquisition after the date hereof of any real or personal property by
the Borrower or such Restricted Subsidiary (including Indebtedness in
respect of Capitalized Leases), provided that the aggregate principal
--------
amount of such Indebtedness of the Borrower and its Restricted
-56-
Subsidiaries shall not exceed the aggregate amount of $15,000,000 at
any one time;
(i) Indebtedness existing on the date hereof and listed and
described on Schedule 9.1 hereto;
(j) Indebtedness of the Borrower to any of the Guarantors
or any of the Guarantors to the Borrower or any of the other
Guarantors;
(k) Indebtedness of the Borrower to any of the Banks with
respect to interest rate protection arrangements;
(l) Indebtedness in respect of performance, surety,
statutory, insurance, appeal or similar bonds obtained in the
ordinary course of business;
(m) Indebtedness of the Borrower and its Restricted
Subsidiaries in respect of operating leases;
(n) Indebtedness in respect of the Bridge Rehabilitation
Project, provided that the aggregate principal amount of such
Indebtedness shall not exceed $900,000;
(o) Indebtedness under the Willamette Valley Note not to
exceed $400,000 in principal amount outstanding at any time;
(p) Indebtedness of the Borrower, IMR and WPR in respect of
their guaranty of the obligations outstanding on or before September
30, 1998 of Leasing under the Apus Railcar Lease;
(q) Indebtedness of the Borrower or any of its Restricted
Subsidiaries in respect of guaranties of obligations in connection
with Permitted Acquisitions and other Investments permitted by
ss.9.3(i), (j) and (m) or the operation of any of its Restricted
Subsidiaries (in each case, to the extent the underlying Indebtedness
with respect thereto is otherwise permitted under this ss.9.1), not
to exceed $10,000,000 in aggregate amount at any time; and
(r) other Indebtedness not included in the foregoing
provisions of this ss.9.1 not to exceed $1,000,000 in the aggregate
at any time outstanding.
9.2. Restrictions on Liens. The Borrower will not, and will not
---------------------
permit any of its Restricted Subsidiaries to, (i) create or incur or suffer to
be created or incurred or to exist any lien, encumbrance, mortgage, pledge,
charge, restriction or other security interest of any kind upon any of their
property or assets of any character whether now owned or hereafter acquired, or
upon the income or profits therefrom; (ii) transfer any of such property or
assets or the income or
-57-
profits therefrom for the purpose of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to payment of
its general creditors; (iii) acquire, or agree or have an option to acquire, any
property or assets upon conditional sale or other title retention or purchase
money security agreement, device or arrangement; (iv) suffer to exist for a
period of more than thirty (30) days after the same shall have been incurred any
Indebtedness or claim or demand against it that if unpaid might by law or upon
bankruptcy or insolvency, or otherwise, be given any priority whatsoever over
its general creditors; or (v) sell, assign, pledge or otherwise transfer any
accounts, contract rights, general intangibles, chattel paper or instruments,
with or without recourse; provided that the Borrower and any Restricted
Subsidiary may create or incur or suffer to be created or incurred or to exist:
(a) liens in favor of the Borrower on all or part of the
assets of Subsidiaries of the Borrower securing Indebtedness owing by
Subsidiaries of the Borrower to the Borrower;
(b) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties
to secure claims for labor, material or supplies in respect of
obligations not overdue;
(c) deposits or pledges made in connection with, or to
secure payment of, workmen's compensation, unemployment insurance,
old age pensions or other social security obligations;
(d) liens on properties in respect of judgments or awards,
the Indebtedness with respect to which is permitted by ss.9.1(d);
(e) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties, in existence less
than 120 days from the date of creation thereof in respect of
obligations not overdue;
(f) encumbrances on Real Estate consisting of easements,
rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which the Borrower or
any of its Restricted Subsidiaries is a party, and other minor liens
or encumbrances none of which in the opinion of the Borrower
interferes materially with the use of the property affected in the
ordinary conduct of the business of the Borrower and its Restricted
Subsidiaries, which defects do not individually or in the aggregate
have a materially adverse effect on the business of the Borrower
individually or of the Borrower and its Restricted Subsidiaries on a
consolidated basis;
(g) liens existing on the date hereof and listed on
Schedule 9.2 hereto;
-58-
(h) purchase money security interests in or purchase money
mortgages on real or personal property acquired after the date hereof
to secure purchase money Indebtedness of the type and amount
permitted by ss.9.1(h), incurred or assumed in connection with the
acquisition of such property, which security interests or mortgages
cover only the real or personal property so acquired;
(i) the CSX Mortgages and the CSX Security Agreements
solely to the extent that the CSX Remaining Debt is permitted under
ss.9.1(f);
(j) liens consisting of deposits to secure Indebtedness
permitted by ss.9.1(l) hereof;
(k) liens to secure Indebtedness permitted by ss.9.1(n)
hereof;
(l) liens on the rights of WPR under Section 14.05 of its
lease with Southern Pacific Transportation Company dated as of
12/30/92 to secure Indebtedness permitted by ss.9.1(o) hereof; and
(m) (i) liens on the equipment, fixtures and improvements
of the Borrower and its Restricted Subsidiaries placed in or upon the
premises leased pursuant to the Corpus Christi Lease, provided that
the Borrower or any Restricted Subsidiary shall not make expenditures
with respect to such equipment, fixtures and improvements with
respect to such premises in excess of $300,000 and (ii) liens of the
Port of Corpus Christi Authority of Nueces County, Texas on the two
locomotives owned by Rail Link, Inc. and numbered as RLIX 547 and
RLIX 475.
9.3. Restrictions on Investments. The Borrower will not, and will not
---------------------------
permit any of its Restricted Subsidiaries to, make or permit to exist or to
remain outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the
United States of America that mature within one (1) year from the
date of purchase by a Borrower;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total
assets in excess of $1,000,000,000;
(c) securities commonly known as "commercial paper" issued
by a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase
have been rated and the ratings for which are not less than "P 1" if
rated by Moody's Investors Services, Inc., and not less than "A 1" if
rated by Standard and Poor's;
-59-
(d) Investments existing on the date hereof and listed on
Schedule 9.3 hereto;
-------- ---
(e) Investments with respect to Indebtedness permitted by
ss.9.1(j) so long as such entities remain Restricted Subsidiaries of
the Borrower;
(f) Investments by the Borrower in any of the Guarantors;
(g) Investments consisting of loans and advances to
employees for moving, entertainment, travel and other similar
expenses in the ordinary course of business not to exceed $250,000 in
the aggregate at any time outstanding;
(h) Investments by the Borrower or any of its Restricted
Subsidiaries in the Borrower or any of the other Restricted
Subsidiaries consisting of rights of reimbursement, contribution,
subrogation and the like in connection with the joint and several
obligations of the Restricted Subsidiaries under the Loan Documents;
(i) Investments by the Borrower and its Restricted
Subsidiaries in GWIA in an aggregate amount not to exceed $14,000,000
at any time;
(j) Investments by the Borrower and its Restricted
Subsidiaries in GRO in an aggregate amount not to exceed $5,000,000
at any time; and
(k) Investments constituting or made in connection with
acquisitions by the Borrower or any Restricted Subsidiary of the
Borrower (with the proceeds of a capital contribution from the
Borrower or otherwise) of any other Person, or of any business,
division or operating unit of any other Person (whether by way of a
purchase of assets or capital stock) (each such acquisition
satisfying all the conditions and requirements of this paragraph (k)
being referred to herein as a "Permitted Acquisition"); provided
--------
that:
(i) the aggregate Purchase Price for (A) any one
Permitted Acquisition (or group of related acquisitions)
shall not exceed $25,000,000 and (B) all such Permitted
Acquisitions shall not exceed $50,000,000 in any period of
twelve consecutive months;
(ii) the Borrower shall have demonstrated to the
reasonable satisfaction of the Agent (based on, among other
things, operating and financial projections and pro forma
financial statements delivered to the Agent and certified
by the chief financial officer of the Borrower) that, after
giving pro-forma effect to the Permitted Acquisition and
the incurrence of any Indebtedness in connection therewith,
all covenants (including all covenants contained in ss.10)
contained herein (1) would have been satisfied on a Pro
Forma Basis as at the end of and for the most recent fiscal
quarter, and
-60-
(2) will be satisfied on a Pro Forma Basis for the next
four fiscal quarters ending after the date of such
Investment;
(iii) with respect to any such Permitted
Acquisition:
(A) the Borrower shall have delivered
to the Agent and the Banks reasonable (and, in
any event, fifteen (15) days) prior written
notice of such acquisition, which notice shall
provide the Agent with a reasonably detailed
description of the proposed acquisition, and
shall include true and complete copies of (to the
extent available at such time but in any event
prior to the closing of any such Permitted
Acquisition) all instruments and agreements
executed or delivered or to be executed or
delivered by the Borrower or any of its
Restricted Subsidiaries in connection with such
acquisition, all of which shall be reasonably
satisfactory in form and substance to the Agent;
(B) the business and assets so
acquired shall be acquired by the Borrower or any
of its Restricted Subsidiaries free and clear of
all Liens (other than Permitted Liens) and
Indebtedness (other than Indebtedness permitted
by ss.9.1 or otherwise consented to in writing by
the Majority Banks) and the business so acquired
shall be substantially the same line of business
as that presently conducted by the Borrower and
its Restricted Subsidiaries or lines of business
reasonably related thereto;
(C) no contingent obligations or
liabilities will be incurred or assumed in
connection with such acquisition which could
reasonably be expected to have a material adverse
effect on the business or financial condition of
the Borrower and its Restricted Subsidiaries,
taken as a whole;
(D) in the case of any acquisition of
capital stock, the acquired Person shall become a
Restricted Subsidiary of the Borrower (or of any
Restricted Subsidiary of the Borrower) or shall
be merged with and into the Borrower or any
Restricted Subsidiary; and the Borrower or the
applicable Restricted Subsidiary and such
acquired Person shall have complied with all the
applicable provisions of ss.8.14;
(iv) no Default or Event of Default shall exist
immediately prior to such Permitted Acquisition or would
result from such Permitted Acquisition and provided further
--------
that if such Permitted Acquisition would result in a change
in control of the acquired Person, such Investment shall
have been approved by the board of directors of such Person
prior to the making of such Investment;
-61-
(v) all computations required to satisfy the
conditions specified in subparagraphs (i), (ii) and (iv)
above shall be reasonably satisfactory to the Agent; and
(vi) with respect to any Permitted Acquisition,
any debt instruments or preferred stock evidencing,
governing or issued in connection with such Investment
shall be reasonably satisfactory to the Agent and shall be
permitted by this Credit Agreement;
(l) Investments consisting of deposits made in connection
with a Permitted Acquisition; or
(m) Investments not otherwise permitted by this ss.9.3 in
an aggregate amount not to exceed $10,000,000 at any time.
9.4. Distributions and Restricted Payments. The Borrower will not,
-------------------------------------
and will not permit any of its Restricted Subsidiaries to, make any Restricted
Payments, provided however that (i) the Borrower's Restricted Subsidiaries may
make Distributions to the Borrower or other Restricted Subsidiaries and (ii) so
long as no Default or Event of Default shall have occurred and be continuing,
and so long as none would result after giving effect thereto the Borrower may
make Restricted Payments in an aggregate amount for all such Restricted Payments
by the Borrower not to exceed, during any period of four consecutive quarters,
the lesser of (A) $5,000,000 and (B) fifty percent (50%) of Consolidated Net
Income for the period of four consecutive fiscal quarters most recently ended.
9.5. Merger, Acquisitions and Disposition of Assets.
----------------------------------------------
9.5.1. Mergers and Acquisitions. The Borrower will not, and
------------------------
will not permit any of its Restricted Subsidiaries to, become a party
to any merger or consolidation other than the merger or consolidation
of (i) a Restricted Subsidiary into any other Restricted Subsidiary,
(ii) one or more of the Restricted Subsidiaries of the Borrower with
and into the Borrower, or (iii) two or more Restricted Subsidiaries
of the Borrower. The Borrower will not, and will not permit any of
its Restricted Subsidiaries to, agree to or effect any asset
acquisition or stock acquisition except (a) the acquisition of assets
in the ordinary course of business consistent with past practices;
(b) Capital Expenditures, provided that no Default or Event of
Default has occurred and is continuing prior to or immediately after
giving effect to such Capital Expenditure; and (c) Permitted
Acquisitions.
9.5.2. Disposition of Assets. The Borrower will not, and
---------------------
will not permit any of its Restricted Subsidiaries to, become a party
to or agree to or effect any disposition of assets, other than the
disposition of assets in the ordinary course of business, consistent
with past practices, and sale-leasebacks to the extent permitted
under ss.9.6. Notwithstanding the
-62-
foregoing, if no Default or Event of Default exists or will occur as
a result of such disposition, (i) Leasing may exchange railcars with
Apus Rail One, Inc. pursuant to the Exchange Agreement and (ii) the
Borrower and its Restricted Subsidiaries may lease, sell or otherwise
dispose of, for cash, assets provided that the aggregate net book
value (at the time of disposition thereof and after giving effect to
the contemplated disposition) of all such assets shall not exceed
$5,000,000 during any period of twelve consecutive months.
9.6. Sale and Leaseback. The Borrower will not, and will not permit
------------------
any of its Restricted Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby the Borrower or any Restricted Subsidiary of the Borrower
shall sell or transfer any property owned by it in order then or thereafter to
lease such property or lease other property that the Borrower or any Restricted
Subsidiary of the Borrower intends to use for substantially the same purpose as
the property being sold or transferred, provided that the Borrower or any of its
Restricted Subsidiaries may enter into such sale-leaseback transactions to the
extent that the aggregate net book value (at the time of disposition thereof and
after giving effect to the contemplated disposition) of the assets sold in
connection with all such sale-leasebacks does not exceed $10,000,000 at any
time.
9.7. Compliance with Environmental Laws. Except in compliance with
----------------------------------
all applicable Environmental Laws, the Borrower will not, and will not permit
any of its Restricted Subsidiaries to, (i) use any of the Real Estate or any
portion thereof for the handling, processing, storage or disposal of Hazardous
Substances, (ii) cause or permit to be located on any of the Real Estate any
underground tank or other underground storage receptacle for Hazardous
Substances, (iii) generate any Hazardous Substances on any of the Real Estate,
(iv) conduct any activity at any Real Estate or use any Real Estate in any
manner so as to cause a release (i.e. releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping) or threatened release of Hazardous Substances on, upon or
into the Real Estate or (v) otherwise conduct any activity at any Real Estate or
use any Real Estate in any manner that would violate any Environmental Law or
bring such Real Estate in violation of any Environmental Law.
9.8. CSX Remaining Debt. The Borrower will not, and will not permit
------------------
any of its Restricted Subsidiaries to, amend, supplement or otherwise modify the
terms of the CSX Remaining Debt, the CSX Security Agreements or the CSX
Mortgages; provided, however, that the Borrower and its Restricted Subsidiaries
may prepay the CSX Remaining Debt on substantially the terms described in its
business plan delivered to the Banks prior to the Closing Date and as is
otherwise acceptable to the Agent, unless such terms materially deviate from
such business plan, in which case the consent of the Majority Banks will be
required prior to any prepayment of the CSX Remaining Debt.
-63-
9.9. Employee Benefit Plans. Neither the Borrower nor any ERISA
----------------------
Affiliate will
(a) engage in any "prohibited transaction" within the
meaning of ss.406 of ERISA or ss.4975 of the Code which could result
in a material liability for the Borrower or any of its Restricted
Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in ss.302
of ERISA, whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could result in the imposition of a lien or encumbrance on the
assets of the Borrower or any of its Restricted Subsidiaries pursuant
to ss.302(f) or ss.4068 of ERISA; or
(d) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of ss.4001 of ERISA)
of all Guaranteed Pension Plans exceeding the value of the aggregate
assets of such Plans, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets in excess of
benefit liabilities, by more than $200,000.
9.10. Business Activities. The Borrower will not, and will not permit
-------------------
any of its Restricted Subsidiaries, to engage directly or indirectly (whether
through Subsidiaries or otherwise) in any type of business not engaged in by the
Borrower or its Restricted Subsidiaries on the Closing Date, unless incidental
or related to any type of business engaged in by the Borrower or its Restricted
Subsidiaries on such date.
9.11. Capitalization. The Borrower will not, and will not permit any
--------------
of its Restricted Subsidiaries to, authorize, issue or sell any capital stock or
partnership interests, grant any options, warrants or other rights to purchase
any capital stock or in any way change the capitalization of any of the
Restricted Subsidiaries in such a manner as to cause the Borrower to own
directly or indirectly less than one hundred percent of the capital stock or
partnership interests, as the case may be, of each of the Restricted
Subsidiaries. The Borrower will not issue any capital stock having debt-like
features (such as mandatory cash dividends, mandatory redemption provisions or
other provisions which create monetary obligations on the Borrower payable in
cash during a period when Loans may be outstanding) except to the extent that
such capital stock, if classified as Indebtedness of the Borrower, would be
permitted by ss.9.1 hereof.
9.12. Fiscal Year. The Borrower will not, and will not permit its
-----------
Restricted Subsidiaries to, change the date of the end of their fiscal year from
that set forth in ss.7.20 hereof.
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9.13. Negative Pledges. Neither the Borrower nor any of its
----------------
Restricted Subsidiaries will enter into any agreement (excluding this Credit
Agreement and the Loan Documents) prohibiting the creation or assumption of any
lien upon its properties, revenues or assets or those of any of its Restricted
Subsidiaries whether now owned or hereafter acquired other than agreements with
Persons prohibiting any such lien on assets in which such Person has a prior
security interest which is permitted by ss.9.2.
9.14. Transactions with Affiliates. The Borrower will not, and will
----------------------------
not permit any of its Restricted Subsidiaries to, engage in any transaction with
any Affiliate (other than (i) for services as employees, officers and directors
and (ii) stock options awarded to employees and directors pursuant to incentive
compensation plans operated by the Borrower involving not more than 15% of the
common stock of the Borrower), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any such Affiliate or, to the knowledge of the Borrower, any
corporation, partnership, trust or other entity in which any such Affiliate has
a substantial interest or is an officer, director, trustee or partner, on terms
more favorable to such Person than would have been obtainable on an arm's-length
basis in the ordinary course of business.
10. FINANCIAL COVENANTS OF THE BORROWER.
-----------------------------------
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Revolving Credit Note is
outstanding or any Bank has any obligation to make any Loans or the Issuing Bank
has any obligation to issue, extend or renew any Letters of Credit:
10.1. Funded Debt to EBITDA. The Borrower will not permit the Funded
---------------------
Debt to EBITDA Ratio at any time during any period described in the table set
forth below to exceed the ratio set forth opposite such period in such table:
Period Ratio
------ -----
Closing Date - December 30, 1999 3.50:1.00
December 31, 1999 - December 30, 2000 3.00:1.00
December 31, 2000 - December 30, 2001 2.75:1.00
December 31, 2001 and thereafter 2.25:1.00
10.2. Cash Flow Coverage. The Borrower will not permit the ratio of
------------------
(a) Consolidated Cash Flow (determined at the end of each fiscal quarter for the
four consecutive fiscal quarters then ended) to (b) the sum of (i) Consolidated
Total Interest Expense for such period, plus (ii) all regularly scheduled
payments required to be made during such period in respect of principal on
long-term Consolidated Funded Debt (other than principal payments on the CSX
Remaining Debt made with the proceeds of a refinancing of the CSX Remaining
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Debt on terms satisfactory to the Agent and the Majority Banks) to be less than
1.25:1.00.
10.3. EBITDA less Capital Expenditures to Interest Ratio. As at the
--------------------------------------------------
end of each fiscal quarter of the Borrower, the Borrower will not permit the
ratio of (a) the result of (i) Consolidated EBITDA for the preceding four
consecutive fiscal quarters, minus (ii) the amount of Capital Expenditures made
by the Borrower and its Restricted Subsidiaries during such period to (b)
Consolidated Total Interest Expense for such period during any period described
in the table set forth below to be less than the ratio set forth opposite such
period in such table:
Period Ratio
------ -----
Closing Date - December 30, 1999 2.00:1.00
December 31, 1999 - December 30, 2001 2.25:1.00
December 31, 2001 and thereafter 2.50:1.00
10.4. Calculation of Financial Covenants. To the extent a Permitted
----------------------------------
Acquisition has occurred in any period being tested in the covenants contained
in this ss.10, the calculations of such covenants, to the extent applicable,
will be tested on a Pro Forma Basis.
11. CLOSING CONDITIONS.
------------------
From and after the Closing Date, all of the obligations of the
Borrower and its Subsidiaries under or in respect of the Prior Credit Agreement
shall be evidenced solely by the terms of this Credit Agreement and the other
Loan Documents. The obligations of the Banks to convert their claims against the
Borrower and its Subsidiaries with respect to the Prior Credit Agreement into
Obligations under this Credit Agreement, to amend and restate the Prior Credit
Agreement and to make the initial Loans and the Issuing Bank to convert any
existing letters of credit into Letters of Credit under this Credit Agreement
and issue any initial Letters of Credit shall be subject to the satisfaction of
the following conditions precedent on or prior to the Closing Date.
11.1. Loan Documents. Each of the Loan Documents shall have been duly
--------------
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the Banks.
Each Bank shall have received a fully executed copy of each such document.
11.2. Certified Copies of Charter and Partnership Documents. Each of
-----------------------------------------------------
the Banks shall have received from the Borrower and each of its Restricted
Subsidiaries either a copy, certified by a duly authorized officer of such
Person to be true and complete on the Closing Date, of each of (i) its charter,
certificate of limited partnership or other organizational documents as in
effect on such date of certification, and (ii) its by-laws or partnership
agreement, as applicable, as in effect on such date or a certificate from a duly
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authorized officer of such Person stating that no amendments, modification,
revisions or other changes have been made since the most recent delivery of such
documents to the Agent under the Prior Credit Agreement and that such documents
are in full force and effect as of the Closing Date.
11.3. Corporate or Other Action. All corporate or other action
-------------------------
necessary for the valid execution, delivery and performance by the Borrower and
each of its Restricted Subsidiaries of this Credit Agreement and the other Loan
Documents to which it is or is to become a party shall have been duly and
effectively taken, and evidence thereof satisfactory to the Banks shall have
been provided to each of the Banks.
11.4. Incumbency Certificate. Each of the Banks shall have received
----------------------
from the Borrower and each of its Restricted Subsidiaries an incumbency
certificate, dated as of the Closing Date, signed by a duly authorized officer
of such Borrower or such Subsidiary, and giving the name and bearing a specimen
signature of each individual who shall be authorized: (i) to sign, in the name
and on behalf of each of the Borrower or such Restricted Subsidiary, each of the
Loan Documents to which the Borrower or such Restricted Subsidiary is or is to
become a party; (ii) in the case of the Borrower, to make Loan Requests and
Conversion Requests and to apply for Letters of Credit; and (iii) to give
notices and to take other action on its behalf under the Loan Documents.
11.5. Opinion of Counsel. Each of the Banks and the Agent shall have
------------------
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from:
(a) Harter, Secrest & Emery, counsel to the Borrower and
its Restricted Subsidiaries; and
(b) local counsel to certain Restricted Subsidiaries in the
state of Virginia.
11.6. Delivery of Agreements. The Borrower and its Restricted
----------------------
Subsidiaries shall have delivered to the Agent copies of the Corpus Christi
Lease, the Apus Railcar Lease and the Exchange Agreement.
11.7. Payment of Fees. The Borrower shall have paid to the Agent all
---------------
fees pursuant to ss.5.1 and all interest and fees under the Prior Credit
Agreement in accordance with ss.28.3 hereof. The Borrower shall have reimbursed
the Agent for, or paid directly, all fees, costs and expenses incurred by the
Agent's Special Counsel in connection with the closing of the transactions
contemplated hereby.
11.8. Certain Assignments. The Banks (as defined in the Prior Credit
-------------------
Agreement) shall have assigned such interest, rights and obligations under the
Prior Credit Agreement to the Banks hereunder as shall be necessary to achieve
the Commitment Percentages set forth herein.
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11.9. Disbursement Instructions. The Agent shall have received an
-------------------------
initial Loan Request and disbursement instructions from the Borrower.
12. CONDITIONS TO ALL BORROWINGS.
----------------------------
The obligations of the Banks to convert their claims against the
Borrower and its Restricted Subsidiaries with respect to the Prior Credit
Agreement into Obligations under this Credit Agreement and to make any Loan, and
the Issuing Bank to convert any existing letters of credit into Letters of
Credit under this Credit Agreement or to issue, extend or renew any Letter of
Credit, in each case whether on or after the Closing Date, shall also be subject
to the satisfaction of the following conditions precedent:
12.1. Representations True; No Event of Default. Each of the
-----------------------------------------
representations and warranties of the Borrower and its Restricted Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Loan or the issuance, extension or
renewal of such Letter of Credit, with the same effect as if made at and as of
that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and to the extent that such
representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
12.2. No Legal Impediment. No change shall have occurred in any law
-------------------
or regulations thereunder or interpretations thereof that in the reasonable
opinion of any Bank would make it illegal for such Bank to make such Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the reasonable opinion of the Agent would make it illegal for the Agent to
issue, extend or renew such Letter of Credit.
12.3. Governmental Regulation. Each Bank shall have received such
-----------------------
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
12.4. Proceedings and Documents. All proceedings in connection with
-------------------------
the transactions contemplated by this Credit Agreement, the other Loan Documents
and all other documents incident thereto shall be satisfactory in substance and
in form to the Banks and to the Agent and the Agent's Special Counsel, and the
Banks, the Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.
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13. EVENTS OF DEFAULT; ACCELERATION; ETC.
------------------------------------
13.1. Events of Default and Acceleration. If any of the following
----------------------------------
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the
Loans or any Reimbursement Obligation when the same shall become due
and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;
(b) the Borrower or any of its Restricted Subsidiaries
shall fail to pay any interest on the Loans, the commitment fee, any
Letter of Credit Fee, the Agent's Fees, or other sums due hereunder
or under any of the other Loan Documents, when the same shall become
due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment,
and such failure shall continue for three (3) days;
(c) the Borrower or any of its Restricted Subsidiaries
shall fail to comply with any of the covenants contained in ss.ss.8,
9 or 10;
(d) the Borrower or any of its Restricted Subsidiaries
shall fail to perform any term, covenant or agreement contained
herein or in any of the other Loan Documents (other than those
specified elsewhere in this ss.13.1) for fifteen (15) days after
written notice of such failure has been given to the Borrower by the
Agent;
(e) any representation or warranty of the Borrower or any
of its Restricted Subsidiaries in this Credit Agreement or any of the
other Loan Documents or in any other document or instrument delivered
pursuant to or in connection with this Credit Agreement shall prove
to have been false in any material respect upon the date when made or
deemed to have been made or repeated;
(f) the Borrower or any of its Restricted Subsidiaries
shall fail to pay at maturity, or within any applicable period of
grace, any obligation for borrowed money or credit received
(including the CSX Remaining Debt) or in respect of any Capitalized
Leases, or fail to observe or perform any material term, covenant or
agreement contained in any agreement by which it is bound, evidencing
or securing borrowed money or credit received (including without
limitation, the CSX Remaining Debt) or in respect of any Capitalized
Leases for such period of time as would permit (assuming the giving
of appropriate notice if required) the holder or holders thereof or
of any obligations issued thereunder to accelerate the maturity
thereof;
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(g) the Borrower or any of its Restricted Subsidiaries
shall make an assignment for the benefit of creditors, or admit in
writing its inability to pay or generally fail to pay its debts as
they mature or become due, or shall petition or apply for the
appointment of a trustee or other custodian, liquidator or receiver
of the Borrower or any of its Restricted Subsidiaries or of any
substantial part of the assets of the Borrower or any of its
Restricted Subsidiaries or shall commence any case or other
proceeding relating to the Borrower or any of its Restricted
Subsidiaries under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect, or shall
take any action to authorize or in furtherance of any of the
foregoing, or if any such petition or application shall be filed or
any such case or other proceeding shall be commenced against the
Borrower or any of its Restricted Subsidiaries and the Borrower or
any of its Restricted Subsidiaries shall indicate its approval
thereof, consent thereto or acquiescence therein or such petition or
application shall not have been dismissed within forty-five (45) days
following the filing thereof;
(h) a decree or order is entered appointing any such
trustee, custodian, liquidator or receiver or adjudicating the
Borrower or any of its Restricted Subsidiaries bankrupt or insolvent,
or approving a petition in any such case or other proceeding, or a
decree or order for relief is entered in respect of any of the
Borrower or any Restricted Subsidiary of the Borrower in an
involuntary case under federal bankruptcy laws as now or hereafter
constituted;
(i) there shall remain in force, undischarged, unsatisfied
and unstayed, for more than thirty days, whether or not consecutive,
any final judgment against the Borrower or any of its Restricted
Subsidiaries that, with other outstanding final judgments,
undischarged, against the Borrower or any of its Restricted
Subsidiaries exceeds in the aggregate $500,000;
(j) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded otherwise than in accordance with
the terms thereof or with the express prior written agreement,
consent or approval of the Banks, or any action at law, suit or in
equity or other legal proceeding to cancel, revoke or rescind any of
the Loan Documents shall be commenced by or on behalf of the Borrower
or any of its Restricted Subsidiaries party thereto or any of their
respective stockholders, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to
the effect that, any one or more of the Loan Documents is illegal,
invalid or unenforceable in accordance with the terms thereof;
(k) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Majority Banks shall
have
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determined in their reasonable discretion that such event reasonably
could be expected to result in liability of the Borrower or any of
its Restricted Subsidiaries to the PBGC or such Guaranteed Pension
Plan in an aggregate amount exceeding $500,000 and such event in the
circumstances occurring reasonably could constitute grounds for the
termination of such Guaranteed Pension Plan by the PBGC or for the
appointment by the appropriate United States District Court of a
trustee to administer such Guaranteed Pension Plan; or a trustee
shall have been appointed by the United States District Court to
administer such Plan; or the PBGC shall have instituted proceedings
to terminate such Guaranteed Pension Plan;
(l) the Borrower or any of its Restricted Subsidiaries
shall be enjoined, restrained or in any way prevented by the order of
any court or any administrative or regulatory agency from conducting
any material part of its business and such order shall continue in
effect for more than thirty (30) days;
(m) there shall occur any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other casualty,
which in any such case causes, for more than fifteen (15) consecutive
days, the cessation or substantial curtailment of revenue producing
activities at any facility of the Borrower or any of its Restricted
Subsidiaries if such event or circumstance is not covered by business
interruption insurance and would have a material adverse effect on
the business or financial condition of the Borrower and its
Restricted Subsidiaries taken as a whole;
(n) there shall occur the loss, suspension or revocation
of, or failure to renew, any license or permit now held or hereafter
acquired by the Borrower or any of its Restricted Subsidiaries if
such loss, suspension, revocation or failure to renew would have a
material adverse effect on the business or financial condition of the
Borrower and its Restricted Subsidiaries taken as a whole;
(o) the Borrower or any of its Restricted Subsidiaries
shall be indicted for a state or federal crime, or any civil or
criminal action shall otherwise have been brought against the
Borrower or any of its Restricted Subsidiaries, a punishment for
which in any such case could include the forfeiture of any assets of
such Borrower or such Restricted Subsidiary having a fair market
value in excess of $500,000; or
(p) (i) the Fuller Immediate Family shall, at any time,
cease to maintain beneficial ownership and control of at least
twenty-five percent (25%) of the voting interests of the Borrower,
(ii) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the
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Securities and Exchange Commission under said Act) of more than
twenty-five percent (25%) of the outstanding shares of the common
stock of the Borrower, (iii) during any prior of twelve consecutive
calendar months, individuals who were directors of the Borrower on
the first day of such period shall cease to constitute a majority of
the board of directors of the Borrower, or (iv) the Borrower shall at
any time own directly or indirectly less than 100% of the shares of
the capital stock or partnership interests, as the case may be, of
each of the Restricted Subsidiaries, as adjusted pursuant to any
stock split, stock dividend or recapitalization or reclassification
of the capital of such Person except that the Borrower may own only
454 shares of the 458 shares of the issued and outstanding capital
stock of Dansville;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Revolving Credit Notes and the other Loan Documents and all Reimbursement
Obligations to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower; provided that in the
--------
event of any Event of Default specified in ss.ss.13.1(g) or 13.1(h), all such
amounts shall become immediately due and payable automatically and without any
requirement of notice from the Agent or any Bank.
13.2. Termination of Commitments. If any one or more of the Events of
--------------------------
Default specified in ss.ss.13.1(g) or 13.1(h) shall occur, any unused portion of
the credit hereunder shall forthwith terminate and each of the Banks shall be
relieved of all further obligations to make Loans to the Borrower and the Agent
shall be relieved of all further obligations to issue, extend or renew Letters
of Credit. If any other Event of Default shall have occurred and be continuing,
or if on any Drawdown Date or other date for issuing, extending or renewing any
Letter of Credit the conditions precedent to the making of the Loans to be made
on such Drawdown Date or (as the case may be) to issuing, extending or renewing
such Letter of Credit on such other date are not satisfied, the Agent may and,
upon the request of the Majority Banks, shall, by notice to the Borrower,
terminate the unused portion of the credit hereunder, and upon such notice being
given such unused portion of the credit hereunder shall terminate immediately
and each of the Banks shall be relieved of all further obligations to make Loans
and the Agent shall be relieved of all further obligations to issue, extend or
renew Letters of Credit. No termination of the credit hereunder shall relieve
the Borrower or any of its Restricted Subsidiaries of any of the Obligations.
13.3. Remedies. In case any one or more of the Events of Default
--------
shall have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to ss.13.1, each Bank, if owed
any amount with respect to the Loans or the Reimbursement Obligations, may, with
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the consent of the Majority Banks but not otherwise, proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Bank are evidenced,
including as permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Revolving Credit Note or purchaser of any
Letter of Credit Participation is intended to be exclusive of any other remedy
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or any other provision of law.
14. SETOFF.
------
Regardless of the adequacy of any collateral, during the continuance
of any Event of Default, any deposits or other sums credited by or due from any
of the Banks to the Borrower and any securities or other property of the
Borrower in the possession of such Bank may be applied to or set off by such
Bank against the payment of Obligations and any and all other liabilities,
direct, or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, of the Borrower to such Bank. Each of the Banks agrees
with each other Bank that (i) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness evidenced by
the Revolving Credit Notes held by such Bank or constituting Reimbursement
Obligations owed to such Bank, such amount shall be applied ratably to such
other Indebtedness and to the Indebtedness evidenced by all such Revolving
Credit Notes held by such Bank or constituting Reimbursement Obligations owed to
such Bank, and (ii) if such Bank shall receive from the Borrower, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Revolving Credit Notes held by, or
constituting Reimbursement Obligations owed to, such Bank by proceedings against
the Borrower at law or in equity or by proof thereof in bankruptcy,
reorganization, liquidation, receivership or similar proceedings, or otherwise,
and shall retain and apply to the payment of the Revolving Credit Notes held by,
or Reimbursement Obligations owed to, such Bank any amount in excess of its
ratable portion of the payments received by all of the Banks with respect to the
Revolving Credit Notes held by, and Reimbursement Obligations owed to, all of
the Banks, such Bank will make such disposition and arrangements with the other
Banks with respect to such excess, either by way of distribution, pro tanto
assignment of claims, subrogation or otherwise as shall result in each Bank
receiving in respect of the Revolving Credit Notes held by it or Reimbursement
Obligations owed it, its proportionate payment as contemplated by this Credit
Agreement; provided that if all or any part of such excess payment is thereafter
recovered from such Bank, such disposition and arrangements shall be
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rescinded and the amount restored to the extent of such recovery, but without
interest.
15. THE AGENT.
---------
15.1. Authorization.
-------------
(a) The Agent is authorized to take such action on behalf
of each of the Banks and to exercise all such powers as are hereunder
and under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably
incident thereto, provided that no duties or responsibilities not
expressly assumed herein or therein shall be implied to have been
assumed by the Agent.
(b) The relationship between the Agent and each of the
Banks is that of an independent contractor. The use of the term
"Agent" is for convenience only and is used to describe, as a form of
convention, the independent contractual relationship between the
Agent and each of the Banks. Nothing contained in this Credit
Agreement nor the other Loan Documents shall be construed to create
an agency, trust or other fiduciary relationship between the Agent
and any of the Banks.
(c) As an independent contractor empowered by the Banks to
exercise certain rights and perform certain duties and
responsibilities hereunder and under the other Loan Documents, the
Agent is nevertheless a "representative" of the Banks, as that term
is defined in Article 1 of the Uniform Commercial Code, for purposes
of actions for the benefit of the Banks and the Agent with respect to
all collateral security and guaranties contemplated by the Loan
Documents. Such actions include the designation of the Agent as
"secured party", "mortgagee" or the like on all financing statements
and other documents and instruments, whether recorded or otherwise,
relating to the attachment, perfection, priority or enforcement of
any security interests, mortgages or deeds of trust in collateral
security intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Banks and the Agent.
15.2. Employees and Agents. The Agent may exercise its powers and
--------------------
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Credit Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine.
15.3. No Liability. Neither the Agent nor any of its shareholders,
------------
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable to any of the Banks
for any waiver, consent or approval given or any action taken, or omitted to be
-74-
taken, in good faith by it or them hereunder or under any of the other Loan
Documents, or in connection herewith or therewith, or be responsible for the
consequences of any oversight or error of judgment whatsoever, except that the
Agent or such other Person, as the case may be, shall be liable for losses due
to its willful misconduct or gross negligence.
15.4. No Representations.
------------------
15.4.1. General. The Agent shall not be responsible for the
-------
execution or validity or enforceability of this Credit Agreement, the
Revolving Credit Notes, the Letters of Credit, any of the other Loan
Documents or any instrument at any time constituting, or intended to
constitute, collateral security for the Revolving Credit Notes, or
for the value of any such collateral security or for the validity,
enforceability or collectability of any such amounts owing with
respect to the Revolving Credit Notes, or for any recitals or
statements, warranties or representations made herein or in any of
the other Loan Documents or in any certificate or instrument
hereafter furnished to it by or on behalf of the Borrower or any of
its Restricted Subsidiaries, or be bound to ascertain or inquire as
to the performance or observance of any of the terms, conditions,
covenants or agreements herein or in any instrument at any time
constituting, or intended to constitute, collateral security for the
Revolving Credit Notes or to inspect any of the properties, books or
records of the Borrower or any of its Restricted Subsidiaries. The
Agent shall not be bound to ascertain whether any notice, consent,
waiver or request delivered to it by the Borrower or any holder of
any of the Revolving Credit Notes shall have been duly authorized or
is true, accurate and complete. The Agent has not made nor does it
now make any representations or warranties, express or implied, nor
does it assume any liability to the Banks, with respect to the credit
worthiness or financial conditions of the Borrower or any of its
Restricted Subsidiaries. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank,
and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into
this Credit Agreement.
15.4.2. Closing Documentation, etc. For purposes of
--------------------------
determining compliance with the conditions set forth in ss.12, each
Bank that has executed this Credit Agreement shall be deemed to have
consented to, approved or accepted, or to be satisfied with, each
document and matter either sent, or made available, by the Agent or
BancBoston Securities Inc., as arranger to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to such
Bank, unless an officer of the Agent or BancBoston Securities Inc.
active upon the Borrower's account shall have received notice from
such Bank prior to the Closing Date specifying such Bank's objection
thereto and such objection shall not
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have been withdrawn by notice to the Agent or BancBoston Securities
Inc. to such effect on or prior to the Closing Date.
15.5. Payments.
--------
15.5.1. Payments to Agent. A payment by the Borrower to the
-----------------
Agent hereunder or any of the other Loan Documents for the account of
any Bank or the Issuing Bank shall constitute a payment to such Bank
or the Issuing Bank. The Agent agrees promptly to distribute to each
Bank and the Issuing Bank, as the case may be, such Bank's or Issuing
Bank's pro rata share of payments received by the Agent for the
account of the Banks or the Issuing Bank except as otherwise
expressly provided herein or in any of the other Loan Documents.
15.5.2. Distribution by Agent. If in the opinion of the
---------------------
Agent the distribution of any amount received by it in such capacity
hereunder, under the Revolving Credit Notes or under any of the other
Loan Documents might involve it in liability, it may refrain from
making distribution until its right to make distribution shall have
been adjudicated by a court of competent jurisdiction. If a court of
competent jurisdiction shall adjudge that any amount received and
distributed by the Agent is to be repaid, each Person to whom any
such distribution shall have been made shall either repay to the
Agent its proportionate share of the amount so adjudged to be repaid
or shall pay over the same in such manner and to such Persons as
shall be determined by such court.
15.5.3. Delinquent Banks. Notwithstanding anything to the
----------------
contrary contained in this Credit Agreement or any of the other Loan
Documents, any Bank that fails (i) to make available to the Agent its
applicable pro rata share (if any) of any Loan or to purchase its
--- ----
applicable pro rata amount (if any) of any Letter of Credit
--- ----
Participation or (ii) to comply with the provisions of ss.15 with
respect to making dispositions and arrangements with the other Banks,
where such Bank's share of any payment received, whether by setoff or
otherwise, is in excess of its pro rata (based on all applicable
--- ----
outstanding Loans and Unpaid Reimbursement Obligations) share of such
payments due and payable to all of the Banks, in each case as, when
and to the full extent required by the provisions of this Credit
Agreement, shall be deemed delinquent (a "Delinquent Bank") and shall
be deemed a Delinquent Bank until such time as such delinquency is
satisfied. A Delinquent Bank shall be deemed to have assigned any and
all payments due to it from the Borrower, whether on account of the
applicable outstanding Loans, Unpaid Reimbursement Obligations,
interest, fees or otherwise, to the remaining applicable
nondelinquent Banks for application to, and reduction of, their
respective applicable pro rata shares of all then applicable
--- ----
outstanding Loans and Unpaid Reimbursement Obligations so affected by
such delinquency. The Delinquent Bank hereby authorizes the Agent to
distribute such payments to the nondelinquent Banks in
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proportion to their respective applicable pro rata shares of all such
--- ----
applicable outstanding Loans and Unpaid Reimbursement Obligations. A
Delinquent Bank shall be deemed to have satisfied in full a
delinquency when and if, as a result of application of the assigned
payments to all outstanding Loans and Unpaid Reimbursement
Obligations of the nondelinquent Banks so affected by such
delinquency, the applicable Banks' respective pro rata shares of all
--- ----
such applicable outstanding Loans and Unpaid Reimbursement
Obligations have returned to those in effect immediately prior to
such delinquency and without giving effect to the nonpayment causing
such delinquency.
15.6. Holders of Revolving Credit Notes. The Agent may deem and treat
---------------------------------
the payee of any Revolving Credit Note or the purchaser of any Letter of Credit
Participation as the absolute owner or purchaser thereof for all purposes hereof
until it shall have been furnished in writing with a different name by such
payee or by a subsequent holder, assignee or transferee.
15.7. Indemnity. The Banks ratably (computed by reference to each
---------
Bank's percentage of the Total Commitment) agree hereby to indemnify and hold
harmless the Agent, its affiliates and each of the Co-Agents from and against
any and all claims, actions and suits (whether groundless or otherwise), losses,
damages, costs, expenses (including any expenses for which the Agent, such
affiliate or such Co-Agent has not been reimbursed by the Borrower as required
by ss.16), and liabilities of every nature and character arising out of or
related to this Credit Agreement, the Revolving Credit Notes, or any of the
other Loan Documents or the transactions contemplated or evidenced hereby or
thereby, or the Agent's, such affiliate's or such Co-Agent's actions taken
hereunder or thereunder, except to the extent that any of the same shall be
directly caused by the Agent's, such affiliate's or such Co-Agent's willful
misconduct or gross negligence.
15.8. Agent as Bank. In its individual capacity, BKB shall have the
-------------
same obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Revolving
Credit Notes and as the purchaser of any Letter of Credit Participations, as it
would have were it not also the Agent.
15.9. Resignation. The Agent may resign at any time by giving sixty
-----------
(60) days prior written notice thereof to the Banks and the Borrower. Upon any
such resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's
Ratings Group, a division of McGraw-Hill, Inc. Upon the acceptance of
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any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation, the provisions of this Credit Agreement and the other Loan
Documents shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Agent.
15.10. Notification of Defaults and Events of Default. Each Bank
----------------------------------------------
hereby agrees that, upon learning of the existence of a Default or an Event of
Default, it shall promptly notify the Agent thereof. The Agent hereby agrees
that upon receipt of any notice under this ss.15.10 it shall promptly notify the
other Banks of the existence of such Default or Event of Default.
15.11. Duties of Co-Agents.
-------------------
The Co-Agents as such shall have no duties or responsibilities to the
Borrower, the Guarantors, the Banks, the Issuing Bank or the Agent hereunder.
16. EXPENSES.
--------
The Borrower agrees to pay (i) any taxes (including any interest and
penalties in respect thereto) payable by the Agent, the Issuing Bank, BancBoston
Securities Inc. or any of the Banks (other than taxes based upon or measured by
the Agent's or any Bank's income or profits) on or with respect to the
transactions contemplated by this Credit Agreement (the Borrower hereby agreeing
to indemnify the Agent, the Issuing Bank, BancBoston Securities Inc. and each
Bank with respect thereto), (ii) the reasonable fees, expenses and disbursements
of the Agent's Special Counsel and any local counsel to the Agent incurred in
connection with the preparation, syndication, administration or interpretation
of the Loan Documents and other instruments mentioned herein, each closing
hereunder, and amendments, modifications, approvals, consents or waivers hereto
or hereunder, provided that such counsel shall provide the Borrower with
invoices reflecting the expenses incurred in connection with the foregoing,
(iii) all reasonable out-of-pocket expenses (including without limitation
reasonable attorneys' fees and costs, which attorneys may be employees of any
Bank, the Issuing Bank or the Agent, and reasonable consulting, accounting,
appraisal, investment banking and similar professional fees and charges)
incurred by any Bank or the Agent in connection with (A) the enforcement of or
preservation of rights under any of the Loan Documents against the Borrower or
any of its Restricted Subsidiaries or the administration thereof after the
occurrence of a Default or Event of Default and (B) any litigation, proceeding
or dispute whether arising hereunder or otherwise, in any way related to any
Bank's, the Issuing Bank's or the Agent's relationship with the Borrower or any
of its Restricted Subsidiaries except in connection with a claim that the
Borrower has against any of the Banks, the Issuing Bank and the Agent and in
which claim the Borrower is the prevailing party after entry of a final
non-appealable judgment or order, (iv) all reasonable fees, expenses and
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disbursements of any Bank or the Agent incurred in connection with UCC searches,
STB searches, UCC filings or STB filings, if any, and (v) all reasonable costs
of conducting commercial finance examinations of the Borrower's properties,
including the applicable daily time charges of the Agent's commercial finance
examiners, agents, consultants and representatives engaged in such examinations
and appraisals as in effect from time to time, and reasonable out-of-pocket
travel and other related expenses provided that so long as no Default or Event
of Default has occurred and is continuing, the costs of such commercial finance
examinations shall be limited to a maximum of (A) $15,000 for the first such
examination and (B) $10,000 for each subsequent commercial finance examination.
The covenants of this ss.16 shall survive payment or satisfaction of all other
Obligations.
17. INDEMNIFICATION.
---------------
The Borrower agrees to indemnify and hold harmless the Agent, the
Issuing Bank, BancBoston Securities Inc. and the Banks from and against any and
all claims, actions and suits whether groundless or otherwise, and from and
against any and all liabilities, losses, damages and expenses of every nature
and character arising out of this Credit Agreement or any of the other Loan
Documents or the transactions contemplated hereby including, without limitation,
(i) any actual or proposed use by the Borrower or any of its Restricted
Subsidiaries of the proceeds of any of the Loans or Letters of Credit, (ii) any
actual or alleged infringement of any patent, copyright, trademark, service mark
or similar right of the Borrower or any of its Restricted Subsidiaries comprised
in the Collateral, (iii) the Borrower or any of its Restricted Subsidiaries
entering into or performing this Credit Agreement or any of the other Loan
Documents or (iv) with respect to the Borrower and its Restricted Subsidiaries
and their respective properties and assets, the violation of any Environmental
Law, the presence, disposal, escape, seepage, leakage, spillage, discharge,
emission, release or threatened release of any Hazardous Substances or any
action, suit, proceeding or investigation brought or threatened with respect to
any Hazardous Substances (including, but not limited to, claims with respect to
wrongful death, personal injury or damage to property), in each case including,
without limitation, the reasonable fees and disbursements of counsel and
allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding other than as a result of the
gross negligence or willful misconduct of the Agent, the Issuing Bank,
BancBoston Securities Inc. or any Bank. In the event that any claim is made
against the Agent, the Issuing Bank, BancBoston Securities Inc. or any Bank for
which indemnity is provided under this ss.17, the Agent, the Issuing Bank,
BancBoston Securities Inc. or such Bank shall provide prompt notice to the
Borrower of any such claim not otherwise known to the Borrower, but the failure
of the Agent, the Issuing Bank, BancBoston Securities Inc. or any Bank to
provide such notice shall not impair the liability of the Borrower with respect
to its indemnification for such claim except to the extent that the Borrower has
been actually prejudiced by such failure. In litigation, or the preparation
therefor, the Banks, the Issuing Bank, BancBoston Securities Inc. and the Agent
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shall be entitled to select their own counsel and to participate in the defense
and the investigation of such claim, action or proceeding and, in addition to
the foregoing indemnity, the Borrower agrees to pay promptly the reasonable fees
and expenses of such counsel if (i) in the written opinion of counsel to the
Agent, the Issuing Bank, BancBoston Securities Inc. or any of the Banks, use of
counsel of the Borrower' choice could reasonably be expected to give rise to a
conflict of interest, (ii) the Borrower shall not have employed counsel
reasonably satisfactory to the Agent, the Issuing Bank, BancBoston Securities
Inc. and the Banks to represent the Agent and the Banks within a reasonable time
after notice of the institution of any such litigation or proceeding, (iii) the
Borrower authorizes the Agent, the Issuing Bank, BancBoston Securities Inc. and
the Banks to employ separate counsel at the Borrower's expense, or (iv) an Event
of Default has occurred and is continuing. If, and to the extent that the
obligations of the Borrower under this ss.17 are unenforceable for any reason,
the Borrower hereby agree to make the maximum contribution to the payment in
satisfaction of such obligations which is permissible under applicable law. The
covenants contained in this ss.17 shall survive payment or satisfaction in full
of all other Obligations.
18. SURVIVAL OF COVENANTS, ETC.
--------------------------
All covenants, agreements, representations and warranties made
herein, in the Revolving Credit Notes, in any of the other Loan Documents or in
any documents or other papers delivered by or on behalf of the Borrower or any
of its Restricted Subsidiaries pursuant hereto shall be deemed to have been
relied upon by the Banks, the Issuing Bank and the Agent, notwithstanding any
investigation heretofore or hereafter made by any of them, and shall survive the
making by the Banks of any of the Loans and the issuance, extension or renewal
of any Letters of Credit, as herein contemplated, and shall continue in full
force and effect so long as any Letter of Credit or any amount due under this
Credit Agreement or the Revolving Credit Notes or any of the other Loan
Documents remains outstanding or any Bank has any obligation to make any Loans
or the Agent has any obligation to issue, extend or renew any Letter of Credit,
and for such further time as may be otherwise expressly specified in this Credit
Agreement. All statements contained in any certificate or other paper delivered
to any Bank, the Issuing Bank or the Agent at any time by or on behalf of the
Borrower or any of its Restricted Subsidiaries pursuant hereto or in connection
with the transactions contemplated hereby shall constitute representations and
warranties by the Borrower or such Restricted Subsidiary hereunder.
19. ASSIGNMENT AND PARTICIPATION.
----------------------------
19.1. Conditions to Assignment by Bank. Except as provided herein,
--------------------------------
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Revolving Credit Loans at the time owing to it, the Revolving Credit Note
held by it and its participating interest, if any, in the risk relating to any
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Letters of Credit,); provided that (i) each of the Agent and, so long as no
--------
Default or Event of Default shall have occurred and be continuing, the Borrower,
shall have given its prior written consent to such assignment, which consent
will not be unreasonably withheld, (ii) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning Bank's rights and
obligations in respect of the Revolving Credit Loans, (iii) each assignment
shall be in a minimum amount of $5,000,000 (or less, if such assignment would be
of all of such Bank's interests, rights and obligations in respect of its
Commitment, Loans and Letter of Credit Participations), (iv) so long as no
Default or Event of Default shall have occurred and be continuing, BKB shall
retain an interest under this Credit Agreement, and (v) the parties to such
assignment shall execute and deliver to the Agent, for recording in the Register
(as hereinafter defined), an Assignment and Acceptance, substantially in the
form of Exhibit E hereto (an "Assignment and Acceptance"), together with any
Revolving Credit Notes subject to such assignment. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
(5) Business Days after the execution thereof, (i) the assignee thereunder shall
be a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Bank hereunder, and (ii) the assigning Bank
shall, to the extent provided in such assignment and upon payment to the Agent
of the registration fee referred to in ss.20.3, be released from its obligations
under this Credit Agreement. Such release shall not include any claims which the
Borrower may have against such Bank arising prior to the date of such
assignment.
19.2. Certain Representations and Warranties; Limitations; Covenants.
--------------------------------------------------------------
By executing and delivering an Assignment and Acceptance, the Borrower, the
Banks (including the assignee Bank) and the Agent confirm to and agree with each
other as to the following paragraphs (c), (e), (f), (g), (h) and (i) hereof and
the Banks (including the assignee Bank) and the Agent confirm to and agree with
each other as to the following paragraphs (a), (b) and (d); :
(a) other than the representation and warranty that it is
the legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim, the assigning Bank makes no
representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement
or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant
hereto or the attachment, perfection or priority of any security
interest or mortgage,
(b) the assigning Bank makes no representation or warranty
and assumes no responsibility with respect to the financial condition
of the Borrower and its Restricted Subsidiaries or any other Person
primarily or secondarily liable in respect of any of the Obligations,
or the performance
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or observance by the Borrower and its Restricted Subsidiaries or any
other Person primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Credit Agreement
or any of the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of
this Credit Agreement, together with copies of the most recent
financial statements referred to in ss.7.4 and ss.8.4 and such other
documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and
Acceptance;
(d) such assignee will, independently and without reliance
upon the assigning Bank, the Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Credit Agreement;
(e) such assignee represents and warrants that it is an
Eligible Assignee;
(f) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under
this Credit Agreement and the other Loan Documents as are delegated
to the Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Credit Agreement are required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is
legally authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made
arrangements with the assigning Bank satisfactory to such assignee
with respect to its pro rata share of Letter of Credit Fees in
--- ----
respect of outstanding Letters of Credit.
19.3. Register. The Agent shall maintain a copy of each Assignment
--------
and Acceptance delivered to it and a register or similar list (the "Register")
for the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Loans owing to and Letter of Credit
Participations purchased by, the Banks from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Credit Agreement.
The Register shall be available for inspection by the Borrower and the Banks at
any
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reasonable time and from time to time upon reasonable prior notice. Upon each
such recordation, the assigning Bank agrees to pay to the Agent a registration
fee in the sum of $3,500.
19.4. New Revolving Credit Notes. Upon its receipt of an Assignment
--------------------------
and Acceptance executed by the parties to such assignment, together with each
Revolving Credit Note subject to such assignment, the Agent shall (i) record the
information contained therein in the Register, and (ii) give prompt notice
thereof to the Borrower and the Banks (other than the assigning Bank). Within
five (5) Business Days after receipt of such notice, the Borrower, at their own
expense, shall execute and deliver to the Agent, in exchange for each
surrendered Revolving Credit Note, a new Revolving Credit Note to the order of
such Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Revolving Credit
Note to the order of the assigning Bank in an amount equal to the amount
retained by it hereunder. Such new Revolving Credit Notes shall provide that
they are replacements for the surrendered Revolving Credit Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Revolving Credit Notes, shall be dated the effective date of such in
Assignment and Acceptance and shall otherwise be substantially the form of the
assigned Revolving Credit Notes. Within five (5) days of issuance of any new
Revolving Credit Notes pursuant to this ss.19.4, the Borrower shall provide a
certificate to the assignee Bank and the assignor Bank, if applicable, entitling
such Banks to rely with respect to the new Revolving Credit Notes on the
resolutions authorizing the execution and delivery of the surrendered Revolving
Credit Notes as conclusively authorizing the execution and delivery of the New
Revolving Credit Notes. The surrendered Revolving Credit Notes shall be
cancelled and returned to the Borrower.
19.5. Participations. Each Bank may sell participations to one or
--------------
more banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (i) each such participation shall be in an amount of not less than
$2,500,000, (ii) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (iii) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Loans, extend the term or increase the
amount of the Commitment of such Bank as it relates to such participant, reduce
the amount of any commitment fees or Letter of Credit Fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest.
19.6. Disclosure. The Borrower agree that in addition to disclosures
----------
made in accordance with standard and customary banking practices any Bank may
disclose information obtained by such Bank pursuant to this Credit
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Agreement to assignees or participants and potential assignees or participants
hereunder; provided that such assignees or participants or potential assignees
or participants shall agree (i) to treat in confidence such information unless
such information otherwise becomes public knowledge, (ii) not to disclose such
information to a third party, except as required by law or legal process and
(iii) not to make use of such information for purposes of transactions unrelated
to such contemplated assignment or participation.
19.7. Assignee or Participant Affiliated with the Borrower. If any
----------------------------------------------------
assignee Bank is an Affiliate of the Borrower or any of its Subsidiaries, then
any such assignee Bank shall have no right to vote as a Bank hereunder or under
any of the other Loan Documents for purposes of granting consents or waivers or
for purposes of agreeing to amendments or other modifications to any of the Loan
Documents or for purposes of making requests to the Agent pursuant to ss.13.1 or
ss.13.2, and the determination of the Majority Banks shall for all purposes of
this Agreement and the other Loan Documents be made without regard to such
assignee Bank's interest in any of the Loans. If any Bank sells a participating
interest in any of the Loans or Reimbursement Obligations to a participant, and
such participant is the Borrower or an Affiliate of the Borrower, then such
transferor Bank shall promptly notify the Agent of the sale of such
participation. A transferor Bank shall have no right to vote as a Bank hereunder
or under any of the other Loan Documents for purposes of granting consents or
waivers or for purposes of agreeing to amendments or modifications to any of the
Loan Documents or for purposes of making requests to the Agent pursuant to
ss.13.1 or ss.13.2 to the extent that such participation is beneficially owned
by the Borrower or any Affiliate of the Borrower, and the determination of the
Majority Banks shall for all purposes of this Agreement and the other Loan
Documents be made without regard to the interest of such transferor Bank in the
Loans to the extent of such participation.
19.8. Miscellaneous Assignment Provisions. Any assigning Bank shall
-----------------------------------
retain its rights to be indemnified pursuant to ss.16 with respect to any claims
or actions arising prior to the date of such assignment. If any assignee Bank is
not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrower and the Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. If any Reference Bank or
the Issuing Bank transfers all of its interest, rights and obligations under
this Credit Agreement, the Agent shall, in consultation with the Borrower and
with the consent of the Borrower and the Majority Banks, appoint another Bank to
act as a Reference Bank or Issuing Bank, as the case may be, hereunder. Anything
contained in this ss.19 to the contrary notwithstanding, any Bank may at any
time pledge all or any portion of its interest and rights under this Credit
Agreement (including all or any portion of its Revolving Credit Notes) to any of
the twelve Federal Reserve Banks organized under ss.4 of the Federal Reserve
Act, 12 U.S.C. ss.341. No such pledge or the enforcement thereof shall release
the
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pledgor Bank from its obligations hereunder or under any of the other Loan
Documents.
19.9. Assignment by Borrower. The Borrower shall not assign or
----------------------
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
20. NOTICES, ETC.
------------
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Revolving Credit Notes or any Letter of Credit
Applications shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail, postage prepaid, sent by
overnight courier, or sent by telegraph, telecopy, facsimile or telex and
confirmed by delivery via courier or postal service, addressed as follows:
(a) if to the Borrower or any Guarantor, at Genesee &
Wyoming Inc., 71 Lewis Street, Greenwich, CT, Attention: Mark W.
Hastings, Treasurer and Chief Financial Officer, or at such other
address for notice as the Borrower shall last have furnished in
writing to the Person giving the notice;
(b) if to the Agent, at 100 Federal Street, Transportation
Division, Boston, Massachusetts 02110, USA, Attention: Dexter
Freeman, Director, or such other address for notice as the Agent
shall last have furnished in writing to the Person giving the notice;
and
(c) if to any Bank, at such Bank's address set forth on
Schedule II hereto, or such other address for notice as such Bank
shall have last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
21. GOVERNING LAW.
-------------
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF
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LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS
TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY
SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN
ss.20.
22. HEADINGS.
--------
The captions in this Credit Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
23. COUNTERPARTS.
------------
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
24. ENTIRE AGREEMENT, ETC.
---------------------
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in ss.26.
25. WAIVER OF JURY TRIAL, ETC.
-------------------------
The Borrower hereby waives its right to a jury trial with respect to
any action or claim arising out of any dispute in connection with this Credit
Agreement, the Revolving Credit Notes or any of the other Loan Documents, any
rights or obligations hereunder or thereunder or the performance of which rights
and obligations. Except as prohibited by law, the Borrower hereby waives any
right it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary or punitive damages or any damages
other than, or in addition to, actual damages and waives all suretyship defenses
generally. The Borrower (i) certifies that no representative, agent or attorney
of any Bank or the Agent has represented, expressly or otherwise, that such Bank
or the Agent would not, in the event of litigation, seek to enforce the
foregoing waivers and (ii) acknowledges that the Agent and the Banks have been
induced to enter into this Credit Agreement, the other Loan Documents to which
it is a party by, among other things, the waivers and certifications contained
herein.
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26. CONSENTS, AMENDMENTS, WAIVERS, ETC.
----------------------------------
Any consent or approval required or permitted by this Credit
Agreement to be given by all of the Banks may be given, and any term of this
Credit Agreement, the other Loan Documents or any other instrument related
hereto or mentioned herein may be amended, and the performance or observance by
the Borrower or any of its Restricted Subsidiaries of any terms of this Credit
Agreement, the other Loan Documents or such other instrument or the continuance
of any Default or Event of Default may be waived (either generally or in a
particular instance and either retroactively or prospectively) with, but only
with, the written consent of the Borrower and the written consent of the
Majority Banks. Notwithstanding the foregoing, the rates of interest on the
Revolving Credit Notes (other than interest accruing pursuant to ss.5.10.2
following the effective date of any waiver by the Majority Banks of the Default
or Event of Default relating thereto), the term of the Revolving Credit Notes,
the amount of the Commitments of the Banks, the timing of payment of any
principal, interest, fees and Reimbursement Obligations, and the amount of
commitment fee or Letter of Credit Fees hereunder may not be changed and
principal may not be forgiven without the written consent of the Borrower and
the written consent of each Bank affected thereby; the release of any Guarantor
shall not be permitted without the consent of the Majority Banks, provided that
the release of any Guarantor having total assets in excess of ten percent (10%)
of the consolidated total assets of GWI and its Restricted Subsidiaries shall
not be permitted without the consent of all of the Banks; the definition of
Majority Banks and this ss.26 may not be amended and the Maturity Date may not
be postponed without the written consent of all of the Banks; and the amount of
the Agent's Fees, any Letter of Credit Fees, or any other fees payable for the
Agent's account and ss.15 may not be amended without the written consent of the
Agent. No waiver shall extend to or affect any obligation not expressly waived
or impair any right consequent thereon. No course of dealing or delay or
omission on the part of the Agent or any Bank in exercising any right shall
operate as a waiver thereof or otherwise be prejudicial thereto. No notice to or
demand upon the Borrower shall entitle the Borrower to other or further notice
or demand in similar or other circumstances.
27. SEVERABILITY.
------------
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
28. TRANSITIONAL ARRANGEMENTS.
-------------------------
28.1. Prior Credit Agreement Superseded. This Credit Agreement shall
---------------------------------
on the Closing Date supersede the Prior Credit Agreement in its entirety,
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except as provided in this ss.28. On the Closing Date, the rights and
obligations of the parties evidenced by the Prior Credit Agreement shall be
evidenced by the Credit Agreement and the other Loan Documents, the "Loans" as
defined in each of the Prior Credit Agreement shall be converted to Loans as
defined herein and all outstanding letters of credit issued by the Agent for the
account of the Borrower or any of its Subsidiaries prior to the Closing Date
shall, for the purposes of this Credit Agreement, be Letters of Credit.
28.2. Return and Cancellation of Notes; Release of Collateral. As
-------------------------------------------------------
soon as reasonably practicable after the Closing Date, the Banks under the Prior
Credit Agreement will promptly return to the Borrower, marked "Substituted" or
"Cancelled", as the case may be, any notes of the Borrower held by the Banks
pursuant to the Prior Credit Agreement. On the Closing Date or as soon as
reasonably practicable thereafter, the Agent will release all collateral pledged
pursuant to the Prior Credit Agreement and the Loan Documents referred to
therein.
28.3. Interest and Fees under Superseded Agreement. All interest and
--------------------------------------------
fees and expenses, if any, owing or accruing under or in respect of the Prior
Credit Agreement through the Closing Date shall be calculated as of the Closing
Date (pro rated in the case of any fractional periods), and shall be paid on the
Closing Date. Commencing on the Closing Date, the commitment fee shall be
payable by the Borrower to the Agent for the account of the Banks in accordance
with ss.2.2.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
GENESEE & WYOMING INC.
By: /s/ Mark W. Hastings
________________________________________________________
Mark W. Hastings, Treasurer
BANKBOSTON, N.A. (f/k/a The First National Bank of Boston),
individually, as Agent and as Issuing Bank
By: /s/ Barbara W. Wilson
________________________________________________________
Name: Barbara W. Wilson
Title: Managing Director
LASALLE NATIONAL BANK, individually and as Co-Agent
By: /s/ Terri A. Maurer
________________________________________________________
Name: Terri A. Maurer
Title: VP
THE FIRST NATIONAL BANK OF CHICAGO, individually and as Co-
Agent
By: /s/ Gregory J. Sjullie
--------------------------------------------------------
Name: Gregory J. Sjullie
Title: Vice President
KEYBANK N.A.
By: /s/ Timothy R. Beers
------------------------------------------------------
Name: Timothy R. Beers
Title: Vice President
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FLEET BANK, N.A.
(f/k/a NatWest Bank, N.A.)
By: /s/ Andrea H. Lee
____________________________________________________
Name: Andrea H. Lee
Title: VP
CORESTATES BANK, N.A.
By: /s/ Theresa Marie Smith
____________________________________________________
Name: Theresa Marie Smith
Title: V.P.
GUARANTORS: ROCHESTER & SOUTHERN
RAILROAD, INC.
LOUISIANA & DELTA RAILROAD,
INC.
GENESEE AND WYOMING
RAILROAD COMPANY
BUFFALO & PITTSBURGH
RAILROAD, INC.
ALLEGHENY & EASTERN
RAILROAD, INC.
WILLAMETTE & PACIFIC
RAILROAD, INC.
GWI LEASING CORPORATION
GWI DAYTON, INC.
GWI RAIL MANAGEMENT
CORPORATION
GENESEE & WYOMING INVESTORS,
INC.
ILLINOIS & MIDLAND RAILROAD,
INC.
GWI CANADA, INC.
PORTLAND & WESTERN
RAILROAD, INC.
By: /s/ Mark W. Hastings
--------------------------------
Mark W. Hastings, Treasurer
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THE DANSVILLE AND MOUNT
MORRIS RAILROAD COMPANY
BRADFORD INDUSTRIAL
RAIL, INC.
GENESEE & WYOMING RAILROAD
SERVICES, INC. (f/k/a Railroad
Services, Inc.)
By: /s/ Alan R. Harris
-------------------------
Alan R. Harris, Treasurer
GWI SWITCHING SERVICES, L.P.
By: GWI Dayton, Inc.
Its General Partner
By: /s/ Mark W. Hastings
----------------------------
Mark W. Hastings, Treasurer
PITTSBURG & SHAWMUT
RAILROAD, INC.
By: /s/ David J. Collins
----------------------------
David J. Collins, President
RAIL LINK, INC.
CAROLINA COASTAL RAILWAY, INC.
COMMONWEALTH RAILWAY, INC.
TALLEYRAND TERMINAL RAILROAD
COMPANY, INC.
By: /s/ James W. Benz
______________________________
James W. Benz, President
CORPUS CHRISTI TERMINAL
RAILROAD, INC.
By: /s/ James W. Benz
----------------------------
Title: President