Exhibit 10.22
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AMENDED AND RESTATED CREDIT AGREEMENT
dated as of November 2, 1998
among
UNITED ROAD SERVICES, INC.,
VARIOUS FINANCIAL INSTITUTIONS,
BANKBOSTON, N.A.,
as Documentation Agent
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
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Arranged by NATIONSBANC MONTGOMERY SECURITIES LLC
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS...................................................... 1
1.1 Definitions.................................................. 1
1.2 Other Interpretive Provisions................................ 13
SECTION 2 COMMITMENTS OF THE BANKS; LETTER OF CREDIT,
BORROWING, CONVERSION AND CONTINUATION PROCEDURES................ 14
2.1 Commitments.................................................. 14
2.1.1 Loan Commitment....................................... 14
2.1.2 L/C Commitment........................................ 14
2.2 Revolving Loan Procedures.................................... 14
2.2.1 Various Types of Loans................................ 14
2.2.2 Borrowing Procedures.................................. 15
2.2.3 Conversion and Continuation Procedures................ 15
2.3 Letter of Credit Procedures.................................. 16
2.3.1 L/C Applications...................................... 16
2.3.2 Participation in Letters of Credit.................... 17
2.3.3 Reimbursement Obligations............................. 17
2.3.4 Limitation on Obligations of Issuing Banks............ 18
2.3.5 Funding by Banks to Issuing Banks..................... 18
2.4 Swing Line Loans............................................. 19
2.4.1 Swing Line Loans...................................... 19
2.4.2 Swing Line Loan Procedures............................ 19
2.4.3 Refunding of, or Funding of Participations
in,Swing Line Loans................................... 19
2.4.4 Repayment of Participations........................... 20
2.4.5 Participation Obligations Unconditional............... 20
2.5 Commitments Several.......................................... 21
2.6 Certain Conditions........................................... 21
SECTION 3 NOTES EVIDENCING LOANS........................................... 21
3.1 Notes........................................................ 21
3.2 Recordkeeping................................................ 21
SECTION 4 INTEREST......................................................... 22
4.1 Interest Rates............................................... 22
4.2 Interest Payment Dates....................................... 22
4.3 Setting and Notice of IBOR Rates............................. 22
4.4 Computation of Interest...................................... 23
SECTION 5 FEES............................................................. 23
5.1 Non-Use Fee.................................................. 23
5.2 Letter of Credit Fees........................................ 23
5.3 Arrangement and Agent's Fees................................. 24
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5.4 Closing Fees................................................. 24
SECTION 6 INCREASE, REDUCTION AND TERMINATION OF THE COMMITMENTS;
PREPAYMENTS..................................................... 24
6.1 Changes in Commitment Amount................................. 24
6.1.1 Reduction or Termination of the Commitments........... 24
6.1.2 Optional Increase in Commitment Amount................ 24
6.2 Voluntary Prepayments........................................ 25
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES................. 25
7.1 Making of Payments........................................... 25
7.2 Application of Certain Payments.............................. 26
7.3 Due Date Extension........................................... 26
7.4 Setoff....................................................... 26
7.5 Proration of Payments........................................ 26
7.6 Taxes........................................................ 27
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR LOANS........ 28
8.1 Increased Costs.............................................. 28
8.2 Basis for Determining Interest Rate Inadequate or
Unfair....................................................... 29
8.3 Changes in Law Rendering Eurodollar Loans Unlawful........... 30
8.4 Funding Losses............................................... 30
8.5 Right of Banks to Fund through Other Offices................. 31
8.6 Discretion of Banks as to Manner of Funding.................. 31
8.7 Mitigation of Circumstances; Replacement of Affected
Bank......................................................... 31
8.8 Conclusiveness of Statements; Survival of
Provisions................................................... 32
SECTION 9 WARRANTIES...................................................... 32
9.1 Organization, etc............................................ 32
9.2 Authorization; No Conflict................................... 32
9.3 Validity and Binding Nature.................................. 33
9.4 Financial Condition.......................................... 33
9.5 No Material Adverse Change................................... 33
9.6 Litigation and Contingent Liabilities........................ 34
9.7 Ownership of Properties; Liens............................... 34
9.8 Subsidiaries................................................. 34
9.9 Pension and Welfare Plans.................................... 34
9.10 Investment Company Act....................................... 35
9.11 Public Utility Holding Company Act........................... 35
9.12 Regulation U................................................. 35
9.13 Taxes........................................................ 35
9.14 Solvency, etc................................................ 35
9.15 Environmental Matters........................................ 35
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9.16 Year 2000 Problem............................................ 37
9.17 Copyrights, Patents, Trademarks and Licenses, etc............ 37
9.18 Transactions with Affiliates................................. 38
9.19 Information.................................................. 38
SECTION 10 COVENANTS...................................................... 38
10.1 Reports, Certificates and Other Information.................. 38
10.1.1 Audit Report........................................ 38
10.1.2 Quarterly Reports................................... 39
10.1.3 Monthly Reports..................................... 39
10.1.4 Compliance Certificates............................. 39
10.1.5 Reports to SEC and to Shareholders.................. 40
10.1.6 Notice of Default, Litigation and ERISA
Matters............................................. 40
10.1.7 Subsidiaries........................................ 41
10.1.8 Management Reports.................................. 41
10.1.9 Projections......................................... 41
10.1.10 Contracts........................................... 41
10.1.11 Fleet Audit Reports................................. 41
10.1.12 Other Information................................... 41
10.2 Books, Records and Inspections............................... 41
10.3 Insurance.................................................... 42
10.4 Compliance with Laws; Payment of Taxes and
Liabilities.................................................. 42
10.5 Maintenance of Existence, etc................................ 42
10.6 Financial Covenants.......................................... 43
10.6.1 Minimum Consolidated Net Income..................... 43
10.6.2 Funded Debt to Funded Debt plus Net Worth
Ratio............................................... 43
10.6.3 Funded Debt to EBITDA Ratio......................... 43
10.6.4 Capital Expenditures................................ 43
10.6.5 EBITR to Interest Expense plus Rental
Expense Ratio....................................... 43
10.6.6 Senior Funded Debt to Tangible Assets Ratio......... 43
10.7 Limitations on Debt.......................................... 43
10.8 Liens........................................................ 44
10.9 Restricted Payments.......................................... 45
10.10 Mergers, Consolidations, Sales.............................. 46
10.11 Modification of Organizational Documents.................... 46
10.12 Use of Proceeds............................................. 47
10.13 Further Assurances.......................................... 47
10.14 Transactions with Affiliates................................ 47
10.15 Employee Benefit Plans...................................... 47
10.16 Environmental Matters....................................... 47
10.17 Unconditional Purchase Obligations.......................... 48
10.18 Inconsistent Agreements..................................... 48
10.19 Business Activities......................................... 48
10.20 Advances and Other Investments.............................. 48
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10.21 Maintenance of Property..................................... 49
10.22 Performance of Obligations.................................. 49
10.23 Leases...................................................... 50
10.24 Assignability of Contracts.................................. 50
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING, ETC...................... 50
11.1 Initial Credit Extensions................................... 50
11.1.1 Notes............................................... 50
11.1.2 Resolutions......................................... 50
11.1.3 Consents, etc....................................... 51
11.1.4 Incumbency and Signature Certificates............... 51
11.1.5 Guaranty............................................ 51
11.1.6 Security Agreement.................................. 51
11.1.7 Pledge Agreements................................... 51
11.1.8 Confirmation and Omnibus Amendment.................. 51
11.1.9 Trust Agreements.................................... 51
11.1.10 Opinions of Counsels for the Company and
the Guarantors...................................... 51
11.1.11 Other............................................... 51
11.2 Conditions.................................................. 52
11.2.1 Compliance with Warranties, No Default,
etc................................................. 52
11.2.2 Confirmatory Certificate............................ 53
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT............................. 53
12.1 Events of Default........................................... 53
12.1.1 Non-Payment of the Loans, etc....................... 53
12.1.2 Non-Payment of Other Debt........................... 53
12.1.3 Other Material Obligations.......................... 53
12.1.4 Bankruptcy, Insolvency, etc......................... 54
12.1.5 Non-Compliance with Provisions of This
Agreement........................................... 54
12.1.6 Warranties.......................................... 54
12.1.7 Pension Plans....................................... 54
12.1.8 Judgments........................................... 55
12.1.9 Invalidity of Guaranty, etc......................... 55
12.1.10 Invalidity of Collateral Documents, etc............. 55
12.1.11 Change in Control................................... 55
12.2 Effect of Event of Default.................................. 56
SECTION 13 THE AGENT...................................................... 56
13.1 Appointment and Authorization............................... 56
13.2 Delegation of Duties........................................ 57
13.3 Liability of Agent.......................................... 57
13.4 Reliance by Agent........................................... 58
13.5 Notice of Default........................................... 58
13.6 Credit Decision............................................. 59
13.7 Indemnification............................................. 59
13.8 Agent in Individual Capacity................................ 60
13.9 Successor Agent............................................. 61
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13.10 Withholding Tax............................................. 61
13.11 Collateral Matters.......................................... 63
13.12 Funding Reliance............................................ 63
13.13 Documentation Agent......................................... 64
SECTION 14 GENERAL........................................................ 64
14.1 Waiver; Amendments.......................................... 64
14.2 Confirmations............................................... 65
14.3 Notices..................................................... 65
14.4 Computations................................................ 65
14.5 Regulation U................................................ 66
14.6 Costs, Expenses and Taxes................................... 66
14.7 Subsidiary References....................................... 66
14.8 Captions.................................................... 67
14.9 Assignments; Participations................................. 67
14.9.1 Assignments......................................... 67
14.9.2 Participations...................................... 68
14.10 Governing Law............................................... 69
14.11 Counterparts................................................ 69
14.12 Successors and Assigns...................................... 69
14.13 Indemnification by the Company.............................. 70
14.14 Forum Selection and Consent to Jurisdiction................. 70
14.15 Waiver of Jury Trial........................................ 71
SCHEDULES
SCHEDULE 1.1A Pricing Schedule
SCHEDULE 2.1 Banks and Percentages
SCHEDULE 2.1.2 Existing Letters of Credit
SCHEDULE 9.6 Litigation and Contingent Liabilities
SCHEDULE 9.8 Subsidiaries
SCHEDULE 9.15 Environmental Matters
SCHEDULE 10.7 Existing Debt
SCHEDULE 10.8 Existing Liens
SCHEDULE 12.1.11A Key Executives
SCHEDULE 12.1.11B Key Directors
SCHEDULE 14.3 Addresses for Notices
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EXHIBITS
EXHIBIT A Form of Note
(Section 3.1)
EXHIBIT B Form of Compliance Certificate
(Section 10.1.4)
EXHIBIT C Guaranty
(Section 1)
EXHIBIT D Security Agreement
(Section 1)
EXHIBIT E Company Pledge Agreement
(Section 1)
EXHIBIT F Form of Subsidiary Pledge Agreement
(Section 11.1.7)
EXHIBIT G Form of Assignment Agreement
(Section 14.9)
EXHIBIT H Form of Notice of Borrowing
(Section 2.2.2)
EXHIBIT I Form of Notice of Conversion/Continuation
(Section 2.2.3)
EXHIBIT J Form of Confirmation and Omnibus Amendment
(Section 11.1.8)
EXHIBIT K Form of Request for Increase
(Section 6.1.2)
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AMENDED AND RESTATED CREDIT AGREEMENT
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This AMENDED AND RESTATED CREDIT AGREEMENT, dated as of November 2, 1998
(this "Agreement"), is entered into among UNITED ROAD SERVICES, INC., a Delaware
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corporation (the "Company"), the financial institutions that are or may from
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time to time become parties hereto (together with their respective successors
and assigns, the "Banks"), BANKBOSTON, N.A., as Documentation Agent, and BANK OF
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AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (in its individual capacity,
"BofA"), as agent for the Banks.
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WHEREAS, the Company, the Banks and the Agent have entered into a Credit
Agreement dated as of May 8, 1998 (as heretofore amended, modified or
supplemented, the "Existing Agreement");
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WHEREAS, the parties hereto have agreed to amend and restate the Existing
Agreement; and
WHEREAS, the parties hereto intend that this Agreement and the documents
executed in connection herewith not effect a novation of the obligations of the
Company under the Existing Agreement, but merely a restatement and, where
applicable, an amendment of the terms governing such obligations;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1 DEFINITIONS.
1.1 Definitions. When used herein the following terms shall have the
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following meanings:
Affected Bank means any Bank that has given notice to the Company (which
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has not been rescinded) of (i) any obligation by the Company to pay any amount
pursuant to Section 7.6 or 8.1 or (ii) the occurrence of any circumstances of
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the nature described in Section 8.2 or 8.3.
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Affiliate of any Person means (i) any other Person which, directly or
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indirectly, controls or is controlled by or is under common control with such
Person and (ii) any officer or director of such Person.
Agent means BofA in its capacity as agent for the Banks hereunder and any
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successor thereto in such capacity.
Agent-Related Persons means BofA and any successor agent arising under
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Section 13.9, together with their respective Affiliates (including, in the case
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of BofA, the Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
Agreement - see the Preamble.
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Arranger means NationsBanc Montgomery Securities LLC, a Delaware limited
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liability company.
Assignment Agreement - see Section 14.9.1.
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Bank - see the Preamble.
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Base Rate means at any time the greater of (a) the Federal Funds Rate plus
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0.5% and (b) the Reference Rate.
Base Rate Loan means any Loan which bears interest at or by reference to
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the Base Rate.
Base Rate Margin - see Schedule 1.1A.
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BofA - see the Preamble.
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Business Day means any day on which BofA is open for commercial banking
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business in Chicago, New York and San Francisco and, in the case of a Business
Day which relates to a Eurodollar Loan, on which dealings are carried on in the
interbank eurodollar market.
Capital Expenditures means all expenditures which, in accordance with GAAP,
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would be required to be capitalized and shown on the consolidated balance sheet
of the Company, but excluding expenditures made in connection with the
replacement, substitution or restoration of assets to the extent financed within
three months (i) from insurance proceeds (or other similar recoveries) paid on
account of the loss of or damage to the assets being replaced or restored or
(ii) with awards of compensation arising from the taking by eminent domain or
condemnation of the assets being replaced.
Capital Lease means, with respect to any Person, any lease of (or other
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agreement conveying the right to use) any real or personal property by such
Person that, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such Person.
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Cash Equivalent Investment means, at any time, (a) any evidence of Debt,
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maturing not more than one year after such time, issued or guaranteed by the
United States Government or any agency thereof, (b) commercial paper, maturing
not more than one year from the date of issue, or corporate demand notes, in
each case (unless issued by a Bank or its holding company) rated at least A-l by
Standard & Poor's Ratings Services Group or P-l by Moody's Investors Service,
Inc., (c) any certificate of deposit (or time deposits represented by such
certificates of deposit) or bankers acceptance, maturing not more than one year
after such time, or overnight Federal Funds transactions that are issued or sold
by a commercial banking institution that is a member of the Federal Reserve
System and has a combined capital and surplus and undivided profits of not less
than $500,000,000, (d) any repurchase agreement entered into with any Bank (or
other commercial banking institution of the stature referred to in clause (c))
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which (i) is secured by a fully perfected security interest in any obligation of
the type described in any of clauses (a) through (c) and (ii) has a market value
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at the time such repurchase agreement is entered into of not less than 100% of
the repurchase obligation of such Bank (or other commercial banking institution)
thereunder and (e) investments in short-term asset management accounts offered
by any Bank for the purpose of investing in loans to any corporation (other than
the Company or an Affiliate of the Company), state or municipality, in each case
organized under the laws of any state of the United States or of the District of
Columbia.
CERCLA - see Section 9.15.
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Code means the Internal Revenue Code of 1986, as amended.
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Collateral Documents means the Company Pledge Agreement, each Subsidiary
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Pledge Agreement, the Security Agreement and any other agreement pursuant to
which the Company or any Guarantor grants collateral to the Agent for the
benefit of the Banks.
Commitment Amount - see Section 2.1.1.
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Commitments means the Loan Commitment and the L/C Commitment.
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Company - see the Preamble.
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Company Pledge Agreement means the pledge agreement between the Company and
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the Agent, a copy of which is attached hereto as Exhibit E.
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3
Computation Period means each period of four consecutive Fiscal Quarters
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ending on the last day of a Fiscal Quarter.
Confirmation and Omnibus Amendment means the Confirmation and Omnibus
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Amendment among the Company, the Subsidiaries and the Agent, substantially in
the form of Exhibit J.
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Consolidated Net Income means, with respect to the Company and its
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Subsidiaries for any period, the net income (or loss) of the Company and its
Subsidiaries for such period, excluding any extraordinary gains during such
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period.
Controlled Group means all members of a controlled group of corporations
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and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Company, are treated
as a single employer under Section 414 of the Code or Section 4001 of ERISA.
Debt of any Person means, without duplication, (a) all indebtedness of such
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Person for borrowed money, whether or not evidenced by bonds, debentures, notes
or similar instruments, (b) all obligations of such Person as lessee under
Capital Leases which have been or should be recorded as liabilities on a balance
sheet of such Person, (c) all obligations of such Person to pay the deferred
purchase price of property or services (excluding trade accounts payable in the
ordinary course of business), (d) all indebtedness secured by a Lien on the
property of such Person, whether or not such indebtedness shall have been
assumed by such Person (it being understood that if such Person has not assumed
or otherwise become personally liable for any such indebtedness, the amount of
the Debt of such Person in connection therewith shall be limited to the lesser
of the face amount of such indebtedness or the fair market value of all property
of such Person securing such indebtedness), (e) all obligations, contingent or
otherwise, with respect to the face amount of all letters of credit (whether or
not drawn) and banker's acceptances issued for the account of such Person
(including the Letters of Credit), (f) net liabilities of such Person under all
Hedging Obligations and (g) all Suretyship Liabilities of such Person.
Disposal - see the definition of "Release".
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Documentation Agent means BankBoston, N.A. in its capacity as documentation
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agent for the Banks hereunder and any successor thereto in such capacity.
Dollar and the sign "$" mean lawful money of the United States of America.
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4
EBITDA means, for any period, Consolidated Net Income for such period plus,
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to the extent deducted in determining such Consolidated Net Income, Interest
Expense, income tax expense, depreciation and amortization for such period;
provided that for purposes of calculating EBITDA for any period, the
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consolidated net income of any Person acquired by the Company or any Subsidiary
during such period (plus, to the extent deducted in determining such
consolidated net income, interest expense, income tax expense, depreciation and
amortization of such Person) shall be included on a pro forma basis for such
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period (assuming the consummation of each such acquisition and the incurrence or
assumption of any Debt in connection therewith occurred on the first day of such
period) in accordance with Article 11 of Regulation S-X of the SEC.
EBITR means, for any period, Consolidated Net Income for such period plus
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Rental Expense and, to the extent deducted in determining such Consolidated Net
Income, Interest Expense and income tax expense.
Effective Date - see Section 11.1.
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Environmental Claims means all claims, however asserted, by any
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governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment.
Environmental Laws means all federal, state or local laws, statutes, common
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law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any governmental authority, in each case
relating to environmental matters.
Equipment has the meaning assigned to such term in the Security Agreement.
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ERISA means the Employee Retirement Income Security Act of 1974.
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References to sections of ERISA also refer to any successor sections.
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Eurocurrency Reserve Percentage means, with respect to any Eurodollar Loan
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for any Interest Period, a percentage (expressed as a decimal) equal to the
daily average during such Interest Period of the percentage in effect on each
day of such Interest Period, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor), for determining the aggregate
5
maximum reserve requirements applicable to "Eurocurrency Liabilities" pursuant
to Regulation D or any other then applicable regulation of such Board of
Governors which prescribes reserve requirements applicable to "Eurocurrency
Liabilities" as presently defined in Regulation D.
Eurodollar Loan means any Loan which bears interest at a rate determined by
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reference to the Eurodollar Rate (Reserve Adjusted).
Eurodollar Margin - see Schedule 1.1A.
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Eurodollar Office means with respect to any Bank the office or offices of
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such Bank which shall be making or maintaining the Eurodollar Loans of such Bank
hereunder or such other office or offices through which such Bank determines its
IBOR Rate. A Eurodollar Office of any Bank may be, at the option of such Bank,
either a domestic or foreign office.
Eurodollar Rate (Reserve Adjusted) means, with respect to any Eurodollar
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Loan for any Interest Period, a rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) determined pursuant to the following formula:
Eurodollar Rate = IBOR Rate
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(Reserve Adjusted) 1-Eurocurrency
Reserve Percentage
Event of Default means any of the events described in Section 12.1.
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Existing Letters of Credit means the letters of credit listed on Schedule
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2.1.2.
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Federal Funds Rate means, for any day, the rate set forth in the weekly
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statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor
publication, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on
that day by each of three leading brokers of Federal funds transactions in New
York City selected by the Agent.
6
Financial Letter of Credit means any Letter of Credit determined by the
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applicable Issuing Bank to be a "financial guaranty-type Standby Letter of
Credit" as defined in footnote 13 to Appendix A to the Risk Based Capital
Guidelines issued by the Comptroller of the Currency (or in any successor
regulation, guideline or ruling by any applicable banking regulatory authority).
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
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Fiscal Year means the fiscal year of the Company and its Subsidiaries,
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which period shall be the 12-month period ending on December 31 of each year.
References to a Fiscal Year with a number corresponding to any calendar year
(e.g., "Fiscal Year 1997") refer to the Fiscal Year ending on December 31 of
such calendar year.
Funded Debt means all Debt of the Company and its Subsidiaries, excluding
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(i) contingent obligations in respect of undrawn letters of credit (other than
letters of credit supporting Debt of a Person other than the Company or any
Subsidiary), (ii) the first $6,000,000 of Suretyship Liabilities in respect of
guarantees of lease obligations described in Section 10.7(h) and any other
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Suretyship Liabilities except (in the case of such other Suretyship Liabilities)
to the extent in respect of Debt of a Person which is not the Company or a
Subsidiary, (iii) Hedging Obligations and (iv) Debt of the Company to
Subsidiaries and Debt of Subsidiaries to the Company or to other Subsidiaries.
Funded Debt to EBITDA Ratio means, as of the last day of any Fiscal
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Quarter, the ratio of (i) Funded Debt as of the last day of such Fiscal Quarter
to (ii) EBITDA for the Computation Period ending on the last day of such Fiscal
Quarter.
GAAP means generally accepted accounting principles set forth from time to
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time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
Group - see Section 2.2.1.
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Guarantor means, on any day, each Subsidiary that has executed a
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counterpart of the Guaranty on or prior to that day
7
(or is required to execute a counterpart of the Guaranty on that date).
Guaranty means the guaranty executed by various Subsidiaries of the
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Company, a copy of which is attached hereto as Exhibit C.
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Hazardous Substances - see Section 9.15.
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Hedging Obligations means, with respect to any Person, all liabilities of
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such Person under interest rate, currency and commodity swap agreements, cap
agreements and collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates, currency
exchange rates or commodity prices.
IBOR Rate means, with respect to any Eurodollar Loan for any Interest
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Period, the rate per annum at which Dollar deposits in immediately available
funds are offered to the Eurodollar Office of BofA two Business Days prior to
the beginning of such Interest Period by major banks in the interbank eurodollar
market as at or about 10:00 A.M., Chicago time, for delivery on the first day of
such Interest Period, for the number of days comprised therein and in an amount
equal or comparable to the amount of the Eurodollar Loan of BofA for such
Interest Period.
Interest Expense means for any period the consolidated interest expense of
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the Company and its Subsidiaries for such period (including all imputed interest
on Capital Leases and before giving effect to any capitalization of interest but
excluding amortization of deferred financing costs).
Interest Period means, as to any Eurodollar Loan, the period commencing on
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the date such Loan is borrowed or continued as, or converted into, a Eurodollar
Loan and ending on the date one, two, three or six months thereafter as selected
by the Company pursuant to Section 2.2.2 or 2.2.3, as the case may be; provided
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that:
(i) if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the following
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(ii) any Interest Period that begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period shall end on the
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last Business Day of the calendar month at the end of such Interest
Period; and
(iii) the Company may not select any Interest Period which would
extend beyond the scheduled Termination Date.
Investment means, relative to any Person, (a) any loan or advance made by
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such Person to any other Person (excluding any commission, travel or similar
advances made to directors, officers and employees of the Company or any of its
Subsidiaries), (b) any Suretyship Liability of such Person, (c) any ownership or
similar interest held by such Person in any other Person and (d) deposits and
the like relating to prospective acquisitions of businesses.
Issuing Bank means BofA in its capacity as an issuer of Letters of Credit
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hereunder and any other Bank which, with the written consent of the Company and
the Agent, is the issuer of one or more Letters of Credit hereunder.
L/C Application means, with respect to any request for the issuance of a
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Letter of Credit, a letter of credit application in the form being used by the
applicable Issuing Bank at the time of such request for the type of letter of
credit requested.
L/C Commitment means the commitment of the Issuing Bank to issue, and of
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each Bank to participate in, Letters of Credit pursuant to Section 2.1.2.
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Letter of Credit - see Section 2.1.2.
---------------- -------------
Lien means, with respect to any Person, any interest granted by such Person
----
in any real or personal property, asset or other right owned or being purchased
or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge or other
security interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise.
Loan Commitment means the commitment of the Banks to make Loans pursuant to
---------------
Section 2.1.1.
- -------------
Loan Documents means this Agreement, the Notes, the Guaranty, the L/C
--------------
Applications and the Collateral Documents.
Loans means Revolving Loans and Swing Line Loans.
-----
9
Margin Stock means any "margin stock" as defined in Regulation U of the
------------
Board of Governors of the Federal Reserve System.
Material Adverse Effect means (a) a material adverse change in, or a
-----------------------
material adverse effect upon, the financial condition, operations, assets,
business, properties or prospects of the Company and its Subsidiaries taken as a
whole, or (b) a material adverse effect upon any substantial portion of the
collateral under the Collateral Documents or upon the legality, validity,
binding effect or enforceability against the Company or any Guarantor of any
Loan Document.
Multiemployer Pension Plan means a multiemployer plan, as such term is
--------------------------
defined in Section 4001(a)(3) of ERISA, and to which the Company or any member
of the Controlled Group may have any liability.
Net Worth means the Company's consolidated stockholders' equity (including
---------
preferred stock accounts).
Non-Financial Letter of Credit means any Letter of Credit other than a
------------------------------
Financial Letter of Credit.
Note - see Section 3.1.
---- -----------
Notice of Borrowing means a notice substantially in the Form of Exhibit H.
------------------- ---------
Notice of Conversion/Continuation means a notice substantially in the form
---------------------------------
of Exhibit I.
---------
Operating Lease means any lease of (or other agreement conveying the right
---------------
to use) any real or personal property by the Company or any Subsidiary, as
lessee, other than any Capital Lease.
PBGC means the Pension Benefit Guaranty Corporation and any entity
----
succeeding to any or all of its functions under ERISA.
Pension Plan means a "pension plan", as such term is defined in Section
------------
3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer
Pension Plan), and to which the Company or any member of the Controlled Group
may have any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years, or by reason of
10
being deemed to be a contributing sponsor under Section 4069 of ERISA.
Percentage means, with respect to any Bank, the percentage specified
----------
opposite such Bank's name on Schedule 2.1 hereto, reduced (or increased) by
------------
subsequent assignments pursuant to Section 14.9.1.
--------------
Person means any natural person, corporation, partnership, trust, limited
------
liability company, association, governmental authority or unit, or any other
entity, whether acting in an individual, fiduciary or other capacity.
RCRA - see Section 9.15.
---- ------------
Reference Rate means, for any day, the rate of interest in effect for such
--------------
day as publicly announced from time to time by BofA in San Francisco,
California, as its "reference rate." (The "reference rate" is a rate set by
BofA based upon various factors, including BofA's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate.) Any change in the reference rate announced by BofA shall take effect at
the opening of business on the day specified in the public announcement of such
change.
Release has the meaning specified in CERCLA and the term "Disposal" (or
------- --------
"Disposed") has the meaning specified in RCRA; provided that in the event either
- --------- --------
CERCLA or RCRA is amended so as to broaden the meaning of any term defined
thereby, such broader meaning shall apply as of the effective date of such
amendment; and provided, further, that to the extent that the laws of a state
-------- -------
wherein any affected property lies establish a meaning for "Release" or
-------
"Disposal" which is broader than is specified in either CERCLA or RCRA, such
- ---------
broader meaning shall apply.
Rental Expense means for any period the consolidated rental expense of the
--------------
Company and its Subsidiaries for such period.
Required Banks means Banks having Percentages aggregating 66-2/3% or more;
--------------
provided that if and so long as any Bank fails to fund its participation in any
- --------
Swing Line Loan when required by Section 2.4.3, such Bank's Percentage shall be
-------------
deemed for purposes of this definition to be reduced by the percentage which the
defaulted amount constitutes of such Bank's Percentage, and the Percentage of
the Swing Line Bank shall be deemed for purposes of this definition to be
increased by such percentage.
11
Revolving Loans - see Section 2.1.1.
--------------- -------------
SEC means the Securities and Exchange Commission.
---
Security Agreement means the Security Agreement among the Company, various
------------------
Subsidiaries of the Company and the Agent, a copy of which is attached hereto as
Exhibit D.
- ---------
Senior Funded Debt means all Funded Debt of the Company and its
------------------
Subsidiaries other than Subordinated Debt.
Stated Amount means, with respect to any Letter of Credit at any date of
-------------
determination, the maximum aggregate amount available for drawing thereunder at
any time during the then ensuing term of such Letter of Credit under any and all
circumstances, plus the aggregate amount of all unreimbursed payments and
disbursements under such Letter of Credit.
Subordinated Debt means any unsecured indebtedness of the Company which (x)
-----------------
is owed to Persons other than officers, employees, directors or Affiliates of
the Company, (y) has no amortization prior to December 31, 2001 and (z) has
subordination terms, covenants, pricing and other terms applicable to such
indebtedness which have been approved in writing by the Required Banks.
Subsidiary means, with respect to any Person, a corporation of which such
----------
Person and/or its other Subsidiaries own, directly or indirectly, such number of
outstanding shares as have more than 50% of the ordinary voting power for the
election of directors. Unless the context otherwise requires, each reference to
Subsidiaries herein shall be a reference to Subsidiaries of the Company.
Subsidiary Pledge Agreement means each pledge agreement substantially in
---------------------------
the form of Exhibit F issued by any Subsidiary, whether pursuant to Section
--------- -------
11.1.7 or Section 10.14.
- ------ -------------
Suretyship Liability means any agreement, undertaking or arrangement by
--------------------
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to or otherwise to invest in a
debtor, or otherwise to assure a creditor against loss) any indebtedness,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of dividends
or other distributions upon the shares of any other Person. The amount of any
Person's
12
obligation in respect of any Suretyship Liability shall (subject to any
limitation set forth therein) be deemed to be the principal amount of the debt,
obligation or other liability supported thereby.
Swing Line Bank means BofA in its capacity as swing line lender hereunder,
---------------
together with any replacement swing line lender arising under Section 13.9.
------------
Swing Line Loan - see Section 2.4.1.
--------------- -------------
Tangible Assets means at any time all assets of the Company and its
---------------
Subsidiaries excluding (i) amounts in excess of $5,000,000 in the aggregate of
---------
cash and Cash Equivalent Investments, and (ii) all Intangible Assets. For
purposes of the foregoing, "Intangible Assets" means goodwill, patents,
-----------------
tradenames, trademarks, copyrights, franchises, experimental expense,
organization expense, deferred financing costs and any other assets that are
properly classified as intangible assets in accordance with GAAP.
Termination Date means the earlier to occur of (a) October 31, 2001, or
----------------
such later date to which the Termination Date may be extended at the request of
the Company and with the consent of each Bank or (b) such other date on which
the Commitments shall terminate pursuant to Section 6 or 12.
--------- --
Trust Agreements means (i) the Trust Agreement dated as of September 21,
----------------
1998 among the Agent, the Company, the Subsidiaries of the Company and Truckers
Bookkeeping Service, L.L.C.; and (ii) the Trust Agreement dated as of October
30, 1998 among the Agent, the Company, the Subsidiaries of the Company and Road
Ready Registration.
13
Type of Loan or Borrowing - see Section 2.2.1. The types of Loans or
------------------------- -------------
borrowings under this Agreement are as follows: Base Rate Loans or borrowings
and Eurodollar Loans or borrowings.
Unmatured Event of Default means any event that, if it continues uncured,
--------------------------
will, with lapse of time or notice or both, constitute an Event of Default.
Welfare Plan means a "welfare plan", as such term is defined in Section
------------
3(1) of ERISA.
1.2 Other Interpretive Provisions. (a) The meanings of defined terms are
-----------------------------
equally applicable to the singular and plural forms of the defined terms.
(b) Section, Schedule and Exhibit references are to this Agreement
------- -------- -------
unless otherwise specified.
(c) (i) The term "including" is not limiting and means "including
without limitation."
(ii) In the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including"; the
words "to" and "until" each mean "to but excluding", and the word "through"
means "to and including."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such statute
or regulation.
(e) This Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(f) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by
14
counsel to the Agent, the Company, the Banks and the other parties thereto and
are the products of all parties. Accordingly, they shall not be construed
against the Agent or the Banks merely because of the Agent's or Banks'
involvement in their preparation.
SECTION 2 COMMITMENTS OF THE BANKS; LETTER OF CREDIT, BORROWING,
CONVERSION AND CONTINUATION PROCEDURES; SWING LINE LOANS.
2.1 Commitments. On and subject to the terms and conditions of this
-----------
Agreement, each of the Banks, severally and for itself alone, agrees to make
loans to, and to issue or participate in the issuance of letters of credit for
the account of, the Company as follows:
2.1.1 Loan Commitment. Each Bank will make loans on a revolving basis
---------------
("Revolving Loans") from time to time before the Termination Date in such Bank's
- -----------------
Percentage of such aggregate amounts as the Company may from time to time
request from all Banks; provided that the sum of (x) the aggregate outstanding
--------
principal amount of all Loans plus (y) the aggregate Stated Amount of all
Letters of Credit shall not at any time exceed $80,000,000, as such amount may
be changed from time to time pursuant to Section 6.1 (as so changed, the
-----------
"Commitment Amount").
- ------------------
2.1.2 L/C Commitment. (a) The Issuing Banks will issue standby letters
--------------
of in each case containing such terms and conditions as are permitted by this
Agreement and are reasonably satisfactory to the applicable Issuing Bank (each,
a "Letter of Credit" and, together with the Existing Letters of Credit, the
"Letters of Credit"), at the request of and for the account of the Company or
- -------------------
any Subsidiary from time to time before the Termination Date and (b) as more
fully set forth in Section 2.3.5, each Bank agrees to purchase a participation
--------------
in each such Letter of Credit; provided that the proposed Letter of Credit shall
--------
not cause the aggregate Stated Amount of all Letters of Credit at any time to
exceed the lesser of (i)$5,000,000 and (ii) the excess, if any, of the
Commitment Amount over the sum of the aggregate principal amount of all
outstanding Loans plus the aggregate Stated Amount of all Letters of Credit.
2.2 Revolving Loan Procedures.
-------------------------
2.2.1 Various Types of Loans. Each Revolving Loan shall be either a Base
----------------------
Rate Loan or a Eurodollar Loan (each a "type" of Loan), as the Company shall
----
specify in the related notice of borrowing or conversion pursuant to Section
-------
2.2.2 or 2.2.3. Eurodollar Loans having the same Interest Period are sometimes
- ----- -----
15
called a "Group" or collectively "Groups". Base Rate Loans and Eurodollar Loans
----- ------
may be outstanding at the same time, provided that (i) not more than seven
--------
different Groups of Revolving Loans shall be outstanding at any one time and
(ii) the aggregate principal amount of each Group of Eurodollar Loans shall at
all times be at least $1,000,000 and an integral multiple of $100,000. All
borrowings, conversions and repayments of Loans shall be effected so that each
Bank will have a pro rata share (according to its Percentage) of all types and
Groups of Revolving Loans.
2.2.2 Borrowing Procedures. The Company shall give written notice
--------------------
pursuant to a Notice of Borrowing or telephonic notice (followed immediately by
written confirmation thereof pursuant to a Notice of Borrowing) to the Agent of
each proposed borrowing not later than (a) in the case of a Base Rate borrowing,
10:00 A.M., Chicago time, on the proposed date of such borrowing, and (b) in the
case of a Eurodollar borrowing, 10:00 A.M., Chicago time, at least three
Business Days prior to the proposed date of such borrowing. Each such notice
shall be effective upon receipt by the Agent, shall be irrevocable, and shall
specify the date, amount and type of borrowing and, in the case of a Eurodollar
borrowing, the initial Interest Period therefor. Promptly upon receipt of such
notice, the Agent shall advise each Bank thereof. Not later than 1:00 p.m.,
Chicago time, on the date of a proposed borrowing, each Bank shall provide the
Agent at the office specified by the Agent with immediately available funds
covering such Bank's Percentage of such borrowing and, so long as the Agent has
not received written notice that the conditions precedent set forth in Section
-------
11 with respect to such borrowing have not been satisfied (and does not have
- --
knowledge of any default in the payment of any principal, interest or fees to be
paid to the Agent for the account of the Banks), the Agent shall pay over the
requested amount to the Company on the requested borrowing date. Each borrowing
shall be on a Business Day. Each Base Rate borrowing shall be in an aggregate
amount of at least $1,000,000 and an integral multiple of $500,000.
2.2.3 Conversion and Continuation Procedures. (a) Subject to Section
-------------------------------------- -------
2.2.1, the Company may, upon irrevocable written notice to the Agent in
- -----
accordance with clause (b) below:
----------
(i) elect, as of any Business Day, to convert any Revolving
Loans (or any part thereof in an aggregate amount not less than
$1,000,000 or a higher integral multiple of $500,000) into Revolving
Loans of the other type; or
16
(ii) elect, as of the last day of the applicable Interest
Period, to continue any Eurodollar Loans having Interest Periods
expiring on such day (or any part thereof in an aggregate amount not
less than $1,000,000 or a higher integral multiple of $500,000) for a
new Interest Period.
(b) The Company shall give written notice pursuant to a Notice of
Conversion/Continuation or telephonic notice (followed immediately by written
confirmation thereof pursuant to a Notice of Conversion/Continuation) to the
Agent of each proposed conversion or continuation not later than (i) in the case
of conversion into Base Rate Loans, 10:00 A.M., Chicago time, on the proposed
date of such conversion; and (ii) in the case of conversion into or continuation
of Eurodollar Loans, 10:00 A.M., Chicago time, at least three Business Days
prior to the proposed date of such conversion or continuation, specifying in
each case:
(i) the proposed date of conversion or continuation;
(ii) the aggregate amount of Revolving Loans to be converted or
continued;
(iii) the type of Revolving Loans resulting from the proposed
conversion or continuation; and
(iv) in the case of conversion into, or continuation of,
Eurodollar Loans, the duration of the requested Interest Period
therefor.
(c) If upon the expiration of any Interest Period applicable to
Eurodollar Loans, the Company has failed to select timely a new Interest Period
to be applicable to such Eurodollar Loans, the Company shall be deemed to have
elected to convert such Eurodollar Loans into Base Rate Loans effective on the
last day of such Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of a
notice of conversion or continuation pursuant to this Section 2.2.3 or, if no
-------------
timely notice is provided by the Company, of the details of any automatic
conversion.
(e) Any conversion of a Eurodollar Loan on a day other than the last
day of an Interest Period therefor shall be subject to Section 8.4.
-----------
17
2.3 Letter of Credit Procedures.
---------------------------
2.3.1 L/C Applications. The Company shall give notice to the Agent and
----------------
the applicable Issuing Bank of the proposed issuance of each Letter of Credit on
a Business Day which is at least three Business Days (or such lesser number of
days as the Agent and such Issuing Bank shall agree in any particular instance)
prior to the proposed date of issuance of such Letter of Credit. Each such
notice shall be accompanied by an L/C Application, duly executed by the Company
(together with any Subsidiary for the account of which the related Letter of
Credit is to be issued) and in all respects satisfactory to the Agent and the
applicable Issuing Bank, together with such other documentation as the Agent or
such Issuing Bank may request in support thereof, it being understood that each
L/C Application shall specify, among other things, the date on which the
proposed Letter of Credit is to be issued, the expiration date of such Letter of
Credit (which shall not be later than the Termination Date) and whether such
Letter of Credit is to be transferable in whole or in part. So long as the
applicable Issuing Bank has not received written notice that the conditions
precedent set forth in Section 11 with respect to the issuance of such Letter of
----------
Credit have not been satisfied, such Issuing Bank shall issue such Letter of
Credit on the requested issuance date. Each Issuing Bank shall promptly advise
the Agent of the issuance of each Letter of Credit by such Issuing Bank and of
any amendment thereto, extension thereof or event or circumstance changing the
amount available for drawing thereunder.
2.3.2 Participation in Letters of Credit. Concurrently with the issuance
----------------------------------
of each Letter of Credit (and with respect to each Existing Letter of Credit, on
the Effective Date), the applicable Issuing Bank shall be deemed to have sold
and transferred to each other Bank, and each other Bank shall be deemed
irrevocably and unconditionally to have purchased and received from such Issuing
Bank, without recourse or warranty, an undivided interest and participation, to
the extent of such other Bank's Percentage, in such Letter of Credit and the
Company's reimbursement obligations with respect thereto. For the purposes of
this Agreement, the unparticipated portion of each Letter of Credit shall be
deemed to be the applicable Issuing Bank's "participation" therein. Each
Issuing Bank hereby agrees, upon request of the Agent or any Bank, to deliver to
such Bank a list of all outstanding Letters of Credit issued by such Issuing
Bank, together with such information related thereto as such Bank may reasonably
request.
18
2.3.3 Reimbursement Obligations. The Company hereby unconditionally and
-------------------------
irrevocably agrees to reimburse the applicable Issuing Bank for each payment or
disbursement made by such Issuing Bank under any Letter of Credit honoring any
demand for payment made by the beneficiary thereunder, in each case on the date
that such payment or disbursement is made. Any amount not reimbursed on the
date of such payment or disbursement shall bear interest from the date of such
payment or disbursement to the date that such Issuing Bank is reimbursed by the
Company therefor, payable on demand, at a rate per annum equal to the Base Rate
from time to time in effect plus the Base Rate Margin from time to time in
----
effect plus, beginning on the three Business Day after receipt of notice from
----
the Issuing Bank of such payment or disbursement, 2%. The applicable Issuing
Bank shall notify the Company and the Agent whenever any demand for payment is
made under any Letter of Credit by the beneficiary thereunder; provided,
--------
however, that the failure of such Issuing Bank to so notify the Company shall
- -------
not affect the rights of such Issuing Bank or the Banks in any manner
whatsoever.
2.3.4 Limitation on Obligations of Issuing Banks. In determining whether
------------------------------------------
to pay under any Letter of Credit, no Issuing Bank shall have any obligation to
the Company or any Bank other than to confirm that any documents required to be
delivered under such Letter of Credit appear to have been delivered and appear
to comply on their face with the requirements of such Letter of Credit. Any
action taken or omitted to be taken by an Issuing Bank under or in connection
with any Letter of Credit, if taken or omitted in the absence of gross
negligence and willful misconduct, shall not impose upon such Issuing Bank any
liability to the Company or any Bank and shall not reduce or impair the
Company's reimbursement obligations set forth in Section 2.3.3 or the
-------------
obligations of the Banks pursuant to Section 2.3.5.
-------------
2.3.5 Funding by Banks to Issuing Banks. If an Issuing Bank makes any
---------------------------------
payment or disbursement under any Letter of Credit and the Company has not
reimbursed such Issuing Bank in full for such payment or disbursement by 11:00
A.M., Chicago time, on the date of such payment or disbursement, or if any
reimbursement received by such Issuing Bank from the Company is or must be
returned or rescinded upon or during any bankruptcy or reorganization of the
Company or otherwise, each other Bank shall be obligated to pay to the Agent for
the account of such Issuing Bank, in full or partial payment of the purchase
price of its participation in such Letter of Credit, its pro rata share
(according to its Percentage) of such payment or disbursement (but no such
payment shall diminish the obligations of the Company under Section 2.3.3), and
-------------
upon notice from the applicable
19
Issuing Bank, the Agent shall promptly notify each other Bank thereof. Each
other Bank irrevocably and unconditionally agrees to so pay to the Agent in
immediately available funds for the applicable Issuing Bank's account the amount
of such other Bank's Percentage of such payment or disbursement. If and to the
extent any Bank shall not have made such amount available to the Agent by 2:00
P.M., Chicago time, on the Business Day on which such Bank receives notice from
the Agent of such payment or disbursement (it being understood that any such
notice received after noon, Chicago time, on any Business Day shall be deemed to
have been received on the next following Business Day), such Bank agrees to pay
interest on such amount to the Agent for the applicable Issuing Bank's account
forthwith on demand for each day from the date such amount was to have been
delivered to the Agent to the date such amount is paid, at a rate per annum
equal to (a) for the first three days after demand, the Federal Funds Rate from
time to time in effect and (b) thereafter, the Base Rate from time to time in
effect. Any Bank's failure to make available to the Agent its Percentage of any
such payment or disbursement shall not relieve any other Bank of its obligation
hereunder to make available to the Agent such other Bank's Percentage of such
payment, but no Bank shall be responsible for the failure of any other Bank to
make available to the Agent such other Bank's Percentage of any such payment or
disbursement.
2.4 Swing Line Loans.
----------------
2.4.1 Swing Line Loans. Subject to the terms and conditions of this
----------------
Agreement, the Swing Line Bank may from time to time, in its discretion, make
loans to the Company (collectively the "Swing Line Loans" and individually each
----------------
a "Swing Line Loan") in accordance with this Section 2.4 in an aggregate amount
--------------- -----------
not at any time exceeding $5,000,000; provided that the aggregate outstanding
--------
principal amount of all Loans plus the aggregate Stated Amount of all Letters of
Credit shall not at any time exceed the Commitment Amount. Amounts borrowed
under this Section 2.4 may be borrowed, repaid and (subject to the agreement of
-----------
the Swing Line Bank) reborrowed until the Termination Date.
2.4.2 Swing Line Loan Procedures. The Company shall give written or
--------------------------
telephonic notice to the Agent (which shall promptly inform the Swing Line Bank)
of each proposed Swing Line Loan not later than 12:00 noon, Chicago time, on the
proposed date of such Swing Line Loan. Each such notice shall be effective upon
receipt by the Agent and shall specify the date and amount of such Swing Line
Loan, which shall be not less than $100,000 or a higher integral multiple
thereof. So long as the Swing Line Bank
20
has not received written notice that the conditions precedent set forth in
Section 11 with respect to the making of such Swing Line Loan have not been
- ----------
satisfied, the Swing Line Bank may make the requested Swing Line Loan. If the
Swing Line Bank agrees to make the requested Swing Line Loan, the Swing Line
Bank shall pay over the requested amount to the Company on the requested
borrowing date. Concurrently with the making of any Swing Line Loan, the Swing
Line Bank shall be deemed to have sold and transferred to each other Bank, and
each other Bank shall be deemed to have purchased and received from the Swing
Line Bank, an undivided interest and participation to the extent of such other
Bank's Percentage in such Swing Line Loan (but such participation shall remain
unfunded until required to be funded pursuant to Section 2.4.3).
-------------
2.4.3 Refunding of, or Funding of Participations in, Swing Line Loans. The
---------------------------------------------------------------
Swing Line Bank may at any time, in its sole discretion, on behalf of the
Company (which hereby irrevocably authorizes the Swing Line Bank to act on its
behalf) deliver a notice to the Agent requesting that each Bank (including the
Swing Line Bank in its individual capacity) make a Revolving Loan (which shall
be a Base Rate Loan) in such Bank's Percentage of the aggregate amount of Swing
Line Loans outstanding on such date for the purpose of repaying all Swing Line
Loans (and, upon receipt of the proceeds of such Revolving Loans, the Agent
shall apply such proceeds to repay Swing Line Loans); provided that if the
--------
conditions precedent to a borrowing of Revolving Loans are not then satisfied or
for any other reason the Banks may not then make Revolving Loans, then instead
of making Revolving Loans each Bank (other than the Swing Line Bank) shall
become immediately obligated to fund its participation in all outstanding Swing
Line Loans and shall pay to the Agent for the account of the Swing Line Bank an
amount equal to such Bank's Percentage of such Swing Line Loans. If and to the
extent any Bank shall not have made such amount available to the Agent by 2:00
P.M., Chicago time, on the Business Day on which such Bank receives notice from
the Agent of its obligation to fund its participation in Swing Line Loans (it
being understood that any such notice received after 12:00 noon, Chicago time,
on any Business Day shall be deemed to have been received on the next following
Business Day), such Bank agrees to pay interest on such amount to the Agent for
the Swing Line Bank's account forthwith on demand for each day from the date
such amount was to have been delivered to the Agent to the date such amount is
paid, at a rate per annum equal to (a) for the first three days after demand,
the Federal Funds Rate from time to time in effect and (b) thereafter, the Base
Rate from time to time in effect. Any Bank's failure to make available to the
Agent its Percentage of the amount of all outstanding Swing
21
Line Loans shall not relieve any other Bank of its obligation hereunder to make
available to the Agent such other Bank's Percentage of such amount, but no Bank
shall be responsible for the failure of any other Bank to make available to the
Agent such other Bank's Percentage of any such amount.
2.4.4 Repayment of Participations. Upon (and only upon) receipt by the
---------------------------
Agent for the account of the Swing Line Bank of immediately available funds from
or on behalf of the Company (a) in reimbursement of any Swing Line Loan with
respect to which a Bank has paid the Agent for the account of the Swing Line
Bank the amount of such Bank's participation therein or (b) in payment of any
interest on a Swing Line Loan, the Agent will pay to such Bank its pro rata
share (according to its Percentage) thereof (and the Swing Line Bank shall
receive the amount otherwise payable to any Bank which did not so pay the Agent
the amount of such Bank's participation in such Swing Line Loan).
2.4.5 Participation Obligations Unconditional. (a) Each Bank's obligation
---------------------------------------
to make available to the Agent for the account of the Swing Line Bank the amount
of its participation interest in all Swing Line Loans as provided in Section
-------
2.4.3 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 Swing Line Bank or any other
Person, (ii) the occurrence or continuance of an Event of Default or Unmatured
Event of Default, (iii) any adverse change in the condition (financial or
otherwise) of the Company or any Subsidiary, (iv) any termination of the
Commitments or (v) any other circumstance, happening or event whatsoever.
(b) Notwithstanding the provisions of clause (a) above, no Bank shall
----------
be required to purchase a participation interest in any Swing Line Loan if,
prior to the making by the Swing Line Bank of such Swing Line Loan, the Swing
Line Bank received written notice specifying that one or more of the conditions
precedent to the making of such Swing Line Loan were not satisfied and, in fact,
such conditions precedent were not satisfied at the time of the making of such
Swing Line Loan.
2.5 Commitments Several. The failure of any Bank to make a requested
-------------------
Loan on any date shall not relieve any other Bank of its obligation to make a
Loan on such date, but no Bank shall be responsible for the failure of any other
Bank to make any Loan to be made by such other Bank.
22
2.6 Certain Conditions. Notwithstanding any other provision of this
------------------
Agreement, no Bank shall have an obligation to make any Loan, or to permit the
continuation of or any conversion into any Eurodollar Loan, and no Issuing Bank
shall have any obligation to issue any Letter of Credit, if an Event of Default
or Unmatured Event of Default exists.
SECTION 3 NOTES EVIDENCING LOANS.
3.1 Notes. The Loans of each Bank shall be evidenced by a promissory
-----
note (each a "Note") substantially in the form set forth in Exhibit A, with
---- ---------
appropriate insertions, payable to the order of such Bank in an amount equal to
such Bank's Percentage of the Loan Commitment or, (x) if less, in the aggregate
unpaid principal amount of such Bank's Loans, or (y) in the case of the Swing
Line Bank, an amount equal to the maximum principal amount of all Revolving
Loans and Swing Line Loans which the Swing Line Bank may at any time have
outstanding hereunder.
3.2 Recordkeeping. Each Bank shall record in its records, or at its
-------------
option on the schedule attached to its Note, the date and amount of each Loan
made by such Bank, each repayment or conversion thereof and, in the case of each
Eurodollar Loan, the dates on which each Interest Period for such Loan shall
begin and end. The aggregate unpaid principal amount so recorded shall be
rebuttable presumptive evidence of the principal amount owing and unpaid on such
Note. The failure to so record any such amount or any error in so recording any
such amount shall not, however, limit or otherwise affect the obligations of the
Company hereunder or under any Note to repay the principal amount of the Loans
evidenced by such Note together with all interest accruing thereon.
SECTION 4 INTEREST.
4.1 Interest Rates. The Company promises to pay interest on the unpaid
--------------
principal amount of each Loan for the period commencing on the date of such Loan
until such Loan is paid in full as follows:
(a) at all times while such Loan is a Base Rate Loan, at a rate per
annum equal to the sum of the Base Rate from time to time in effect plus
the Base Rate Margin from time to time in effect;
(b) at all times while such Loan is a Eurodollar Loan, at a rate per
annum equal to the sum of the Eurodollar Rate (Reserve Adjusted) applicable
to each Interest Period for
23
such Loan plus the Eurodollar Margin from time to time in effect; and
(c) at all times while such Loan is a Swing Line Loan, at a rate per
annum separately agreed to by the Company and the Swing Line Bank from time
to time (provided that if at any time the Banks are obligated to fund
participations in Swing Line Loans pursuant to Section 2.4.3, all of such
-------------
Swing Line Loans shall bear interest, from the date the obligation to fund
such participations first arises to the date such Swing Line Loans are paid
in full, at a rate per annum equal to the sum of the Base Rate from time to
time in effect plus the Base Rate Margin from time to time in effect);
provided, however, that at any time an Event of Default exists, the interest
- -------- -------
rate applicable to each Loan shall be increased by 2% (200 basis points per
annum).
4.2 Interest Payment Dates. Accrued interest on each Base Rate Loan and
----------------------
Swing Line Loan shall be payable in arrears on the last Business Day of each
calendar month and at maturity. Accrued interest on each Eurodollar Loan shall
be payable on the last day of each Interest Period relating to such Loan (and,
in the case of a Eurodollar Loan with a six-month Interest Period, on the three-
month anniversary of the first day of such Interest Period) and at maturity.
After maturity, accrued interest on all Loans shall be payable on demand.
4.3 Setting and Notice of IBOR Rates. The applicable IBOR Rate for each
--------------------------------
Interest Period shall be determined by the Agent, and notice thereof shall be
given by the Agent promptly to the Company and each Bank. Each determination of
the applicable IBOR Rate by the Agent shall be conclusive and binding upon the
parties hereto, in the absence of demonstrable error. The Agent shall, upon
written request of the Company or any Bank, deliver to the Company or such Bank
a statement showing the computations used by the Agent in determining any
applicable IBOR Rate hereunder.
4.4 Computation of Interest. All determinations of interest for Base
-----------------------
Rate Loans and Swing Line Loans when the Base Rate is determined by the
Reference Rate shall be made on the basis of a year of 365 or 366 days, as the
case may be, and the actual number of days elapsed. All other computations of
interest shall be computed for the actual number of days elapsed on the basis of
a year of 360 days. The applicable interest rate
24
for each Base Rate Loan (and each Swing Line Loan, if applicable) shall change
simultaneously with each change in the Base Rate.
SECTION 5 FEES.
5.1 Non-Use Fee. The Company agrees to pay to the Agent for the account
-----------
of each Bank a non-use fee, for the period from the Effective Date to the
Termination Date, at the rate per annum in effect from time to time pursuant to
Schedule 1.1A of the daily average of the unused amount of such Bank's
- -------------
Percentage of the Commitment Amount. For purposes of calculating usage under
this Section, the Commitment Amount shall be deemed used to the extent of the
aggregate principal amount of all outstanding Revolving Loans plus the undrawn
amount of all Letters of Credit. Such non-use fee shall be payable in arrears on
the last Business Day of each calendar quarter and on the Termination Date for
any period then ending for which such non-use fee shall not have theretofore
been paid. The non-use fee shall be computed for the actual number of days
elapsed on the basis of a year of 360 days.
5.2 Letter of Credit Fees. (a) The Company agrees to pay to the Agent
---------------------
for the account of the Banks pro rata according to their respective Percentages
a letter of credit fee for each Letter of Credit in an amount equal to the rate
per annum in effect from time to time pursuant to Schedule 1.1A of the undrawn
-------------
amount of such Letter of Credit (computed for the actual number of days elapsed
on the basis of a year of 360 days); provided that the rate applicable to each
--------
Letter of Credit shall be increased by 2% (200 basis points per annum)at any
time that an Event of Default exists. Such letter of credit fee shall be
payable in arrears on the last Business Day of each calendar quarter and on the
Termination Date for the period from the date of the issuance of each Letter of
Credit to the date such payment is due or, if earlier, the date on which such
Letter of Credit expired or was terminated.
(b) In addition, with respect to each Letter of Credit, the Company agrees
to pay to the applicable Issuing Bank, for its own account, (i) such fees and
expenses as such Issuing Bank customarily requires in connection with the
issuance, negotiation, processing and/or administration of letters of credit in
similar situations and (ii) a letter of credit fee in the amount separately
agreed to by the Company and such Issuing Bank.
5.3 Arrangement and Agent's Fees. The Company agrees to pay to the
----------------------------
Arranger and the Agent such arrangement and agent's
25
fees as are mutually agreed to from time to time by the Company and the Agent.
5.4 Closing Fees. On the Effective Date, the Company shall pay to the
------------
Agent for the account of each Bank a closing fee in the amount previously agreed
with such Bank.
SECTION 6 INCREASE, REDUCTION AND TERMINATION OF THE COMMITMENTS;
PREPAYMENTS.
6.1 Changes in Commitment Amount.
----------------------------
6.1.1 Reduction or Termination of the Commitments. The Company may from
-------------------------------------------
time to time on at least five Business Days' prior written notice received by
the Agent (which shall promptly advise each Bank thereof) permanently reduce the
Commitment Amount to an amount not less than the sum of the aggregate unpaid
principal amount of the Loans and the aggregate Stated Amount of all Letters of
Credit. Any such reduction shall be in an amount not less than $5,000,000 or a
higher integral multiple of $1,000,000. The Company may at any time on like
notice terminate the Commitments upon payment in full of all Loans and all other
obligations of the Company hereunder and cash collateralization in full,
pursuant to documentation in form and substance reasonably satisfactory to the
Banks, of all obligations arising with respect to the Letters of Credit. All
reductions of the Commitment Amount shall reduce the Commitments pro rata among
the Banks according to their respective Percentages.
6.1.2 Optional Increase in Commitment Amount. The Company may, from time
--------------------------------------
to time prior to February 28, 1999, by means of a letter to the Agent
substantially in the form of Exhibit K, request that the Commitment Amount be
---------
increased by (a) increasing the Commitment of one or more Banks which have
agreed to such increase and/or (b) adding one or more commercial banks or other
Persons as a party hereto with a Commitment in an amount agreed to by any such
commercial bank or other Person; provided that (i) no commercial bank or other
Person shall be added as a party hereto without the written consent of the Agent
(which shall not be unreasonably withheld) and (ii) in no event shall the
Commitment Amount exceed $100,000,000 without the written consent of all Banks.
Any increase in the Commitment Amount pursuant to this Section 6.1.2 shall be
-------------
effective three Business Days after the date on which the Agent has received and
accepted the applicable increase letter in the form of Annex 1 to Exhibit K (in
---------
the case of an increase in the Commitment of an existing Bank) or assumption
letter in the form of Annex 2 to Exhibit K
---------
26
(in the case of the addition of a commercial bank or other Person as a new
Bank). The Agent shall promptly notify the Company and the Banks of any increase
in the amount of the Commitment Amount pursuant to this Section 6.1.2 and of the
-------------
Commitment and Percentage of each Bank after giving effect thereto. The Company
acknowledges that, in order to maintain Loans in accordance with each Bank's
Percentage, a reallocation of the Commitments as a result of a non-pro-rata
increase in the Commitment Amount may require prepayment of all or portions of
certain Loans on the date of such increase (and any such prepayment shall be
subject to the provisions of Section 8.4). The Agent shall promptly notify all
-----------
Banks of any increase in the Commitment Amount pursuant to this Section 6.1.2.
-------------
6.2 Voluntary Prepayments. The Company may from time to time prepay the
---------------------
Loans in whole or in part, provided that (a) the Company shall give the Agent
--------
(which shall promptly advise each Bank) notice thereof not later than 10:00 A.M.
(Chicago time) on the day of such prepayment (which shall be a Business Day)
specifying the Loans to be prepaid and the date and amount of prepayment,(b)
each partial prepayment shall be in a principal amount of at least $500,000 and
an integral multiple of $100,000, or such lesser amount as may be necessary to
prepay in full all Loans outstanding, (c) any prepayment of a Eurodollar Loan on
a day other than the last day of an Interest Period therefor shall be subject to
Section 8.4, and (d) if any prepayment shall result in the aggregate principal
- -----------
amount of a Group of Eurodollar Loans being less than $1,000,000, such
Eurodollar Loans shall be automatically converted into Base Rate Loans.
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments. All payments of principal of or interest on the
------------------
Notes, and of all non-use fees and Letter of Credit fees, shall be made by the
Company to the Agent in immediately available funds at the office specified by
the Agent not later than noon, Chicago time, on the date due; and funds received
after that hour shall be deemed to have been received by the Agent on the next
following Business Day. The Agent shall promptly remit to each Bank or other
holder of a Note its share of all such payments received in collected funds by
the Agent for the account of such Bank or holder.
All payments under Section 8.1 shall be made by the Company directly to the
-----------
Bank entitled thereto.
7.2 Application of Certain Payments. Each payment of principal shall be
-------------------------------
applied to such Loans as the Company shall
27
direct by notice to be received by the Agent on or before the date of such
payment or, in the absence of such notice, as the Agent shall determine in its
discretion. Concurrently with each remittance to any Bank of its share of any
such payment, the Agent shall advise such Bank as to the application of such
payment.
7.3 Due Date Extension. If any payment of principal or interest with
------------------
respect to any of the Notes, or of non-use fees or Letter of Credit fees, falls
due on a day which is not a Business Day, then such due date shall be extended
to the immediately following Business Day (unless, in the case of a Eurodollar
Loan, such immediately following Business Day is the first Business Day of a
calendar month, in which case such date shall be the immediately preceding
Business Day) and, in the case of principal, additional interest shall accrue
and be payable for the period of any such extension.
7.4 Setoff. The Company agrees that the Agent and each Bank have all
------
rights of set-off and bankers' lien provided by applicable law, and in addition
thereto, the Company agrees that at any time any Event of Default exists, the
Agent and each Bank may apply to the payment of any obligations of the Company
hereunder, whether or not then due, any and all balances, credits, deposits,
accounts or moneys of the Company then or thereafter with the Agent or such
Bank.
7.5 Proration of Payments. If any Bank shall obtain any payment or other
---------------------
recovery (whether voluntary, involuntary, by application of offset or otherwise
but excluding any payment made to give effect to a non-pro-rata increase in the
Commitment Amount as described in Section 6.1.2 or any payment to the Swing Line
-------------
Bank in respect of a Swing Line Loan) on account of principal of or interest on
any Note (or on account of its participation in any Letter of Credit or Swing
Line Loan) in excess of its pro rata share of payments and other recoveries
obtained by all Banks on account of principal of and interest on Notes (or such
participation) then held by them, such Bank shall purchase from the other Banks
such participation in the Notes (or sub-participation in Letters of Credit or
Swing Line Loans) held by them as shall be necessary to cause such purchasing
Bank to share the excess payment or other recovery ratably with each of them;
provided, however, that if all or any portion of the excess payment or other
- -------- -------
recovery is thereafter recovered from such purchasing Bank, the purchase shall
be rescinded and the purchase price restored to the extent of such recovery.
28
7.6 Taxes. All payments of principal of, and interest on, the Loans and
-----
all other amounts payable hereunder shall be made free and clear of and without
deduction for any present or future income, excise, stamp or franchise taxes and
other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, but excluding franchise taxes and
taxes imposed on or measured by any Bank's net income or receipts (all non-
excluded items being called "Taxes"). If any withholding or deduction from any
-----
payment to be made by the Company hereunder is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then the Company will:
(a) pay directly to the relevant authority the full amount required
to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the Agent for the account of the Banks such additional
amount or amounts as is necessary to ensure that the net amount actually
received by each Bank will equal the full amount such Bank would have
received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Agent or any Bank with
respect to any payment received by the Agent or such Bank hereunder, the Agent
or such Bank may pay such Taxes and the Company will promptly pay such
additional amounts (including any penalty, interest and expense) as is necessary
in order that the net amount received by such Person after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the amount
such Person would have received had such Taxes not been asserted.
If the Company fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Agent, for the account of the respective
Banks, the required receipts or other required documentary evidence, the Company
shall indemnify the Banks for any incremental Taxes, interest or penalties that
may become payable by any Bank as a result of any such failure. For purposes of
this Section 7.6, a distribution hereunder by the Agent or any Bank to or for
-----------
the account of any Bank shall be deemed a payment by the Company.
Upon the request from time to time of the Company or the Agent, each Bank
that is organized under the laws of a jurisdiction other than the United States
of America shall
29
execute and deliver to the Company and the Agent one or more (as the Company or
the Agent may reasonably request) United States Internal Revenue Service Forms
4224 or Forms 1001 or such other forms or documents, appropriately completed, as
may be applicable to establish the extent, if any, to which a payment to such
Bank is exempt from withholding or deduction of Taxes.
The obligations of the Company under this Section 7.6 are subject to the
-----------
limitation set out in Section 14.9.1.
--------------
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR LOANS.
8.1 Increased Costs. (a) If, after the date hereof, the adoption of any
---------------
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or any Eurodollar Office of such Bank) with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency
(A) shall subject any Bank (or any Eurodollar Office of such Bank) to
any tax, duty or other charge with respect to its Eurodollar Loans, its
Note or its obligation to make Eurodollar Loans, or shall change the basis
of taxation of payments to any Bank of the principal of or interest on its
Eurodollar Loans or any other amounts due under this Agreement in respect
of its Eurodollar Loans or its obligation to make Eurodollar Loans (except
for changes in the rate of tax on the overall net income of such Bank or
its Eurodollar Office imposed by the jurisdiction in which such Bank's
principal executive office or Eurodollar Office is located); or
(B) shall impose, modify or deem applicable any reserve (including any
reserve imposed by the Board of Governors of the Federal Reserve System,
but excluding any reserve included in the determination of interest rates
pursuant to Section 4), special deposit or similar requirement against
---------
assets of, deposits with or for the account of, or credit extended by any
Bank (or any Eurodollar Office of such Bank); or
(C) shall impose on any Bank (or its Eurodollar Office) any other
condition affecting its Eurodollar Loans, its Note or its obligation to
make Eurodollar Loans;
30
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D of the Board of Governors of the Federal Reserve System, to
impose a cost on) such Bank (or any Eurodollar Office of such Bank) of making or
maintaining any Eurodollar Loan, or to reduce the amount of any sum received or
receivable by such Bank (or its Eurodollar Office) under this Agreement or under
its Note with respect to any Eurodollar Loan, then within 10 days after demand
by such Bank (which demand shall be accompanied by a statement setting forth the
basis for such demand and a calculation of the amount thereof in reasonable
detail, a copy of which shall be furnished to the Agent), the Company shall pay
directly to such Bank such additional amount as will compensate such Bank for
such increased cost or such reduction.
(b) If any Bank shall reasonably determine that the adoption or phase-in of
any applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank or any
Person controlling such Bank with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Bank's or such controlling Person's capital as a consequence of
such Bank's obligations hereunder (including such Bank's obligations under the
Loan Commitment or the L/C Commitment) or under any Letter of Credit to a level
below that which such Bank or such controlling Person could have achieved but
for such adoption, change or compliance (taking into consideration such Bank's
or such controlling Person's policies with respect to capital adequacy) by an
amount deemed by such Bank or such controlling Person to be material, then from
time to time, within 10 days after demand by such Bank (which demand shall be
accompanied by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which shall be
furnished to the Agent), the Company shall pay to such Bank such additional
amount or amounts as will compensate such Bank or such controlling Person for
such reduction.
8.2 Basis for Determining Interest Rate Inadequate or Unfair. If with
--------------------------------------------------------
respect to any Interest Period:
(a) deposits in Dollars (in the applicable amounts) are not being
offered to the Agent in the interbank eurodollar market for such Interest
Period, or the Agent
31
otherwise reasonably determines (which determination, if made in good
faith, shall be binding and conclusive on the Company) that by reason of
circumstances affecting the interbank eurodollar market adequate and
reasonable means do not exist for ascertaining the applicable IBOR Rate; or
(b) Banks having an aggregate Percentage of 40% or more advise the
Agent that the Eurodollar Rate (Reserve Adjusted) as determined by the
Agent will not adequately and fairly reflect the cost to such Banks of
maintaining or funding such Loans for such Interest Period (taking into
account any amount to which such Banks may be entitled under Section 8.1)
-----------
or that the making or funding of Eurodollar Loans has become impracticable
as a result of an event occurring after the date of this Agreement which in
the opinion of such Banks materially affects such Loans;
then the Agent shall promptly notify the other parties thereof and, so long as
- ----
such circumstances shall continue, (i) no Bank shall be under any obligation to
make or convert into Eurodollar Loans and (ii) on the last day of the current
Interest Period for each Eurodollar Loan, such Loan shall, unless then repaid in
full, automatically convert to a Base Rate Loan.
8.3 Changes in Law Rendering Eurodollar Loans Unlawful. In the event
--------------------------------------------------
that any change in (including the adoption of any new) applicable laws or
regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it (or in the good faith judgment of any
Bank cause a substantial question as to whether it is) unlawful for any Bank to
make, maintain or fund Eurodollar Loans, then such Bank shall promptly notify
each of the other parties hereto and, so long as such circumstances shall
continue, (a) such Bank shall have no obligation to make or convert into
Eurodollar Loans (but shall make Base Rate Loans concurrently with the making of
or conversion into Eurodollar Loans by the Banks which are not so affected, in
each case in an amount equal to such Bank's pro rata share of all Eurodollar
Loans which would be made or converted into at such time in the absence of such
circumstances) and (b) on the last day of the current Interest Period for each
Eurodollar Loan of such Bank (or, in any event, on such earlier date as may be
required by the relevant law, regulation or interpretation), such Eurodollar
Loan shall, unless then repaid in full, automatically convert to a Base Rate
Loan. Each Base Rate Loan made by a Bank which, but for the circumstances
described in the foregoing sentence, would be a Eurodollar Loan (an "Affected
Loan") shall remain outstanding for
32
the same period as the Group of Eurodollar Loans of which such Affected Loan
would be a part absent such circumstances.
8.4 Funding Losses. The Company hereby agrees that upon demand by any
--------------
Bank (which demand shall be accompanied by a statement setting forth the basis
for the amount being claimed, a copy of which shall be furnished to the Agent),
the Company will indemnify such Bank against any net loss or expense which such
Bank may sustain or incur (including any net loss or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by such
Bank to fund or maintain any Eurodollar Loan), as reasonably determined by such
Bank, as a result of (a) any payment, prepayment or conversion of any Eurodollar
Loan of such Bank on a date other than the last day of an Interest Period for
such Loan (including any conversion pursuant to Section 8.3) or (b) any failure
-----------
of the Company to borrow or convert any Loan on a date specified therefor in a
notice of borrowing or conversion pursuant to this Agreement. For this purpose,
all notices to the Agent pursuant to this Agreement shall be deemed to be
irrevocable.
8.5 Right of Banks to Fund through Other Offices. Each Bank may, if it
--------------------------------------------
so elects, fulfill its commitment as to any Eurodollar Loan by causing a foreign
branch or affiliate of such Bank to make such Loan, provided that in such event
--------
for the purposes of this Agreement such Loan shall be deemed to have been made
by such Bank and the obligation of the Company to repay such Loan shall
nevertheless be to such Bank and shall be deemed held by it, to the extent of
such Loan, for the account of such branch or affiliate.
8.6 Discretion of Banks as to Manner of Funding. Notwithstanding any
-------------------------------------------
provision of this Agreement to the contrary, each Bank shall be entitled to fund
and maintain its funding of all or any part of its Loans in any manner it sees
fit, it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if such Bank had actually funded and
maintained each Eurodollar Loan during each Interest Period for such Loan
through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the IBOR Rate for such
Interest Period.
8.7 Mitigation of Circumstances; Replacement of Affected Bank. (a) Each
---------------------------------------------------------
Bank shall promptly notify the Company and the Agent of any event of which it
has knowledge which will result in, and will use reasonable commercial efforts
available to it (and not, in such Bank's good faith judgment, otherwise
33
disadvantageous to such Bank) to mitigate or avoid, (i) any obligation by the
Company to pay any amount pursuant to Section 7.6 or 8.1 or (ii) the occurrence
----------- ---
of any circumstances of the nature described in Section 8.2 or 8.3 (and, if any
----------- ---
Bank has given notice of any such event described in clause (i) or (ii) above
---------- ----
and thereafter such event ceases to exist, such Bank shall promptly so notify
the Company and the Agent). Without limiting the foregoing, each Bank will
designate a different funding office if such designation will avoid (or reduce
the cost to the Company of) any event described in clause (i) or (ii) of the
---------- ----
preceding sentence and such designation will not, in such Bank's sole judgment,
be otherwise disadvantageous to such Bank.
(b) At any time any Bank is an Affected Bank, the Company may replace such
Affected Bank as a party to this Agreement with one or more other bank(s) or
financial institution(s) reasonably satisfactory to the Agent (and upon notice
from the Company such Affected Bank shall assign pursuant to an Assignment
Agreement, and without recourse or warranty, its Commitment, its Loans, its
Note, its participation in Letters of Credit, and all of its other rights and
obligations hereunder to such replacement bank(s) or other financial
institution(s) for a purchase price equal to the sum of the principal amount of
the Loans so assigned, all accrued and unpaid interest thereon, its ratable
share of all accrued and unpaid non-use fees and Letter of Credit fees, any
amounts payable under Section 8.4 as a result of such Bank receiving payment of
-----------
any Eurodollar Loan prior to the end of an Interest Period therefor and all
other obligations owed to such Affected Bank hereunder).
8.8 Conclusiveness of Statements; Survival of Provisions. Determinations
----------------------------------------------------
and statements of any Bank pursuant to Section 8.1, 8.2, 8.3 or 8.4 shall be
----------- --- --- ---
conclusive absent demonstrable error. Banks may use reasonable averaging and
attribution methods in determining compensation under Sections 8.1 and 8.4, and
------------ ---
the provisions of such Sections shall survive repayment of the Loans,
cancellation of the Notes, cancellation or expiration of the Letters of Credit
and any termination of this Agreement.
SECTION 9 WARRANTIES.
To induce the Agent and the Banks to enter into this Agreement and to
induce the Banks to make Loans and issue or purchase participations in Letters
of Credit hereunder, the Company warrants to the Agent and the Banks that:
9.1 Organization, etc. The Company is a corporation duly organized,
------------------
validly existing and in good standing under the laws
34
of the State of Delaware; each Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation; and the Company and each Subsidiary is duly qualified to do
business in each jurisdiction where the nature of its business makes such
qualification necessary (except in those instances in which the failure to be
qualified or in good standing does not have a Material Adverse Effect) and has
full power and authority to own its property and conduct its business as
presently conducted by it.
9.2 Authorization; No Conflict. The execution and delivery by the
--------------------------
Company of this Agreement and each other Loan Document to which it is a party,
the borrowings hereunder, the execution and delivery by each Guarantor of each
Loan Document to which it is a party and the performance by each of the Company
and each Guarantor of its obligations under each Loan Document to which it is a
party are within the corporate powers of the Company and each Guarantor, have
been duly authorized by all necessary corporate action on the part of the
Company and each Guarantor (including any necessary shareholder action), have
received all necessary governmental approval (if any shall be required), and do
not and will not (a) violate any provision of law or any order, decree or
judgment of any court or other government agency which is binding on the Company
or any Guarantor, (b) contravene or conflict with, or result in a breach of, any
provision of the Certificate of Incorporation, By-Laws or other organizational
documents of the Company or any Guarantor or of any agreement, indenture,
instrument or other document which is binding on the Company, any Guarantor or
any other Subsidiary or (c) result in, or require, the creation or imposition of
any Lien on any property of the Company, any Guarantor or any other Subsidiary
(other than Liens arising under the Loan Documents).
9.3 Validity and Binding Nature. Each of this Agreement and each other
---------------------------
Loan Document to which the Company is a party is the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms; and each Loan Document to which any Guarantor is a party is, or upon
the execution and delivery thereof by such Guarantor will be, the legal, valid
and binding obligation of such Guarantor, enforceable against such Guarantor in
accordance with its terms.
9.4 Financial Condition. The financial statements of the Company and its
-------------------
Subsidiaries incorporated in the Form S-1 Registration Statement filed on
October 9, 1998, copies of which have been furnished to each Bank:
35
(i) were prepared in accordance with GAAP consistently applied
throughout the periods covered thereby, except as otherwise expressly noted
therein (subject, in the case of the unaudited financial statements, to the
absence of footnotes and to customary year-end audit adjustments); and
(ii fairly present in all material respects the financial
condition of the Company and its Subsidiaries as of the dates thereof and
the results of operations for the periods covered thereby.
9.5 No Material Adverse Change. As of the Effective Date, there has been
--------------------------
no material adverse change in the financial condition, operations, assets,
business, properties or prospects of the Company or any Subsidiary since the
date of the applicable financial statements referred to in Section 9.4 and since
-----------
the Effective Date there has been no material adverse change in the financial
condition, operations, assets, business, properties or prospects of the Company
and its Subsidiaries taken as a whole.
9.6 Litigation and Contingent Liabilities. No litigation (including
-------------------------------------
derivative actions), arbitration proceeding, labor controversy or governmental
investigation or proceeding is pending or, to the Company's knowledge,
threatened against the Company or any Subsidiary which might reasonably be
expected to have a Material Adverse Effect, except as set forth in Schedule 9.6.
------------
Other than any liability incident to such litigation or proceedings, neither the
Company nor any Subsidiary has any material contingent liabilities not listed in
such Schedule 9.6.
------------
9.7 Ownership of Properties; Liens. Each of the Company and each
------------------------------
Subsidiary owns good and marketable title to all of its properties and assets,
real and personal, tangible and intangible, of any nature whatsoever (including
patents, trademarks, trade names, service marks and copyrights), free and clear
of all Liens, charges and material claims (including material infringement
claims with respect to patents, trademarks, copyrights and the like) except as
permitted pursuant to Section 10.8.
------------
9.8 Subsidiaries. As of the Effective Date, the Company has no
------------
Subsidiaries except those listed in Schedule 9.8.
------------
9.9 Pension and Welfare Plans. (a) During the twelve-consecutive-month
-------------------------
period prior to the date of the execution and delivery of this Agreement or the
making of any Loan hereunder, (i) no steps have been taken to terminate any
Pension Plan and
36
(ii) no contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a lien under Section 302(f) of ERISA. No condition
exists or event or transaction has occurred with respect to any Pension Plan
which could result in the incurrence by the Company of any material liability,
fine or penalty. The Company has no contingent liability with respect to any
post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Subtitle B of Title I of ERISA.
(b) All contributions (if any) have been made to any Multiemployer Pension
Plan that are required to be made by the Company or any other member of the
Controlled Group under the terms of the plan or of any collective bargaining
agreement or by applicable law; neither the Company nor any member of the
Controlled Group has withdrawn or partially withdrawn from any Multiemployer
Pension Plan, incurred any withdrawal liability with respect to any such plan,
received notice of any claim or demand for withdrawal liability or partial
withdrawal liability from any such plan, and no condition has occurred which, if
continued, might result in a withdrawal or partial withdrawal from any such
plan; and neither the Company nor any member of the Controlled Group has
received any notice that any Multiemployer Pension Plan is in reorganization,
that increased contributions may be required to avoid a reduction in plan
benefits or the imposition of any excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the Code, that any
such plan is or may be terminated, or that any such plan is or may become
insolvent.
9.10 Investment Company Act. Neither the Company nor any Subsidiary is an
----------------------
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940.
9.11 Public Utility Holding Company Act. Neither the Company nor any
----------------------------------
Subsidiary is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935.
9.12 Regulation U. The Company is not engaged principally, or as one of
------------
its important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
37
9.13 Taxes. Each of the Company and each Subsidiary has filed all tax
-----
returns and reports required by law to have been filed by it and has paid all
taxes and governmental charges thereby shown to be owing, except any such taxes
or charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books.
9.14 Solvency, etc. On the Effective Date (or, in the case of any Person
--------------
which becomes a Guarantor after the Effective Date, on the date such Person
becomes a Guarantor), and immediately prior to and after giving effect to the
issuance of each Letter of Credit and each borrowing hereunder and the use of
the proceeds thereof, (a) each of the Company's and each Guarantor's assets will
exceed its liabilities and (b) each of the Company and each Guarantor will be
solvent, will be able to pay its debts as they mature, will own property with
fair saleable value greater than the amount required to pay its debts and will
have capital sufficient to carry on its business as then constituted.
9.15 Environmental Matters.
---------------------
(a) No Violations. Except as set forth on Schedule 9.15, neither the
------------- -------- ----
Company nor any Subsidiary, nor any operator of the Company's or any
Subsidiary's properties, is in violation, or alleged violation, of any judgment,
decree, order, law, permit, license, rule or regulation pertaining to
environmental matters, including those arising under the Resource Conservation
and Recovery Act ("RCRA"), the Comprehensive Environmental Response,
----
Compensation and Liability Act of 1980 ("CERCLA"), the Superfund Amendments and
------
Reauthorization Act of 1986 or any other Environmental Law which (i) in any
single case, requires expenditures in any three-year period of $500,000 or more
by the Company and its Subsidiaries in penalties and/or for investigative,
removal or remedial actions or (ii) individually or in the aggregate otherwise
might reasonably be expected to have a Material Adverse Effect.
(b) Notices. Except as set forth on Schedule 9.15, neither the
------- -------------
Company nor any Subsidiary has received notice from any third party, including
any Federal, state or local governmental authority: (a) that any one of them
has been identified by the U.S. Environmental Protection Agency as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 300 Appendix B; (b) that any hazardous waste, as
defined by 42 U.S.C. (S)6903(5), any hazardous substance as defined by 42 U.S.C.
(S)9601(14), any pollutant or contaminant as defined by 42 U.S.C.
38
(S)9601(33) or any toxic substance, oil or hazardous material or other chemical
or substance regulated by any Environmental Law, excluding household hazardous
waste (all of the foregoing, "Hazardous Substances"), which any one of them has
----------------------
generated, transported or disposed of has been found at any site at which a
Federal, state or local agency or other third party has conducted a remedial
investigation, removal or other response action pursuant to any Environmental
Law; (c) that the Company or any Subsidiary must conduct a remedial
investigation, removal, response action or other activity pursuant to any
Environmental Law; or (d) of any Environmental Claim.
(c) Handling of Hazardous Substances. Except as set forth on Schedule
-------------------------------- --------
9.15, (i) no portion of any real property or other assets owned, leased or
- ----
operated by the Company or any Subsidiary has been used for the handling,
processing, storage or disposal of Hazardous Substances except in accordance in
all material respects with applicable Environmental Laws; and no underground
tank or other underground storage receptacle for Hazardous Substances is located
on such properties; (ii) in the course of any activities conducted by the
Company, any Subsidiary or the operators of any real property owned, leased or
operated by the Company or any Subsidiary, no Hazardous Substances have been
generated or are being used on such properties except in accordance in all
material respects with applicable Environmental Laws; (iii) there have been no
Releases or threatened Releases of Hazardous Substances on, upon, into or from
any real property or other assets owned, leased or operated by the Company or
any Subsidiary, which Releases singly or in the aggregate might reasonably be
expected to have a material adverse effect on the value of such real property or
assets; (iv) to the Company's actual knowledge, there have been no Releases on,
upon, from or into any real property in the vicinity of any real property or
other assets owned, leased or operated by the Company or any Subsidiary which,
through soil or groundwater contamination, may have come to be located on, and
which might reasonably be expected to have a material adverse effect on the
value of, any real property or other assets owned, leased or operated by the
Company or any Subsidiary; and (v) any Hazardous Substances generated by the
Company and its Subsidiaries have been transported offsite only by properly
licensed carriers and delivered only to treatment or disposal facilities
maintaining valid permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the Company's
knowledge, operating in compliance with such permits and applicable
Environmental Laws.
39
(d) Investigations. Except as set forth on Schedule 9.15, the Company
-------------- -------------
and its Subsidiaries have taken all reasonable steps to investigate the past and
present condition and usage of any real property owned, leased or operated by
the Company and its Subsidiaries and the operations conducted by the Company and
its Subsidiaries with regard to environmental matters.
9.16 Year 2000 Problem. The Company and its Subsidiaries have reviewed
-----------------
the areas within their business and operations which could be adversely affected
by, and have developed or are developing a program to address on a timely basis,
the "Year 2000 Problem" (that is, the risk that computer applications used by
the Company and its Subsidiaries may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999). Based on such review and program, the Company reasonably
believes that the "Year 2000 Problem" will not have a Material Adverse Effect.
9.17 Copyrights, Patents, Trademarks and Licenses, etc. The Company and
-------------------------------------------------
its Subsidiaries own or are licensed or otherwise have the right to use all of
the patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person. No slogan or other advertising device, product, process,
method, substance, part or other material now employed, or now contemplated to
be employed, by the Company or any Subsidiary infringes upon any rights held by
any other Person. No claim or litigation regarding any of the foregoing is
pending or, to the knowledge of the Company, threatened, and no patent,
invention, device, application, principle or any statute, law, rule, regulation,
standard or code is pending or, to the knowledge of the Company, proposed,
which, in either case, could reasonably be expected to have a Material Adverse
Effect.
9.18 Transactions with Affiliates. Neither the Company nor any Subsidiary
----------------------------
has entered into or participated in any agreements or transactions of any kind
with any Affiliates of the Company except agreements or transactions entered
into in the ordinary course of business on an arms-length basis.
9.19 Information. All information heretofore or contemporaneously
-----------
herewith furnished in writing by the Company or any Subsidiary to any Bank for
purposes of or in connection with this Agreement and the transactions
contemplated hereby is, and all written information hereafter furnished by or on
behalf of the Company or any Subsidiary to any Bank pursuant hereto or in
40
connection herewith will be, true and accurate in every material respect on the
date as of which such information is dated or certified, and none of such
information is or will be incomplete by omitting to state any material fact
necessary to make such information not misleading in light of the circumstances
under which made (it being recognized by the Agent and the Banks that (a) any
projections and forecasts provided by the Company are based on good faith
estimates and assumptions believed by the Company to be reasonable as of the
date of the applicable projections or assumptions and that actual results during
the period or periods covered by any such projections and forecasts may differ
from projected or forecasted results and (b) any information provided by the
Company or any Subsidiary with respect to any Person or assets acquired or to be
acquired by the Company or any Subsidiary shall, for all periods prior to the
date of such acquisition, be limited to the knowledge of the Company or the
acquiring Subsidiary after reasonable inquiry).
SECTION 10 COVENANTS.
Until the expiration or termination of the Commitments and thereafter until
all obligations of the Company hereunder and under the other Loan Documents are
paid in full and all Letters of Credit have been terminated, the Company agrees
that, unless at any time the Required Banks shall otherwise expressly consent in
writing, it will:
10.1 Reports, Certificates and Other Information. Furnish to the Agent
-------------------------------------------
and each Bank:
10.1.1 Audit Report. Promptly when available and in any event within 90
------------
days after the close of each Fiscal Year: (a) a copy of the annual audit report
of the Company and its Subsidiaries for such Fiscal Year, including therein
consolidated balance sheets of the Company and its Subsidiaries as of the end of
such Fiscal Year and consolidated statements of earnings and cash flow of the
Company and its Subsidiaries for such Fiscal Year certified without
qualification by independent auditors of recognized standing selected by the
Company and reasonably acceptable to the Required Banks, together with a written
statement from such accountants to the effect that in making the examination
necessary for the signing of such annual audit report by such accountants,
nothing came to their attention that caused them to believe that the Company was
not in compliance with any provision of Section 10.6, 10.7 or 10.9 of this
------------ ---- ----
Agreement insofar as such provision relates to accounting matters or, if
something has come to their attention that caused them to believe that the
Company was not in compliance with any such provision, describing
41
such non-compliance in reasonable detail (it being understood that any such
audit is not directed primarily toward obtaining knowledge of such non-
compliance); and (b) consolidating balance sheets of the Company and its
Subsidiaries as of the end of such Fiscal Year and a consolidating statement of
earnings for the Company and its Subsidiaries for such Fiscal Year, certified by
the Chief Financial Officer, the Vice President, Finance, Controller or
Treasurer of the Company.
10.1.2 Quarterly Reports. Promptly when available and in any event within
-----------------
45 days after the end of each Fiscal Quarter (except the last Fiscal Quarter) of
each Fiscal Year, consolidated and consolidating balance sheets of the Company
and its Subsidiaries as of the end of such Fiscal Quarter, together with
consolidated and consolidating statements of earnings and a consolidated
statement of cash flows for such Fiscal Quarter and for the period beginning
with the first day of such Fiscal Year and ending on the last day of such Fiscal
Quarter, certified by the Chief Financial Officer, the Vice President, Finance,
Controller or Treasurer of the Company.
10.1.3 Monthly Reports. Promptly when available and in any event within
---------------
45 days after the end of each of the first two months of each Fiscal Quarter,
balance sheets of the Company and its Subsidiaries as of the end of such month,
together with statements of earnings for such month and for the period beginning
with the first day of the Fiscal Year and ending on the last day of such month,
certified by the Chief Financial Officer, the Vice President, Finance,
Controller or Treasurer of the Company.
10.1.4 Compliance Certificates. Contemporaneously with the furnishing
-----------------------
of a copy of each annual audit report pursuant to Section 10.1.1 and of each
--------------
set of quarterly statements pursuant to Section 10.1.2, a duly completed
--------------
compliance certificate in the form of Exhibit B, with appropriate insertions,
---------
dated the date of such annual report or such quarterly statements and signed by
the Chief Financial Officer, the Vice President, Finance, Controller or
Treasurer of the Company, containing a computation of each of the financial
ratios and restrictions set forth in Section 10.6 and to the effect that such
------------
officer has not become aware of any Event of Default or Unmatured Event of
Default that has occurred and is continuing or, if there is any such event,
describing it and the steps, if any, being taken to cure it.
10.1.5 Reports to SEC and to Shareholders. Promptly upon the filing or
----------------------------------
sending thereof, copies of all regular, periodic or special reports of the
Company or any Subsidiary filed with the
42
SEC (excluding exhibits thereto, provided that the Company shall promptly
deliver any such exhibit to the Agent or any Bank upon request therefor); copies
of all registration statements of the Company or any Subsidiary filed with the
SEC (other than on Form S-8); and copies of all proxy statements or other
communications made to security holders generally concerning material
developments in the business of the Company or any Subsidiary.
10.1.6 Notice of Default, Litigation and ERISA Matters. Promptly upon
-----------------------------------------------
becoming aware of any of the following, written notice describing the same and
the steps being taken by the Company or the Subsidiary affected thereby with
respect thereto:
(a) the occurrence of an Event of Default or an Unmatured Event of
Default;
(b) any litigation, arbitration or governmental investigation or
proceeding not previously disclosed by the Company to the Banks which has
been instituted or, to the knowledge of the Company, is threatened against
the Company or any Subsidiary or to which any of the properties of any
thereof is subject which, if adversely determined, might reasonably be
expected to have a Material Adverse Effect;
(c) the institution of any steps by any member of the Controlled Group
or any other Person to terminate any Pension Plan, or the failure of any
member of the Controlled Group to make a required contribution to any
Pension Plan (if such failure is sufficient to give rise to a lien under
Section 302(f) of ERISA) or to any Multiemployer Pension Plan, or the
taking of any action with respect to a Pension Plan which could result in
the requirement that the Company furnish a bond or other security to the
PBGC or such Pension Plan, or the occurrence of any event with respect to
any Pension Plan or Multiemployer Pension Plan which could result in the
incurrence by any member of the Controlled Group of any material liability,
fine or penalty (including any claim or demand for withdrawal liability or
partial withdrawal from any Multiemployer Pension Plan), or any material
increase in the contingent liability of the Company with respect to any
post-retirement Welfare Plan benefit, or any notice that any Multiemployer
Pension Plan is in reorganization, that increased contributions may be
required to avoid a reduction in plan benefits or the imposition of an
excise tax, that any such plan is or has been funded at a rate less than
that required under Section 412 of the Code, that any such plan is or may
be terminated, or that any such plan is or may become insolvent;
43
(d) any cancellation or material change in any insurance maintained by
the Company or any Subsidiary;
(e) any event (including (i) any violation of any Environmental Law or
the assertion of any Environmental Claim or (ii) the enactment or
effectiveness of any law, rule or regulation) which might reasonably be
expected to have a Material Adverse Effect; or
(f) any setoff, claims, withholdings or other defenses to which any of
the Collateral, or the Banks' rights with respect to the Collateral, are
subject.
10.1.7 Subsidiaries. Promptly upon any change in the list of its
------------
Subsidiaries, a written report of such change.
10.1.8 Management Reports. Promptly upon the request of the Agent or any
------------------
Bank, copies of all detailed financial and management reports submitted to the
Company by independent auditors in connection with each annual or interim audit
made by such auditors of the books of the Company.
10.1.9 Projections. As soon as practicable and in any event within 60
-----------
days after the commencement of each Fiscal Year, financial projections for the
Company and its Subsidiaries for such Fiscal Year prepared in a manner
consistent with those projections delivered by the Company to the Banks prior to
the Effective Date or otherwise in a manner reasonably satisfactory to the
Agent.
10.1.10 Contracts. As soon as practicable after becoming aware of the
---------
event and in any event within 30 days of such event, written notice of any
termination by a customer of a material contract with a Subsidiary (with
materiality being measured at the Subsidiary level).
10.1.11 Fleet Audit Reports. From time to time as requested by the Agent,
-------------------
a written report by appraisers acceptable to the Agent of an audit and appraisal
of the Equipment of the Company and its Subsidiaries.
10.1.12 Other Information. From time to time such other information
-----------------
concerning the Company and its Subsidiaries as any Bank or the Agent may
reasonably request.
10.2 Books, Records and Inspections. Keep, and cause each Subsidiary to
------------------------------
keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of
44
financial statements in accordance with GAAP; permit, and cause each Subsidiary
to permit, any Bank or the Agent or any representative thereof to inspect the
properties and operations of the Company and of such Subsidiary; and permit, and
cause each Subsidiary to permit, at any reasonable time and with reasonable
notice (or at any time without notice if an Event of Default exists), any Bank
or the Agent or any representative thereof to visit any or all of its offices,
to discuss its financial matters with its officers and its independent auditors
(and the Company hereby authorizes such independent auditors to discuss such
financial matters with any Bank or the Agent or any representative thereof,
provided that so long as no Event of Default exists, a representative of the
Company shall be present at any such discussions), and to examine (and, at the
expense of the Company or the applicable Subsidiary, photocopy extracts from)
any of its books or other corporate records.
10.3 Insurance. Maintain, and cause each Subsidiary to maintain, with
---------
responsible insurance companies, such insurance as may be required by any law or
governmental regulation or court decree or order applicable to it and such other
insurance, to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated and that is acceptable to
the Agent; and, on each anniversary of the Effective Date and from time to time
upon request of the Agent or any Bank, furnish to the Agent or such Bank a
certificate setting forth in reasonable detail the nature and extent of all
insurance maintained by the Company and its Subsidiaries.
10.4 Compliance with Laws; Payment of Taxes and Liabilities. (a) Comply,
------------------------------------------------------
and cause each Subsidiary to comply, in all material respects with all
applicable laws (including Environmental Laws), rules, regulations, decrees,
orders, judgments, licenses and permits; and (b) pay, and cause each Subsidiary
to pay, prior to delinquency, all taxes and other governmental charges against
it or any of its property, as well as claims of any kind which, if unpaid, might
become a Lien on any of its property; provided, however, that the foregoing
-------- -------
shall not require the Company or any Subsidiary to pay any such tax or charge so
long as it shall contest the validity thereof in good faith by appropriate
proceedings and shall set aside on its books adequate reserves with respect
thereto in accordance with GAAP.
10.5 Maintenance of Existence, etc. Maintain and preserve, and (subject
------------------------------
to Section 10.11) cause each Subsidiary to maintain and preserve, (a) its
-------------
existence and good standing in the jurisdiction of its incorporation and (b) its
qualification and good standing as a foreign corporation in each jurisdiction
where
45
the nature of its business makes such qualification necessary (except in those
instances in which the failure to be qualified or in good standing does not have
a Material Adverse Effect).
10.6 Financial Covenants.
-------------------
10.6.1 Minimum Consolidated Net Income. Not permit its Consolidated Net
-------------------------------
Income as of the last day of any Fiscal Quarter to be less than zero.
10.6.2 Funded Debt to Funded Debt plus Net Worth Ratio. Not permit the
-----------------------------------------------
ratio of (a) Funded Debt to (b) the sum of Funded Debt plus Net Worth as of the
last day of any Fiscal Quarter to exceed 0.50 to 1.0.
10.6.3 Funded Debt to EBITDA Ratio. Not permit the Funded Debt to EBITDA
---------------------------
Ratio as of the last day of any Fiscal Quarter to exceed the applicable ratio
set forth below:
Fiscal Funded Debt to
Quarter Ending EBITDA Ratio
-------------- --------------
12/31/98 through 6/30/99 2.75 to 1.0
9/30/99 and thereafter 2.50 to 1.0.
10.6.4 Capital Expenditures. The Company will not permit the aggregate
--------------------
amount of all Capital Expenditures made by the Company and its Subsidiaries to
exceed $9,000,000 in Fiscal Year 1998 or $10,000,000 in any subsequent Fiscal
Year.
10.6.5 EBITR to Interest Expense plus Rental Expense Ratio. Not permit
---------------------------------------------------
the ratio of EBITR to Interest Expense plus Rental Expense to be less than 2.0
to 1.0 as of the last day of any Fiscal Quarter.
10.6.6 Senior Funded Debt to Tangible Assets Ratio. Not permit the ratio
-------------------------------------------
of Senior Funded Debt to Tangible Assets to exceed at any time the applicable
ratio set forth below:
Senior Funded Debt to
Period Tangible Assets Ratio
- ------------------------------------- ---------------------
Effective Date through 6/29/99 1.50 to 1.0
6/30/99 through 12/30/99 1.40 to 1.0
12/31/99 and thereafter 1.25 to 1.0
46
10.7 Limitations on Debt. Not, and not permit any Subsidiary to, create,
-------------------
incur, assume or suffer to exist any Debt, except:
(a) obligations in respect of the Loans, the L/C Applications and the
Letters of Credit;
(b) unsecured Debt of the Company or any Subsidiary which represents all or
part of the purchase price payable in connection with a transaction
permitted by Section 10.10(c); provided that the aggregate principal amount
---------------- --------
of all such unsecured Debt shall not at any time exceed $2,500,000;
(c) Debt secured by Liens permitted by subsection 10.8(c) or (d), and
------------------ ---
refinancings of any such Debt so long as the terms applicable to such
refinanced Debt are no less favorable to the Company or the applicable
Subsidiary than the terms in effect immediately prior to such refinancing,
provided that the aggregate amount of all such Debt at any time outstanding
--------
shall not exceed (i) $4,500,000 in the case of all Debt described in
subsections 10.8(c) and clauses (i), (ii) and (iii) of subsection 10.8(d)
------------------- ----------------- ----- ------------------
and (ii) $10,000,000 in the case of all Debt described in clause (iv) of
---- -----------
subsection 10.8(d);
------------------
(d) Debt of Subsidiaries owed to the Company;
(e) unsecured Debt of the Company to Subsidiaries;
(f) Subordinated Debt;
(g) other Debt outstanding on the date hereof and listed in Schedule 10.7;
-------------
and
(h) guarantees of lease obligations of independent carriers in connection
with leases of equipment by such carriers, provided that (c) each
--------
independent carrier agrees to subcontract the applicable equipment to the
Company or a Subsidiary for the balance of the applicable lease term and
(y) the aggregate principal amount so guaranteed by the Company and its
Subsidiaries (without duplication) shall not at any time exceed
$10,000,000).
10.8 Liens. Not, and not permit any Subsidiary to, create or permit to
-----
exist any Lien on any of its real or personal properties, assets or rights of
whatsoever nature (whether now owned or hereafter acquired), except:
47
(a) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in good
faith by appropriate proceedings and, in each case, for which it maintains
adequate reserves;
(b) Liens arising in the ordinary course of business (such as (i) Liens of
carriers, warehousemen, mechanics and materialmen and other similar Liens
imposed by law and (ii) Liens incurred in connection with worker's
compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA) or in connection with surety bonds,
bids, performance bonds and similar obligations) for sums not overdue or
being contested in good faith by appropriate proceedings and not involving
any deposits or advances or borrowed money or the deferred purchase price
of property or services, and, in each case, for which it maintains adequate
reserves;
(c) Liens identified in Schedule 10.8;
-------------
(d) subject to the limitations set forth in subsection 10.7(c), (i) Liens
------------------
arising in connection with Capital Leases (and attaching only to the
property being leased), (ii) Liens existing on property at the time of the
acquisition thereof (or the acquisition of the owner of such property) by
the Company or any Subsidiary (and not created in contemplation of such
acquisition), (iii) Liens that constitute purchase money security interests
on any tangible property securing Debt incurred for the purpose of
financing all or any part of the cost of acquiring such property, provided
--------
that any such Lien attaches to such property within 60 days of the
acquisition thereof and such Lien attaches solely to the property so
acquired, and (iv) Liens on vehicles existing at the time the Company or a
Subsidiary acquires such vehicles, or acquires the owner of such vehicles,
pursuant to an acquisition described in clause (c) of Section 10.10,
---------- -------------
provided that, except to the extent such Liens are permitted by clause (i),
-----------
(ii) or (iii) of this subsection (d), each such Lien shall be released not
---- ----- --------------
later than 90 days after such acquisition;
(e) attachments, appeal bonds, judgments and other similar Liens, for sums
not exceeding $250,000 arising in connection with court proceedings,
provided the execution or other enforcement of such Liens is effectively
stayed and the claims secured thereby are being actively contested in good
faith and by appropriate proceedings;
48
(f) easements, rights of way, restrictions, minor defects or irregularities
in title and other similar Liens not interfering in any material respect
with the ordinary conduct of the business of the Company or any Subsidiary;
and
(g) Liens in favor of the Agent arising under the Loan Documents.
10.9 Restricted Payments. Not, and not permit any Subsidiary to, (a)
-------------------
declare or pay any dividends on any of its capital stock (other than stock
dividends), (b) purchase or redeem any such stock or any warrants, units,
options or other rights in respect of such stock, (c) make any other
distribution to shareholders, (d) prepay, purchase, defease or redeem any
Subordinated Debt or (e) set aside funds for any of the foregoing; provided that
--------
any Subsidiary may declare and pay dividends to the Company or to any other
wholly-owned Subsidiary.
10.10 Mergers, Consolidations, Sales. Not, and not permit any Subsidiary
------------------------------
to, be a party to any merger or consolidation, or purchase or otherwise acquire
all or substantially all of the assets or any stock of any class of, or any
partnership or joint venture interest in, any other Person, or sell, transfer,
convey or lease all or any substantial part of its assets, or sell or assign
with or without recourse any receivables, except for (a) any such merger or
consolidation, sale, transfer, conveyance, lease or assignment of or by any
wholly-owned Subsidiary into the Company or into, with or to any other wholly-
owned Subsidiary; (b) any such purchase or other acquisition by the Company or
any wholly-owned Subsidiary of the assets or stock of any wholly-owned
Subsidiary; (c) any such purchase or other acquisition by the Company or any
wholly-owned Subsidiary of the assets or stock of any other Person where (1)
such assets (in the case of an asset purchase) are for use, or such Person (in
the case of a stock purchase) is engaged, solely in providing towing services
and/or vehicle transport; (2) immediately before or after giving effect to such
purchase or acquisition, no Event of Default or Unmatured Event of Default shall
have occurred and be continuing; (3) either (i) (x) the aggregate consideration
to be paid by the Company and its Subsidiaries (including any Debt assumed or
issued in connection therewith, the amount thereof to be calculated in
accordance with GAAP) in connection with such purchase or other acquisition (or
any series of related acquisitions) is not greater than $5,000,000 and (y) the
aggregate consideration to be paid in cash by the Company and its Subsidiaries
in connection with such purchase or acquisition (or any series of related
acquisitions) is not greater than
49
$2,500,000, (ii) immediately after giving effect to such purchase or
acquisition, the Funded Debt to EBITDA Ratio is less than 1.0 to 1.0 or (iii)
the Required Lenders have consented to such purchase or acquisition; (4) the
Company is in pro forma compliance with all the financial ratios and
--- -----
restrictions set forth in Section 10.6; and (5) such Person (or its board of
------------
directors or similar body) has approved such acquisition or other purchase; and
(d) sales and dispositions of assets (including the stock of Subsidiaries) so
long as the net book value of all assets sold or otherwise disposed of in any
Fiscal Year does not exceed 5% of the aggregate net book value of all assets of
the Company and its Subsidiaries.
10.11 Modification of Organizational Documents. Not permit the
----------------------------------------
Certificate of Incorporation, By-Laws or other organizational documents of the
Company or any Subsidiary to be amended or modified in any way which might
reasonably be expected to materially adversely affect the interests of the
Banks.
10.12 Use of Proceeds. Use the proceeds of the Loans solely to finance
---------------
the Company's working capital, for acquisitions permitted by Section 10.10, for
-------------
Capital Expenditures and for other general corporate purposes; and not use or
permit any proceeds of any Loan to be used, either directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of "purchasing or
carrying" any Margin Stock.
10.13 Further Assurances. Take, and cause each Subsidiary to take, such
------------------
actions as are necessary, or as the Agent or the Required Banks may reasonably
request, from time to time (including the execution and delivery of guaranties,
security agreements, pledge agreements, financing statements and other
documents, the filing or recording of any of the foregoing, and the delivery of
stock certificates and other collateral with respect to which perfection is
obtained by possession) to ensure that (i) the obligations of the Company
hereunder and under the other Loan Documents are secured by substantially all of
the assets of the Company and guaranteed by all of the Subsidiaries (including,
promptly upon the acquisition or creation thereof, any Subsidiary acquired or
created after the date hereof) by execution of a counterpart of the Guaranty and
(ii) the obligations of each Guarantor under the Guaranty are secured by
substantially all of the assets of such Guarantor.
10.14 Transactions with Affiliates. Not, and not permit any Subsidiary
----------------------------
to, enter into, or cause, suffer or permit to exist any transaction, arrangement
or contract with any of its other Affiliates (other than the Company and its
Subsidiaries)
50
which is on terms which are less favorable than are obtainable from any Person
which is not one of its Affiliates.
10.15 Employee Benefit Plans. Maintain, and cause each Subsidiary to
----------------------
maintain, each Pension Plan in substantial compliance with all applicable
requirements of law and regulations.
10.16 Environmental Matters. (a) If any material Release or Disposal of
---------------------
Hazardous Substances shall occur or shall have occurred on any real property or
any other assets owned, leased or operated by the Company or any Subsidiary, the
Company shall, or shall cause the applicable Subsidiary to, cause the prompt
containment and removal of such Hazardous Substances and the remediation of such
real property or other assets as necessary to comply in all material respects
with all Environmental Laws and to preserve the value of such real property or
other assets. Without limiting the generality of the foregoing, the Company
shall, and shall cause each Subsidiary to, comply in a reasonable and cost-
effective manner with any valid Federal or state judicial or administrative
order requiring the performance at any real property owned, leased or operated)
of the Company or any Subsidiary of activities in response to the Release or
threatened Release of a Hazardous Substance except for the period of time that
the Company or such Subsidiary is diligently and in good faith contesting such
order.
(b) To the extent that the transportation of "hazardous waste" as
defined by RCRA is permitted by this Agreement, the Company shall, and shall
cause its Subsidiaries to, dispose of such hazardous waste only at licensed
disposal facilities operating, to the best of the Company's or such Subsidiary's
knowledge after reasonable inquiry, in compliance with Environmental Laws.
10.17 Unconditional Purchase Obligations. Not, and not permit any
----------------------------------
Subsidiary to, enter into or be a party to any contract for the purchase of
materials, supplies or other property or services, if such contract requires
that payment be made by it regardless of whether or not delivery is ever made of
such materials, supplies or other property or services; provided that the
foregoing shall not prohibit the Company or any Subsidiary from entering into
options for the purchase of particular assets or businesses.
10.18 Inconsistent Agreements. Not, and not permit any Subsidiary to,
-----------------------
enter into any agreement containing any provision which (a) would be violated or
breached by any borrowing by the Company hereunder or by the performance by the
Company or any
51
Subsidiary of any of its obligations hereunder or under any other Loan Document
or (b) would prohibit the Company or any Subsidiary from granting to the Agent,
for the benefit of the Banks, a Lien on any of its assets.
10.19 Business Activities. Not, and not permit any Subsidiary to, engage
-------------------
in any line of business other than the towing service and vehicle transport
businesses and businesses which are reasonably related thereto.
10.20 Advances and Other Investments. Not, and not permit any Subsidiary
------------------------------
to, make, incur, assume or suffer to exist any Investment in any other Person,
except (without duplication) the following:
(a) equity Investments existing on the Effective Date in wholly-owned
Subsidiaries identified in Schedule 9.8;
------------
(b) equity Investments in Subsidiaries acquired after the Effective Date
in transactions permitted as acquisitions of stock or assets pursuant to
Section 10.10;
-------------
(c) in the ordinary course of business, contributions by the Company to
the capital of any of its Subsidiaries, or by any such Subsidiary to the
capital of any of its Subsidiaries;
(d) in the ordinary course of business, Investments by the Company in any
Subsidiary or by any of the Subsidiaries in the Company, by way of
intercompany loans, advances or guaranties, all to the extent permitted by
Section 10.7;
------------
(e) Suretyship Liabilities permitted by Section 10.7;
------------
(f) good faith deposits made in connection with prospective acquisitions
of stock or assets permitted by Section 10.10;
-------------
(g) loans to officers and employees not exceeding (i) $100,000 in the
aggregate to any single individual or (ii) $250,000 in the aggregate for
all such individuals;
(h) Cash Equivalent Investments; and
(i) bank deposits in the ordinary course of business; provided that the
--------
aggregate amount of all such deposits (excluding amounts in payroll
accounts or for accounts payable, in each case to the extent that checks
have been issued to third parties) which are maintained with any bank other
than the Agent shall not at any time exceed (x) in the
52
case of such deposits with any single bank, $100,000 for three consecutive
Business Days and (y) in the case of all such deposits, $2,500,000 for
three consecutive Business Days;
provided, however, that no Investment otherwise permitted by clause (b), (c),
- -------- ------- ---------- ---
(d), (e), (f) or (g) shall be permitted to be made if, immediately before or
- --- --- --- ---
after giving effect thereto, any Event of Default or Unmatured Event of Default
shall have occurred and be continuing.
10.21 Maintenance of Property. The Company shall, and shall cause each
-----------------------
Subsidiary to, maintain and preserve all its property which is used or useful in
its business in good working order and condition, ordinary wear and tear
excepted.
10.22 Performance of Obligations. The Company shall, and shall cause
--------------------------
each Subsidiary to, pay and discharge as the same shall become due and payable,
all their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or levies
upon it or its properties or assets; and
(b) all lawful claims which, if unpaid, would by law become a Lien upon its
property; unless, in each case, the same are being contested in good faith
by appropriate proceedings and adequate reserves in accordance with GAAP
are being maintained by the Company or such Subsidiary.
10.23 Leases. Enter into, and cause each Subsidiary to enter into,
------
leases acceptable to the Agent with respect to any real property used by the
Company or any Subsidiary in the conduct of its business.
10.24 Assignability of Contracts. The Company shall, and shall cause
--------------------------
each Subsidiary to, ensure that any contracts acquired as a result of an
acquisition permitted by Section 10.10 shall be properly assigned to the Company
-------------
or such Subsidiary.
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.
The obligation of each Bank to make its Loans and of any Issuing Bank to
issue Letters of Credit is subject to the following conditions precedent:
11.1 Initial Credit Extensions. The obligation of each Bank to make its
-------------------------
initial Loan and of any Issuing Bank to issue any Letter of Credit, whichever
first occurs, is, in addition to
53
the conditions precedent specified in Section 11.2, subject to the conditions
------------
precedent (and the date on which all such conditions precedent have been
satisfied or waived in writing by the Banks is called the "Effective Date") that
--------------
(a) the Agent shall have received all amounts which are then due and payable
pursuant to Section 5 and (to the extent billed) Section 14.6, and (b) all of
--------- ------------
the following, each duly executed and dated the Effective Date (or such other
date as shall be satisfactory to the Agent), in form and substance satisfactory
to the Agent, and each (except for the Notes, of which only the originals shall
be signed) in sufficient number of signed counterparts to provide one for each
Bank:
11.1.1 Notes. The Notes.
-----
11.1.2 Resolutions. Certified copies of resolutions of the Board of
-----------
Directors of the Company authorizing or ratifying the execution, delivery and
performance by the Company of this Agreement, the Notes and the other Loan
Documents to which the Company is a party; and certified copies of resolutions
of the Board of Directors of each Subsidiary (if any) which is to execute and
deliver any document pursuant to Section 11.1.5, 11.1.6, 11.1.7, 11.1.8 or
-------------- ------ ------ ------
11.1.9 authorizing or ratifying the execution, delivery and performance by such
- ------
Subsidiary of each Loan Document to which such Subsidiary is a party.
11.1.3 Consents, etc. Certified copies of all documents evidencing any
--------------
necessary corporate action, consents and governmental approvals (if any)
required for the execution, delivery and performance by the Company and each
Subsidiary of the documents referred to in this Section 11.
----------
11.1.4 Incumbency and Signature Certificates. A certificate of the
-------------------------------------
Secretary or an Assistant Secretary of the Company and each Subsidiary of the
Company as of the Effective Date certifying the names of the officer or officers
of such entity authorized to sign the Loan Documents to which such entity is a
party, together with a sample of the true signature of each such officer (it
being understood that the Agent and each Bank may conclusively rely on each such
certificate until formally advised by a like certificate of any changes
therein).
11.1.5 Guaranty. Counterparts to the Guaranty executed by each Subsidiary
--------
(if any) as of the Effective Date which has not previously executed a
counterpart thereof.
11.1.6 Security Agreement. Counterparts to the Security Agreement
------------------
executed by each Subsidiary (if any) as of the Effective Date which has not
previously executed a counterpart
54
thereof, together with evidence, satisfactory to the Agent, that all filings
necessary to perfect the Agent's Lien on any collateral granted under the
Security Agreement have been duly made and are in full force and effect.
11.1.7 Pledge Agreements. With respect to any Subsidiary that as of the
-----------------
Effective Date has one or more Subsidiaries, a Subsidiary Pledge Agreement, in
each case together with all stock certificates, stock powers and other items
required to be delivered in connection with the Company Pledge Agreement or the
Subsidiary Pledge Agreement and not previously delivered.
11.1.8 Confirmation and Omnibus Amendment. The Confirmation and
----------------------------------
Omnibus Amendment executed by the Company and each Subsidiary.
11.1.9 Trust Agreements. To the extent not already received by the
----------------
Agent, the Trust Agreements (or counterparts thereof) executed by the Company
and each Subsidiary.
11.1.10 Opinions of Counsels for the Company and the Guarantors. The
-------------------------------------------------------
opinion of McDermott, Will & Emery, transaction counsel to the Company and the
Guarantors and the opinions of local counsels to certain Guarantors.
11.1.11 Other. Such other documents as the Agent or any Bank may
-----
reasonably request.
11.2 Conditions. The obligation (a) of each Bank to make each Loan and
----------
(b) of each Issuing Bank to issue each Letter of Credit is subject to the
following further conditions precedent that:
11.2.1 Compliance with Warranties, No Default, etc. Both before and
--------------------------------------------
after giving effect to any borrowing and the issuance of any Letter of Credit
(but, if any Event of Default of the nature referred to in Section 12.1.2 shall
--------------
have occurred with respect to any other Debt, without giving effect to the
application, directly or indirectly, of the proceeds thereof) the following
statements shall be true and correct:
(a) the representations and warranties of the Company and the
Guarantors set forth in this Agreement (excluding Section 9.6) and the
-----------
other Loan Documents shall be true and correct in all material respects
with the same effect as if then made (except to the extent stated to relate
to an earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date);
55
(b) except as disclosed by the Company to the Agent and the Banks
pursuant to Section 9.6,
-----------
(i) no litigation (including derivative actions), arbitration
proceeding, labor controversy or governmental investigation or
proceeding shall be pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries which might
reasonably be expected to have a Material Adverse Effect or which
purports to affect the legality, validity or enforceability of this
Agreement, the Notes or any other Loan Document; and
(ii) no development shall have occurred in any litigation
(including derivative actions), arbitration proceeding, labor
controversy or governmental investigation or proceeding disclosed
pursuant to Section 9.6 which might reasonably be expected to have a
-----------
Material Adverse Effect; and
(c) no Event of Default or Unmatured Event of Default shall have then
occurred and be continuing, and neither the Company nor any of its
Subsidiaries shall be in violation of any law or governmental regulation or
court order or decree where such violation or violations singly or in the
aggregate might reasonably be expected to have a Material Adverse Effect;
and
(d) there shall have been no change in the operations, financial
condition or prospects of the Company and its Subsidiaries or in the market
for syndicated loans that might reasonably be expected to have a Material
Adverse Effect.
11.2.2 Confirmatory Certificate. If requested by the Agent or any Bank,
------------------------
the Agent shall have received (in sufficient counterparts to provide one to each
Bank) a certificate dated the date of such requested Loan or Letter of Credit
and signed by a duly authorized representative of the Company as to the matters
set out in Section 11.2.1 (it being understood that each request by the Company
--------------
for the making of a Loan or the issuance of a Letter of Credit shall be deemed
to constitute a warranty by the Company that the conditions precedent set forth
in Section 11.2.1 will be satisfied at the time of the making of such Loan or
--------------
the issuance of such Letter of Credit), together with such other documents as
the Agent or any Bank may reasonably request in support thereof.
56
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.
12.1 Events of Default. Each of the following shall constitute an Event
-----------------
of Default under this Agreement:
12.1.1 Non-Payment of the Loans, etc. Default in the payment when due of
------------------------------
the principal of any Loan; or default, and continuance thereof for five days, in
the payment when due of any interest, fee, reimbursement obligation with respect
to any Letter of Credit or other amount payable by the Company hereunder or
under any other Loan Document.
12.1.2 Non-Payment of Other Debt. Any default shall occur under the terms
-------------------------
applicable to any Debt of the Company or any Subsidiary in an aggregate amount
(for all such Debt so affected) exceeding $250,000 and such default shall (a)
consist of the failure to pay such Debt when due (subject to any applicable
grace period), whether by acceleration or otherwise, or (b) accelerate the
maturity of such Debt or permit the holder or holders thereof, or any trustee or
agent for such holder or holders, to cause such Debt to become due and payable
prior to its expressed maturity.
12.1.3 Other Material Obligations. Default in the payment when due, or in
--------------------------
the performance or observance of, any material obligation of, or condition
agreed to by, the Company or any Subsidiary with respect to any material
purchase or lease of goods or services where such default, singly or in the
aggregate with other such defaults might reasonably be expected to have a
Material Adverse Effect (except only to the extent that the existence of any
such default is being contested by the Company or such Subsidiary in good faith
and by appropriate proceedings and appropriate reserves have been made in
respect of such default).
12.1.4 Bankruptcy, Insolvency, etc. The Company or any Subsidiary becomes
----------------------------
insolvent or generally fails to pay, or admits in writing its inability or
refusal to pay, debts as they become due; or the Company or any Subsidiary
applies for, consents to, or acquiesces in the appointment of a trustee,
receiver or other custodian for the Company or such Subsidiary or any property
thereof, or makes a general assignment for the benefit of creditors; or, in the
absence of such application, consent or acquiescence, a trustee, receiver or
other custodian is appointed for the Company or any Subsidiary or for a
substantial part of the property of any thereof and is not discharged within 60
days; or any bankruptcy, reorganization, debt arrangement, or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution or
liquidation proceeding (except the voluntary
57
dissolution, not under any bankruptcy or insolvency law, of a Subsidiary), is
commenced in respect of the Company or any Subsidiary, and if such case or
proceeding is not commenced by the Company or such Subsidiary, it is consented
to or acquiesced in by the Company or such Subsidiary, or remains for 60 days
undismissed; or the Company or any Subsidiary takes any corporate action to
authorize, or in furtherance of, any of the foregoing.
12.1.5 Non-Compliance with Provisions of This Agreement. (a) Failure by
------------------------------------------------
the Company to comply with or to perform any covenant set forth in Sections 10.6
-------------
through 10.11, 10.14 or 10.17 through 10.20; or (b) failure by the Company to
----- ----- ----- -----
comply with or to perform any other provision of this Agreement (and not
constituting an Event of Default under any of the other provisions of this
Section 12) and continuance of such failure described in this clause (b) for 30
- ---------- ----------
days (or, in the case of Section 10.13, five Business Days) after notice thereof
-------------
to the Company from the Agent, any Bank or the holder of any Note.
12.1.6 Warranties. Any warranty made by the Company herein is breached
----------
or is false or misleading in any material respect, or any schedule, certificate,
financial statement, report, notice or other writing furnished by the Company to
the Agent or any Bank in connection herewith is false or misleading in any
material respect on the date as of which the facts therein set forth are stated
or certified.
12.1.7 Pension Plans. (i) Institution of any steps by the Company or any
-------------
other Person to terminate a Pension Plan if as a result of such termination the
Company could be required to make a contribution to such Pension Plan, or could
incur a liability or obligation to such Pension Plan, in excess of $250,000;
(ii) a contribution failure occurs with respect to any Pension Plan sufficient
to give rise to a Lien under section 302(f) of ERISA; or (iii) there shall occur
any withdrawal or partial withdrawal from a Multiemployer Pension Plan and the
withdrawal liability (without unaccrued interest) to Multiemployer Pension Plans
as a result of such withdrawal (including any outstanding withdrawal liability
that the Company and the Controlled Group have incurred on the date of such
withdrawal) exceeds $250,000.
12.1.8 Judgments. Final judgments which exceed an aggregate of $250,000
---------
shall be rendered against the Company, or any Subsidiary and shall not have been
paid, discharged or vacated or had execution thereof stayed pending appeal
within 30 days after entry or filing of such judgments.
12.1.9 Invalidity of Guaranty, etc. The Guaranty shall cease to be in
----------------------------
full force and effect with respect to any
58
Guarantor, any Guarantor shall fail (subject to any applicable grace period) to
comply with or to perform any applicable provision of the Guaranty, or any
Guarantor (or any Person by, through or on behalf of such Guarantor) shall
contest in any manner the validity, binding nature or enforceability of the
Guaranty with respect to such Guarantor.
12.1.10 Invalidity of Collateral Documents, etc. Any Collateral Document
----------------------------------------
shall cease to be in full force and effect with respect to the Company or any
Guarantor, the Company or any Guarantor shall fail (subject to any applicable
grace period) to comply with or to perform any applicable provision of any
Collateral Document to which such entity is a party, or the Company or any
Guarantor (or any Person by, through or on behalf of the Company or such
Guarantor) shall contest in any manner the validity, binding nature or
enforceability of any Collateral Document.
12.1.11 Change in Control. (a) Any Person or group of Persons (within the
-----------------
meaning of Section 13 or 14 of the Securities Exchange Act of 1934, but
excluding the executive managers of the Company as of the Effective Date) shall
acquire beneficial ownership (within the meaning of Rule 13d-3 promulgated under
such Act) of 30% or more of the outstanding shares of common stock of the
Company; (b) during any 24-month period, individuals who at the beginning of
such period constituted the Company's Board of Directors (together with any new
directors whose election by the Company's Board of Directors or whose nomination
for election by the Company's shareholders was approved by a vote of at least
two-thirds of the directors who either were directors at beginning of such
period or whose election or nomination was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company; (c) a
period of 60 consecutive days shall have elapsed during which any of the
individuals named in Schedule 12.1.11A shall have ceased to hold executive
-----------------
offices with the Company at least equal in seniority to such individual's
present offices, as set out in such Schedule 12.1.11A, excluding any such
----------------- ---------
individual who has been replaced by another individual or individuals reasonably
satisfactory to the Required Banks (it being understood that any such
replacement individual shall be deemed added to Schedule 12.1.11A on the date of
-----------------
approval thereof by the Required Banks); or (d) a period of 60 consecutive days
shall have elapsed during which all of the individuals named in Schedule
--------
12.1.11B shall have ceased to be members of the Company's Board of Directors.
- --------
12.2 Effect of Event of Default. If any Event of Default described in
--------------------------
Section 12.1.4 shall occur, the Commitments (if they have not theretofore
- --------------
terminated) shall immediately terminate and
59
the Notes and all other obligations hereunder shall become immediately due and
payable and the Company shall become immediately obligated to deliver to the
Agent cash collateral in an amount equal to the outstanding face amount of all
Letters of Credit, all without presentment, demand, protest or notice of any
kind; and, if any other Event of Default shall occur and be continuing, the
Agent (upon written request of the Required Banks) shall declare the Commitments
(if they have not theretofore terminated) to be terminated and/or declare all
Notes and all other obligations hereunder to be due and payable and/or demand
that the Company immediately deliver to the Agent cash collateral in amount
equal to the outstanding face amount of all Letters of Credit, whereupon the
Commitments (if they have not theretofore terminated) shall immediately
terminate and/or all Notes and all other obligations hereunder shall become
immediately due and payable and/or the Company shall immediately become
obligated to deliver to the Agent cash collateral in an amount equal to the face
amount of all Letters of Credit, all without presentment, demand, protest or
notice of any kind. The Agent shall promptly advise the Company of any such
declaration, but failure to do so shall not impair the effect of such
declaration. Notwithstanding the foregoing, the effect as an Event of Default of
any event described in Section 12.1.1 or Section 12.1.4 may be waived by the
-------------- --------------
written concurrence of all of the Banks, and the effect as an Event of Default
of any other event described in this Section 12 may be waived by the written
----------
concurrence of the Required Banks. Any cash collateral delivered hereunder shall
be held by the Agent (without liability for interest thereon) and applied to
obligations arising in connection with any drawing under a Letter of Credit.
After the expiration or termination of all Letters of Credit, such cash
collateral shall be applied by the Agent to any remaining obligations hereunder
and any excess shall be delivered to the Company or as a court of competent
jurisdiction may elect.
SECTION 13 THE AGENT.
13.1 Appointment and Authorization. (a) Each Bank hereby irrevocably
-----------------------------
(subject to Section 13.9) appoints, designates and authorizes the Agent to take
------------
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied
60
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against the Agent.
(b) Each Issuing Bank shall act on behalf of the Banks with respect to any
Letters of Credit issued by it and the documents associated therewith. Each
Issuing Bank shall have all of the benefits and immunities (i) provided to the
Agent in this Section 13 with respect to any acts taken or omissions suffered by
----------
such Issuing Bank in connection with Letters of Credit issued by it or proposed
to be issued by it and the applications and agreements for letters of credit
pertaining to such Letters of Credit as fully as if the term "Agent", as used in
this Section 13, included such Issuing Bank with respect to such acts or
----------
omissions and (ii) as additionally provided in this Agreement with respect to
the Issuing Banks.
(c) The Swing Line Bank shall have all of the benefits and immunities (i)
provided to the Agent in this Section 13 with respect to any acts taken or
----------
omissions suffered by the Swing Line Bank in connection with Swing Line Loans
made or proposed to be made by it as fully as if the term "Agent", as used in
this Section 13, included the Swing Line Bank with respect to such acts or
----------
omissions and (ii) as additionally provided in this Agreement with respect to
the Swing Line Bank.
13.2 Delegation of Duties. The Agent may execute any of its duties under
--------------------
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
13.3 Liability of Agent. None of the Agent-Related Persons shall (i) be
------------------
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
61
any Loan Document to perform its obligations hereunder or thereunder. No Agent-
Related Person shall be under any obligation to any Bank to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
13.4 Reliance by Agent. The Agent shall be entitled to rely, and shall
-----------------
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Banks as it deems appropriate and, if it
so requests, confirmation from the Banks of their obligation to indemnify the
Agent against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Required Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.
13.5 Notice of Default. The Agent shall not be deemed to have knowledge
-----------------
or notice of the occurrence of any Event of Default or Unmatured Event of
Default except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Agent for the account of the Banks, unless
the Agent shall have received written notice from a Bank or the Company
referring to this Agreement, describing such Event of Default or Unmatured Event
of Default and stating that such notice is a "notice of default". The Agent
will notify the Banks of its receipt of any such notice. The Agent shall take
such action with respect to such Event of Default or Unmatured Event of Default
as may be requested by the Required Banks in accordance with Section 12;
----------
provided, however, that unless and until the Agent has received any such
- -------- -------
request, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default or
Unmatured Event of Default as it shall deem advisable or in the best interest of
the Banks.
62
13.6 Credit Decision. Each Bank acknowledges that none of the Agent-
---------------
Related Persons has made any representation or warranty to it, and that no act
by the Agent hereafter taken, including any review of the affairs of the Company
and its Subsidiaries, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company hereunder. Each Bank also
represents that it will, independently and without reliance upon any Agent-
Related Person and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of the Company. Except for notices, reports and
other documents expressly herein required to be furnished to the Banks by the
Agent, the Agent shall not have any duty or responsibility to provide any Bank
with any credit or other information concerning the business, prospects,
operations, property, financial or other condition or creditworthiness of the
Company which may come into the possession of any of the Agent-Related Persons.
13.7 Indemnification. Whether or not the transactions contemplated
---------------
hereby are consummated, the Banks shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), pro rata, from and against any
and all Indemnified Liabilities; provided, however, that no Bank shall be liable
-------- -------
for any payment to the Agent-Related Person of any portion of the Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Bank shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including reasonable fees of attorneys for the Agent (including the allocable
costs of internal legal services and all disbursements of internal counsel))
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities
63
under, this Agreement, any other Loan Document, or any document contemplated by
or referred to herein, to the extent that the Agent is not reimbursed for such
expenses by or on behalf of the Company. The undertaking in this Section shall
survive repayment of the Loans, cancellation of the Notes, any foreclosure
under, or any modification, release or discharge of, any or all of the
Collateral Documents, any termination of this Agreement and the resignation or
replacement of the Agent.
For the purposes of this Section 13.7, "Indemnified Liabilities" shall
------------ -----------------------
mean: any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements (including
reasonable fees of attorneys for the Agent (including the allocable costs of
internal legal services and all disbursements of internal counsel)) of any kind
or nature whatsoever which may at any time (including at any time following
repayment of the Loan and the termination, resignation or replacement of the
Agent or the replacement of any Bank) be imposed on, incurred by or asserted
against any Agent-Related Person in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, including with respect
to any investigation, litigation or proceeding (including (a) any case, action
or proceeding before any court or other governmental authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the benefit
of creditors, composition, marshalling of assets for creditors, or other,
similar arrangement in respect of its creditors generally or any substantial
portion of its creditors; undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code, and including any appellate proceeding) related
to or arising out of this Agreement or the Commitments or the use of the
proceeds thereof, whether or not any Agent-Related Person, any Bank or any of
their respective officers, directors, employees, counsel, agents or attorneys-
in-fact is a party thereto.
13.8 Agent in Individual Capacity. BofA and its Affiliates may make
----------------------------
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent, the Issuing Bank
or the Swing Line Bank hereunder and without notice to or consent of the Banks.
The Banks acknowledge that, pursuant to such activities, BofA or its Affiliates
may receive information regarding the Company or its Affiliates (including
64
information that may be subject to confidentiality obligations in favor of the
Company or such Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to their Loans,
BofA and its Affiliates shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though BofA were not
the Agent, the Issuing Bank and the Swing Line Bank, and the terms "Bank" and
"Banks" include BofA and its Affiliates, to the extent applicable, in their
individual capacities.
13.9 Successor Agent. The Agent may, and at the request of the Required
---------------
Banks shall, resign as Agent upon 30 days' notice to the Banks. If the Agent
resigns under this Agreement, the Required Banks shall, with (so long as no
Event of Default exists) the consent of the Company (which shall not be
unreasonably withheld or delayed), appoint from among the Banks a successor
agent for the Banks. If no successor agent is appointed prior to the effective
date of the resignation of the Agent, the Agent may appoint, after consulting
with the Banks and the Company, a successor agent from among the Banks. Upon
the acceptance of its appointment as successor agent hereunder, such successor
agent shall succeed to all the rights, powers and duties of the retiring Agent
and the term "Agent" shall mean such successor agent, and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Section 13 and
----------
Sections 14.6 and 14.13 shall inure to its benefit as to any actions taken or
- ------------- -----
omitted to be taken by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Banks shall
perform all of the duties of the Agent hereunder until such time, if any, as the
Required Banks appoint a successor agent as provided for above. Notwithstanding
the foregoing, however, BofA may not be removed as the Agent at the request of
the Required Banks unless BofA shall also simultaneously be replaced as an
"Issuing Bank" and the "Swing Line Bank" hereunder pursuant to documentation in
form and substance reasonably satisfactory to BofA.
13.10 Withholding Tax.
---------------
(a) If any Bank is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Bank claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the
Code, such Bank agrees to deliver to the Agent:
65
(i) if such Bank claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed
Internal Revenue Service ("IRS") Forms 1001 and W-8 before the payment
---
of any interest in the first calendar year and before the payment of
any interest in each third succeeding calendar year during which
interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this Agreement
is exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Bank, two
properly completed and executed copies of IRS Form 4224 before the
payment of any interest is due in the first taxable year of such Bank
and in each succeeding taxable year of such Bank during which interest
may be paid under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the Code
or other laws of the United States as a condition to exemption from,
or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form 1001 and such
Bank sells, assigns, grants a participation in, or otherwise transfers all
or part of the obligations of the Company to such Bank, such Bank agrees to
notify the Agent of the percentage amount in which it is no longer the
beneficial owner of such obligations of the Company hereunder. To the
extent of such percentage amount, the Agent will treat such Bank's IRS Form
1001 as no longer valid.
(c) If any Bank claiming exemption from United States withholding tax
by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the obligations of
the Company to such Bank hereunder, such Bank agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed
by Sections 1441 and 1442 of the Code.
66
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such
Bank an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required
by subsection (a) of this Section are not delivered to the Agent, then the
--------------
Agent may withhold from any interest payment to such Bank not providing
such forms or other documentation an amount equivalent to the applicable
withholding tax.
(e) If the IRS or any other governmental authority of the United
States or any other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered or was not properly
executed, or because such Bank failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Bank shall
indemnify the Agent fully for all amounts paid, directly or indirectly, by
the Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section, together with all costs and expenses
(including reasonable fees of attorneys for the Agent (including the
allocable costs of internal legal services and all disbursements of
internal counsel)). The obligation of the Banks under this subsection shall
survive the repayment of the Loans, cancellation of the Notes, any
termination of this Agreement and the resignation or replacement of the
Agent.
13.11 Collateral Matters. The Banks irrevocably authorize the Agent, at
------------------
its option and in its discretion, to release any Lien granted to or held by the
Agent under any Collateral Document (i) upon termination of the Commitments and
payment in full of all Loans and all other obligations of the Company hereunder
and the expiration or termination of all Letters of Credit; (ii) constituting
property sold or to be sold or disposed of as part of or in connection with any
disposition permitted hereunder; or (iii) subject to Section 14.1, if approved,
------------
authorized or ratified in writing by the Required Banks. Upon request by the
Agent at any time, the Banks will confirm in writing the Agent's authority to
release particular types or items of collateral pursuant to this Section 13.11.
-------------
13.12 Funding Reliance. (a) Unless the Agent receives notice from a
----------------
Bank by 1:00 p.m., Chicago time, on the day of a
67
proposed borrowing that such Bank will not make available to the Agent an amount
equal to its Percentage of such borrowing, the Agent may assume that such Bank
has made such amount available to the Agent and, in reliance upon such
assumption, make a corresponding amount available to the Company. If and to the
extent such Bank has not made such amount available to the Agent, such Bank and
the Company jointly and severally agree to repay such amount to the Agent
forthwith on demand, together with interest thereon at the interest rate
applicable to Revolving Loans comprising such borrowing or, in the case of any
Bank which repays such amount within three Business Days, the Federal Funds Rate
(together with such other compensatory amounts as may be required to be paid by
such Bank to the Agent pursuant to the Rules for Interbank Compensation of the
Council on International Banking or the Clearinghouse Compensation Committee, as
applicable, as in effect from time to time). Nothing set forth in this
clause (a) shall relieve any Bank of any obligation it may have to make any
- ----------
Revolving Loan hereunder.
(b) Unless the Agent receives notice from the Company prior to the due date
for any payment hereunder that the Company does not intend to make such payment,
the Agent may assume that the Company has made such payment and, in reliance
upon such assumption, make available to each Bank its share of such payment. If
and to the extent that the Company has not made any such payment to the Agent,
each Bank which received a share of such payment shall repay such share (or the
relevant portion thereof) to the Agent forthwith on demand, together with
interest thereon at the Base Rate (or, in the case of any Bank which repays such
amount within three Business Days, the Federal Funds Rate). Nothing set forth
in this clause (b) shall relieve the Company of any obligation it may have to
----------
make any payment hereunder.
13.13 Documentation Agent. No Bank identified on the facing page or the
-------------------
signature pages of this Agreement as a "Documentation Agent" shall have any
right, power, obligation, liability, responsibility or duty under this Agreement
other than those applicable to all Banks as such. Without limiting the
foregoing, no Bank so identified as a "Documenation Agent" shall have or be
deemed to have any fiduciary relationship with any Bank. Each Bank acknowledges
that it has not relied, and will not rely, on any Bank so identified in deciding
to enter into this Agreement or in taking or not taking action hereunder.
SECTION 14 GENERAL.
14.1 Waiver; Amendments. No delay on the part of the Agent, any Bank or
------------------
any other holder of a Note in the exercise of any right, power or remedy shall
operate as a waiver thereof, nor
68
shall any single or partial exercise by any of them of any right, power or
remedy preclude other or further exercise thereof, or the exercise of any other
right, power or remedy. No amendment, modification or waiver of, or consent with
respect to, any provision of this Agreement or the Notes shall in any event be
effective unless the same shall be in writing and signed and delivered by Banks
having an aggregate Percentage of not less than the aggregate Percentage
expressly designated herein with respect thereto or, in the absence of such
designation as to any provision of this Agreement or the Notes, by the Required
Banks, and then any such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No amendment, modification, waiver or consent shall change the Percentage
of any Bank (except as provided in Section 6.1.2) without the consent of such
-------------
Bank. No amendment, modification, waiver or consent shall (i) extend or increase
the amount of the Commitments (except as provided in Section 6.1.2), (ii) extend
-------------
the date for payment of any principal of or interest on the Loans or any fees
payable hereunder, (iii) reduce the principal amount of any Loan, the rate of
interest thereon or any fees payable hereunder, (iv) release the Guaranty (other
than with respect to a Guarantor which ceases to be a Subsidiary as a result of
a transaction permitted hereunder) or all or any substantial part of the
collateral granted under the Collateral Documents or (v) reduce the aggregate
Percentage required to effect an amendment, modification, waiver or consent
without, in each case, the consent of all Banks. No provisions of Section 13 or
----------
other provision of this Agreement affecting the Agent in its capacity as such
shall be amended, modified or waived without the consent of the Agent. No
provision of this Agreement relating to the rights or duties of an Issuing Bank
in its capacity as such shall be amended, modified or waived without the consent
of such Issuing Bank. No provision of this Agreement relating to the rights or
duties of a Swing Line Bank in its capacity as such shall be amended, modified
or waived without the consent of such Swing Line Bank.
14.2 Confirmations. The Company and each holder of a Note agree from
-------------
time to time, upon written request received by it from the other, to confirm to
the other in writing (with a copy of each such confirmation to the Agent) the
aggregate unpaid principal amount of the Loans then outstanding under such Note.
14.3 Notices. Except as otherwise provided in Section 2.2, all notices
------- -----------
hereunder shall be in writing (including facsimile transmission) and shall be
sent to the applicable party at its address shown on Schedule 14.3 or at such
-------------
other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose. Notices sent by
facsimile transmission shall be deemed to have been given when
69
sent; notices sent by mail shall be deemed to have been given three Business
Days after the date when sent by registered or certified mail, postage prepaid;
and notices sent by hand delivery or overnight courier service shall be deemed
to have been given when received. For purposes of Sections 2.2 and 2.4, the
------------ ---
Agent and the Swing Line Bank shall be entitled to rely on telephonic
instructions from any person that the Agent or the Swing Line Bank in good faith
believes is an authorized officer or employee of the Company, and the Company
shall hold the Agent, the Swing Line Bank and each Bank harmless from any loss,
cost or expense resulting from any such reliance.
14.4 Computations. Where the character or amount of any asset or
------------
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP, consistently applied; provided that if the Company
--------
notifies the Agent that the Company wishes to amend any covenant in Section 10
----------
to eliminate or to take into account the effect of any change in GAAP on the
operation of such covenant (or if the Agent notifies the Company that the
Required Banks wish to amend Section 10 for such purpose), then the Company's
----------
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Company and the Required Banks.
14.5 Regulation U. Each Bank represents that it in good faith is not
------------
relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or maintenance by it of any credit provided for in
this Agreement.
14.6 Costs, Expenses and Taxes. The Company agrees to pay on demand all
-------------------------
reasonable out-of-pocket costs and expenses of Agent-Related Persons (including
the reasonable accounting fees, appraisal fees and fees and charges of counsel
for the Agent-Related Persons and of local counsel, if any, who may be retained
by said counsel) in connection with the preparation, execution, delivery and
administration of this Agreement, the other Loan Documents and all other
documents provided for herein or delivered or to be delivered hereunder or in
connection herewith (including any amendments, supplements or waivers to any
Loan Documents), and all reasonable out-of-pocket costs and expenses (including
reasonable accounting fees, appraisal fees and attorneys' fees, court costs and
other legal expenses and allocated costs of staff counsel) incurred by the
Agent-Related Persons and each Bank after an Event of Default in connection
70
with the enforcement of this Agreement, the other Loan Documents or any such
other documents. Each Bank agrees to reimburse the Agent for such Bank's pro
rata share (based on its respective Percentage) of any such costs and expenses
of the Agent not paid by the Company. In addition, the Company agrees to pay,
and to save the Agent and the Banks harmless from all liability for, (a) any
stamp or other taxes (excluding income taxes and franchise taxes based on net
income) which may be payable in connection with the execution and delivery of
this Agreement, the borrowings hereunder, the issuance of the Notes or the
execution and delivery of any other Loan Document or any other document provided
for herein or delivered or to be delivered hereunder or in connection herewith
and (b) any fees of the Company's auditors in connection with any reasonable
exercise by the Agent and the Banks of their rights pursuant to Section 10.2.
------------
All obligations provided for in this Section 14.6 shall survive repayment of the
------------
Loans, cancellation of the Notes and any termination of this Agreement.
14.7 Subsidiary References. The provisions of this Agreement relating to
---------------------
Subsidiaries shall apply only during such times as the Company has one or more
Subsidiaries.
14.8 Captions. Section captions used in this Agreement are for
--------
convenience only and shall not affect the construction of this Agreement.
14.9 Assignments; Participations.
---------------------------
14.9.1 Assignments. Any Bank may, with the prior written consents of the
-----------
Company and the Agent (which consents shall not be unreasonably delayed or
withheld), at any time assign and delegate to one or more commercial banks or
other Persons (any Person to whom such an assignment and delegation is to be
made being herein called an "Assignee"), all or any fraction of such Bank's
--------
Loans and Commitments (which assignment and delegation shall be of a constant,
and not a varying, percentage of all the assigning Bank's Loans and Commitments)
in a minimum aggregate amount equal to the lesser of (i) the assigning Bank's
remaining aggregate Commitments and (ii) $5,000,000; provided, however, that (a)
-------- -------
no assignment and delegation may be made to any Person if, at the time of such
assignment and delegation, the Company would be obligated to pay any greater
amount under Section 7.6 or Section 8 to the Assignee than the Company is then
----------- ---------
obligated to pay to the assigning Bank under such Sections (and if any
assignment is made in violation of the foregoing, the Company will not be
required to pay the incremental amounts) and (b) the Company and the Agent shall
be entitled to continue to deal solely and directly with such Bank in connection
with the
71
interests so assigned and delegated to an Assignee until the date when all of
the following conditions shall have been met:
(x) five Business Days (or such lesser period of time as the Agent
and the assigning Bank shall agree) shall have passed after written notice
of such assignment and delegation, together with payment instructions,
addresses and related information with respect to such Assignee, shall have
been given to the Company and the Agent by such assigning Bank and the
Assignee,
(y) the assigning Bank and the Assignee shall have executed and
delivered to the Company and the Agent an assignment agreement
substantially in the form of Exhibit G (an "Assignment Agreement"),
--------- --------------------
together with any documents required to be delivered thereunder, which
Assignment Agreement shall have been accepted by the Agent, and
(z) the assigning Bank or the Assignee shall have paid the Agent a
processing fee of $3,500.
From and after the date on which the conditions described above have been met,
(x) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Bank hereunder, and (y) the assigning Bank, to the
extent that rights and obligations hereunder have been assigned and delegated by
it pursuant to such Assignment Agreement, shall be released from its obligations
hereunder. Within five Business Days after effectiveness of any assignment and
delegation, the Company shall execute and deliver to the Agent (for delivery to
the Assignee and the Assignor, as applicable) a new Note in the principal amount
of the Assignee's Loan Commitment and, if the assigning Bank has retained a Loan
Commitment hereunder, a replacement Note in the principal amount of the Loan
Commitment retained by the assigning Bank (such Note to be in exchange for, but
not in payment of, the predecessor Note held by such assigning Bank). Each such
Note shall be dated the effective date of such assignment. The assigning Bank
shall mark the predecessor Note "exchanged" and deliver it to the Company.
Accrued interest on that part of the predecessor Note being assigned shall be
paid as provided in the Assignment Agreement. Accrued interest and fees on that
part of the predecessor Note not being assigned shall be paid to the assigning
Bank. Accrued interest and accrued fees shall be paid at the same time or times
provided in the predecessor Note and in this Agreement. Any attempted
assignment and delegation not made in accordance with this Section 14.9.1 shall
--------------
be null and void.
72
Notwithstanding the foregoing provisions of this Section 14.9.1 or any
--------------
other provision of this Agreement, any Bank may at any time assign all or any
portion of its Loans and its Note to a Federal Reserve Bank (but no such
assignment shall release any Bank from any of its obligations hereunder).
14.9.2 Participations. Any Bank may at any time sell to one or more
--------------
commercial banks or other Persons participating interests in any Loan owing to
such Bank, the Note held by such Bank, the Commitments of such Bank, the direct
or participation interest of such Bank in any Letter of Credit or any other
interest of such Bank hereunder (any Person purchasing any such participating
interest being herein called a "Participant"); provided that any Bank selling
----------- --------
any such participating interest shall give notice thereof to the Company. In
the event of a sale by a Bank of a participating interest to a Participant, (x)
such Bank shall remain the holder of its Note for all purposes of this
Agreement, (y) the Company and the Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
hereunder and (z) all amounts payable by the Company shall be determined as if
such Bank had not sold such participation and shall be paid directly to such
Bank. No Participant (other than a Participant which (i) is an affiliate of the
participating Bank and (ii) holds a 100% participation in the interests of such
Bank hereunder) shall have any direct or indirect voting rights hereunder except
with respect to any of the events (excluding the events described in clause (v)
----------
thereof) described in the third to last sentence of Section 14.1. Each Bank
------------
agrees to incorporate the requirements of the preceding sentence into each
participation agreement which such Bank enters into with any Participant. The
Company agrees that if amounts outstanding under this Agreement and the Notes
are due and payable (as a result of acceleration or otherwise), each Participant
shall be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement, any Note and with respect to any
Letter of Credit to the same extent as if the amount of its participating
interest were owing directly to it as a Bank under this Agreement or such Note;
provided that such right of setoff shall be subject to the obligation of each
- --------
Participant to share with the Banks, and the Banks agree to share with each
Participant, as provided in Section 7.5. The Company also agrees that each
-----------
Participant shall be entitled to the benefits of Section 7.6 and Section 8 as if
----------- ---------
it were a Bank (provided that no Participant shall receive any greater
compensation pursuant to Section 7.6 or Section 8 than would have been paid to
----------- ---------
the participating Bank if no participation had been sold).
14.10 Governing Law. This Agreement and each Note shall be a contract
-------------
made under and governed by the internal laws of the
73
State of Illinois. Whenever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement. All obligations of the Company
and rights of the Agent, the Banks and any other holder of a Note expressed
herein or in any other Loan Document shall be in addition to and not in
limitation of those provided by applicable law.
14.11 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement. When
counterparts executed by all of the parties hereto shall have been lodged with
the Agent (or, in the case of any Bank as to which an executed counterpart shall
not have been so lodged, the Agent shall have received confirmation from such
Bank of execution of a counterpart hereof by such Bank), this Agreement shall
become effective as of the date hereof, and at such time the Agent shall notify
the Company and each Bank.
14.12 Successors and Assigns. This Agreement shall be binding upon the
----------------------
Company, the Banks and the Agent and their respective successors and assigns,
and shall inure to the benefit of the Company, the Banks and the Agent and the
successors and assigns of the Banks and the Agent.
14.13 Indemnification by the Company.
------------------------------
(a) In consideration of the execution and delivery of this Agreement by the
Agent and the Banks and the agreement to extend the Commitments provided
hereunder, the Company hereby agrees to indemnify, exonerate and hold the Agent,
each Bank and each of the officers, directors, employees, Affiliates and agents
of the Agent and each Bank (each a "Bank Party") free and harmless from and
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against any and all actions, causes of action, suits, losses, liabilities,
damages and expenses, including reasonable attorneys' fees and charges and
allocated costs of staff counsel (collectively, for purposes of this Section
-------
14.13, called the "Indemnified Liabilities"), incurred by the Bank Parties or
- ----- -----------------------
any of them as a result of, or arising out of, or relating to (i) any tender
offer, merger, purchase of stock, purchase of assets or other similar
transaction financed or proposed to be financed in whole or in part, directly or
indirectly, with the proceeds of any of the Loans, (ii) the use, handling,
release, emission, discharge, transportation, storage, treatment or disposal of
any
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hazardous substance at any property owned or leased by the Company or any
Subsidiary, (iii) any violation of any Environmental Laws with respect to
conditions at any property owned or leased by the Company or any Subsidiary or
the operations conducted thereon, (iv) the investigation, cleanup or remediation
of offsite locations at which the Company or any Subsidiary or their respective
predecessors are alleged to have directly or indirectly disposed of hazardous
substances or (v) the execution, delivery, performance or enforcement of this
Agreement or any other Loan Document by any of the Bank Parties, except for any
such Indemnified Liabilities arising on account of any such Bank Party's gross
negligence or willful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. Nothing set
forth above shall be construed to relieve any Bank Party from any obligation it
may have under this Agreement.
(b) All obligations provided for in this Section 14.13 shall survive
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repayment of the Loans, cancellation of the Notes, any foreclosure under, or any
modification, release or discharge of any or all of the Collateral Documents and
any termination of this Agreement.
14.14 Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED
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HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
-------- -------
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION,
IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS
SET FORTH ABOVE. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE COMPANY HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
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ITSELF OR ITS PROPERTY, THE COMPANY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
14.15 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE AGENT AND EACH BANK
--------------------
HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
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Delivered at Chicago, Illinois, as of the day and year first above written.
UNITED ROAD SERVICES, INC.
By____________________________________
Title_________________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By____________________________________
Title_________________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVING ASSOCIATION, as Issuing Bank,
Swing Line Bank and as a Bank
By____________________________________
Title_________________________________
BANKBOSTON, N.A., as Documenation Agent
and a Bank
By____________________________________
Title_________________________________
COMERICA BANK, as a Bank
By____________________________________
Title_________________________________
FLEET NATIONAL BANK, as a Bank
By____________________________________
Title_________________________________
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