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EXHIBIT 10.7
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
dated as of August 26, 1997
by and among
DYNAMEX INC.
as Borrower
and
DYNAMEX CANADA INC.
DYNAMEX OPERATIONS EAST, INC.
DYNAMEX OPERATIONS WEST, INC.
PARCELWAY COURIER SYSTEMS (B.C.) LTD.
and
ROAD RUNNER TRANSPORTATION, INC.
as Loan Parties and/or Guarantors
and
NATIONSBANK OF TEXAS, N.A.
as Agent
BANKBOSTON, N.A. and CREDITANSTALT-BANKVEREIN
as Co-Agents
and
THE BANK OF NOVA SCOTIA
$75,000,000 REVOLVING CREDIT FACILITY
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TABLE OF CONTENTS
ARTICLE 1 - Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 Definitions, etc. . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Other Definitional Provisions. . . . . . . . . . . . . 26
Section 1.3 Accounting Terms and Determinations. . . . . . . . . . 26
Section 1.4 Financial Covenants and Reporting. . . . . . . . . . . 26
ARTICLE 2 - Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.1 Commitments. . . . . . . . . . . . . . . . . . . . . . 27
Section 2.2 Notes. . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.3 Repayment of Loans. . . . . . . . . . . . . . . . . . . 28
Section 2.4 Interest. . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.5 Borrowing Procedure. . . . . . . . . . . . . . . . . . 29
Section 2.6 Optional Prepayments, Conversions and Continuations
of Loans . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.7 Minimum Amounts. . . . . . . . . . . . . . . . . . . . 30
Section 2.8 Certain Notices. . . . . . . . . . . . . . . . . . . . 30
Section 2.9 Use of Proceeds. . . . . . . . . . . . . . . . . . . . 31
Section 2.10 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.11 Computations. . . . . . . . . . . . . . . . . . . . . . 31
Section 2.12 Termination or Reduction of Commitments. . . . . . . . 32
Section 2.13 Letters of Credit. . . . . . . . . . . . . . . . . . . 32
ARTICLE 3 - Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 3.1 Method of Payment. . . . . . . . . . . . . . . . . . . 35
Section 3.2 Pro Rata Treatment. . . . . . . . . . . . . . . . . . . 35
Section 3.3 Sharing of Payments, Etc. . . . . . . . . . . . . . . . 36
Section 3.4 Non-Receipt of Funds by the Agent . . . . . . . . . . . 36
Section 3.5 Withholding Taxes. . . . . . . . . . . . . . . . . . . 36
Section 3.6 Withholding Tax Exemption. . . . . . . . . . . . . . . 37
Section 3.7 Reinstatement of Obligations. . . . . . . . . . . . . . 38
ARTICLE 4 - Yield Protection and Illegality . . . . . . . . . . . . . . . . . 38
Section 4.1 Additional Costs. . . . . . . . . . . . . . . . . . . . 38
Section 4.2 Limitation on Types of Loans. . . . . . . . . . . . . . 39
Section 4.3 Illegality . . . . . . . . . . . . . . . . . . . . . . 40
Section 4.4 Treatment of Affected Loans. . . . . . . . . . . . . . 40
Section 4.5 Compensation. . . . . . . . . . . . . . . . . . . . . . 41
Section 4.6 Capital Adequacy. . . . . . . . . . . . . . . . . . . . 41
Section 4.7 Additional Interest on Eurodollar Loans. . . . . . . . 41
ARTICLE 5 - Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 5.1 Collateral. . . . . . . . . . . . . . . . . . . . . . . 42
Section 5.2 Guaranties. . . . . . . . . . . . . . . . . . . . . . . 43
Section 5.3 New Subsidiaries; New Issuances of Capital Stock. . . . 43
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Section 5.4 New Mortgaged Properties. . . . . . . . . . . . . . . . 44
Section 5.5 Release of Collateral. . . . . . . . . . . . . . . . . 44
Section 5.6 Setoff. . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 5.7 Release of Certain Prior Security. . . . . . . . . . . 45
Section 5.8 Collateral and Guaranties of Canadian Subsidiaries . . 45
ARTICLE 6 - Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . 46
Section 6.1 Initial Extension of Credit. . . . . . . . . . . . . . 46
Section 6.2 All Extensions of Credit. . . . . . . . . . . . . . . . 50
Section 6.3 Closing Certificates. . . . . . . . . . . . . . . . . . 51
ARTICLE 7 - Representations and Warranties . . . . . . . . . . . . . . . . . 51
Section 7.1 Corporate Existence . . . . . . . . . . . . . . . . . . 51
Section 7.2 Financial Statements. . . . . . . . . . . . . . . . . . 52
Section 7.3 Corporate Action; No Breach. . . . . . . . . . . . . . 52
Section 7.4 Operation of Business. . . . . . . . . . . . . . . . . 52
Section 7.5 Intellectual Property. . . . . . . . . . . . . . . . . 53
Section 7.6 Litigation and Judgments. . . . . . . . . . . . . . . . 53
Section 7.7 Rights in Properties; Liens. . . . . . . . . . . . . . 53
Section 7.8 Enforceability. . . . . . . . . . . . . . . . . . . . . 53
Section 7.9 Approvals. . . . . . . . . . . . . . . . . . . . . . . 54
Section 7.10 Debt. . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 7.11 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 7.12 Margin Securities. . . . . . . . . . . . . . . . . . . 54
Section 7.13 ERISA; Canadian Plans. . . . . . . . . . . . . . . . . 55
Section 7.14 Disclosure. . . . . . . . . . . . . . . . . . . . . . . 55
Section 7.15 Capitalization; Subsidiaries. . . . . . . . . . . . . . 56
Section 7.16 Agreements. . . . . . . . . . . . . . . . . . . . . . . 56
Section 7.17 Compliance with Laws. . . . . . . . . . . . . . . . . . 56
Section 7.18 Investment Company Act . . . . . . . . . . . . . . . . 56
Section 7.19 Public Utility Holding Company Act. . . . . . . . . . . 56
Section 7.20 Environmental Matters. . . . . . . . . . . . . . . . . 57
Section 7.21 Labor Disputes and Acts of God. . . . . . . . . . . . . 58
Section 7.22 Material Contracts. . . . . . . . . . . . . . . . . . . 58
Section 7.23 Bank Accounts. . . . . . . . . . . . . . . . . . . . . 58
Section 7.24 Outstanding Securities. . . . . . . . . . . . . . . . 58
Section 7.25 Related Transactions Documents. . . . . . . . . . . . . 58
Section 7.26 Solvency. . . . . . . . . . . . . . . . . . . . . . . . 59
Section 7.27 Employee Matters. . . . . . . . . . . . . . . . . . . 59
Section 7.28 Insurance. . . . . . . . . . . . . . . . . . . . . . . 60
Section 7.29 Common Enterprise. . . . . . . . . . . . . . . . . . . 60
ARTICLE 8 - Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . 60
Section 8.1 Reporting Requirements. . . . . . . . . . . . . . . . . 60
Section 8.2 Maintenance of Existence; Conduct of Business . . . . . 64
Section 8.3 Maintenance of Properties. . . . . . . . . . . . . . . 64
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Section 8.4 Taxes and Claims. . . . . . . . . . . . . . . . . . . . 64
Section 8.5 Insurance. . . . . . . . . . . . . . . . . . . . . . . 64
Section 8.6 Inspection Rights. . . . . . . . . . . . . . . . . . . 66
Section 8.7 Keeping Books and Records. . . . . . . . . . . . . . . 66
Section 8.8 Compliance with Laws. . . . . . . . . . . . . . . . . . 66
Section 8.9 Compliance with Agreements. . . . . . . . . . . . . . . 66
Section 8.10 Further Assurances . . . . . . . . . . . . . . . . . . 67
Section 8.11 ERISA; Canadian Plans. . . . . . . . . . . . . . . . . 67
Section 8.12 Trade Accounts Payable. . . . . . . . . . . . . . . . . 67
Section 8.13 Unified Cash Management System. . . . . . . . . . . . . 67
Section 8.14 Indemnifications under Acquisition Documents. . . . . . 67
Section 8.15 Ownership of Subsidiaries. . . . . . . . . . . . . . . 68
Section 8.16 Interest Rate Protection Agreements. . . . . . . . . . 68
Section 8.17 Documentation relating to Future Acquisitions. . . . . 68
ARTICLE 9 - Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . 70
Section 9.1 Debt. . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 9.2 Limitation on Liens. . . . . . . . . . . . . . . . . . 71
Section 9.3 Mergers, Etc. . . . . . . . . . . . . . . . . . . . . . 71
Section 9.4 Restricted Payments. . . . . . . . . . . . . . . . . . 72
Section 9.5 Investments. . . . . . . . . . . . . . . . . . . . . . 73
Section 9.6 Limitation on Issuance of Capital Stock of Subsidiaries. 74
Section 9.7 Transactions with Affiliates. . . . . . . . . . . . . . 74
Section 9.8 Disposition of Property. . . . . . . . . . . . . . . . 75
Section 9.9 Sale and Leaseback. . . . . . . . . . . . . . . . . . . 75
Section 9.10 Lines of Business. . . . . . . . . . . . . . . . . . . 75
Section 9.11 Environmental Protection. . . . . . . . . . . . . . . . 76
Section 9.12 Intercompany Transactions. . . . . . . . . . . . . . . 76
Section 9.13 Modification of Other Agreements . . . . . . . . . . . 76
Section 9.14 Bank Accounts . . . . . . . . . . . . . . . . . . . . . 76
Section 9.15 ERISA and Canadian Plans. . . . . . . . . . . . . . . . 76
ARTICLE 10 - Financial Covenants . . . . . . . . . . . . . . . . . . . . . . 77
Section 10.1 Maximum Ratio of Total Debt to EBITDA. . . . . . . . . 77
Section 10.2 Minimum Net Worth. . . . . . . . . . . . . . . . . . . 77
Section 10.3 Minimum Fixed Charge Coverage Ratio. . . . . . . . . . 77
Section 10.4 Capital Expenditures. . . . . . . . . . . . . . . . . 78
ARTICLE 11 - Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 11.1 Events of Default. . . . . . . . . . . . . . . . . . . 78
Section 11.2 Remedies. . . . . . . . . . . . . . . . . . . . . . . . 81
Section 11.3 Performance by the Agent. . . . . . . . . . . . . . . . 82
Section 11.4 Judgment Currency. . . . . . . . . . . . . . . . . . . 82
Section 11.5 Cash Collateral. . . . . . . . . . . . . . . . . . . . 83
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ARTICLE 12 - The Agent . . . . . . . . . . . . . . . . . . . . . . . 83
Section 12.1 Appointment, Powers and Immunities. . . . . . . . . . . 83
Section 12.2 Rights of Agent as a Lender. . . . . . . . . . . . . . 84
Section 12.3 Defaults. . . . . . . . . . . . . . . . . . . . . . . . 84
Section 12.4 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . 84
Section 12.5 Independent Credit Decisions. . . . . . . . . . . . . . 85
Section 12.6 Several Commitments. . . . . . . . . . . . . . . . . . 85
Section 12.7 Successor Agent. . . . . . . . . . . . . . . . . . . . 85
ARTICLE 13 -Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 13.1 Expenses. . . . . . . . . . . . . . . . . . . . . . . . 86
Section 13.2 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . 86
Section 13.3 Limitation of Liability. . . . . . . . . . . . . . . . 87
Section 13.4 No Duty. . . . . . . . . . . . . . . . . . . . . . . . 88
Section 13.5 No Fiduciary Relationship. . . . . . . . . . . . . . . 88
Section 13.6 Equitable Relief. . . . . . . . . . . . . . . . . . . . 88
Section 13.7 No Waiver; Cumulative Remedies. . . . . . . . . . . . . 88
Section 13.8 Successors and Assigns. . . . . . . . . . . . . . . . . 88
Section 13.9 Survival. . . . . . . . . . . . . . . . . . . . . . . . 91
Section 13.10 ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . 91
Section 13.11 Amendments. . . . . . . . . . . . . . . . . . . . . . . 91
Section 13.12 Maximum Interest Rate. . . . . . . . . . . . . . . . . 92
Section 13.13 Notices. . . . . . . . . . . . . . . . . . . . . . . . 93
Section 13.14 GOVERNING LAW; SUBMISSION TO JURISDICTION;
SERVICE OF PROCESS. . . . . . . . . . . . . . . . . . . 93
Section 13.15 Counterparts. . . . . . . . . . . . . . . . . . . . . . 94
Section 13.16 Severability. . . . . . . . . . . . . . . . . . . . . . 94
Section 13.17 Headings. . . . . . . . . . . . . . . . . . . . . . . . 94
Section 13.18 Construction. . . . . . . . . . . . . . . . . . . . . . 94
Section 13.19 Independence of Covenants. . . . . . . . . . . . . . . 94
Section 13.20 Confidentiality. . . . . . . . . . . . . . . . . . . . 94
Section 13.21 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . 94
Section 13.22 Approvals and Consent. . . . . . . . . . . . . . . . . 95
Section 13.23 Agent for Services of Process. . . . . . . . . . . . . 95
Section 13.24 Joint and Several Obligations. . . . . . . . . . . . . 95
Section 13.25 Amendment and Restatement of Existing Agreement. . . . 95
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INDEX TO EXHIBITS
Exhibit Description of Exhibit Section
- ------- ---------------------- -------
A Form of Assignment and Acceptance 1.1
B Form of Joinder Agreement 1.1
C Form of Note 1.1 and 2.2
D Form of Note evidencing Swingline Advances 1.1 and 2.2
E Form of Notice of Borrowings, Conversions,
Continuations, Prepayments, etc. 2.9
F Form of Compliance Certificate 8.1(c)
INDEX TO SCHEDULES
Schedule Description of Schedule
- -------- -----------------------
1.1(a) Permitted Liens
1.1(b) Pro Formas
1.1(c) Projections
2.13 Outstanding Letters of Credit
7.4 Permits, Franchises, Licenses and Authorizations required by
Governmental Requirements or issued by Governmental Authorities
7.6 Litigation and Judgments
7.7(a) Ownership of Real Properties or Interests therein
7.7(b) Ownership of Intellectual Property
7.7(c) Locations of Places of Business and Material Properties
7.10 Existing Debt
7.11 Taxes
7.13 Plans
7.15 Capitalization
7.22 Material Contracts
7.23 Bank Accounts
7.25 Certain Approvals and Consents
7.27 Employee Matters
7.28 Insurance
9.5 Investments
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August
26, 1997, is by and among DYNAMEX INC. (f/k/a Parcelway Systems Holdings Corp.,
the "Borrower"), a Delaware corporation, DYNAMEX CANADA INC. (f/k/a Parcelway
Courier Systems Canada Ltd., "Dynamex Canada"), a federal Canadian corporation,
DYNAMEX OPERATIONS EAST, INC. ("Dynamex East"), a Delaware corporation, DYNAMEX
OPERATIONS WEST, INC. ("Dynamex West"), a Delaware corporation, PARCELWAY
COURIER SYSTEMS (B.C.) LTD. ("Parcelway BC"), a British Columbia (Canada)
corporation, and ROAD RUNNER TRANSPORTATION, INC., a Minnesota corporation
("Road Runner"), each of the banks or other lending institutions which is a
party hereto (as evidenced by the signature pages of this Agreement) or which
may from time to time become a party hereto or any successor or assignee
thereof (individually, a "Lender" and, collectively, the "Lenders"),
NATIONSBANK OF TEXAS, N.A., a national banking association, as agent for itself
and the other Lenders (in such capacity, together with its successors in such
capacity, the "Agent") and BANKBOSTON, N.A., a national banking association,
and CREDITANSTALT-BANKVEREIN, an Austrian banking corporation, as Co-Agents.
RECITALS:
a. The Borrower, either directly or indirectly, owns
all of the issued and outstanding Capital Stock of Dynamex
Canada, Dynamex East, Dynamex West, Parcelway BC and Road
Runner.
b. Pursuant to that certain Credit Agreement dated as
of December 15, 1995, by and among Dynamex and certain of
its Subsidiaries and NationsBank, individually as a lender
and as agent (the "Original Agreement"), NationsBank
extended certain credit facilities to the Borrower and its
Subsidiaries.
c. Pursuant to that certain Amended and Restated
Credit Agreement dated as of July 5, 1996, by and among
Dynamex and certain of its Subsidiaries and NationsBank,
individually as a lender and as agent (the "Existing
Agreement"), the Original Agreement was amended and
restated and NationsBank extended a revolving credit/term
loan facility to the Borrower and its Subsidiaries.
d. Subsequent to July 5, 1996, the Borrower and/or its
Subsidiaries consummated various stock and asset
acquisitions, in certain cases, with proceeds of loans
made by NationsBank pursuant to the Existing Agreement,
and the Borrower and/or its Subsidiaries consummated
various mergers and wind-ups of the entities acquired
pursuant to such acquisitions.
e. The Borrower and its Subsidiaries, the Lenders
identified on the signature pages of this Agreement and
the Agent desire to enter into this Agreement for the
purposes of, among other things, amending and restating
the Existing Agreement in its entirety effective as of the
Closing Date and providing a $75,000,000 revolving credit
facility to the Borrower, a portion of which shall be
used to refinance the
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Existing Loans and the remainder of which may be used to
finance capital expenditures and permitted acquisitions by
the Borrower and its Subsidiaries and to provide working
capital for, and other funds for the general corporate
purposes of, the Borrower and its Subsidiaries.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions, etc. As used in this Agreement, the
following terms shall have the following meanings:
"ABR" means, at any time, the greater of (a) the Prime Rate then in
effect or (b) the Federal Funds Rate then in effect plus one-half of one
percent (0.50%). Each change in any interest rate provided for herein based
upon the Prime Rate or the Federal Funds Rate resulting from a change in the
Prime Rate or the Federal Funds Rate, respectively, shall take effect without
notice to the Borrower at the time of such change in the Prime Rate or the
Federal Funds Rate, respectively.
"ABR Loans" means Loans that bear interest at rates based upon the ABR.
"Acquired Entity" means any Person whose Capital Stock is acquired in
connection with any Future Acquisition.
"Acquisition Agreements" means any and all agreements, documents,
instruments and certificates evidencing or governing any one or more of the
Acquisitions.
"Acquisition Documents" means the Acquisition Agreements and any and all
other material agreements, documents, instruments and certificates executed
and/or delivered in connection with or pursuant to the Acquisition Agreements.
"Acquisitions" means the Prior Acquisitions and the Future Acquisitions.
"Additional Costs" means as specified in Section 4.1(a).
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of one percent) determined by the Agent to be equal to (a) the
Eurodollar Rate for such Eurodollar Loan for such Interest Period divided by
(b) one minus the Reserve Requirement for such Eurodollar Loan for such
Interest Period.
"Affiliate" means, as to any Person, any other Person (a) that directly
or indirectly, through one or more intermediaries, controls or is controlled
by, or is under common control with, such Person; (b) that directly or
indirectly beneficially owns or holds ten percent or more of any class of
voting Capital Stock of such Person; or (c) ten percent or more of the voting
Capital Stock of which
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is directly or indirectly beneficially owned or held by the Person in question.
The term "control" means the possession, directly or indirectly, of the power
to direct or cause direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise;
provided, however, in no event shall the Agent or any Lender be deemed an
Affiliate of the Borrower or any of its Subsidiaries.
"Agent" means as specified in the introductory paragraph of this
Agreement.
"Agent's Letter" means that certain Fee Letter dated as of May 7, 1997
among NationsBank, NationsBanc Capital Markets, Inc. and the Borrower.
"Agreement" means this Agreement and any and all amendments,
modifications, supplements, renewals, extensions or restatements hereof.
"Applicable Commitment Fee Rate" means, for the period commencing with
the Closing Date and thereafter, the rate per annum set forth in the table
below that corresponds to the ratio of (i) Funded Debt as of the date of the
relevant financial statements referred to below to (ii) EBITDA for the four
fiscal quarters of the Borrower and its Subsidiaries then most recently ended
as of the date of such financial statements, calculated in accordance with
Section 1.4:
----------------------------------------------------------
Ratio of Applicable
Funded Debt to EBITDA Commitment Fee Rate
----------------------------------------------------------
Less than or equal to 1.50 to 1.00 0.25%
Less than or equal to 2.00 to 1.00
but greater than 1.50 to 1.00 0.25%
Less than or equal to 2.75 to 1.00
but greater than 2.00 to 1.00 0.25%
Greater than 2.75 to 1.00 0.375%
----------------------------------------------------------
For purposes hereof and notwithstanding the preceding sentence, the Applicable
Commitment Fee Rate for the period from the Closing Date to the first
Calculation Date shall be deemed to be 0.25% and shall thereafter be calculated
on each Calculation Date based upon the preceding table and the financial
statements delivered by the Borrower pursuant to Section 8.1(b) and the
certificate delivered by the Borrower pursuant to Section 8.1(d); provided,
that if the Borrower fails to deliver to the Agent such financial statements or
certificate on or before the relevant Calculation Date, the Applicable
Commitment Fee Rate shall be deemed to be the percentage reflected in the
preceding table as if the ratio of Funded Debt to EBITDA were greater than 2.75
to 1.00 until the date such statements and certificate are received by the
Agent, after which the Applicable Commitment Fee Rate shall be determined as
otherwise provided herein.
"Applicable Lending Office" means for each Lender and each Type of Loan,
the Lending Office of such Lender (or an Affiliate of such Lender) designated
for such Type of Loan below its name on the signature pages hereof (or, with
respect to a Lender that becomes a party to this Agreement pursuant to an
assignment made in accordance with Section 13.8, in the Assignment and
Acceptance executed by it) or such other office of such Lender (or an Affiliate
of such Lender) as
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such Lender may from time to time specify to the Borrower and the Agent as the
office by which its Loans of such Type are to be made and maintained.
"Applicable Margin" means, for the period commencing with the Closing
Date and thereafter, the rate per annum set forth in the table below that
corresponds to the ratio of (i) Funded Debt as of the date of the relevant
financial statements referred to below to (ii) EBITDA for the four fiscal
quarters of the Borrower and its Subsidiaries then most recently ended as of
the date of such financial statements, calculated in accordance with Section
1.4:
Applicable Margins for
-----------------------------------------------------------------------
Ratio of
Funded Debt to EBITDA ABR Loans Eurodollar Loans
-----------------------------------------------------------------------
Less than or equal to 1.50 to 1.00 0% 1.25%
Less than or equal to 2.00 to 1.00
but greater than 1.50 to 1.00 0% 1.50%
Less than or equal to 2.75 to 1.00
but greater than 2.00 to 1.00 0% 1.75%
Greater than 2.75 to 1.00 0.25% 2.00%
-----------------------------------------------------------------------
For purposes hereof and notwithstanding the preceding sentence, the Applicable
Margin for the period from the Closing Date to the first Calculation Date shall
be deemed to be 0% for ABR Loans and 1.75% for Eurodollar Loans and shall
thereafter be calculated on each Calculation Date based upon the preceding
table and the financial statements delivered by the Borrower pursuant to
Section 8.1(b) and the certificate delivered by the Borrower pursuant to
Section 8.1(d); provided, that if the Borrower fails to deliver to the Agent
such financial statements or certificate on or before the relevant Calculation
Date, the Applicable Margin shall be deemed to be the percentage reflected in
the preceding table as if the ratio of Funded Debt to EBITDA were greater than
2.75 to 1.00 until the date such statements and certificate are received by the
Agent, after which the Applicable Margin shall be determined as otherwise
provided herein.
"Asset Disposition" means the disposition of any or all of the Property
(other than sales of Inventory in the ordinary course of business and the grant
of a Lien as security) of the Borrower or any of its Subsidiaries, whether by
sale, lease, transfer, assignment, condemnation or otherwise, but excluding any
involuntary disposition resulting from casualty damage to Property.
"Assignee" means as specified in Section 13.8(b).
"Assigning Lender" means as specified in Section 13.8(b).
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and its Assignee and accepted by the Agent pursuant to Section
13.8(e), in substantially the form of Exhibit A hereto.
"Bankruptcy Code" means as specified in Section 11.1(e).
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"Basle Accord" means the proposals for risk-based capital framework
described by the Basle Committee on Banking Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988, as amended, supplemented
and otherwise modified and in effect from time to time, or any replacement
thereof.
"Borrower" means as specified in the initial paragraph of this
Agreement.
"Business Day" means (a) any day on which commercial banks are not
authorized or required to close in Dallas, Texas or New York, New York, and (b)
with respect to all borrowings, payments, Conversions, Continuations, Interest
Periods and notices in connection with Eurodollar Loans, any day which is a
Business Day described in clause (a) above and which is also a day on which the
relevant international financial markets are open for the transaction of
business contemplated by this Agreement in London, England and New York, New
York.
"Calculation Date" means the date occurring each quarter during the term
of this Agreement which is 15 days after the date on which quarterly financial
statements of the Borrower and its Subsidiaries are required by Section 8.1(b)
to be delivered to the Agent (or, if such date is not a Business Day, the next
succeeding Business Day).
"Canadian Pension Authority" means any federal or provincial pension
regulator having jurisdiction over any Canadian Pension Plan.
"Canadian Pension and Benefits Law" means any federal or provincial
legislation or regulations applicable to any Canadian Plan including, without
limitation, any pension benefits or tax legislation or regulations.
"Canadian Pension Plan" means any pension or retirement plan, written or
unwritten, registered or unregistered, maintained or contributed to for any
Canadian employee or former employee of Parcelway Canada or any other Loan
Party currently or at any time within the six years immediately preceding the
Closing Date.
"Canadian Plan" means any pension, retirement, profit sharing, stock
option, stock purchase, stock bonus, severance, bonus, incentive, deferred
compensation, supplemental unemployment, health, welfare, dental, disability,
life insurance or other plan, program or arrangement maintained for any
Canadian employee of Parcelway Canada or any other Loan Party, including any
Canadian Pension Plan.
"Canadian Subsidiaries" means a Subsidiary of the Borrower which is
incorporated and organized under Canadian law or under the laws of a province
of Canada (including Dynamex Canada and Parcelway BC).
"Capital Expenditures" means, for any period, expenditures (including
the aggregate amount of Capital Lease Obligations incurred during such period)
made by the Borrower or any of its Subsidiaries to acquire or construct fixed
assets, plant or equipment (including renewals, improvements or replacements,
but excluding repairs) during such period and which, in accordance with GAAP,
are classified as capital expenditures.
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"Capital Lease Obligations" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal Property, which obligations
are classified as a capital lease on a balance sheet of such Person under GAAP.
For purposes of this Agreement, the amount of such Capital Lease Obligations
shall be the capitalized amount thereof, determined in accordance with GAAP.
"Capital Stock" means corporate stock and any and all shares,
partnership interests, limited partnership interests, limited liability company
interests, membership interests, equity interests, participations, rights or
other equivalents (however designated) of corporate stock or any of the
foregoing issued by any entity (whether a corporation, a partnership or another
entity).
"Cdn. Dollars" and "Cdn. $" mean lawful money of Canada.
"Change in Control" means the occurrence, at any time, of any one or
more of the following: (a) any "person" or "group" (each as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act), other than any such "person" or
"group" existing as of the Closing Date, either (i) becomes the "beneficial
owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly,
of voting Capital Stock of the Borrower (or securities convertible into or
exchangeable for such Capital Stock) representing twenty-five percent (25%) or
more of the combined voting power of all voting Capital Stock of the Borrower
(on a fully diluted basis) or (ii) otherwise has the ability, directly or
indirectly, to elect a majority of the board of directors of the Borrower; (b)
during any period of up to 24 consecutive months, commencing on the Closing
Date, individuals who at the beginning of such 24-month period were directors
of the Borrower shall cease for any reason to constitute a majority of the
board of directors of the Borrower (provided, however, that no change in
directors shall be deemed to have occurred upon the death, disability or
retirement of an officer of the Borrower or an outside director of the Borrower
who is serving as a director at such time so long as another officer of the
Borrower or another outside director, respectively, chosen by the then existing
directors replaces such Person as a director); or (c) any Person or two or more
Persons acting in concert shall have acquired, by contract or otherwise, or
shall have entered into a contract or arrangement that, upon consummation
thereof, will result in its or their acquisition of the power to exercise,
directly or indirectly, a voting control over twenty-five percent (25%) or more
of the voting Capital Stock of the Borrower.
"Closing Date" means August 26, 1997, the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"Collateral" means all Property of any nature whatsoever upon which a
Lien is created or purported to be created by any Loan Document as security for
the Obligations or any portion thereof.
"Commitment" means, as to any Lender, the obligation of such Lender to
make or continue Loans and incur or participate in Letter of Credit Liabilities
hereunder in an aggregate principal amount at any one time outstanding up to
but not exceeding the amount set forth opposite the name of such Lender on the
signature pages hereto under the heading "Commitment" or, if such Lender is a
party to an Assignment and Acceptance, the amount of the "Commitment" set forth
in the most
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recent Assignment and Acceptance of such Lender, as the same may be reduced or
terminated pursuant to Section 2.12 or 11.2, and "Commitments" means such
obligations of all Lenders. As of the Closing Date, the aggregate principal
amount of the Commitments is $75,000,000.
"Commitment Percentage" means, as to any Lender, the percentage
equivalent of a fraction, the numerator of which is the amount of the
outstanding Commitment of such Lender (or, if such Commitment has terminated or
expired, the outstanding principal amount of the Loans and Letter of Credit
Liabilities of such Lender) and the denominator of which is the aggregate
amount of the outstanding Commitments of all Lenders (or, if such Commitments
have terminated or expired, the aggregate outstanding principal amount of the
Loans and Letter of Credit Liabilities of all Lenders), as adjusted from time
to time in accordance with Section 13.8.
"Concentration Account" means a concentration deposit account, into
which all proceeds of Collateral shall be deposited, which is maintained by the
Borrower or its Subsidiaries (as applicable) with a bank selected by the
Borrower or such Subsidiary and reasonably acceptable to the Agent, and
"Concentration Accounts" means all of such Concentration Accounts.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.6 of a Eurodollar Loan as a Eurodollar Loan
of the same Type from one Interest Period to the next Interest Period.
"Contract Rate" means as specified in Section 13.12(a).
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.6 or Article 4 of one Type of Loan into the other Type of
Loan.
"Cost of Acquisition" means, with respect to any Acquisition, as of the
date of such Acquisition, the sum of the following (without duplication): (a)
the value of the Capital Stock, warrants or options to acquire Capital Stock of
the Borrower or any of its Subsidiaries to be transferred in connection
therewith (adjusted to give effect to any limitations on transfer of such
Capital Stock, warrants or options), (b) the amount of any cash and the fair
market value of all other Property (excluding Property described in clause (a)
and the unpaid principal amount of any debt instrument) given as consideration,
(c) the amount (determined by using the face amount or the amount payable at
maturity, whichever is greater) of any Debt incurred (without duplication),
assumed or acquired by the Borrower or any of its Subsidiaries in connection
with such Acquisition, (d) all additional purchase price amounts in the form of
earnouts and other contingent obligations that should be recorded on the
financial statements of the Borrower and its Subsidiaries in accordance with
GAAP, (e) all amounts paid in respect of covenants not to compete or consulting
agreements that should be capitalized on financial statements of the Borrower
and its Subsidiaries in accordance with GAAP, and (f) the aggregate fair market
value of all other consideration given by the Borrower or any of its
Subsidiaries in connection with such Acquisition.
"Currency Hedge Agreement" means any currency hedge or exchange
agreement, option or futures contract or other agreement intended to protect
against or manage a Person's exposure to fluctuations in currency exchange
rates.
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"Current Date" means a date occurring no more than 30 days prior to (a)
the Closing Date or (b) such earlier date which is acceptable to the Agent.
"Debt" means as to any Person at any time (without duplication): (a) all
indebtedness, liabilities and obligations of such Person for borrowed money,
(b) all indebtedness, liabilities and obligations of such Person evidenced by
bonds, notes, debentures or other similar instruments, (c) all indebtedness,
liabilities and obligations of such Person to pay the deferred purchase price
of Property or services, except trade accounts payable of such Person arising
in the ordinary course of business that are not past due by more than 90 days,
(d) all Capital Lease Obligations of such Person, (e) all Debt of others
Guaranteed by such Person, (f) all indebtedness, liabilities and obligations
secured by a Lien existing on Property owned by such Person, whether or not the
indebtedness, liabilities or obligations secured thereby have been assumed by
such Person or are non-recourse to such Person, (g) all reimbursement
obligations of such Person in respect of letters of credit, bankers'
acceptances, surety or other bonds and similar instruments, (h) all
indebtedness, liabilities and obligations of such Person to redeem or retire
shares of Capital Stock of such Person, (i) all indebtedness, liabilities and
obligations of such Person under Interest Rate Protection Agreements or
Currency Hedge Agreements, and (j) all indebtedness, liabilities and
obligations of such Person in respect of unfunded vested benefits under any
Plan or Canadian Plan.
"Default" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event of
Default.
"Default Rate" means (a) in respect of any principal of any Loan or any
Reimbursement Obligation at all times during which any Event of Default has
occurred and is continuing, and (b) in respect of any principal of any Loan,
any Reimbursement Obligation or any other amount payable by the Borrower under
this Agreement or any other Loan Document which is not paid when due (whether
at stated maturity, by acceleration or otherwise), a rate per annum during the
period of such Event of Default or during the period commencing on the due date
until such amount is paid in full, respectively, equal to the lesser of (i) the
sum of two percent (2.00%) plus the ABR as in effect from time to time plus the
Applicable Margin for ABR Loans or (ii) the Maximum Rate; provided, however,
that if such Event of Default relates to, or if such amount in default is,
principal of a Eurodollar Loan and the due date is a day other than the last
day of an Interest Period therefor, the "Default Rate" for such principal shall
be, for the period from and including the due date and to but excluding the
last day of the Interest Period therefor, the lesser of (i) the sum of two
percent (2.00%) plus the interest rate for such Eurodollar Loan for such
Interest Period as provided in clause (ii) of Section 2.4(a) hereof or (ii)
the Maximum Rate and, thereafter, the rate provided for above in this
definition.
"Deposit Account" means a deposit account maintained by the Borrower
with a bank selected by the Borrower and reasonably acceptable to the Agent.
"Dollars" and "$" mean lawful money of the U.S.
"Dynamex Canada" means as specified in the introductory paragraph of
this Agreement.
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"Dynamex Common Stock" means the common stock of the Borrower, par value
$0.01 per share.
"Dynamex East" means as specified in the introductory paragraph of this
Agreement.
"Dynamex IPO" means the initial public offering of shares of Dynamex
Common Stock which occurred on or about August 16, 1996.
"Dynamex West" means as specified in the introductory paragraph of this
Agreement.
"EBIT" means, for any period, without duplication, the sum of the
following for the Borrower and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP: (a) Net Income, plus (b) Interest
Expense, plus (c) income and franchise taxes to the extent deducted in
determining Net Income, plus (d) non-cash items, other than depreciation and
amortization expense, to the extent deducted in determining Net Income, minus
(e) non-cash income to the extent included in determining Net Income.
"EBITDA" means, for any period, without duplication, the sum of the
following for the Borrower and its Subsidiaries (or other applicable Person)
for such period determined on a consolidated basis in accordance with GAAP: (a)
Net Income, plus (b) Interest Expense, plus (c) income and franchise taxes to
the extent deducted in determining Net Income, plus (d) depreciation and
amortization expense and other non-cash items to the extent deducted in
determining Net Income, minus (e) non-cash income to the extent included in
determining Net Income.
"Eligible Assignee" means (a) a Lender or any Affiliate of a Lender or
(b) any commercial bank, savings and loan association, savings bank, finance
company, insurance company, pension fund, mutual fund or other financial
institution (whether a corporation, partnership or other entity) or other
Person approved by the Agent and, unless a Default has occurred and is
continuing at the time any assignment is affected in accordance with Section
13.8, the Borrower, which approval shall not be unreasonably withheld or
delayed by the Agent or the Borrower; provided, however, that neither the
Borrower nor an Affiliate of the Borrower shall qualify as an Eligible
Assignee.
"Environmental Law" means any federal, state, provincial, local or
foreign law, statute, code or ordinance, principle of common law, rule or
regulation, as well as any Permit, order, decree, judgment or injunction
issued, promulgated, approved or entered thereunder, relating to pollution or
the protection, cleanup or restoration of the environment or natural resources,
or to the public health or safety, or otherwise governing the generation, use,
handling, collection, treatment, storage, transportation, recovery, recycling,
discharge or disposal of Hazardous Materials, including, without limitation as
to U.S. laws, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601 et seq., the Superfund Amendment
and Reauthorization Act of 1986, 99-499, 100 Stat. 1613, the Resource
Conservation and Recovery Act of 1976, 42 U. S. C. Section 6901 et seq., the
Occupational Safety and Health Act, 29 U S.C. Section 651 et seq., the Clean
Air Act, 42 U.S.C. Section 7401 et seq., the Clean Water Act, 33 U. S. C.
Section 1251 et seq., the Emergency Planning and Community Right to Know Act,
42 U. S. C. Section 11001 et seq., the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. Section 136 et seq., and the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq., and any state or local
counterparts.
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"Environmental Liabilities" means, as to any Person, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs and expenses (including,
without limitation, all reasonable fees, disbursements and expenses of counsel,
expert and consulting fees and costs of investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any claim or
demand, by any Person, whether based in contract, tort, implied or express
warranty, strict liability or criminal, penal or civil statute, including,
without limitation, any Environmental Law, Permit, order or agreement with any
Governmental Authority or other Person, arising from environmental, health or
safety conditions or the Release or threatened Release of a Hazardous Material
into the environment.
"Equity Issuance" means any issuance by the Borrower of any Capital
Stock of the Borrower.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of a group of entities, organizations or employers of which a Loan Party
is also a member and which is treated as a single employer within the meaning
of Sections 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loans" means Loans that bear interest at rates based upon
the Eurodollar Rate and the Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/16 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "Eurodollar Rate" shall mean, for any
Eurodollar Loan for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) appearing on Reuters Screen
LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates
(rounded upwards, if necessary, to the nearest 1/16 of 1%).
"Event of Default" has the meaning specified in Section 11.1.
"Excess Insurance Proceeds" means any and all proceeds of any Insurance
Recovery which the Borrower or its Subsidiary (as applicable) (a) has elected
to not apply to the repair, construction or replacement of the Property
affected or to the purchase of other, similar Property for use in its business
or (b) has not both (i) elected to apply to the repair, construction or
replacement of the Property affected or to the purchase of other, similar
Property for use in its business within 90 days of the event giving rise to the
Insurance Recovery and (ii) actually applied to such repair, construction,
replacement or purchase (A) within 180 days after the earliest to occur of the
receipt of such proceeds by the Borrower, any of its Subsidiaries or the Agent,
with respect to an Insurance Recovery relating to other than real Property, or
(B) commencing within 180 days after the earliest
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to occur of the receipt of such proceeds by the Borrower, any of its
Subsidiaries or the Agent and continuing in a reasonably prompt and diligent
fashion thereafter, with respect to an Insurance Recovery relating to real
Property.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the regulations promulgated thereunder.
"Existing Agreement" means as specified in Recital C of this Agreement.
"Existing Loans" means the "Loans" as such term is defined in the
Existing Agreement.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest one-sixteenth of one percent (1/16 of
1%)) equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, provided that (a) if the day for
which such rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day and (b) if
such rate is not so published on such next succeeding Business Day, the Federal
Funds Rate for any day shall be the average rate which would be charged to the
Reference Lender on such day on such transactions as determined by the Agent.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of (a)
the sum of the following (without duplication) for the Borrower and its
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP: (i) Net Income, plus (ii) Interest Expense, plus (iii) income and
franchise taxes to the extent deducted in determining Net Income, plus (iv)
depreciation and amortization expense and other non-cash items to the extent
deducted in determining Net Income, minus (v) non-cash income to the extent
included in determining Net Income, plus (vi) Lease Expense, minus (vii)
Capital Expenditures, to (b) the Fixed Charges of the Borrower and its
Subsidiaries for such period.
"Fixed Charges" means, for any period, the sum of the following for the
Borrower and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP: (a) Interest Expense, plus (b) taxes paid in
cash, (c) principal payments of Debt, plus (d) Lease Expense.
"Funded Debt" means, at any particular time, the aggregate amount of all
Debt of the Borrower and its Subsidiaries determined on a consolidated basis in
accordance with GAAP, exclusive of (i) Debt referred to in clauses (e) and (j)
of the definition of such term if and to the extent (but only if and to the
extent) that such Debt is not included on the consolidated balance sheet of the
Borrower and its Subsidiaries, and (ii) Debt referred to in clause (f) of the
definition of such term if and to the extent that such Debt is non-recourse to
the Borrower and its Subsidiaries.
"Future Acquisitions" means any and all purchases or acquisitions by the
Borrower or any of its Subsidiaries, on or after the Closing Date, of all or a
material or substantial part of the Capital Stock or business or Properties of
another Person (including, without limitation, by way of merger, consolidation,
amalgamation or wind-up).
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"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants and/or in statements
of the Financial Accounting Standards Board and/or their respective successors
and which are applicable in the circumstances as of the date in question.
Accounting principles are applied on a "consistent basis" when the accounting
principles applied in a current period are comparable in all material respects
to those accounting principles applied in a preceding period.
"Governmental Authority" means any nation or government, any state,
provincial or political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Governmental Requirement" means any law, statute, code, ordinance,
order, rule, regulation, judgment, decree, injunction, franchise, Permit,
certificate, license, authorization or other directive or requirement of any
federal, state, county, municipal, parish, provincial or other Governmental
Authority or any department, commission, board, court, agency or any other
instrumentality of any of them.
"Guarantee" by any Person means any obligation, contingent or otherwise,
of such Person directly or indirectly guaranteeing any Debt or other obligation
of any other Person and, without limiting the generality of the foregoing, any
indebtedness, liability or obligation, direct or indirect, contingent or
otherwise, of such Person (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or other obligation (whether arising
by virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay or to maintain financial
statement conditions or otherwise) or (b) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other indebtedness,
liability or obligation as to the payment thereof or to protect the obligee
against loss in respect thereof (in whole or in part), provided that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning. The amount of any Guarantee shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum anticipated liability in respect thereof (assuming such Person is
required to perform thereunder).
"Guaranties" means the Guaranty Agreements in form and substance
satisfactory to the Agent executed by each of the Subsidiaries of the Borrower,
other than the Canadian Subsidiaries, and any other Loan Party (one executed
by each such Loan Party), dated the Closing Date or a subsequent date (e.g.,
with respect to such Subsidiaries acquired after the Closing Date), in favor of
the Agent for the benefit of the Agent and the Lenders, and any Guaranty
Agreement executed pursuant to Article 5 hereof, and any and all amendments,
modifications, supplements, renewals, extensions or restatements thereof.
"Hazardous Material" means any substance, product, liquid, waste,
pollutant, chemical, contaminant, insecticide, pesticide, gaseous or solid
matter, organic or inorganic matter, fuel, micro-organisms, ray, odor,
radiation, energy, vector, plasma, constituent or material which (a) is or
becomes listed, regulated or addressed under any Environmental Law or (b) is,
or is deemed to be,
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alone or in any combination, hazardous, hazardous waste, toxic, a pollutant, a
deleterious substance, a contaminant or a source of pollution or contamination
under any Environmental Law, including, without limitation, asbestos,
petroleum, underground storage tanks (whether empty or containing any
substance) and polychlorinated biphenyls.
"Intellectual Property" means any U.S., Canadian or foreign patents,
patent applications, trademarks, trade names, service marks, brand names, logos
and other trade designations (including unregistered names and marks),
trademark and service mark registrations and applications, copyrights and
copyright registrations and applications, inventions, invention disclosures,
protected formulae, formulations, processes, methods, trade secrets, computer
software, computer programs and source codes, manufacturing research and
similar technical information, engineering know-how, customer and supplier
information, assembly and test data drawings or royalty rights.
"Interest Expense" means, for any period, all interest on Debt of the
Borrower and its Subsidiaries (or other applicable Person) paid or accrued
during such period, including the interest portion of payments under Capital
Lease Obligations; provided, however, for purposes of determining compliance
with the financial covenants set forth in Section 10.2, Interest Expense (in
computing Fixed Charges) shall exclude interest payable in kind or in other
securities of the obligor other than cash or cash equivalents.
"Interest Period" means, with respect to any Eurodollar Loan, each
period commencing on the date such Loan is made or Converted from an ABR Loan
or (if Continued) the last day of the next preceding Interest Period with
respect to such Loan, and ending on the numerically corresponding day in the
first, second, third or sixth calendar month thereafter, as the Borrower may
select as provided in Section 2.8 hereof, except that each such Interest Period
which commences on the last Business Day of a calendar month (or on any day for
which there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month. Notwithstanding the foregoing: (a) each Interest
Period which would otherwise end on a day which is not a Business Day shall end
on the next succeeding Business Day (or, if such succeeding Business Day falls
in the next succeeding calendar month, on the next preceding Business Day); (b)
any Interest Period which would otherwise extend beyond the Maturity Date shall
end on the Maturity Date; (c) no more than five Interest Periods for Eurodollar
Loans shall be in effect at the same time; (d) no Interest Period shall have a
duration of less than one month and, if the Interest Period for any Eurodollar
Loans would otherwise be a shorter period, such Loans shall not be available
hereunder; and (e) no Interest Period for a Loan may commence before and end
after any principal repayment date unless, after giving effect thereto, the
aggregate principal amount of the Eurodollar Loans having Interest Periods that
end after such principal payment date shall be equal to or less than the amount
of the applicable Loans scheduled to be outstanding hereunder after such
principal payment date.
"Interest Rate Protection Agreements" means, with respect to any Person,
an interest rate swap, cap or collar agreement or similar arrangement between
such Person and one or more Lenders that are parties to this Agreement
providing for the transfer or mitigation of interest rate risks either
generally or under specified contingencies.
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"Inventory" means all inventory now owned or hereafter acquired by the
Borrower or any of its Subsidiaries wherever located and whether or not in
transit, which is or may at any time be held for sale or lease, or furnished
under any contract (exclusive of leases of real Property) for service or held
as raw materials, work in process, or supplies or materials used or consumed in
the business of the Borrower or any of its Subsidiaries.
"Investments" means as specified in Section 9.5.
"Issuing Bank" means NationsBank or such other Lender which is a
commercial bank as the Borrower and NationsBank may mutually designate from
time to time which agrees to be the issuer of such Letter of Credit.
"Joinder Agreement" means a Joinder Agreement in substantially the form
of Exhibit B hereto.
"Lease Expense" means, for any period, the lease expense of the Borrower
and its Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP, and includes, without limitation, expenses under
Operating Leases and the current maturities of Capital Lease Obligations.
"Lender" and "Lenders" means as specified in the initial paragraph of
this Agreement.
"Lenders' Letter" means that certain letter agreement dated as of August
20, 1997, between the Borrower and the Agent relating to the payment of
origination fees in connection with this Agreement to each Lender which is a
party hereto as of the Closing Date.
"Letter of Credit" means any standby letter of credit (a) issued from
time to time by the Issuing Bank for the account of the Borrower pursuant to
this Agreement or (b) issued pursuant to the Original Agreement or the Existing
Agreement which is outstanding as of the Closing Date.
"Letter of Credit Agreement" means, with respect to each Letter of
Credit to be issued by the Issuing Bank therefor, the letter of credit
application and reimbursement agreement which such Issuing Bank requires to be
executed by the Borrower in connection with the issuance of such Letter of
Credit.
"Letter of Credit Liabilities" means, at any time, the aggregate undrawn
face amount of all outstanding Letters of Credit and all unreimbursed drawings
under Letters of Credit.
"Lien" means any lien, mortgage, security interest, tax lien, financing
statement, pledge, charge, hypothecation or other encumbrance of any kind or
nature whatsoever (including, without limitation, any conditional sale or title
retention agreement), whether arising by contract, operation of law or
otherwise.
"Loan Documents" means this Agreement, the Notes, the Security
Documents, the Agent's Letter, the Letters of Credit, the Letter of Credit
Agreements, the Joinder Agreements, any Interest Rate Protection Agreement or
Currency Hedge Agreement between the Borrower or any of its
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Subsidiaries and any Lender and all other agreements, documents and instruments
now or hereafter executed and/or delivered pursuant to or in connection with
any of the foregoing, and any and all amendments, modifications, supplements,
renewals, extensions or restatements thereof.
"Loan Party" means (a) the Borrower, Dynamex Canada, Dynamex East,
Dynamex West, Parcelway BC and Road Runner, (b) each of the Subsidiaries of the
Borrower (whether existing on or after the Closing Date, including, without
limitation, each Acquired Entity) and (c) any other Person who is or becomes a
party to any agreement, document or instrument that Guarantees or secures
payment or performance of the Obligations or any part thereof.
"Loans" means as specified in Section 2.1, and "Loan" means any of such
Loans.
"Material Adverse Effect" means any material adverse effect, or the
occurrence of any event or the existence of any condition that could reasonably
be expected to have a material adverse effect, on (a) the prospects, business
or financial condition or performance of the Borrower and its Subsidiaries,
taken as a whole, or of the Borrower, Dynamex East, Dynamex West or Road Runner
on an individual basis, (b) the prospects, business or financial condition or
performance of Dynamex Canada and its Subsidiaries, taken as a whole, or of
Dynamex Canada on an individual basis, (c) the ability of the Borrower to pay
and perform the Obligations when due, or (d) the validity or enforceability of
(i) any of the Loan Documents, (ii) any Lien created or purported to be created
by any of the Loan Documents or the required priority of any such Lien, or
(iii) the rights and remedies of the Agent or the Lenders under any of the Loan
Documents.
"Material Contracts" means, as to any Person, any supply, purchase,
service, employment, tax, indemnity, shareholder or other agreement or contract
for which the aggregate amount or value of services performed or to be
performed for or by, or funds or other Property transferred or to be
transferred to or by, such Person or any of its Subsidiaries party to such
agreement or contract, or by which such Person or any of its Subsidiaries or
any of their respective Properties are otherwise bound, during any fiscal year
of the Borrower exceeds $100,000 or Cdn. $150,000, and any and all amendments,
modifications, supplements, renewals or restatements thereof.
"Maturity Date" means August 31, 2000.
"Maximum Rate" means, with respect to any Lender, the maximum non-
usurious interest rate, if any, that any time or from time to time may be
contracted for, taken, reserved, charged or received with respect to the
particular Obligations as to which such rate is to be determined, payable to
such Lender pursuant to this Agreement or any other Loan Document, under laws
applicable to such Lender which are presently in effect or, to the extent
allowed by law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum non-usurious interest rate than applicable laws
now allow. The Maximum Rate shall be calculated in a manner that takes into
account any and all fees, payments and other charges in respect of the Loan
Documents that constitute interest under applicable law. Each change in any
interest rate provided for herein based upon the Maximum Rate resulting from a
change in the Maximum Rate shall take effect without notice to the Borrower at
the time of such change in the Maximum Rate. For purposes of determining the
Maximum Rate under Texas law, the applicable rate ceiling shall be the
indicated rate ceiling described in, and computed in accordance with, Article
5069-1.04, Vernon's Texas Civil
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Statutes or any successor or replacement statute; provided, however, that, to
the extent permitted by applicable law, the Agent shall have the right to
change the applicable rate ceiling from time to time in accordance with
applicable law.
"Mortgaged Properties" means, collectively, any real Properties or
interests therein which become or are required to become subject to Mortgages
pursuant to Section 5.4 hereof.
"Mortgages" means any (if any) deed of trusts, leasehold deeds of trust,
mortgages, leasehold mortgages, collateral assignments of leases and other real
estate security documents executed and delivered pursuant to this Agreement by
the Borrower or any of its Subsidiaries or any other Loan Party in favor of the
Agent for the benefit of the Agent and the Lenders with respect to any
Mortgaged Property, and any and all amendments, modifications, supplements,
renewals or restatements thereof.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by or are required
from any Loan Party or any ERISA Affiliate since 1974 and which is covered by
Title IV of ERISA.
"NationsBank" means NationsBank of Texas, N.A., a national banking
association.
"Net Income" means, for any period, the net income (or loss) of the
Borrower and its Subsidiaries (or other applicable Person) for such period,
determined on a consolidated basis in accordance with GAAP, but excluding (for
all purposes other than compliance with Section 10.2) as income (a) net gains
on the sale, conversion or other disposition of capital assets, (b) net gains
on the acquisition, retirement, sale or other disposition of Capital Stock and
other securities of the Borrower or its Subsidiaries, (c) net gains on the
collection of proceeds of life insurance policies, and (d) any write-up of any
asset.
"Net Proceeds" means, with respect to any Asset Disposition, (a) the
gross amount of cash received by the Borrower or any of its Subsidiaries from
such Asset Disposition, minus (b) the amount, if any, of all taxes paid or
payable by the Borrower or any of its Subsidiaries directly resulting from such
Asset Disposition (including the amount, if any, estimated by the Borrower in
good faith at the time of such Asset Disposition for taxes payable by the
Borrower or any of its Subsidiaries on or measured by net income or gain
resulting from such Asset Disposition), minus (c) the reasonable out-of-pocket
costs and expenses incurred by the Borrower or such Subsidiary in connection
with such Asset Disposition (including reasonable brokerage fees paid to a
Person other than an Affiliate of the Borrower) excluding any fees or expenses
paid to an Affiliate of the Borrower, minus (d) amounts applied to the
repayment of indebtedness (other than the Obligations) secured by any Permitted
Lien (if any) on the Property subject to the Asset Disposition. "Net Proceeds"
with respect to any Asset Disposition shall also include proceeds (after
deducting any amounts specified in clauses (b), (c) and (d) of the preceding
sentence) of insurance with respect to any actual or constructive loss of
Property, an agreed or compromised loss of Property or the taking of any
Property under the power of eminent domain and condemnation awards and awards
in lieu of condemnation for the taking of Property under the power of eminent
domain, except such proceeds and awards as are released to and used by the
Borrower or any of its Subsidiaries in accordance with Section 8.5. "Net
Proceeds" means, with respect to any Equity Issuance, (i) the
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gross amount of cash or cash equivalents plus the gross value of all other
consideration received from such Equity Issuance, exclusive of the proceeds of
sales of Capital Stock of the Borrower to employees or directors of the
Borrower or its Subsidiaries in connection with the provision of compensation
or benefits to such employees or directors for their activities as such, minus
(ii) the out-of-pocket costs and expenses incurred by the Borrower in
connection with such Equity Issuance (including any underwriting fees paid to a
Person) excluding any fees or expenses paid to an Affiliate of the Borrower
which are in excess of those that would be paid or payable in connection with
an arms' length transaction with a Person who is not an Affiliate of the
Borrower.
"Net Worth" means, at any particular time, all amounts which, in
conformity with GAAP, would be included as stockholders' equity on a
consolidated balance sheet of the Borrower and its Subsidiaries minus any
additions made for currency translation adjustments.
"Notes" means the Promissory Notes, in the form of Exhibit B or Exhibit
C hereto, made by the Borrower evidencing the Loans and any and all amendments,
modifications, supplements, renewals, extensions or restatements thereof and
all substitutions therefor (including promissory notes issued by the Borrower
pursuant to Section 13.8), and "Note" means any of such promissory note.
"Obligations" means any and all (a) indebtedness, liabilities and
obligations of the Borrower and the other Loan Parties, or any of them, to the
Agent, the Issuing Bank and the Lenders, or any of them, evidenced by and/or
arising pursuant to any of the Loan Documents (including, without limitation,
this Agreement, the Notes and the Guaranties), now existing or hereafter
arising, whether direct, indirect, related, unrelated, fixed, contingent,
liquidated, unliquidated, joint, several or joint and several, including,
without limitation, (i) the obligations of the Borrower and the Guarantors to
repay the Loans and the Reimbursement Obligations, to pay interest on the Loans
and the Reimbursement Obligations (including, without limitation, interest
accruing after any, if any, bankruptcy, insolvency, reorganization or other
similar filing) and to pay all fees, indemnities, costs and expenses (including
attorneys' fees) provided for in the Loan Documents and (ii) the indebtedness
constituting the Loans, the Reimbursement Obligations and such interest, fees,
indemnities, costs and expenses, and (b) indebtedness, liabilities and
obligations of the Borrower or any of its Subsidiaries under any and all
Interest Rate Protection Agreements and Currency Hedge Agreements that it may
enter into with any Lender with the prior written consent of the Agent and the
Required Lenders (whether or not such Lender remains as a Lender after the
execution of any such Interest Rate Protection Agreement or Currency Hedge
Agreement, unless the Agent and the Required Lenders otherwise provide in
connection with or as a condition to their consent).
"Operating Lease" means, with respect to any Person, any lease, rental
or other agreement for the use by that Person of any Property which is not a
Capital Lease Obligation.
"Original Agreement" means as specified in Recital B of this Agreement.
"Outstanding Credit" means, at any particular time, the sum of (a) the
aggregate outstanding principal amount of the Loans (inclusive of the Swingline
Advances) plus (b) the Letter of Credit Liabilities.
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"Parcelway BC" means as specified in the introductory paragraph of this
Agreement.
"Payor" means as specified in Section 3.4.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"PBGF" means the Ontario Pension Benefits Guarantee Fund.
"Pension Plan" means an employee pension benefit plan as defined in
Section 3(2) of ERISA (including a Multiemployer Plan) which is subject to the
funding requirements under Section 302 of ERISA or Section 412 of the Code, in
whole or in part, and which is maintained or contributed to currently or at any
time within the six years immediately preceding the Closing Date or, in the
case of a Multiemployer Plan, at any time since September 2, 1974, by any
Borrower or any ERISA Affiliate for employees of any Borrower or any ERISA
Affiliate.
"Peril" means as specified in Section 8.5(a).
"Permit" means any permit, certificate, approval, order, license or
other authorization.
"Permitted Acquisition" means any Future Acquisition that complies with
each of the following requirements:
(a) such Future Acquisition consists of (i) an acquisition of
assets by a Loan Party that is organized under the laws of a State of
the U.S. or by Dynamex Canada or another Canadian Subsidiary that is a
direct, wholly-owned Subsidiary of the Borrower, (ii) an acquisition of
Capital Stock by the Borrower, or (iii) an acquisition of Capital Stock
by Dynamex Canada if (but only if) the Acquired Entity acquired pursuant
to such acquisition is wound-up with and into Dynamex Canada or another
Canadian Subsidiary that is a direct, Wholly-Owned Subsidiary of the
Borrower within six months after the date of consummation of such
acquisition;
(b) such Future Acquisition shall not involve an aggregate
Cost of Acquisition paid or payable, in whatever form (but exclusive of
any trade payables incurred in the ordinary course of business to the
extent that the aggregate amount of such trade payables assumed does not
exceed the aggregate amount of accounts receivable acquired in
connection with such Future Acquisition), in excess of $6,000,000 unless
such Future Acquisition has been approved in writing by the Agent and
the Required Lenders;
(c) such Future Acquisition and all other Future Acquisitions
consummated or proposed to be consummated during any twelve-month period
shall not involve an aggregate Cost of Acquisition paid or payable, in
whatever form (but exclusive of any trade payables incurred in the
ordinary course of business to the extent that the aggregate amount of
such trade payables assumed does not exceed the aggregate amount of
accounts receivable acquired in connection with such Future
Acquisitions) in excess of $10,000,000 unless such Future Acquisition
has been approved in writing by the Agent and the Required Lenders;
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(d) both before and after giving effect to such Future
Acquisition and the Loans requested to be made in connection therewith,
no Default exists or will exist and the Borrower shall have represented
pro forma compliance with the financial covenants contained in Article
10 of this Agreement for the most recent twelve-month period and as of
the end of the most recent fiscal quarter after giving effect to such
Future Acquisition;
(e) the Loan Parties shall not, as a result of or in
connection with any such Future Acquisition, assume or incur any
contingent liabilities (whether relating to environmental, tax,
litigation or other matters) that could reasonably be expected to result
in the existence or occurrence of a Material Adverse Effect;
(f) if such Future Acquisition involves an acquisition of
Capital Stock, the Borrower or Dynamex Canada (as applicable) shall
acquire and own (and have voting control with respect to) at least 90%
of each class of the issued and outstanding shares of Capital Stock of
the Acquired Entity whose Capital Stock is being acquired unless a
lesser percentage of each such class of Capital Stock has been approved
in writing by the Agent and the Required Lenders (in which case such
lesser percentage is being acquired);
(g) if such Future Acquisition is effectuated pursuant to a
merger, consolidation, amalgamation or wind-up, the Borrower (if the
Borrower is a party thereto) or the Wholly-Owned Subsidiary (if such
Wholly-Owned Subsidiary is a party thereto and the Borrower is not a
party thereto) shall be the Person surviving such merger, consolidation,
amalgamation or wind-up; and
(h) such Future Acquisition shall have been approved by all
requisite corporate (or other applicable entity) action (including,
without limitation, shareholder or other owner action, if required) of
the target entity or Acquired Entity (as applicable) required by
applicable law and shall not have been disapproved or recommended for
disapproval by the board of directors or analogous governing body of
such target entity or Acquired Entity (as applicable).
"Permitted Acquisition Documents" means any and all Acquisition
Documents which relate to any Permitted Acquisition.
"Permitted Liens" means:
(a) Liens disclosed on Schedule 1.1(a) hereto;
(b) Liens securing the Obligations in favor of the Agent (for
the benefit of the Agent and the Lenders) pursuant to the Loan
Documents;
(c) Encumbrances consisting of easements, rights-of-way,
zoning restrictions or other restrictions on the use of real Property
or, as to the real Property referred to in clause (ii) below only,
imperfections to title that (i) as to any Mortgaged Property, do not
(individually or in the aggregate) materially affect the value of the
Property encumbered thereby or materially impair the ability of the
Borrower or any of its Subsidiaries to use such
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Property in its businesses, and none of which is violated in any
material respect by existing or proposed structures or land use, and
(ii) as to any real Property other than Mortgaged Property, were entered
into in the ordinary course of business and could not have a Material
Adverse Effect;
(d) Liens for taxes, assessments or other governmental charges
that are not delinquent or which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing
the forfeiture or sale of the Property subject to such Liens, and for
which adequate reserves have been established;
(e) Liens of mechanics, materialmen, warehousemen, carriers,
landlords or other similar statutory Liens securing obligations that are
not yet due and are incurred in the ordinary course of business or which
are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the
Property subject to such Liens, and for which adequate reserves have
been established;
(f) Liens resulting from good faith deposits to secure payment
of workmen's compensation or other social security programs or to secure
the performance of tenders, statutory obligations, surety and appeal
bonds, bids, contracts (other than for payment of Debt) or leases, all
in the ordinary course of business;
(g) Purchase-money Liens on any Property hereafter acquired or
the assumption after the Closing Date of any Lien on Property existing
at the time of such acquisition (and not created in contemplation of
such acquisition), or a Lien incurred after the Closing Date in
connection with any conditional sale or other title retention agreement
or Capital Lease Obligation; provided that:
(i) any Property subject to the foregoing is acquired
by the Borrower or any of its Subsidiaries in the ordinary course
of its respective business and the Lien on the Property attaches
concurrently or within 90 days after the acquisition thereof;
(ii) the Debt secured by any Lien so created, assumed or
existing shall not exceed the lesser of the cost or fair market
value at the time of acquisition of the Property covered thereby;
(iii) each such Lien shall attach only to the Property so
acquired and the proceeds thereof; and
(iv) the Debt secured by all such Liens, when aggregated
with the Debt secured by all other purchase money Liens at any
time outstanding and whenever incurred or created, shall not
exceed $1,000,000 at any time outstanding in the aggregate; and
(h) Any extension, renewal or replacement of any of the
foregoing, provided that Liens permitted hereunder shall not be extended
or spread to cover any additional indebtedness or Property;
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provided, however, that (A) none of the Permitted Liens (except those in favor
of the Agent) may attach or relate to the Capital Stock of or any other
ownership interest in the Borrower or any of its Subsidiaries and (B) none of
the Permitted Liens referred to in clause (a) preceding, other than purchase-
money Liens permitted in accordance with this Agreement, may have a priority
equal or prior to the Liens in favor of the Agent as security for the
Obligations.
"Permitted Subordinated Debt" means Debt of the Borrower which meets all
of the following requirements: (a) such Debt is wholly unsecured; and (b) such
Debt is evidenced and governed by agreements, documents and instruments in form
and substance, and containing payment, subordination and other terms and
provisions, which have been wholly approved by the Agent and the Required
Lenders in writing prior to the incurrence of such Debt.
"Person" means any individual, corporation, trust, association, company,
partnership, joint venture, limited liability company, Governmental Authority
or other entity.
"Plan" means any employee benefit plan as defined in Section 3(3) of
ERISA established or maintained or contributed to by any Loan Party or any
ERISA Affiliate, including any Pension Plan.
"Prime Rate" means, at any time, the rate of interest per annum then
most recently announced or established by NationsBank as its highest commercial
prime rate then in effect, which rate may not be the lowest rate of interest
charged by NationsBank to its commercial borrowers.
"Principal Office" means the principal office of the Agent in Dallas,
Texas, presently located at 901 Main Street, 7th Floor, Dallas, Texas 75202.
"Prior Acquisitions" means (a) any and all purchases or acquisitions by
the Borrower or any of its Subsidiaries (whether or not such Subsidiaries
currently exist), prior to the Closing Date, of all or a material or
substantial part of the Capital Stock or business or Properties of another
Person (including, without limitation, by way of merger, consolidation,
amalgamation or wind-up), including, without limitation, the purchases or
acquisitions of the Capital Stock or business or Properties of Dynamex Express
Inc., Mayne Nickless Courier Systems, Inc., Mayne Nickless Messenger Services,
Inc., Mayne Nickless Transport Inc. (including its IPX Courier and Loomis Rush
Messenger divisions), LogisTechs Worldwide, Inc., Action Delivery and Messenger
Service (1996) Limited, Seidel Enterprises, Inc., Now Courier, Inc., Seko-
Rocket Enterprises, Inc., YS Corporation, Attention Messenger of Illinois,
Inc., Southbank Courier Inc., K.H.B. & Associates Ltd., Zipper Transportation
Services Ltd., Express It, Inc., Dollar Courier, Winged Foot Messenger
Services, Inc., Boogey Transportation Ltd., One Hour Delivery Service, Inc.,
Priority Parcel Express Inc., Max America Holdings, Inc., Eagle Courier, Inc.,
Regina Mail Marketing Inc., One Hour Courier Service, Inc., Road Runner
Transportation Inc., Hodder Express (1996) Limited and Trans-City Express
Limited and (b) any and all of the mergers, consolidations, amalgamations and
wind-ups of any one or more of such Persons with or into the Borrower or any of
its Subsidiaries (whether or not such Subsidiaries currently exist).
"Prior Acquisition Documents" means all Acquisition Documents which
relate to any Prior Acquisition.
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"Pro Formas" means the unaudited pro forma financial statements of the
Borrower and its consolidated Subsidiaries after giving effect to the Related
Transactions (including, without limitation, the Prior Acquisitions), which Pro
Formas are attached hereto as Schedule 1.1(b).
"Prohibited Transaction" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code.
"Projections" means the Borrower's forecasted consolidated (a) balance
sheets, (b) income statements, and (c) cash flow statements, together with
appropriate supporting details and a statement of underlying assumptions, after
giving effect to the Related Transactions (including, without limitation, the
Prior Acquisitions), which Projections are dated as of June 16, 1997, and are
attached hereto as Schedule 1.1(c).
"Property" means property or assets of all kinds, real, personal or
mixed, tangible or intangible (including, without limitation, all rights
relating thereto), whether owned or acquired on or after the Closing Date.
"Quarterly Date" means the last day of each January, April, July and
October of each year, the first of which shall be October 31, 1997.
"Receivables" means, as at any date of determination thereof, each and
every "account" as such term is defined in the UCC and includes, without
limitation, the unpaid portion of the obligation, as stated on the respective
invoice, or, if there is no invoice, other writing, of a customer of the
Borrower or any of its Subsidiaries in respect of Inventory sold and shipped or
services rendered by the Borrower or any of its Subsidiaries.
"Regina Mail" means Regina Mail Marketing Systems Inc., a Saskatchewan
(Canada) corporation.
"Register" means as specified in Section 13.8(d).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulatory Change" means, with respect to any Lender, any change after
the Closing Date in any U.S. federal or state, Canadian federal or provincial
or foreign laws or regulations (including Regulation D) or the adoption or
making after such date of any interpretations, directives or requests applying
to a class of lenders including such Lender of or under any U.S. federal or
state, Canadian federal or provincial or foreign laws or regulations (whether
or not having the force of law) by any Governmental Authority charged with the
interpretation or administration thereof.
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Issuing Bank for any drawing under a Letter of Credit.
"Related Transactions" means, collectively, (a) the Acquisitions, (b)
the execution and delivery of the Related Transactions Documents, (c) the
issuance of the Dynamex Common Stock
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pursuant to the Dynamex IPO and the Borrower's receipt of cash proceeds in
connection therewith, (d) the payment in full of all principal, interest, fees
and expenses payable by the Borrower or any of its Subsidiaries pursuant to the
Existing Agreement with the proceeds of Loans made pursuant to this Agreement,
(e) the incorporation, establishment and organization of the Subsidiaries of
the Borrower, and (f) the payment of all fees, costs and expenses associated
with the foregoing.
"Related Transactions Documents" means the Acquisition Documents, the
agreements, documents, instruments and certificates relating to the Dynamex IPO
and all other agreements, documents, instruments and certificates executed
and/or delivered pursuant to or in connection with any of the foregoing.
"Release" means, as to any Person, any release, spill, emission,
leaking, pumping, injection, deposit, discharge, disposal, disbursement,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment or into or out of Property owned by such Person, including, without
limitation, the movement of Hazardous Materials through or in the air, soil,
surface water or ground water.
"Remedial Action" means all actions required to (a) cleanup, remove,
respond to, treat or otherwise address Hazardous Materials in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release of Hazardous Materials so that they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) perform studies and investigations on the extent and
nature of any actual or suspected contamination, the remedy or remedies to be
used or health effects or risks of such contamination, or (d) perform post-
remedial monitoring, care or remedy of a contaminated site.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA.
"Required Lenders" means, at any date of determination, Lenders having
in the aggregate at least sixty percent (60%) (in Dollar amount) of the
aggregate amount of the outstanding Commitments (or, if such Commitments have
terminated or expired, the aggregate outstanding principal amount of the Loans
and the aggregate Letter of Credit Liabilities).
"Required Payment" means as specified in Section 3.4.
"Reserve Requirement" means, for any Eurodollar Loan of any Lender for
any Interest Period therefor, the maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under any regulations of the Board of Governors of
the Federal Reserve System (or any successor) by such Lender for deposits
exceeding $1,000,000 against "Eurocurrency Liabilities" as such term is used in
Regulation D. Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained by such
Lenders by reason of any Regulatory Change against (a) any category of
liabilities which includes deposits by reference to which the Eurodollar Rate
or the Adjusted Eurodollar Rate is to be determined or (b) any category of
extensions of credit or other assets which include Eurodollar Loans.
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"Responsible Officer" means, as to any Loan Party, the chief financial
officer, chief operating officer or chief executive officer of such Person.
"Restricted Payment" means (a) any dividend or other distribution
(whether in cash, Property or obligations), direct or indirect, on account of
(or the setting apart of money for a sinking or other analogous fund for) any
shares of any class of Capital Stock of the Borrower or any of its Subsidiaries
now or hereafter outstanding, except a dividend payable solely in shares of
that class of stock to the holders of that class; (b) any redemption,
conversion, exchange, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
Capital Stock of the Borrower or any of its Subsidiaries now or hereafter
outstanding; (c) any payment or prepayment of principal of, premium, if any, or
interest on, or any redemption, conversion, exchange, purchase, retirement or
defeasance of, or payment with respect to, any Subordinated Debt; (d) any loan,
advance or payment to any officer, director or shareholder of the Borrower or
any of its Subsidiaries (other than a shareholder consisting of the Borrower or
a Subsidiary of the Borrower), exclusive of reasonable compensation paid to
officers or directors paid in the ordinary course of business and exclusive of
consulting fees paid to George M. Siegel which comply with Section 9.7; and (e)
any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Capital
Stock of the Borrower or any of its Subsidiaries now or hereafter outstanding.
"Revolving Period" means the period commencing on the Closing Date and
ending on the day immediately preceding the Revolving Period Termination Date.
"Revolving Period Termination Date" means August 31, 2000.
"Road Runner" means as specified in the introductory paragraph of this
Agreement.
"Security Agreements" means security agreements, pledge agreements,
securities pledge agreements, debenture pledge agreements, hypothecs, bank act
security documents, and other agreements, documents or instruments evidencing
or creating a Lien as security for the Obligations or any portion thereof in
form and substance satisfactory to the Agent executed by the Borrower and each
of its Subsidiaries and any other Loan Party (one executed by each such Loan
Party), dated the Closing Date or a subsequent date (e.g., with respect to
Subsidiaries acquired after the Closing Date), in favor of the Agent for the
benefit of the Agent and the Lenders, and any such agreement, document or
instrument executed pursuant to Article 5 hereof, and any and all amendments,
modifications, supplements, renewals, extensions or restatements thereof.
"Security Documents" means the Guaranties, the Security Agreements and
the Mortgages, as they may be amended, modified, supplemented, renewed,
extended or restated from time to time, and any and all other agreements, deeds
of trust, mortgages, chattel mortgages, security agreements, pledges,
guaranties, assignments of proceeds, assignments of income, assignments of
contract rights, assignments of partnership interests, assignments of royalty
interests, assignments of performance or other collateral assignments,
completion or surety bonds, standby agreements, subordination agreements,
undertakings and other agreements, documents, instruments and financing
statements now or hereafter executed and/or delivered by any Loan Party in
connection with or as security or assurance for the payment or performance of
the Obligations or any part thereof.
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"Solvent" means, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (e) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's Property would constitute
unreasonably small capital after giving due consideration to current and
anticipated future capital requirements and current and anticipated future
business conduct and the prevailing practice in the industry in which such
Person is engaged. In computing the amount of contingent liabilities at any
time, such liabilities shall be computed at the amount which, in light of the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Subordinated Debt" means, at any particular time, any and all other
Debt of the Borrower or any of its Subsidiaries which is subordinated to all or
any portion of the Obligations (including, without limitation, Permitted
Subordinated Debt).
"Subordinated Debt Documents" means any and all agreements, documents
and instruments now or hereafter evidencing or governing any Subordinated Debt.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which at least a majority of the outstanding shares of stock or other
ownership interests having by the terms thereof ordinary voting power to elect
a majority of the board of directors (or Persons performing similar functions)
of such corporation or entity (irrespective of whether or not at the time, in
the case of a corporation, stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) that is at the time directly or indirectly owned or controlled
by such Person or one or more of its Subsidiaries or by such Person and one or
more of its Subsidiaries.
"Swingline Advances" means as such term is defined in Section 2.1(a).
"Total Debt" means, at any particular time, the aggregate amount of all
Debt of the Borrower and its Subsidiaries determined on a consolidated basis in
accordance with GAAP.
"Type" means any type of Loan (i.e., an ABR Loan or a Eurodollar Loan).
"UCC" means the Uniform Commercial Code as in effect in the State of
Texas and/or any other jurisdiction, the laws of which may be applicable to or
in connection with the creation, perfection or priority of any Lien on any
Property created pursuant to any Security Document.
"Unified Cash Management System" means as specified in Section 8.13.
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"U.S." means the United States of America.
"U.S. Person" means a citizen or resident of the U.S., a corporation,
partnership or other entity created or organized in or under any laws of the
U.S. or any estate or trust that is subject to U.S. Federal income taxation
regardless of the source of its income.
"U.S. Taxes" means any present or future tax, assessment or other charge
or levy imposed by or on behalf of the U.S. or any taxing authority thereof.
"Wholly-Owned Subsidiary" means, with respect to any Person, a
Subsidiary of such Person all of whose outstanding Capital Stock (other than
directors' qualifying shares, if any) shall at the time be owned by such Person
and/or one or more of its Wholly-Owned Subsidiaries.
Section 1.2 Other Definitional Provisions. All definitions contained
in this Agreement are equally applicable to the singular and plural forms of
the terms defined. The words "hereof", "herein" and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement. Unless otherwise
specified, all Article and Section references pertain to this Agreement. Terms
used herein that are defined in the UCC, unless otherwise defined herein, shall
have the meanings specified in the UCC.
Section 1.3 Accounting Terms and Determinations.
(a) All accounting terms not specifically defined herein shall be
construed in accordance with GAAP (subject to year end adjustments, if
applicable) consistent with such accounting principles applied in the
preparation of the audited financial statements referred to in Section 7.2(a).
All financial information delivered to the Agent pursuant to Section 8.1 shall
be prepared in accordance with GAAP (subject to year end adjustments, if
applicable) applied on a basis consistent with such accounting principles
applied in the preparation of the audited financial statements referred to in
Section 7.2(a) or in accordance with Section 8.7.
(b) The Borrower shall deliver to the Agent and the Lenders, at the
same time as the delivery of any annual, quarterly or monthly financial
statement under Section 8.1, (i) a description, in reasonable detail, of any
material variation between the application of GAAP employed in the preparation
of the next preceding annual, quarterly or monthly financial statements as to
which no objection has been made in accordance with the last sentence of
subsection (a) preceding and (ii) reasonable estimates of the difference
between such statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of compliance
with the covenants set forth in this Agreement (including Article 10 hereof),
neither the Borrower nor any of its Subsidiaries will change the last day of
its fiscal year from July 31st or the last days of the first three fiscal
quarters of the Borrower and its Subsidiaries in each of its fiscal years from
that existing on the Closing Date unless such change is approved by the
Required Lenders.
Section 1.4 Financial Covenants and Reporting. The financial
covenants contained in Article 10 and the financial ratios referred to in the
definitions of the terms "Applicable Margin" and "Applicable Commitment Fee
Rate" shall be calculated on a consolidated basis for the Borrower and
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its Subsidiaries (including, without limitation, Dynamex Canada and its
Subsidiaries) in accordance with GAAP (subject to appropriate adjustments for
minority interests with respect to Subsidiaries which are not Wholly-Owned
Subsidiaries); provided, however, that the historical financial results of
operations (determined on an historical pro forma basis in form and substance
satisfactory to the Agent and including any anticipated and reasonably provable
improvements to EBITDA or Net Income consented to by the Agent) for the
relevant periods attributable to (a) the Subsidiaries acquired prior to the
Closing Date, and (b) with respect to the purchase or acquisition of all of the
Capital Stock of an Acquired Entity or substantially all of the assets of a
Person, in each case as permitted by clause (ii) of Section 9.3, such Acquired
Entity or such assets so acquired, shall be included (as applicable) in the
calculation of the Applicable Margin and the financial covenants in Article 10.
ARTICLE 2
Loans
Section 2.1 Commitments.
(a) Loans. Subject to the terms and conditions of this Agreement
(including, without limitation, Section 2.12(a)), each Lender severally agrees
to make one or more loans to the Borrower from time to time from and including
the Closing Date to but excluding the Revolving Period Termination Date up to
but not exceeding the positive remainder of (i) the amount of such Lender's
Commitment as then in effect, minus (ii) such Lender's Commitment Percentage of
the Letter of Credit Liabilities then outstanding, minus (iii) such Lender's
Commitment Percentage of the Swingline Advances then outstanding. (Such loans
referred to in this Section 2.1(a) now or hereafter made by the Lenders to the
Borrower from and including and after the Closing Date are hereinafter
collectively called the "Loans".) Subject to the foregoing limitations and the
other terms and conditions of this Agreement, the Borrower may borrow, repay
and reborrow the Loans hereunder during (but not after) the Revolving Period.
Notwithstanding anything to the contrary contained in this Agreement, the
Borrower may from time to time request, and NationsBank may at its discretion
from time to time advance (but shall in no event be obligated to advance),
Loans which are to be funded solely by NationsBank (the "Swingline Advances");
provided, however, that (i) the aggregate principal amount of the Swingline
Advances outstanding at any time shall not exceed $5,000,000 and the aggregate
principal amount of the Loans outstanding at any time (inclusive of the
Swingline Advances) shall not exceed the aggregate principal amount of the
Commitments, (ii) all Swingline Advances shall be and shall remain as ABR Loans
and (iii) NationsBank shall give the Agent and each Lender written notice of
the aggregate outstanding principal amount of the Swingline Advances upon the
written request of the Agent or any Lender (but no more often than once every
calendar quarter). Furthermore, upon one Business Day's prior written notice
given by NationsBank to the Agent and the other Lenders at any time and from
time to time (including, without limitation, at any time following the
occurrence of a Default or an Event of Default), each Lender (including,
without limitation, NationsBank) severally agrees, as provided in the first
sentence of this Section 2.1(a), and notwithstanding anything to the contrary
contained in this Agreement, any Default or Event of Default or the inability
or failure of the Borrower or any of its Subsidiaries or any other Loan Party
to satisfy any condition precedent to funding any of the Loans contained in
Article 6 (which conditions precedent shall not apply to this sentence), to
make a Loan, in the form of an ABR Loan,
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in an amount equal to its Commitment Percentage of the aggregate principal
amount of the Swingline Advances then outstanding, and the proceeds of such
Loans shall be promptly paid by the Agent to NationsBank and applied as a
repayment of the aggregate principal amount of the Swingline Advances then
outstanding. NationsBank agrees to use all reasonable efforts to cause
Swingline Advances which have been outstanding for 15 days or more to be
refinanced by ABR Loans in accordance with the immediately preceding sentence
if and to the extent that such refinancing may occur given the minimum
borrowing amounts set forth in Section 2.7.
(b) Continuation and Conversion of Loans. Subject to the terms and
conditions of this Agreement, the Borrower may borrow the Loans as ABR Loans or
Eurodollar Loans and, until the Maturity Date, the Borrower may Continue
Eurodollar Loans or Convert Loans of one Type into Loans of the other Type.
(c) Lending Offices. Loans of each Type made by each Lender shall be
made and maintained at such Lender's Applicable Lending Office for Loans of
such Type.
Section 2.2 Notes. The Loans made by each Lender shall be evidenced
by a single promissory note of the Borrower in substantially the form of
Exhibit C hereto, dated the Closing Date (or such later date on which such
Lender becomes a party to this Agreement), payable to the order of such Lender
in a principal amount equal to its Commitment and otherwise duly completed;
provided, however, that the Swingline Advances made by NationsBank shall be
evidenced by a single promissory note of the Borrower in the maximum original
principal amount of $5,000,000 payable to the order of NationsBank in
substantially the form of Exhibit D hereto, dated the Closing Date. Each
Lender is hereby authorized by the Borrower to endorse on a schedule (or a
continuation thereof) attached to the Note of such Lender, to the extent
applicable, the date, amount and Type of and the Interest Period for each Loan
made by such Lender to the Borrower and the amount of each payment or
prepayment of principal of such Loan received by such Lender, provided that any
failure by such Lender to make any such endorsement shall not affect the
obligations of the Borrower under such Note or this Agreement in respect of
such Loan.
Section 2.3 Repayment of Loans. The Borrower shall pay to the Agent
for the account of each applicable Lender the principal of the Loans
outstanding as of the Maturity Date (and the principal of the Loans outstanding
as of the Maturity Date shall be due and payable) in full on the Maturity Date.
Section 2.4 Interest.
(a) Interest Rate. The Borrower shall pay to the Agent for the
account of each Lender interest on the unpaid principal amount of each Loan
made by such Lender (or deemed made by such Lender with respect to a Loan
assigned to such Lender after the making of such Loan) to the Borrower for the
period commencing on the date of such Loan to but excluding the date such Loan
shall be paid in full, at the following rates per annum:
(i) during the periods such Loan is an ABR Loan, the lesser of
(A) the ABR plus the Applicable Margin or (B) the Maximum Rate; and
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(ii) during the periods such Loan is a Eurodollar Loan, the
lesser of (A) the Eurodollar Rate plus the Applicable Margin or (B) the
Maximum Rate.
(b) Payment Dates. Accrued interest on the Loans shall be due and
payable as follows:
(i) in the case of ABR Loans, on each Quarterly Date;
(ii) in the case of each Eurodollar Loan, on the last day of
the Interest Period with respect thereto and, in the case of an Interest
Period greater than three months, at three-month intervals after the
first day of such Interest Period;
(iii) upon the payment or prepayment (whether mandatory or
optional) of any Loan or the Conversion of any Loan to a Loan of the
other Type (but only on the principal amount so paid, prepaid or
Converted); and
(iv) on the Maturity Date.
(c) Default Interest. Notwithstanding the foregoing, the Borrower
shall pay to the Agent for the account of the Lenders or the Agent, as
applicable, interest at the applicable Default Rate (i) at all times during
which any Event of Default has occurred and is continuing, on any principal of
any Loan or Reimbursement Obligation outstanding and (ii) to the fullest extent
permitted by law and whether or not any Event of Default has occurred and is
continuing, on any other amount payable by the Borrower under this Agreement or
any other Loan Document which is not paid in full when due (whether at stated
maturity, by acceleration or otherwise) for the period from and including the
due date thereof to but excluding the date the same is paid in full. Interest
payable at the Default Rate shall be payable from time to time on demand by the
Agent.
Section 2.5 Borrowing Procedure. The Borrower shall give the Agent
notice of each borrowing hereunder in accordance with Section 2.8. Not later
than 11:00 a.m. (Dallas, Texas time) on the date specified for each borrowing
hereunder, each Lender will make available the amount of the Loan to be made by
it on such date to the Agent, at the Principal Office, in immediately available
funds, for the account of the Borrower. The amount of each borrowing hereunder
so received by the Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower by wire transfer of immediately
available funds to the Deposit Account no later than 1:00 p.m. (Dallas, Texas
time); provided, however, that the amount of any borrowing hereunder used to
finance any Future Acquisition may be (at the option of the Agent or the
Required Lenders) disbursed directly to the sellers thereunder in accordance
with the applicable Acquisition Agreement.
Section 2.6 Optional Prepayments, Conversions and Continuations of
Loans. The Borrower shall have the right from time to time to prepay the
Loans, to Convert all or part of a Loan (other than a Swingline Advance) of one
Type into a Loan of another Type or to Continue Eurodollar Loans; provided
that: (a) the Borrower shall give the Agent notice of each such prepayment,
Conversion or Continuation as provided in Section 2.8, (b) Eurodollar Loans may
only be Converted on the last day of the Interest Period and any prepayment of
Eurodollar Loans on any day other than the last day of the Interest Period
shall be subject to payment of the additional compensation
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specified in Section 4.5, (c) except for Conversions of Eurodollar Loans into
ABR Loans, no Conversions or Continuations shall be made while a Default has
occurred and is continuing, and (d) optional prepayments of the Loans shall be
applied first to the Swingline Advances (until such advances are paid in full)
and then to the Loans other than the Swingline Advances.
Section 2.7 Minimum Amounts. Except for Conversions and prepayments
pursuant to Article 4, each borrowing, each Conversion and each prepayment of
principal of the Loans shall be in an amount at least equal to $1,000,000 (or,
with respect to Swingline Advances, $25,000) or an integral multiple of
$100,000 in excess thereof (borrowings, prepayments or Conversions of or into
Loans of different Types or, in the case of Eurodollar Loans, having different
Interest Periods at the same time hereunder shall be deemed separate
borrowings, prepayments and Conversions for purposes of the foregoing, one for
each Type or Interest Period).
Section 2.8 Certain Notices. Notices by the Borrower to the Agent of
terminations or reductions of Commitments, of borrowings, Conversions,
Continuations and prepayments of Loans and of the duration of Interest Periods
shall be irrevocable and shall be effective only if received by the Agent not
later than 11:00 a.m. (Dallas, Texas, time) on the Business Day prior to the
date of the relevant termination, reduction, borrowing, Conversion,
Continuation or prepayment or the first day of such Interest Period specified
below:
Notice Number of Business Days Prior
------ ----------------------------
Terminations or Reductions of Commitments 1
Borrowings of Loans which are ABR Loans 1
Borrowings of Loans which are Eurodollar Loans 3
Prepayments of Loans 1
Each such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation or prepayment shall specify the Loans to be borrowed,
Converted, Continued or prepaid and the amount (subject to Section 2.7 hereof)
and Type of the Loans to be borrowed (and, with respect to ABR Loans, whether
any of such Loans shall consist of Swingline Advances), Converted, Continued or
prepaid (and, in the case of a Conversion, the Type of Loans to result from
such Conversion) and the date of borrowing, Conversion, Continuation or
prepayment (which shall be a Business Day). Notices of borrowings,
Conversions, Continuations or prepayments shall be in the form of Exhibit C
hereto, appropriately completed as applicable. Each such notice which includes
reference to the duration of an Interest Period shall specify the Loans to
which such Interest Period is to relate. The Agent shall promptly notify the
Lenders of the contents of each such notice. In the event the Borrower fails
to select the Type of Loan, or the duration of any Interest Period for any
Eurodollar Loan, within the time period and otherwise as provided in this
Section 2.8, such Loan (if outstanding as Eurodollar Loan) will be
automatically Converted into an ABR Loan on the last day of preceding Interest
Period for such Loan or (if outstanding as an ABR Loan) will remain as, or (if
not then outstanding) will be made as, an ABR Loan. The Borrower may not
borrow any Eurodollar Loans, Convert any Loans
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into Eurodollar Loans or Continue any Loans as Eurodollar Loans if the interest
rate for such Eurodollar Loans would exceed the Maximum Rate.
Section 2.9 Use of Proceeds.
(a) The Borrower agrees that the proceeds of the Loans to be made on
the Closing Date shall be used (in part) to pay the Existing Loans and interest
and fees accrued thereon or relating thereto in full, and the Borrower hereby
irrevocably requests that the Agent disburse and apply such proceeds
accordingly.
(b) The Borrower agrees that the proceeds of the Loans to be made
after the Closing Date shall be used by the Borrower and its Subsidiaries for
working capital and general corporate purposes in the ordinary course of
business and to finance acquisitions permitted by this Agreement and Capital
Expenditures permitted by this Agreement.
(c) None of the proceeds of any Loan have been or will be used to
acquire any security in any transaction that is subject to Section 13 or 14 of
the Exchange Act or to purchase or carry any margin stock (within the meaning
of Regulations G, T, U or X of the Board of Governors of the Federal Reserve
System).
Section 2.10 Fees.
(a) Subject to Section 13.12, the Borrower agrees to pay to the Agent
for the account of each Lender a commitment fee on the daily average unused or
unfunded amount of such Lender's Commitment, for the period from and including
the Closing Date to and including the Revolving Period Termination Date, at the
Applicable Commitment Fee Rate per annum based on a 360 day year and the actual
number of days elapsed, which accrued commitment fees shall be payable in
arrears on each Quarterly Date and on the Revolving Period Termination Date.
Notwithstanding anything to the contrary contained in this Agreement, any and
all Swingline Advances outstanding from time to time shall be wholly excluded,
and shall not count as used or funded amounts, for purposes of determining the
unused or unfunded amount of each Lender's Commitment in accordance with this
Section 2.10(a).
(b) Subject to Section 13.12, the Borrower agrees to pay to the Agent
for the account of each Lender which is a party hereto as of the Closing Date
an up-front fee in the amount set forth in the Lender's Letter, which fee shall
be payable in full on the Closing Date.
(c) Subject to Section 13.12, the Borrower agrees to pay to the Agent
and NationsBank such additional fees as are specified in the Agent's Letter,
which fees shall be payable in such amounts and on such dates as are specified
therein (or, if the date for payment of a fee is not specified thereon, on the
Closing Date).
Section 2.11 Computations. All interest and fees payable by the
Borrower hereunder and under the other Loan Documents shall be computed on the
basis of a year of 360 days and the actual number of days elapsed (including
the first day but excluding the last day) occurring in the period
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for which payable unless, in the case of interest, such calculation would
result in a usurious rate, in which case interest shall be calculated on the
basis of a year of 365 or 366 days, as the case may be.
Section 2.12 Termination or Reduction of Commitments. The Borrower
shall have the right to terminate or reduce in part the unused portion of the
Commitments at any time and from time to time prior to the Revolving Period
Termination Date, provided that (a) the Borrower shall not have the right to
terminate or reduce in part any unused portion of the Commitments that could or
may be required to be advanced by the Lenders to refinance Swingline Advances
then outstanding, (b) the Borrower shall give notice of each such termination
or reduction as provided in Section 2.8, and (c) each partial reduction shall
be in an aggregate amount at least equal to $1,000,000 or an integral multiple
of $100,000 in excess thereof. The Commitments may not be reinstated after
they have been terminated or increased after they have been reduced.
Section 2.13 Letters of Credit.
(a) Subject to the terms and conditions of this Agreement, the
Borrower may utilize the Commitments by requesting that the Issuing Bank issue
Letters of Credit; provided, that the aggregate amount of outstanding Letter of
Credit Liabilities shall not at any time exceed $5,000,000. Upon the date of
issue of each Letter of Credit, the Issuing Bank shall be deemed, without
further action by any party hereto, to have sold to each Lender, and each
Lender shall be deemed, without further action by any party hereto, to have
purchased from the Issuing Bank, a participation to the extent of such Lender's
Commitment Percentage in such Letter of Credit.
(b) The Borrower shall give the Issuing Bank (with a copy to the
Agent) at least five Business Days irrevocable prior notice (effective upon
receipt) specifying the date of each Letter of Credit and the nature of the
transactions to be supported thereby. Upon receipt of such notice the Issuing
Bank shall promptly notify each applicable Lender of the contents thereof and
of such Lender's Commitment Percentage of the amount of the proposed Letter of
Credit. Each Letter of Credit shall have an expiration date that does not
exceed one year from the date of issuance and that does not extend beyond the
Maturity Date, shall be payable in Dollars, shall support a transaction entered
into in the ordinary course of the Borrower's or its Wholly-Owned Subsidiary's
business, shall be satisfactory in form and substance to the Issuing Bank, and
shall be issued pursuant to such agreements, documents and instruments
(including a Letter of Credit Agreement) as the Issuing Bank may reasonably
require, none of which shall be inconsistent with this Section 2.13. Each
Letter of Credit shall (i) provide for the payment of drafts presented for, on
or thereunder by the beneficiary in accordance with the terms thereof, when
such drafts are accompanied by the documents (if any) described in the Letter
of Credit and (ii) to the extent not inconsistent with the terms hereof or any
applicable Letter of Credit Agreement, be subject to the Uniform Customs and
Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 (together with any subsequent revision thereof
approved by a Congress of the International Chamber of Commerce and adhered to
by the Issuing Bank, the "UCP"), and shall, as to matters not governed by the
UCP, be governed by, and construed and interpreted in accordance with, the laws
of the State of Texas.
(c) The Borrower agrees to pay to the Agent for the account of each
Lender, concurrently with the issuance of such Letter of Credit and on each
Quarterly Date thereafter, a nonrefundable
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letter of credit fee with respect to each Letter of Credit issued in an amount
equal to one and three-eighth's of one percent (1.375%) per annum of the face
amount of the Letter of Credit then in effect. The Agent agrees to pay to each
Lender, promptly after receiving any payment of such letter of credit fees,
such Lender's Commitment Percentage of such fees. In addition, the Borrower
agrees to pay to the Issuing Bank for its own account, concurrently with the
issuance of such Letter of Credit and on each Quarterly Date thereafter, a
nonrefundable fronting fee with respect to each Letter of Credit issued by the
Issuing Bank in an amount equal to one-eighth of one percent (0.125%) per annum
of the face amount of the Letter of Credit then in effect. In addition to the
foregoing fees, the Borrower shall pay or reimburse the Issuing Bank for such
normal and customary costs and expenses, including, without limitation,
administrative, issuance, amendment, payment and negotiation charges, as are
incurred or charged by the Issuing Bank in issuing, effecting payment under,
amending or otherwise administering any Letter of Credit.
(d) Upon receipt from the beneficiary of any Letter of Credit of any
demand for payment or other drawing under such Letter of Credit, the Issuing
Bank shall promptly notify the Borrower and each Lender as to the amount to be
paid as a result of such demand or drawing and the respective payment date. If
at any time the Issuing Bank shall make a payment to a beneficiary of a Letter
of Credit pursuant to a drawing under such Letter of Credit, each Lender will
pay to the Issuing Bank, immediately upon the Issuing Bank's demand at any time
commencing after such payment until reimbursement therefor in full by the
Borrower, an amount equal to such Lender's Commitment Percentage of such
payment, together with interest on such amount for each day from the date of
such demand to the date of payment by such Lender of such amount at a rate of
interest per annum equal to the Federal Funds Rate.
(e) The Borrower shall be irrevocably and unconditionally obligated
to immediately reimburse the Issuing Bank for any amounts paid by the Issuing
Bank upon any drawing under any Letter of Credit, without presentment, demand,
protest or other formalities of any kind. The Issuing Bank will pay to each
Lender such Lender's Commitment Percentage of all amounts received from or on
behalf of the Borrower for application in payment, in whole or in part, of the
Reimbursement Obligation in respect of any Letter of Credit, but only to the
extent such Lender has made payment to the Issuing Bank in respect of such
Letter of Credit pursuant to subsection (d) above. Outstanding Reimbursement
Obligations shall bear interest at the Default Rate and such interest shall be
payable on demand.
(f) The Reimbursement Obligations of the Borrower under this
Agreement and the other Loan Documents shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement and the other Loan Documents under all circumstances whatsoever,
including, without limitation, the following circumstances:
(i) Any lack of validity or enforceability of any Letter of
Credit or any other Loan Document;
(ii) Any amendment or waiver of or any consent to departure
from any Loan Document;
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(iii) The existence of any claim, setoff, counterclaim, defense
or other right which any Loan Party or other Person may have at any time
against any beneficiary of any Letter of Credit, the Agent, the Issuing
Bank, the Lenders or any other Person, whether in connection with this
Agreement or any other Loan Document or any unrelated transaction;
(iv) Any statement, draft or other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(v) Payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, provided, that such payment
shall not have constituted gross negligence or willful misconduct of the
Issuing Bank; and
(vi) Any other circumstance whatsoever, whether or not similar
to any of the foregoing, provided that such other circumstance or event
shall not have been the result of the gross negligence or willful
misconduct of the Issuing Bank.
(g) The Borrower assumes all risks of the acts or omissions of any
beneficiary of any Letter of Credit with respect to its use of such Letter of
Credit. Neither the Agent, the Issuing Bank, the Lenders nor any of their
respective officers or directors shall have any responsibility or liability to
the Borrower or any other Person for: (i) the failure of any draft to bear any
reference or adequate reference to any Letter of Credit, or the failure of any
documents to accompany any draft at negotiation, or the failure of any Person
to surrender or to take up any Letter of Credit or to send documents apart from
drafts as required by the terms of any Letter of Credit, or the failure of any
Person to note the amount of any instrument on any Letter of Credit, (ii)
errors, omissions, interruptions or delays in transmission or delivery of any
messages, (iii) the validity, sufficiency or genuineness of any draft or other
document, or any endorsement(s) thereon, even if any such draft, document or
endorsement should in fact prove to be in any and all respects invalid,
insufficient, fraudulent or forged or any statement therein is untrue or
inaccurate in any respect, (iv) the payment by the Issuing Bank to the
beneficiary of any Letter of Credit against presentation of any draft or other
document that does not comply with the terms of the Letter of Credit, or (v)
any other circumstance whatsoever in making or failing to make any payment
under a Letter of Credit; provided, however, that, notwithstanding the
foregoing, the Borrower shall have a claim against the Issuing Bank, and the
Issuing Bank shall be liable to the Borrower, to the extent of any direct, but
not indirect or consequential, damages suffered by the Borrower which the
Borrower proves in a final nonappealable judgment were caused by (A) the
Issuing Bank's willful misconduct or gross negligence in determining whether
documents presented under any Letter of Credit complied with the terms thereof
or (B) the Issuing Bank's willful failure to pay under any Letter of Credit
after presentation to it of documents strictly complying with the terms and
conditions of such Letter of Credit. The Issuing Bank may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
(h) All Letters of Credit issued pursuant to the Original Agreement
or the Existing Agreement which are outstanding as of the Closing Date shall be
deemed to be Letters of Credit issued pursuant to this Agreement, which
outstanding Letters of Credit are set forth in Schedule 2.13.
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ARTICLE 3
Payments
Section 3.1 Method of Payment. All payments of principal, interest,
fees and other amounts to be made by the Borrower under this Agreement and the
other Loan Documents shall be made to the Agent at the Principal Office for the
account of each Lender's Applicable Lending Office in Dollars and in
immediately available funds, without setoff, deduction or counterclaim, not
later than 11:00 a.m. (Dallas, Texas time) on the date on which such payment
shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day). The Borrower
shall, at the time of making each such payment, specify to the Agent the sums
payable by the Borrower under this Agreement and the other Loan Documents to
which such payment is to be applied (and in the event that the Borrower fails
to so specify, or if an Event of Default has occurred and is continuing, the
Agent may apply such payment to the Obligations in such order and manner as the
Agent may elect, subject to Section 3.2); provided, however, that, unless
NationsBank expressly agrees to the contrary, such payment shall be applied
first to any outstanding Swingline Advances until such advances are paid in
full. Upon the occurrence and during the continuation of an Event of Default,
all proceeds of any Collateral, all funds from time to time on deposit in any
Concentration Account or any collection account referred to in Section 8.13 and
all other funds of the Borrower or any Guarantor in the possession of the Agent
or any Lender, may be applied by the Agent to the Obligations in such order and
manner as the Agent may elect, subject to Section 3.2; provided, however, that,
unless NationsBank expressly agrees to the contrary, such proceeds and funds
shall be applied first to any outstanding Swingline Advances until such
advances are paid in full. Each payment received by the Agent under this
Agreement or any other Loan Document for the account of a Lender shall be paid
promptly to such Lender, in immediately available funds, for the account of
such Lender's Applicable Lending Office. Whenever any payment under this
Agreement or any other Loan Document shall be stated to be due on a day that is
not a Business Day, such payment may be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of the payment of interest and commitment fee, as the case may be.
Section 3.2 Pro Rata Treatment. Except to the extent otherwise
provided in this Agreement: (a) each Loan shall be made by the Lenders under
Section 2.1, each payment of commitment fees under Section 2.10(a) shall be
made for the account of the Lenders, and each termination or reduction of the
Commitments under Section 2.12 shall be applied to the Commitments of the
Lenders, pro rata according to the respective unused Commitments; (b) the
making, Conversion and Continuation of Loans of a particular Type (other than
Conversions provided for by Section 4.4) shall be made pro rata among the
Lenders holding Loans of such Type according to the amounts of their respective
Commitments; (c) each payment and prepayment by the Borrower of principal of or
interest on Loans of a particular Type shall be made to the Agent for the
account of the Lenders holding Loans of such Type pro rata in accordance with
the respective unpaid principal amounts of such Loans held by such Lenders; (d)
Interest Periods for Loans of a particular Type shall be allocated among the
Lenders holding Loans of such Type pro rata according to the respective
principal amounts held by such Lenders; and (e) the Lenders (other than the
Issuing Bank)
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shall purchase participations in the Letters of Credit pro rata in accordance
with their Commitment Percentages.
Section 3.3 Sharing of Payments, Etc. If a Lender shall obtain
payment of any principal of or interest on any of the Obligations due to such
Lender hereunder through the exercise of any right of setoff, banker's lien,
counterclaim or similar right, or otherwise, it shall promptly purchase from
the other Lenders participations in the Obligations held by the other Lenders
in such amounts, and make such adjustments from time to time, as shall be
equitable to the end that all the Lenders shall share pro rata in accordance
with the unpaid principal and interest on the Obligations then due to each of
them. To such end, all of the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if all or any
portion of such excess payment is thereafter rescinded or must otherwise be
restored. Each of the Borrower and each other Loan Party agrees, to the
fullest extent it may effectively do so under applicable law, that any Lender
so purchasing a participation in the Obligations by the other Lenders may
exercise all rights of setoff, banker's lien, counterclaim or similar rights
with respect to such participation as fully as if such Lender were a direct
holder of Obligations in the amount of such participation. Nothing contained
herein shall require any Lender to exercise any such right or shall affect the
right of any Lender to exercise, and retain the benefits of exercising, any
such right with respect to any other indebtedness, liability or obligation of
the Borrower or any other Loan Party.
Section 3.4 Non-Receipt of Funds by the Agent. Unless the Agent shall
have been notified by a Lender or the Borrower (the "Payor") prior to the date
on which such Lender is to make payment to the Agent of the proceeds of a Loan
to be made by it hereunder or the Borrower is to make a payment to the Agent
for the account of one or more of the Lenders, as the case may be (such payment
being herein called the "Required Payment"), which notice shall be effective
upon receipt, that the Payor does not intend to make the Required Payment to
the Agent, the Agent may assume that the Required Payment has been made and
may, in reliance upon such assumption (but shall not be required to), make the
amount thereof available to the intended recipient on such date and, if the
Payor has not in fact made the Required Payment to the Agent, the recipient of
such payment shall, on demand, pay to the Agent the amount made available to it
together with interest thereon in respect of the period commencing on the date
such amount was so made available by the Agent until the date the Agent
recovers such amount at a rate per annum equal to the Federal Funds Rate for
such period.
Section 3.5 Withholding Taxes. (a) All payments by the Borrower of
principal of and interest on the Loans and the Letter of Credit Liabilities and
of all fees and other amounts payable under the Loan Documents shall be made
free and clear of, and without deduction by reason of, any present or future
taxes, levies, duties, imposts, assessments or other charges levied or imposed
by any Governmental Authority (other than taxes on the overall net income of
any Lender). If any such taxes, levies, duties, imposts, assessments or other
charges are so levied or imposed, the Borrower will (i) make additional
payments in such amounts so that every net payment of principal of and interest
on the Loans and the Letter of Credit Liabilities and of all other amounts
payable by it under the Loan Documents, after withholding or deduction for or
on account of any such present or future taxes, levies, duties, imposts,
assessments or other charges (including any tax imposed on or measured by net
income of a Lender attributable to payments made to or on behalf of a Lender
pursuant to this Section 3.5 and any penalties or interest attributable to such
payments), will not be less than the amount provided for herein or therein
absent such withholding or deduction (provided
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that the Borrower shall not have any obligation to pay such additional amounts
to any Lender to the extent that such taxes, levies, duties, imposts,
assessments or other charges are levied or imposed by reason of the failure of
such Lender to comply with the provisions of Section 3.6), (ii) make such
withholding or deduction and (iii) remit the full amount deducted or withheld
to the relevant Governmental Authority in accordance with applicable law.
Without limiting the generality of the foregoing, the Borrower will, upon
written request of any Lender, reimburse each such Lender for the amount of (A)
such taxes, levies, duties, imports, assessments or other charges so levied or
imposed by any Governmental Authority and paid by such Lender as a result of
payments made by the Borrower under or with respect to the Loans other than
such taxes, levies, duties, imports, assessments and other charges previously
withheld or deducted by the Borrower which have previously resulted in the
payment of the required additional amount to such Lender, and (B) such taxes,
levies, duties, assessments and other charges so levied or imposed with respect
to any Lender reimbursement under the foregoing clause (A), so that the net
amount received by such Lender (net of payments made under or with respect to
the Loans and the Letter of Credit Liabilities) after such reimbursement will
not be less than the net amount such Lender would have received if such taxes,
levies, duties, assessments and other charges on such reimbursement had not
been levied or imposed. The Borrower shall furnish promptly to the Agent for
distribution to each affected Lender, as the case may be, upon request of such
Lender, official receipts evidencing any such payment, withholding or
reduction.
(b) The Borrower will indemnify the Agent and each Lender (without
duplication) against, and reimburse the Agent and each Lender for, all present
and future taxes, levies, duties, imposts, assessments or other charges
(including interest and penalties) levied or collected (whether or not legally
or correctly imposed, assessed, levied or collected), excluding, however, any
taxes imposed on the overall net income of the Agent or such Lender or any
lending office of the Agent or such Lender by any jurisdiction in which the
Agent or such Lender or any such lending office is located, on or in respect of
this Agreement, any of the Loan Documents or the Obligations or any portion
thereof (the "reimbursable taxes"). Any such indemnification shall be on an
after-tax basis, taking into account any such reimbursable taxes imposed on the
amounts paid as indemnity.
(c) Without prejudice to the survival of any other term or provision
of this Agreement, the obligations of the Borrower under this Section 3.5 shall
survive the payment of the Loans and the other Obligations and termination of
the Commitments.
Section 3.6 Withholding Tax Exemption. Each Lender that is not
incorporated or otherwise formed under the laws of the U.S. or a state thereof
agrees that it will, prior to or on or about the Closing Date or the date upon
which it initially becomes a party to this Agreement and if it is legally able
to do so, deliver to the Borrower and the Agent two duly completed copies of
U.S. Internal Revenue Service Form 1001, 4224 or W-8, as appropriate,
certifying in any case that such Lender is entitled to receive payments from
the Borrower under any Loan Document without deduction or withholding of any
U.S. federal income taxes. Each Lender which so delivers a Form 1001, 4224 or
W-8 further undertakes to deliver to the Borrower and the Agent two additional
copies of such form (or a successor form) on or before the date such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form so delivered by it, and such amendments thereto
or extensions or renewals thereof as may be reasonably requested by the
Borrower or the Agent, in each case certifying that such Lender is entitled to
receive payments from
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the Borrower under any Loan Document without deduction or withholding of any
U.S. federal income taxes, unless an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the date on which
any such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender advises the
Borrower and the Agent that it is not capable of receiving such payments
without any deduction or withholding of U.S. federal income tax.
Section 3.7 Reinstatement of Obligations. Notwithstanding anything to
the contrary contained in this Agreement or any other Loan Document, if the
payment of any amount of principal of or interest with respect to the Loans,
the Reimbursement Obligations or any other amount of the Obligations, or any
portion thereof, is rescinded, voided or must otherwise be refunded by the
Agent, any Lender or the Issuing Bank upon the insolvency, bankruptcy or
reorganization of the Borrower or any other Loan Party or otherwise for any
reason whatsoever, then each of (a) the Obligations, (b) the Loan Documents
(including, without limitation, this Agreement, the Notes and the Security
Documents), (c) the indebtedness, liabilities and obligations of the Borrower
and any other Loan Party under the Loan Documents and (d) all Liens for the
benefit of the Agent and the Lenders created under or evidenced by the Loan
Documents, will be automatically reinstated and become automatically effective
and in full force and effect, all to the extent that and as though such payment
so rescinded, voided or otherwise refunded had never been made.
ARTICLE 4
Yield Protection and Illegality
Section 4.1 Additional Costs.
(a) The Borrower shall pay directly to each Lender from time to time,
promptly upon the request of such Lender, the costs incurred by such Lender
which such Lender determines are attributable to its making or maintaining of
any Eurodollar Loans or its obligation to make any of such Loans, or any
reduction in any amount receivable by such Lender hereunder in respect of any
such Loans or obligations (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), resulting from any
Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to
such Lender under this Agreement or its Notes in respect of any of such
Loans (other than taxes imposed on the overall net income of such Lender
or its Applicable Lending Office for any of such Loans by the
jurisdiction in which such Lender has its principal office or such
Applicable Lending Office);
(ii) imposes or modifies any reserve, special deposit, minimum
capital, capital ratio or similar requirement relating to any extensions
of credit or other assets of, or any deposits with or other liabilities
or commitments of, such Lender (including any of such Loans or any
deposits referred to in the definition of "Eurodollar Rate" in Section
1.1 hereof, but excluding the Reserve Requirement to the extent it is
included in the calculation of the Adjusted Eurodollar Rate); or
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(iii) imposes any other condition affecting this Agreement or
the Notes or any of such extensions of credit or liabilities or
commitments contemplated hereunder or thereunder.
Each Lender will notify the Borrower (with a copy to the Agent) of any event
occurring after the Closing Date which will entitle such Lender to compensation
pursuant to this Section 4.1(a) as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation, and (if so
requested by the Borrower) will designate a different Applicable Lending Office
for the Eurodollar Loans of such Lender if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the sole
opinion of such Lender, violate any law, rule or regulation or be in any way
disadvantageous to such Lender, provided that such Lender shall have no
obligation to so designate an Applicable Lending Office located in the U.S.
Each Lender will furnish the Borrower with a certificate setting forth the
basis and the amount of each request of such Lender for compensation under this
Section 4.1(a). If any Lender requests compensation from the Borrower under
this Section 4.1(a), the Borrower may, by notice to such Lender (with a copy to
the Agent), suspend the obligation of such Lender to make or Continue making,
or Convert ABR Loans into, Eurodollar Loans until the Regulatory Change giving
rise to such request ceases to be in effect (in which case the provisions of
Section 4.4 hereof shall be applicable).
(b) Without limiting the effect of the foregoing provisions of this
Section 4.1, in the event that, by reason of any Regulatory Change, any Lender
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Lender which includes deposits by reference to which the interest rate on
Eurodollar Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Lender which includes Eurodollar
Loans or (ii) becomes subject to restrictions on the amount of such a category
of liabilities or assets which it may hold, then, if such Lender so elects by
notice to the Borrower (with a copy to the Agent), the obligation of such
Lender to make or Continue making, or Convert ABR Loans into, Eurodollar Loans
hereunder shall be suspended until such Regulatory Change ceases to be in
effect (in which case the provisions of Section 4.4 hereof shall be
applicable).
(c) Determinations and allocations by any Lender for purposes of this
Section 4.1 of the effect of any Regulatory Change on its costs of maintaining
its obligation to make Loans or of making or maintaining Loans or on amounts
receivable by it in respect of Loans, and of the additional amounts required to
compensate such Lender in respect of any Additional Costs, shall be conclusive
in the absence of manifest error, provided that such determinations and
allocations are made on a reasonable basis.
Section 4.2 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if with respect to any Eurodollar Loans for any
Interest Period therefor:
(a) the Agent determines (which determination shall be
conclusive absent manifest error) that quotations of interest rates for
the relevant deposits referred to in the definition of "Eurodollar Rate"
in Section 1.1 hereof are not being provided in the relative amounts or
for the relative maturities for purposes of determining the rate of
interest for such Loans as provided in this Agreement; or
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(b) the Required Lenders determine (which determination shall
be conclusive absent manifest error) and notify the Agent that the
relevant rates of interest referred to in the definition of "Eurodollar
Rate" or "Adjusted Eurodollar Rate" in Section 1.1 hereof on the basis
of which the rate of interest for such Loans for such Interest Period is
to be determined do not accurately reflect the cost to the Lenders of
making or maintaining such Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof and, so long as
such condition remains in effect, the Lenders shall be under no obligation to
make Eurodollar Loans or to Convert ABR Loans into Eurodollar Loans and the
Borrower shall, on the last day(s) of the then current Interest Period(s) for
the outstanding Eurodollar Loans, either prepay such Loans or Convert such
Loans into ABR Loans in accordance with the terms of this Agreement.
Section 4.3 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to (a) honor its obligation to make Eurodollar Loans
or (b) maintain Eurodollar Loans, then such Lender shall promptly notify the
Borrower (with a copy to the Agent) thereof and such Lender's obligation to
make or maintain Eurodollar Loans and to Convert ABR Loans into Eurodollar
Loans hereunder shall be suspended until such time as such Lender may again
make and maintain Eurodollar Loans (in which case the provisions of Section 4.4
hereof shall be applicable).
Section 4.4 Treatment of Affected Loans. If the obligation of any
Lender to make or Continue, or to Convert ABR Loans into, Eurodollar Loans is
suspended pursuant to Section 4.1 or 4.3 hereof, such Lender's Eurodollar Loans
shall be automatically Converted into ABR Loans on the last day(s) of the then
current Interest Period(s) for the Eurodollar Loans (or, in the case of a
Conversion required by Section 4.1(b) or 4.3 hereof, on such earlier date as
such Lender may specify to the Borrower with a copy to the Agent) and, unless
and until such Lender gives notice as provided below that the circumstances
specified in Section 4.1 or 4.3 hereof which gave rise to such Conversion no
longer exist:
(a) to the extent that such Lender's Eurodollar Loans have
been so Converted, all payments and prepayments of principal which would
otherwise be applied to such Lender's Eurodollar Loans shall be applied
instead to its ABR Loans; and
(b) all Loans which would otherwise be made or Continued by
such Lender as Eurodollar Loans shall be made as or Converted into ABR
Loans and all Loans of such Lender which would otherwise be Converted
into Eurodollar Loans shall be Converted instead into (or shall remain
as) ABR Loans.
If such Lender gives notice to the Borrower that the circumstances specified in
Section 4.1 or 4.3 hereof which gave rise to the Conversion of such Lender's
Eurodollar Loans pursuant to this Section 4.4 no longer exist (which such
Lender agrees to do promptly upon such circumstances ceasing to exist) at a
time when Eurodollar Loans are outstanding, such Lender's ABR Loans shall be
automatically Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Eurodollar Loans, to the extent necessary so
that, after giving effect thereto, all Loans
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held by the Lenders holding Eurodollar Loans and by such Lender are held pro
rata (as to principal amounts, Types and Interest Periods) in accordance with
their respective Commitments.
Section 4.5 Compensation. The Borrower shall pay to the Agent for the
account of each Lender, promptly upon the request of such Lender through the
Agent, such amount or amounts as shall be sufficient (in the reasonable opinion
of such Lender) to compensate it for any loss, cost or expense incurred by it
as a result of:
(a) Any payment, prepayment or Conversion of a Eurodollar Loan
for any reason (including, without limitation, the acceleration of the
outstanding Loans pursuant to Section 11.2) on a date other than the
last day of an Interest Period for such Loan; or
(b) Any failure by the Borrower for any reason (including,
without limitation, the failure of any conditions precedent specified in
Article 6 to be satisfied) to borrow, Convert or prepay a Eurodollar
Loan on the date for such borrowing, Conversion or prepayment specified
in the relevant notice of borrowing, prepayment or Conversion under this
Agreement.
Section 4.6 Capital Adequacy. If, after the Closing Date, any Lender
shall have determined that the adoption or implementation of any applicable
law, rule or regulation regarding capital adequacy (including, without
limitation, any law, rule or regulation implementing the Basle Accord), or any
change therein, or any change in the interpretation or administration thereof
by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or compliance by such Lender (or its
parent) with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of any central bank or other
Governmental Authority (including, without limitation, any guideline or other
requirement implementing the Basle Accord), has or would have the effect of
reducing the rate of return on such Lender's (or its parent's) capital as a
consequence of its obligations hereunder or the transactions contemplated
hereby to a level below that which such Lender (or its parent) could have
achieved but for such adoption, implementation, change or compliance (taking
into consideration such Lender's policies with respect to capital adequacy) by
an amount deemed by such Lender to be material, then from time to time, within
ten Business Days after demand by such Lender (with a copy to the Agent), the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender (or its parent) for such reduction. A certificate of
such Lender claiming compensation under this Section 4.6 and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive
absent manifest error, provided that the determination thereof is made on a
reasonable basis. In determining such amount or amounts, such Lender may use
any reasonable averaging and attribution methods.
Section 4.7 Additional Interest on Eurodollar Loans. The Borrower
shall pay, directly to each Lender from time to time, additional interest on
the unpaid principal amount of each Eurodollar Loan held by such Lender, from
the date of the making of such Eurodollar Loan until such principal amount is
paid in full, at an interest rate per annum determined by such Lender in good
faith equal to the positive remainder (if any) of (a) the Adjusted Eurodollar
Rate applicable to such Eurodollar Loan minus (b) the Eurodollar Rate
applicable to such Eurodollar Loan. Each payment of additional interest
pursuant to this Section 4.7 shall be payable by the Borrower on each date upon
which
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interest is payable on such Eurodollar Loan pursuant to Section 2.4(b);
provided, however, that the Borrower shall not be obligated to make any such
payment of additional interest until the first Business Day after the date when
the Borrower has been informed (i) that such Lender is subject to a Reserve
Requirement and (ii) of the amount of such Reserve Requirement (after which
time the Borrower shall be obligated to make all such payments of additional
interest, including, without limitation, such payment of additional interest
that otherwise would have been payable by the Borrower on or prior to such time
had the Borrower been earlier informed).
ARTICLE 5
Security
Section 5.1 Collateral. To secure the full and complete payment and
performance of the Obligations, the Borrower shall, and shall cause each of its
Subsidiaries, other than the Canadian Subsidiaries, to, on or before the
Closing Date, grant to the Agent for the benefit of the Agent and the Lenders a
perfected, first priority Lien (except for Permitted Liens, if any, which are
expressly permitted by the Loan Documents to have priority over the Liens in
favor of the Agent) on all of its right, title and interest in and to the
following Property, whether now owned or hereafter acquired, pursuant to the
Security Documents:
(a) all Capital Stock of each of the Subsidiaries of the
Borrower, other than Capital Stock of the Canadian Subsidiaries (whether
present or future), owned as of the Closing Date or thereafter acquired
by the Borrower or any Subsidiary of the Borrower;
(b) 65% of the shares of each class of Capital Stock of
Dynamex Canada and any other Canadian Subsidiary (whether present or
future) that is a direct, Wholly-Owned Subsidiary of the Borrower, owned
as of the Closing Date or thereafter acquired by the Borrower; and
(c) all other Property of the Borrower and each of its
Subsidiaries, other than the Canadian Subsidiaries, owned as of the
Closing Date or thereafter acquired, including, without limitation, all
accounts (including, without limitation, Receivables), inventory
(including, without limitation, Inventory), equipment, furniture,
fixtures, contract rights, general intangibles, instruments, investment
property, chattel paper, Permits, Intellectual Property and intercompany
Debt, but excluding immaterial leases (provided, however, that the
Agent's Lien on certificated vehicles shall not be required to be
perfected unless and until the Agent so requests).
If required by the Agent or the Required Lenders, the pledge of the Capital
Stock of Dynamex Canada or any other Canadian Subsidiary that is a direct,
Wholly-Owned Subsidiary of the Borrower shall be appropriately registered in
the share registry of Dynamex Canada or such other Canadian Subsidiary (as
applicable). The Borrower covenants that none of the Capital Stock to be
pledged in accordance with this Section 5.1 shall be subject to any transfer
restrictions, shareholders' agreement or other restriction except for such
restrictions under applicable securities laws and such restrictions, if any, as
may be reasonably acceptable to the Agent. In connection with and in addition
to the foregoing, the Borrower and its Subsidiaries shall execute and/or
deliver such further agreements,
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documents and instruments (including, without limitation, stock certificates,
stock powers and financing statements) as the Agent may reasonably request in
order for it to obtain and maintain the perfected, first priority Liens to be
granted in accordance with this Section 5.1.
Section 5.2 Guaranties. Each Subsidiary of the Borrower, other than
the Canadian Subsidiaries, in existence on the Closing Date shall guarantee the
payment and performance of the Obligations pursuant to the applicable Guaranty.
Section 5.3 New Subsidiaries; New Issuances of Capital Stock.
Contemporaneously with the creation or acquisition of any Subsidiary of the
Borrower (other than a Canadian Subsidiary, except as provided in this Section
5.3 below) after the Closing Date, the Borrower shall, and shall cause each of
its Subsidiaries to:
(a) grant or cause to be granted to the Agent, for the benefit
of the Agent and the Lenders, a perfected, first priority security
interest in all Capital Stock or other ownership interests in or
indebtedness of such Subsidiary owned by the Borrower or any Subsidiary
of the Borrower (to the extent such Capital Stock or other ownership
interests or indebtedness are already not so pledged to the Agent);
(b) cause each such Subsidiary to guarantee the payment and
performance of the Obligations by executing and delivering to the Agent
an appropriate Guaranty; and
(c) cause each such Subsidiary to execute and deliver to the
Agent an appropriate Security Agreement and such other Security
Documents as the Agent may reasonably request to grant the Agent, for
the benefit of the Agent and the Lenders, a perfected, first priority
Lien (except for Permitted Liens, if any, which are expressly permitted
by the Loan Documents to have priority over the Liens in favor of the
Agent) on all Property of such Subsidiary, excluding immaterial leases
(provided, however, that the Agent's Lien on certificated vehicles shall
not be required to be perfected unless and until the Agent so requests).
Contemporaneously with the issuance of any additional Capital Stock of any of
the Subsidiaries of the Borrower after the Closing Date, the Borrower shall,
and shall cause each of its Subsidiaries and other appropriate Persons (as
applicable) to, grant or cause to be granted to the Agent, for the benefit of
the Agent and the Lenders, a perfected, first priority security interest in all
Capital Stock or other ownership interests in such Subsidiary owned by any
shareholder of any Subsidiary of the Borrower, the Borrower or any Subsidiary
of the Borrower (to the extent such Capital Stock or other ownership interests
are already not so pledged to the Agent). The Borrower covenants that none of
the Capital Stock to be pledged in accordance with this Section 5.3 shall be
subject to any transfer restriction, shareholders' agreement or other
restriction except for such restrictions under applicable securities laws and
such restrictions, if any, as may be reasonably acceptable to the Agent.
Notwithstanding anything to the contrary contained in this Section 5.3, (i)
neither the Borrower nor any Subsidiary of the Borrower shall be obligated to
pledge more than 65% of each class of the issued and outstanding Capital Stock
of Dynamex Canada or any other Canadian Subsidiary that is a direct, Wholly-
Owned Subsidiary of the Borrower or to pledge any Capital Stock or other
ownership interests in or other indebtedness of any Canadian Subsidiary of
Dynamex Canada, (ii) no Canadian
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Subsidiary shall be obligated to execute a Guaranty guaranteeing payment or
performance of the Obligations as otherwise required in clause (b) preceding,
and (iii) no Canadian Subsidiary shall be obligated to execute a Security
Agreement securing payment or performance of the Obligations as otherwise
required in clause (c) preceding. In connection with and in addition to the
foregoing, the Borrower and its Subsidiaries shall execute and/or deliver such
further agreements, documents and instruments (including, without limitation,
stock certificates, stock powers and financing statements) as the Agent may
reasonably request in order for it to obtain and maintain the perfected, first
priority Liens to be granted in accordance with this Section 5.3.
Section 5.4 New Mortgaged Properties. The Borrower shall, and shall
cause each of its Subsidiaries other than its Canadian Subsidiaries to,
contemporaneously with the acquisition of any fee real Property, execute,
acknowledge and deliver to the Agent a Mortgage or an amendment or modification
to a then existing Mortgage covering all fee real Property acquired by the
Borrower or any of such Subsidiaries subsequent to the Closing Date, together
with evidence reasonably satisfactory to the Agent and its counsel, including,
without limitation, if requested by the Agent, a commitment for a mortgagee
policy of title insurance or a title opinion in favor of the Agent, in form and
substance reasonably satisfactory to the Agent, that the Mortgage creates a
valid, first priority Lien on the fee estate in favor of the Agent for the
benefit of the Agent and the Lenders (except for Permitted Liens, if any, which
are expressly permitted by the Loan Documents to have priority over the Liens
in favor of the Agent), together with appraisals and surveys if requested by
the Agent; provided, however, that, with respect to the acquisition of any fee
real Property having a fair market value of less than $100,000, the Borrower
and such Subsidiaries shall not be required to execute, acknowledge or deliver
such documents unless or until fee real Property or Properties having an
aggregate fair market value of $100,000 or more would be covered by any such
new Mortgage or amendment or modification to an existing Mortgage. Following
the date of each such acquisition of Property, if requested by the Agent, the
Borrower shall, and shall cause each of its Subsidiaries (other than its
Canadian Subsidiaries) with an interest in such Properties to, (a) deliver or
cause to be delivered to the Agent, a mortgagee policy of title insurance
insuring the Liens of the Mortgage covering such fee real Property in an amount
reasonably satisfactory to the Agent on standard form policies (except for
Permitted Liens, if any, which are expressly permitted by the Loan Documents to
have priority over the Liens in favor of the Agent) or, with respect to such
Properties located in Canada, title opinions in form and substance reasonably
satisfactory to the Agent issued by law firms reasonably satisfactory to the
Agent and (b) provide the Agent with a current environmental assessment of such
Property in form and substance reasonably satisfactory to the Agent.
Section 5.5 Release of Collateral. Upon any sale, transfer or other
disposition of Collateral that is expressly permitted under Section 9.8 and
upon five Business Days prior written request by the Borrower, the Agent shall
execute at the Borrower's expense such documents as may be necessary to
evidence the release by the Agent of its Liens on such Collateral being sold,
transferred or otherwise disposed of; provided, however, that (a) the Agent
shall not be required to release any Lien on any Collateral if a Default shall
have occurred and be continuing, (b) the Agent shall not be required to execute
any such document on terms which, in the Agent's opinion, would expose the
Agent to liability or create any obligation not reimbursed by the Borrower or
entail any consequences other than the release of such Lien without recourse or
warranty, and (c) such release shall not in any manner discharge, affect or
impair any of the Obligations or any of the Agent's Liens
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on any Collateral retained by the Borrower or any of its Subsidiaries,
including, without limitation, its Liens on the proceeds of any such sale,
transfer or other disposition.
Section 5.6 Setoff. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
without notice to the Borrower or any other Person (any such notice being
hereby expressly waived by the Borrower and the Loan Parties), to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of the Borrower or any other Loan Party
against any and all of the Obligations of the Borrower or such other Loan Party
now or hereafter existing under this Agreement, any of such Lender's Notes or
any other Loan Document, irrespective of whether or not the Agent or such
Lender shall have made any demand under this Agreement, any of such Lender's
Note or any such other Loan Document and although such Obligations may be
unmatured. Each Lender agrees promptly to notify the Borrower (with a copy to
the Agent) after any such setoff and application, provided that the failure to
give such notice shall not affect the validity of such setoff and application.
The rights and remedies of each Lender hereunder are in addition to other
rights and remedies (including, without limitation, other rights of setoff)
which such Lender may have.
Section 5.7 Release of Certain Prior Security. The Lenders hereby
authorize the Agent to release (a) its Liens which attach to the Property of
Dynamex Canada (including its Capital Stock of Parcelway BC) and the other
Canadian Subsidiaries, (b) the guaranties executed by Dynamex Canada and the
other Canadian Subsidiaries and (c) its Liens which attach to thirty-five
percent (35%) of each class of Capital Stock of Dynamex Canada owned by the
Borrower, all of which Liens and guaranties were previously granted, executed
or delivered in connection with the Original Agreement or the Existing
Agreement. The Lenders hereby further authorize the Agent to execute and
deliver and to file or record (or to allow or cause to be filed or recorded),
as appropriate, such agreements, documents and instruments as Agent, in its
sole discretion, shall deem necessary or appropriate to effectuate such
releases.
Section 5.8 Collateral and Guaranties of Canadian Subsidiaries. The
Borrower and its Subsidiaries agree that, notwithstanding anything to the
contrary contained in this Article 5 or elsewhere in this Agreement or in any
other Loan Document, promptly upon (and, in any event, within ten Business Days
after) any written request therefor made by the Agent or the Required Lenders
after and during the continuation of an Event of Default, they will execute
and/or deliver, or cause to be executed and/or delivered, each of the following
as may be so requested and all of which shall be in form and substance
satisfactory to the Agent:
(a) a Security Agreement executed by each of the Borrower and
each applicable Subsidiary of the Borrower which grants to the Agent for
the benefit of the Agent and the Lenders a perfected, first priority
Lien (except for Permitted Liens, if any, which are expressly permitted
by the Loan Documents to have priority over the Liens in favor of the
Agent) on all of such Person's right, title and interest in and to the
following Property, whether now owned or hereafter acquired:
(i) all Capital Stock of Dynamex Canada and each other
Canadian Subsidiary (whether present or future); and
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(ii) all other Property of Dynamex Canada and each other
Canadian Subsidiary owned as of the Closing Date or thereafter
acquired, including, without limitation, all accounts (including,
without limitation, Receivables), inventory (including, without
limitation, Inventory), equipment, furniture, fixtures, contract
rights, general intangibles, instruments, investment property,
chattel paper, Permits, Intellectual Property, intercompany Debt
and real Property; and
(b) a Guaranty executed by each of Dynamex Canada and each of
the other Canadian Subsidiaries (whether present or future) which
guarantees payment and performance of the Obligations; and
(c) such further agreements, documents and instruments
(including, without limitation, stock certificates, stock powers,
financing statements and other Security Documents) as the Agent may
request in connection with any of the foregoing.
The Borrower covenants that none of the Capital Stock to be pledged in
accordance with this Section 5.8 shall be subject to any transfer restrictions,
shareholders' agreement or other restriction except for such restrictions under
applicable securities laws and such restrictions, if any, as may be reasonably
acceptable to the Agent.
ARTICLE 6
Conditions Precedent
Section 6.1 Initial Extension of Credit. The obligation of each
Lender to make its initial Loan under this Agreement and the obligation of the
Issuing Bank to issue the initial Letter of Credit under this Agreement are
subject to the conditions precedent that the Agent shall have received, on or
before the Closing Date, all of the following in form and substance
satisfactory to the Agent and, in the case of actions to be taken, evidence
that the following required actions have been taken to the satisfaction of the
Agent:
(a) Resolutions. Resolutions of the Board of Directors of
each Loan Party certified by its Secretary or an Assistant Secretary
which authorize the execution, delivery and performance by such Loan
Party of the Loan Documents and Related Transactions Documents to which
it is or is to be a party;
(b) Incumbency Certificate. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of each Loan Party
certifying as to the name of each officer or other representative of
such Loan Party (i) who is authorized to sign the Loan Documents to
which such Loan Party is or is to be a party (including any certificates
contemplated therein), together with specimen signatures of each such
officer or other representative, and (ii) who will, until replaced by
other officers or representatives duly authorized for that purpose, act
as its representative for the purposes of signing documents and giving
notices and other communications in connection with the Loan Documents
and the transactions contemplated thereby;
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(c) Articles or Certificates of Incorporation, etc. The
articles or certificates of incorporation, certificate of formation,
certificate of limited partnership, partnership agreement or other
applicable constitutional document of each Loan Party certified by the
Secretary of State or other applicable Governmental Authority of the
state, province or other jurisdiction of incorporation or organization
of such Loan Party and dated as of a Current Date;
(d) Bylaws. The bylaws of each Loan Party certified by the
Secretary or an Assistant Secretary of such Loan Party;
(e) Governmental Certificates. Certificates of appropriate
officials as to the existence and good standing, status or compliance,
as applicable, of each Loan Party in their respective jurisdictions of
incorporation or organization and any and all jurisdictions where such
Loan Party is qualified to do business as a foreign corporation or other
entity, each such certificate to be dated as of a Current Date;
(f) Notes. The Notes duly completed and executed by the
Borrower (one payable to the order of each Lender);
(g) Guaranties. A Guaranty executed by each of the
Subsidiaries of the Borrower other than the Canadian Subsidiaries;
(h) Security Agreements. A Security Agreement executed by the
Borrower and each of its Subsidiaries other than the Canadian
Subsidiaries;
(i) Insurance Policies. Copies of all insurance policies
required by this Agreement and the other Loan Documents;
(j) Stock Certificates; Intercompany Notes. The stock
certificates representing all of the issued and outstanding Capital
Stock of each of the Subsidiaries of the Borrower except to the extent
that such Capital Stock is not required to be pledged in accordance with
Section 5.1(a), in each case accompanied by appropriate instruments of
transfer or stock powers signed in blank (as appropriate) and all
promissory notes evidencing any intercompany Debt between or among the
Borrower and any of its Subsidiaries accompanied by appropriate
endorsements thereto executed by the holder(s) of such promissory notes
to and in favor of the Agent;
(k) Financing Statements. Financing statements and all other
requisite filing documents executed by the Loan Parties necessary to
perfect the Liens created pursuant to the Security Documents;
(l) Payment of Certain Debt; Lien Releases. Payment in full
of the Existing Loans and all interest accrued thereon, termination of
all credit agreements (other than the Existing Agreement and this
Agreement) to which the Borrower or any Subsidiary of the Borrower is a
party and payment in full of all Debt of the Borrower or any such
Subsidiary (other than Debt payable to the Agent or the Lenders under
the Loan Documents and other
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Debt permitted in accordance with Section 9.1) and duly executed
releases of Debt, releases of guaranties and releases or assignments of
Liens, UCC-3 financing statements and personal property security act
filings in recordable form, as may be necessary to reflect that the
Liens created by the Security Documents are first priority Liens (other
than Permitted Liens, if any, which are expressly permitted by the Loan
Documents to have priority over the Liens in favor of the Agent);
(m) Lien Searches. Lien searches in the names of the Borrower
and each of its Subsidiaries (and in all names under which each such
Person has done business within the last five years and in all names of
Persons who previously owned any of the material Properties constituting
Collateral as the Agent may require) in each state or province where
each such Person maintains an office or has Property, showing no
financing statements or other Lien instruments of record except for
Permitted Liens (and Liens released in accordance with Section 6.1(l));
provided, however, that no such searches shall be required with respect
to Loan Parties if and to the extent that counsel to the Agent
determines that such searches are not reasonably necessary or
appropriate given searches previously undertaken;
(n) Leases. Copies of all material leases (and all amendments
and supplements thereto) pursuant to which the Borrower or any of its
Subsidiaries leases real Properties;
(o) Solvency Certificate; Contribution Agreement. A
certificate executed by a Responsible Officer of the Borrower (with
respect to the Borrower and its Subsidiaries other than Dynamex Canada
and Parcelway BC) and Dynamex Canada (with respect to Dynamex Canada and
its Subsidiaries) demonstrating that, concurrently with and after giving
effect to the Loans and the Related Transactions, each of the Borrower
and each of its Subsidiaries is Solvent on a consolidated and
consolidating basis; and contribution agreements between and among the
Borrower and its Subsidiaries to evidence applicable rights of
contribution;
(p) Prior Acquisition Documents. Copies of all Prior
Acquisition Documents (other than Prior Acquisition Documents previously
delivered to the Agent and certified by a Loan Party as being true and
correct copies), certified by a Responsible Officer of the Borrower as
being true and correct copies of such documents as of the Closing Date;
(q) Consents. Copies of all material consents or waivers
(other than consents or waivers previously delivered to the Agent and
certified by a Loan Party as being true and correct copies) necessary
for the execution, delivery and performance by each of the Loan Parties
of the Loan Documents and the Related Transactions Documents to which it
is a party, including, without limitation, any consents or waivers in
connection with the Prior Acquisitions as the Agent may require and the
grant of a security interest in each Material Contract of the Borrower
or its Subsidiaries, which consents shall be certified by a Responsible
Officer of the applicable Loan Party as true and correct copies of such
consents as of the Closing Date;
(r) Permits. Copies of all material Permits (other than
Permits previously delivered to the Agent and certified by a Loan Party
as being true and correct copies)
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affecting the Borrower or any of its Subsidiaries in connection with its
businesses or any of the Properties owned or leased by it, and evidence
satisfactory to the Agent that the Borrower and its Subsidiaries are
able to conduct their businesses with the use of such Permits in full
force and effect;
(s) Payment of Fees and Expenses. The Borrower shall have
paid to the appropriate Person(s) (i) all interest and fees accrued to
the Closing Date and not previously paid which are payable in accordance
with the Existing Agreement, (ii) all fees due on or before the Closing
Date as specified in this Agreement or in the Agent's Letter and (iii)
all fees and expenses of or incurred by the Agent and its counsel to the
extent billed on or before the Closing Date and payable pursuant to this
Agreement;
(t) Regulatory Approvals. Evidence satisfactory to the Agent
that all filings, consents or approvals with or of Governmental
Authorities necessary to consummate the transactions contemplated by the
Loan Documents and the Related Transactions Documents have been made and
obtained, as applicable, including, without limitation, all approvals or
filings (if any) required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, the Investment Canada Act (Canada) and the
Competition Act (Canada) and the lapse of all waiting periods with
respect thereto;
(u) Compliance with Laws. As of the Closing Date, each Person
that is a party to this Agreement, any of the other Loan Documents or
any of the Related Transactions Documents shall have complied with all
Governmental Requirements necessary to consummate the transactions
contemplated by this Agreement, the other Loan Documents and such
Related Transactions Documents;
(v) No Prohibitions. No Governmental Requirement shall
prohibit the consummation of the transactions contemplated by this
Agreement, any other Loan Document or any Related Transactions Document,
and no order, judgment or decree of any Governmental Authority or
arbitrator shall, and no litigation or other proceeding shall be pending
or threatened which would, enjoin, prohibit, restrain or otherwise
adversely affect in any material manner the consummation of the
transactions contemplated by this Agreement, the other Loan Documents
and such Related Transactions Documents or otherwise have a Material
Adverse Effect;
(w) No Material Adverse Change. As of the Closing Date, no
material adverse change shall have occurred with respect to the
financial condition, results of operations, business, operations,
capitalization, assets, liabilities or prospects of the Borrower or any
of its Subsidiaries since July 31, 1996, and the Agent shall be
satisfied that the economic performance of the Borrower and each of its
Subsidiaries to the Closing Date is not materially different from the
economic projections for the Borrower and each of its Subsidiaries
through the Closing Date that were previously submitted to the Agent;
(x) Financial Statements. Copies of each of the financial
statements referred to in Section 7.2;
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(y) Opinions of Counsel. Favorable opinions (or comfort
letters with respect to clause (iii) succeeding) of (i) Crouch &
Hallett, counsel for the Loan Parties, Smith Lyons, Canadian counsel for
the Loan Parties, Stikeman, Elliott, Canadian counsel for the Agent, and
such other counsel as may be acceptable to the Agent, in form and
substance satisfactory to the Agent, with respect to the Borrower and
its Subsidiaries and with respect to the Loan Documents and the Related
Transactions and the Related Transactions Documents relating thereto,
(ii) regulatory counsel for the Loan Parties as may be acceptable to the
Agent, in form and substance satisfactory to the Agent, regarding
licensing and other regulatory requirements and matters in each of the
jurisdictions in which the Borrower or any of its Subsidiaries operates
or will operate after giving effect to the Related Transactions, and
(iii) such other counsel as may be acceptable to the Agent regarding the
power and authority of each of the Subsidiaries of the Borrower to
execute and deliver its Guaranty and Security Agreement under the laws
of its jurisdiction of incorporation or organization;
(z) Reliance Letters. Copies of all legal opinions (other
than legal opinions previously delivered to the Agent) issued in
connection with the Prior Acquisitions and letters from counsel that
issued such opinions stating that such opinions may be relied upon by
the Agent and the Lenders (or, alternatively, originals of such opinions
addressed to the Agent and the Lenders);
(aa) Accountant's Letter. A letter from the Borrower
authorizing the independent public accountants of the Borrower and its
Subsidiaries to communicate with the Agent and the Lenders and
acknowledging reliance by the Agent and the Lenders on past, present and
future financial statements; and
(ab) Letters of Credit. With respect to the issuance of a
Letter of Credit, a Letter of Credit Agreement in the form required by
the Issuing Bank with respect thereto executed by the Borrower.
The Borrower shall deliver, or cause to be delivered, to the Agent sufficient
counterparts of each agreement, document or instrument to be received by the
Agent under this Section 6.1 to permit the Agent to distribute a copy of the
same to each of the Lenders. After the request of the Borrower, the Agent
shall inform the Borrower in writing as to the status of satisfaction of the
conditions precedent set forth in this Section 6.1.
Section 6.2 All Extensions of Credit. The obligation of each Lender
to make any Loan (including the initial Loan) under this Agreement and the
obligation of the Issuing Bank to issue any Letter of Credit (including the
initial Letter of Credit) under this Agreement are subject to the satisfaction
of each of the conditions precedent set forth in Section 6.1 and each of the
following additional conditions precedent:
(a) No Default or Material Adverse Effect. No Default or
Material Adverse Effect shall have occurred and be continuing, or would
result from such Loan or Letter of Credit;
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(b) Representations and Warranties. All of the
representations and warranties of the Borrower and its Subsidiaries and
the other Loan Parties contained in this Agreement and in the other Loan
Documents shall be true and correct on and as of the date of such Loan
or Letter of Credit with the same force and effect as if such
representations and warranties had been made on and as of such date; and
(c) Additional Documentation. The Agent shall have received
such additional approvals, opinions, agreements, documents and
instruments as the Agent may reasonably request.
Each notice of borrowing or request for the issuance of a Letter of Credit by
the Borrower hereunder shall constitute a representation and warranty by the
Borrower that the conditions precedent set forth in Sections 6.2(a) and (b)
have been satisfied (both as of the date of such notice and, unless the
Borrower otherwise notifies the Agent prior to the date of such borrowing or
Letter of Credit, as of the date of such borrowing or Letter of Credit).
Section 6.3 Closing Certificates. The Borrower shall, concurrently
with the Closing Date, execute and deliver to the Agent a Closing Certificate
in form and substance satisfactory to the Agent certifying as to the
satisfaction of each of the conditions precedent set forth in Sections 6.1 and
6.2 which are required to be satisfied on or before the Closing Date. In
addition, the Borrower shall, on or before the date of the making or issuance
of the requested Loan or Letter of Credit, respectively, if such Loan is made
or Letter of Credit is issued to finance (in whole or in part) a Future
Acquisition, execute and deliver to the Agent a Closing Certificate in form and
substance satisfactory to the Agent certifying as to the satisfaction of each
of the conditions precedent set forth in Sections 6.1 and 6.2 which are
required to be satisfied on or before such date.
ARTICLE 7
Representations and Warranties
Each of the Borrower and each of its Subsidiaries jointly and severally
represents and warrants to the Agent and the Lenders that the following
statements are and, after giving effect to the Related Transactions and the
funding of the initial Loans on the Closing Date, will be true, correct and
complete:
Section 7.1 Corporate Existence. Each Loan Party (a) is a corporation
(or other entity) duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization, (b) has all
requisite power and authority to own its Properties and carry on its business
as now being or as proposed to be conducted, and (c) is qualified to do
business in all jurisdictions in which the nature of its business makes such
qualification necessary and where failure to so qualify would have a Material
Adverse Effect. Each Loan Party has the power and authority and legal right to
execute, deliver and perform its obligations under the Loan Documents and the
Related Transactions Documents to which it is or may become a party.
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Section 7.2 Financial Statements.
(a) The Borrower has delivered to the Agent and the Lenders audited
consolidated and consolidating financial statements of the Borrower and its
Subsidiaries as of and for the fiscal years ended July 31, 1994, 1995 and 1996
and interim financial statements as of and for the period ended April 30, 1997
(unaudited). To the Borrower's knowledge, such financial statements are true
and correct, have been prepared in accordance with GAAP and fairly and
accurately present, on a consolidated and consolidating (where applicable)
basis, the financial condition of the Borrower and its consolidated
Subsidiaries as of the respective dates indicated therein and the results of
operations for the respective periods indicated therein. There has not been,
as of the Closing Date, any material adverse change in the financial condition,
results of operations, business, operations, capitalization, assets,
liabilities or prospects of the Borrower or its Subsidiaries since the
effective dates of the most recent applicable financial statements referred to
in this Section 7.2(a).
(b) The Pro-Formas were prepared by the Borrower on a basis
substantially consistent with the financial statements referred to in Section
7.2(a), with only such adjustments thereto as would be required in accordance
with GAAP. Neither the Borrower nor any of its Subsidiaries has any contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments or
unrealized or unanticipated losses from any unfavorable commitments except as
referred to or reflected in the Pro-Formas.
(c) The Projections were prepared by the Borrower on a basis
substantially consistent with the financial statements referred to in Section
7.2(a). The Projections represent, as of the Closing Date, the good faith
estimate of the Borrower and its senior management concerning the probable
financial condition and performance of the Borrower and its Subsidiaries based
on assumptions believed to be reasonable at the time made.
Section 7.3 Corporate Action; No Breach. The execution, delivery and
performance by each Loan Party of the Loan Documents and Related Transactions
Documents to which it is or may become a party and compliance with the terms
and provisions hereof and thereof have been duly authorized by all requisite
corporate or other entity action on the part of the Loan Parties and do not and
will not (a) violate or conflict with, or result in a breach of, or require any
consent under (i) the articles or certificates of incorporation or bylaws of
any Loan Party, (ii) any Governmental Requirement or any order, writ,
injunction or decree of any Governmental Authority or arbitrator, or (iii) any
material agreement, document or instrument to which any Loan Party is a party
or by which any Loan Party or any of its Property is bound or subject, or (b)
constitute a default under any such material agreement, document or instrument,
or result in the creation or imposition of any Lien (except a Lien in favor of
the Agent for and on behalf of the Lenders under the Security Documents as
provided in Article 5) upon any of the revenues or Property of any Loan Party.
Section 7.4 Operation of Business. The Loan Parties possess all
Permits, franchises, licenses and authorizations necessary or appropriate to
conduct their respective businesses substantially as now conducted. All of
such Permits, franchises, licenses and authorizations which are required by any
Governmental Requirement or which are or are to be issued by any
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Governmental Authority are disclosed on Schedule 7.4. None of such Persons is
in material violation of any such Permits, franchises, licenses or
authorizations.
Section 7.5 Intellectual Property. The Loan Parties own or possess
(or will be licensed or have the full right to use) all Intellectual Property
which is necessary or appropriate for the operation of their respective
businesses as presently conducted and as proposed to be conducted, without any
known conflict with the rights of others. The consummation of the transactions
contemplated by this Agreement, the other Loan Documents and the Related
Transactions Documents will not materially alter or impair, individually or in
the aggregate, any of such rights of such Persons. No product or service of
the Loan Parties infringes upon any Intellectual Property owned by any other
Person, and no claim or litigation is pending or, to the knowledge of any Loan
Party, threatened against any Loan Party or any such Person contesting its
right to use any product or material which could have a Material Adverse
Effect. There is no violation by any Loan Party of any right of such Loan
Party with respect to any material Intellectual Property owned or used by such
Loan Party.
Section 7.6 Litigation and Judgments. Each material action, suit,
investigation or proceeding before or by any Governmental Authority or
arbitrator pending or, to the knowledge of any Loan Party, threatened against
or affecting any Loan Party, or that relates to any of the Related Transactions
as of the Closing Date, is disclosed on Schedule 7.6. None of such actions,
suits, investigations or proceedings could, if adversely determined, have a
Material Adverse Effect or could adversely affect the ability of the Borrower
and the other Loan Parties to pay and perform their indebtedness, liabilities
and obligations under the Loan Documents. Except as may be disclosed on
Schedule 7.6, as of the Closing Date, there are no outstanding judgments
against any Loan Party. No Loan Party has received any opinion or memorandum
or legal advice from legal counsel to the effect that it is exposed to any
liability or disadvantage that could reasonably be expected to have a Material
Adverse Effect.
Section 7.7 Rights in Properties; Liens. Each of the Loan Parties has
good and indefeasible title to or, with respect to leasehold interests, valid
leasehold interests in all of its material Properties and assets, real and
personal, including the material Properties, assets and leasehold interests
reflected in the financial statements described in Section 7.2(a) and the Pro
Formas, and none of the Properties or leasehold interests of any Loan Party or
any of its Subsidiaries is subject to any Lien, except Permitted Liens. Except
as disclosed on Schedule 7.7(a), as of the Closing Date, neither the Borrower
nor any of its Subsidiaries owns any material right, title or interest in any
real Properties. Except as disclosed on Schedule 7.7(b), as of the Closing
Date, neither the Borrower nor any of its Subsidiaries owns any right, title or
interest of a material nature in Intellectual Property. As of the Closing
Date, Schedule 7.7(c) sets forth the locations of all of the offices and other
places of business of the Borrower and its Subsidiaries and the locations of
all of the material Properties of the Borrower and its Subsidiaries, as well as
the identities of the Borrower and its Subsidiaries who conduct business or own
Properties at such locations and the identities of the predecessor entities who
previously conducted business or owned Properties at such locations and whose
Capital Stock or assets were acquired by the Borrower or its Subsidiaries.
Section 7.8 Enforceability. The Loan Documents and the Related
Transactions Documents have been duly and validly executed and delivered by
each of the Loan Parties that is a party thereto
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as of the Closing Date, and such Loan Documents and Related Transaction
Documents constitute the legal, valid and binding obligations of the Loan
Parties, enforceable against the Loan Parties in accordance with their
respective terms, except as limited by bankruptcy, insolvency or other laws of
general application relating to the enforcement of creditors' rights and
general principles of equity.
Section 7.9 Approvals. No authorization, approval or consent of, and
no filing or registration with or notice to, any Governmental Authority or
third party is or will be necessary for the execution, delivery or performance
by any Loan Party of any of the Loan Documents or Related Transactions
Documents to which it is or will be a party or for the validity or
enforceability thereof, except for such consents, approvals and filings as have
been validly obtained or made and are in full force and effect. The
consummation of the Related Transactions does not require the consent or
approval of any other Person, except such consents and approvals (a) as have
been validly obtained and are in full force and effect or (b) as to which the
failure to obtain is not, individually or in the aggregate, material. None of
the Loan Parties has failed to obtain any material governmental consent,
approval, license, Permit, franchise or other governmental authorization
necessary for the ownership or use of any of its Properties or the conduct of
its business.
Section 7.10 Debt. As of the Closing Date and after giving effect to
the initial Loans made on the Closing Date, the Loan Parties and their
Subsidiaries have no Debt except for (a) the Obligations, and (b) the Debt
disclosed on Schedule 7.10 hereto.
Section 7.11 Taxes. The Loan Parties have filed all tax returns
(federal, state, provincial and local) required to be filed, including all
income, franchise, employment, Property and sales tax returns, and have paid
all of their respective liabilities for taxes, assessments, governmental
charges and other levies that are due and payable. None of the Loan Parties is
aware of any pending investigation of any Loan Party or any of its Affiliates
by any taxing authority, or of any pending but unassessed tax liability of any
Loan Party or any of its Affiliates, other than with respect to (a) ad valorem
or other real property taxes not in excess of $10,000 as to any such Person and
(b) other taxes in an aggregate amount as to any such Person which could not,
if an adverse determination is made with respect to such taxes, materially and
adversely affect such Person, which (as to each of clauses (a) and (b)
preceding) are currently being contested in good faith by appropriate
proceedings diligently conducted by or on behalf of such Person and as to
which, if required by GAAP, such Person has established adequate reserves. No
tax Liens have been filed and, except as disclosed on Schedule 7.11, no claims
are being asserted against any Loan Party or any of its Affiliates, with
respect to any taxes. Except as disclosed on Schedule 7.11 hereto, as of the
Closing Date, none of the U.S. or Canadian income tax returns of any Loan Party
or any of its Affiliates are under audit. The charges, accruals and reserves
on the books of the Loan Parties in respect of taxes or other governmental
charges are in accordance with GAAP.
Section 7.12 Margin Securities. None of the Loan Parties or any of
their respective Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulations G, T, U
or X of the Board of Governors of the Federal Reserve System), and no part of
the proceeds of any Loan will be used to purchase or carry any margin stock or
to extend credit to others for the purpose of purchasing or carrying margin
stock.
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Section 7.13 ERISA; Canadian Plans. Neither any Loan Party nor any
ERISA Affiliate maintains or contributes to, or has any obligation under, any
Pension Plan or Canadian Pension Plan other than the Pension Plans and Canadian
Pension Plans identified on Schedule 7.13. Each Plan and Canadian Plan of each
Loan Party is in compliance in all material respects with all applicable
provisions of ERISA and the Code or of Canadian Pension and Benefits Law, as
the case may be. Neither a Reportable Event nor a Prohibited Transaction has
occurred within the last 60 months with respect to any Plan. No event has
occurred or investment has been made which could render any Loan Party,
Canadian Plan or funding agent thereof liable for any tax or penalty under
Canadian Pension and Benefits Law. No notice of intent to terminate a Pension
Plan or Canadian Pension Plan has been filed, nor has any Pension Plan or
Canadian Pension Plan been terminated. No circumstances exist which constitute
grounds entitling the PBGC or a Canadian Pension Authority to institute
proceedings to terminate, or appoint a trustee to administer, a Pension Plan or
Canadian Pension Plan, nor has the PBGC or a Canadian Pension Authority
instituted any such proceedings. Neither any of the Loan Parties nor any ERISA
Affiliate has completely or partially withdrawn from a Multiemployer Plan.
Each Loan Party and each ERISA Affiliate have met their minimum funding
requirements under ERISA and the Code or under Canadian Pension and Benefits
Law with respect to all of their Plans or Canadian Plans subject to such
requirements, and, as of the Closing Date except as specified on Schedule 7.13,
the present value of all tested benefits under each funded Plan or funded
Canadian Plan (exclusive of any Multiemployer Plan) does not and will not
exceed the fair market value of all such Plan or Canadian Plan assets allocable
to such benefits, as determined on the most recent valuation date of such Plan
or Canadian Plan and in accordance with ERISA or Canadian Pension and Benefits
Law, as the case may be. Neither any of the Loan Parties nor any ERISA
Affiliate has incurred any liability to the PBGC under ERISA or to the PBGF.
No litigation is pending or threatened concerning or involving any Plan or
Canadian Plan. There are no unfunded or unreserved liabilities (on either a
going-concern basis or a wind-up basis) relating to any Plan or Canadian Plan
that could, individually or in the aggregate, have a Material Adverse Effect if
such Loan Party were required to fund or reserve such liability in full. As of
the Closing Date, no funding waivers have been or will have been requested or
granted under Section 412 of the Code with respect to any Plan. No unfunded or
unreserved liability for benefits under any Plan or Plans or Canadian Plan or
Canadian Plans (exclusive of any Multiemployer Plans) exceeds $1,000,000 or
Cdn. $1,000,000, with respect to any such Plan or Canadian Plan, respectively,
or $2,000,000 or Cdn. $2,000,000 with respect to all such Plans or Canadian
Plans, respectively, in the aggregate as of the Closing Date, on either a
going-concern basis or a wind-up basis.
Section 7.14 Disclosure. No written statement, information, report,
representation or warranty made by any Loan Party in any Loan Document or
Related Transaction Document or furnished to the Agent or any Lender by or on
behalf of any Loan Party in connection with the Loan Documents or the Related
Transactions Documents or any transaction contemplated hereby or thereby
contains any untrue statement of a material fact or omits to state any material
fact necessary to make the statements herein or therein not misleading. There
is no fact known to any Loan Party which has had a Material Adverse Effect, and
there is no fact known to any Loan Party which might in the future have a
Material Adverse Effect, except as may have been disclosed in writing to the
Agent and the Lenders.
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Section 7.15 Capitalization; Subsidiaries.
(a) On and as of the Closing Date, the authorized Capital Stock, the
par value per share and the number of shares issued and outstanding with
respect to the Capital Stock of each of the Loan Parties, other than the
Borrower, are as specified on Schedule 7.15 hereto. The Borrower will, as of
the Closing Date, own all of the issued and outstanding Capital Stock of each
of Dynamex Canada, Dynamex East, Dynamex West and Road Runner. Dynamex Canada
will, as of the Closing Date, own all of the issued and outstanding Capital
Stock of Parcelway BC and Regina Mail.
(b) On and as of the Closing Date, (i) the Borrower will have no
Subsidiaries other than Dynamex Canada, Dynamex East, Dynamex West and Road
Runner and the indirectly owned Subsidiaries of Dynamex Canada referred to in
clause (ii) succeeding, (ii) Dynamex Canada will have no Subsidiaries other
than Parcelway BC and Regina Mail, and (iii) no Subsidiary of the Borrower will
have any Subsidiaries except as specified in clause (ii) preceding. Each of
Parcelway BC and Regina Mail is an inactive corporation holding certain
regulatory licenses.
(c) All of the issued and outstanding Capital Stock of the Borrower
and the Subsidiaries of the Borrower has been validly issued and is fully paid
and nonassessable. There are no outstanding subscriptions, options, warrants,
calls or rights (including preemptive rights) to acquire, and no outstanding
securities or instruments convertible into, Capital Stock of any of the
Subsidiaries of the Borrower.
Section 7.16 Agreements. None of the Loan Parties is a party to any
indenture, loan, credit agreement, stock purchase agreement or any lease or
other agreement, document or instrument, or subject to any charter or corporate
restriction, that could have a Material Adverse Effect. None of the Loan
Parties is in default in any respect in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement, document or instrument binding on it or its Properties, except for
instances of noncompliance that, individually or in the aggregate, could not
have a Material Adverse Effect.
Section 7.17 Compliance with Laws. None of the Loan Parties is in
violation of any Governmental Requirement, except for instances of non-
compliance that, individually or in the aggregate, could not have a Material
Adverse Effect.
Section 7.18 Investment Company Act. None of the Loan Parties is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
Section 7.19 Public Utility Holding Company Act. None of the Loan
Parties is a "holding company" or a "subsidiary company" of a "holding company"
or an "affiliate" of a "holding company" or a "public utility" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
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Section 7.20 Environmental Matters.
(a) Except for instances of noncompliance with or exceptions to any
of the following representations and warranties that could not have,
individually or in the aggregate, a Material Adverse Effect:
(i) The Loan Parties and all of their respective Properties
and operations are in full compliance with all Environmental Laws.
Neither the Borrower nor any of its Subsidiaries is aware of, and
neither the Borrower nor any of its Subsidiaries has received written
notice of, any past, present or future conditions, events, activities,
practices or incidents which may interfere with or prevent the
compliance or continued compliance by any Loan Party with all
Environmental Laws;
(ii) The Loan Parties have obtained all Permits that are
required under applicable Environmental Laws, and all such Permits are
in good standing and all such Persons are in compliance with all of the
terms and conditions thereof;
(iii) No Hazardous Materials exist on, about or within or have
been (to the knowledge of any Loan Party) or are being used, generated,
stored, transported, disposed of on or Released from any of the
Properties of the Loan Parties except in compliance with applicable
Environmental Laws. The use which the Loan Parties make and intend to
make of their respective Properties will not result in the use,
generation, storage, transportation, accumulation, disposal or Release
of any Hazardous Material on, in or from any of their Properties except
in compliance with applicable Environmental Laws;
(iv) Neither the Loan Parties nor any of their respective
currently or previously owned or leased Properties or operations are
subject to any outstanding or, to the knowledge of any Loan Party,
threatened order from or agreement with any Governmental Authority or
other Person or subject to any judicial or administrative proceeding
with respect to (A) any failure to comply with Environmental Laws, (B)
any Remedial Action, or (C) any Environmental Liabilities;
(v) There are no conditions or circumstances associated with
the currently or previously owned or leased Properties or operations of
the Loan Parties that could reasonably be expected to give rise to any
Environmental Liabilities or claims resulting in any Environmental
Liabilities. None of the Loan Parties is subject to, or has received
written notice of any claim from any Person alleging that any of the
Loan Parties is or will be subject to, any Environmental Liabilities;
(vi) None of the Properties of the Loan Parties is a treatment
facility (except for the recycling of Hazardous Materials generated on-
site and the treatment of liquid wastes subject to the Clean Water Act
or other applicable Environmental Law of Canada for temporary storage of
Hazardous Materials generated on-site prior to their disposal off-site)
or disposal facility requiring a permit under the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 et seq., regulations
thereunder or any comparable provision of state or
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Canadian federal or provincial law. The Loan Parties and their
Subsidiaries are compliance with all applicable financial responsibility
requirements of all Environmental Laws; and
(vii) None of the Loan Parties has failed to file any notice
required under applicable Environmental Law reporting a Release.
(b) No Lien arising under any Environmental Law that could have,
individually or in the aggregate, a Material Adverse Effect has attached to any
Property or revenues of any Loan Party.
Section 7.21 Labor Disputes and Acts of God. Neither the business nor
the Properties of any Loan Party are affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy or other casualty (whether or not
covered by insurance) that is having or could have a Material Adverse Effect.
Section 7.22 Material Contracts. Attached hereto as Schedule 7.22 is a
complete list, as of the Closing Date, of all Material Contracts of the Loan
Parties, other than the Loan Documents. All of the Material Contracts are in
full force and effect and none of the Loan Parties is in default under any
Material Contract and, to the knowledge of the Loan Parties after due inquiry,
no other Person that is a party thereto is in default under any of the Material
Contracts. None of the Material Contracts prohibit the transactions
contemplated under the Loan Documents or the Related Transactions Documents.
Except as may be provided on Schedule 7.22, (a) each of the Material Contracts
has been transferred or assigned to, or are currently in the name of, a Loan
Party and (b) each of the Material Contracts is assignable to the Agent as
collateral and is assignable by the Agent to a transferee if an Event of
Default were to occur. The Borrower has delivered to the Agent a complete and
current copy of each Material Contract (other than purchase orders entered into
in the ordinary course of business) existing on the Closing Date and, with
respect to each Material Contract (other than purchase orders entered into in
the ordinary course of business) entered into after the Closing Date, will
deliver to the Agent a complete and current copy of such Material Contract in a
reasonably prompt fashion after the creation thereof.
Section 7.23 Bank Accounts. As of the Closing Date, Schedule 7.23 sets
forth the account numbers and location of all bank accounts (including lock box
and special accounts) of the Borrower and its Subsidiaries.
Section 7.24 Outstanding Securities. As of the Closing Date, all
outstanding securities (as defined in the Securities Act of 1933, as amended,
or any successor thereto, and the rules and regulations of the Securities and
Exchange Commission thereunder) of the Loan Parties have been offered, issued,
sold and delivered in compliance with all applicable Governmental Requirements.
Section 7.25 Related Transactions Documents.
(a) All representations and warranties made by the Loan Parties in
the Related Transactions Documents and, to the knowledge of the Loan Parties
after due inquiry, all representations and warranties made by all other Persons
in the Related Transactions Documents, are true and correct in all material
respects on and as of each date made or deemed made and as of the Closing Date.
No rights of cancellation or rescission and, to the knowledge of the Loan
Parties,
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no defaults or defenses exist with respect to any of the Related Transactions
Documents. The Borrower has delivered to the Agent complete and correct copies
of all Related Transactions Documents, including all schedules and exhibits
thereto. The Related Transactions Documents set forth the entire agreement and
understanding of the parties thereto relating to the subject matter thereof,
and there are no other agreements, arrangements or understandings, written or
oral, relating to the matters covered thereby.
(b) As of the Closing Date, all conditions precedent to the Related
Transactions pursuant to the Related Transactions Documents have been fulfilled
in all material respects or (with the prior written consent of the Agent)
waived, the Related Transactions Documents have not been amended or otherwise
modified in any material respect (except as permitted by this Agreement), and
there has not been any breach of any material term or condition contained in
the Related Transactions Documents. After giving effect to the consummation of
the Acquisitions, the Borrower has or will have acquired and become the owner
of all of the issued and outstanding Capital Stock of each of its Subsidiaries
free and clear of any Liens, except the Liens securing the Obligations in favor
of the Agent for and on behalf of the Lenders. In connection with the
Acquisitions, neither the Borrower nor any of its Subsidiaries has assumed or
will assume any liabilities other than those required to be assumed by the
Borrower in accordance with the express terms and provisions of the Acquisition
Documents, all of which assumed liabilities relating to the Prior Acquisitions
are reflected or reserved against in the applicable Pro Forma or are contingent
liabilities which are not required to be reflected or reserved against in
accordance with GAAP. Except as set forth in Schedule 7.25 (with respect to
the Prior Acquisitions) or except as will be disclosed to the Agent and to the
Lenders in writing (with respect to any Future Acquisition) prior to the
consummation of any Future Acquisition, all approvals, authorizations,
consents, licenses, exemptions of, filings or registrations with any
Governmental Authority or other Person required in connection with the
Acquisitions have been obtained (including, without limitation, notification
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the Investment
Canada Act (Canada) and the Competition Act (Canada), the approvals of the
appropriate transportation regulation authorities and any necessary licenses to
operate the acquired businesses in the applicable locations on and after the
Closing Date) and all waiting periods (if any) relating thereto have lapsed.
None of the approvals, authorizations, consents, licenses, exemptions, filings,
registrations or other actions which has not been obtained will, individually
or in the aggregate with all such approvals, authorizations, consents,
licenses, exemptions, filings, registrations or other actions which have not
been obtained, materially adversely affect the businesses of the Loan Parties.
(c) None of the Related Transactions to occur on or about the Closing
Date will violate any term or provision of the Prior Acquisition Documents and
no approval, authorization, consent or other action by any party to the Prior
Acquisition Documents is necessary for the consummation of the Related
Transactions to occur on or about the Closing Date.
Section 7.26 Solvency. Each of the Borrower and each of its
Subsidiaries, as a separate entity, is Solvent, both before and after giving
effect to the Loans and the Related Transactions.
Section 7.27 Employee Matters. Except as set forth on Schedule 7.27,
as of the Closing Date (a) none of the Loan Parties or any of its respective
Subsidiaries or employees is subject to any collective bargaining agreement,
and (b) no petition for certification or union election is pending
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with respect to the employees of any Loan Party or any of its respective
Subsidiaries, and no union or collective bargaining unit has sought such
certification or recognition with respect to the employees of any of the Loan
Parties or any of its respective Subsidiaries. There are no strikes,
slowdowns, work stoppages or controversies pending or, to the best knowledge of
the Loan Parties after due inquiry, threatened against, any of the Loan Parties
or its respective employees which could have, either individually or in the
aggregate, a Material Adverse Effect. Except as set forth on Schedule 7.27, as
of the Closing Date, none of the Loan Parties or any of its respective
Subsidiaries is subject to an employment contract.
Section 7.28 Insurance. Schedule 7.28 sets forth a complete and
accurate description of all policies of insurance that will be in effect as of
the Closing Date for the Borrower and its Subsidiaries. To the extent such
policies have not been replaced, no notice of cancellation has been received
for such policies and the Borrower and its Subsidiaries are in compliance with
all of the terms and conditions of such policies.
Section 7.29 Common Enterprise. Each of the Borrower and its
Subsidiaries is a member of an affiliated group with each other such Person and
the Borrower and its Subsidiaries are collectively engaged in a common
enterprise with one another. Each of the Borrower and its Subsidiaries expects
to derive substantial benefit (and may reasonably be expected to derive
substantial benefit), directly and indirectly, from the Loans and Letters of
Credit contemplated by this Agreement, both in its separate capacity and as a
member of an affiliated and integrated group. Each of the Borrower and its
Subsidiaries will receive reasonably equivalent value in exchange for the
Collateral and Guaranty being provided by it as security for the payment and
performance of the Obligations.
ARTICLE 8
Affirmative Covenants
Each of the Borrower and each of its Subsidiaries jointly and severally
covenants and agrees that, as long as the Obligations or any part thereof are
outstanding or any Lender has any Commitment hereunder or any Letter of Credit
remains outstanding, it will perform and observe, or cause to be performed and
observed, the following covenants:
Section 8.1 Reporting Requirements. The Borrower will furnish to the
Agent and each Lender:
(a) Annual Financial Statements. As soon as available, and in
any event within 90 days after the end of each fiscal year of the
Borrower, beginning with the fiscal year ending July 31, 1997, (i) a
copy of the annual audit report of the Borrower and its consolidated
Subsidiaries as of the end of and for such fiscal year then ended
containing, on a consolidated basis and with unaudited consolidating
schedules attached, balance sheets and statements of income, retained
earnings and cash flow, in each case setting forth in comparative form
the figures for the preceding fiscal year, all in reasonable detail and
audited and certified by Deloitte & Touche or other independent
certified public accountants of recognized standing acceptable to the
Agent and containing no qualification thereto except
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as may be reasonably acceptable to the Agent, to the effect that such
report has been prepared in accordance with GAAP and (ii) a certificate
of such independent certified public accountants to the Agent (A)
stating that to their knowledge no Default has occurred and is
continuing or, if in their opinion a Default has occurred and is
continuing, stating the nature thereof, and (B) confirming the
calculations set forth in the officer's certificate referred to in
Section 8.1(d) delivered concurrently therewith;
(b) Quarterly Financial Statements. As soon as available, and
in any event within 45 days after the end of each of the first, second
and third quarters of each fiscal year of the Borrower, beginning with
the fiscal quarter ending October 31, 1997, a copy of (i) an unaudited
financial report of the Borrower and its consolidated Subsidiaries as of
the end of such fiscal quarter and for the portion of the fiscal year
then ended containing, on a consolidated basis, balance sheets and
statements of income, retained earnings and cash flow, in each case
setting forth in comparative form the figures for the corresponding
period of the preceding fiscal year, all in reasonable detail certified
by a Responsible Officer of the Borrower to have been prepared in
accordance with GAAP and to fairly and accurately present (subject to
year-end audit adjustments) the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries, on a
consolidated basis, at the date and for the periods indicated therein,
and containing information regarding any guaranties and other contingent
Debt in detail consistent with the information regarding guaranties and
other contingent Debt contained in the Borrower's annual audit report,
and (ii) management's financial reports comparing actual financial
results for the period to the current budget for the period;
(c) Compliance Certificate. Concurrently with the delivery of
each of the financial statements referred to in Sections 8.1(a) and
8.1(b), a Compliance Certificate of a Responsible Officer of the
Borrower substantially in the form of Exhibit D hereto, appropriately
completed, (i) stating that, to the best of such officer's knowledge, no
Default has occurred and is continuing or, if a Default has occurred and
is continuing, stating the nature thereof and the action that has been
taken and is proposed to be taken with respect thereto, and (ii) showing
in reasonable detail the calculations demonstrating compliance with
Article 10;
(d) Applicable Margin and Applicable Commitment Fee Rate
Certificate. Concurrently with the delivery of each of the financial
statements referred to in Section 8.1(b) and within 45 days after the
end of the fourth quarter of each fiscal year of the Borrower, a
certificate of a Responsible Officer of the Borrower showing in
reasonable detail the calculation of the Applicable Margin and the
Applicable Commitment Fee Rate as of the next Calculation Date;
(e) Receivables Agings, Etc. As soon as available and in any
event within 45 days after the end of each fiscal quarter, and, in any
event from time to time upon the request of the Agent or the Required
Lenders, an aged trial balance of all then-existing Receivables and all
then-existing accounts payable of the Borrower and its Subsidiaries;
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(f) Budget. As soon as available and in any event before the
beginning of each fiscal year of the Borrower, a copy of the budget of
the Borrower and its Subsidiaries for such fiscal year (segregated by
fiscal quarter and setting forth all material assumptions);
(g) Management Letters. Promptly upon any request therefor by
the Agent or the Required Lenders, a copy of any management letter or
written report submitted to any Loan Party by independent certified
public accountants with respect to the business, condition (financial or
otherwise), operations, prospects or Properties of any such Person;
(h) Notice of Litigation. Promptly after the commencement
thereof, notice of all actions, suits and proceedings before any
Governmental Authority or arbitrator affecting any Loan Party which, if
determined adversely to any such Person, could have a Material Adverse
Effect;
(i) Notice of Default. As soon as possible and in any event
immediately upon (i) any Loan Party's knowledge of the occurrence of any
Default a written notice setting forth the details of such Default and
the action that such Loan Party has taken and proposes to take with
respect thereto and (ii) the failure of the Borrower to make any
required payment of principal, premium (if any), interest or other
payment of or with respect to any Subordinated Debt or the occurrence of
any other default or event of default with respect to any Subordinated
Debt, a written notice setting forth the details thereof and the action
that such Loan Party or the Borrower has taken or proposes to take with
respect thereto;
(j) ERISA and Canadian Plan Reports. Promptly after the
filing or receipt thereof, copies of all reports, including annual
reports, and notices which any Loan Party or any of its ERISA Affiliates
files with or receives from the PBGC or the U.S. Department of Labor
under ERISA or the PBGF or a Canadian Pension Authority under Canadian
Pension and Benefits Law; and as soon as possible and in any event
within five days after any such Person knows or has reason to know that
any Pension Plan or Canadian Pension Plan is insolvent, or that any
Reportable Event or Prohibited Transaction has occurred with respect to
any Plan or Multiemployer Plan, or that any tax or penalty could become
payable under Canadian Pension and Benefits Law with respect to any
Canadian Plan, or that the PBGC, any Canadian Pension Authority, any
Loan Party or any ERISA Affiliate has instituted or will institute
proceedings under ERISA or Canadian Pension and Benefits Law to
terminate or withdraw from or reorganize any Pension Plan or Canadian
Pension Plan, a certificate of a Responsible Officer of such Loan Party
setting forth the details as to such insolvency, withdrawal, Reportable
Event, Prohibited Transaction, tax or penalty or termination and the
action that such Loan Party has taken and proposes to take with respect
thereto;
(k) Reports to Other Creditors. Promptly after the furnishing
thereof, a copy of any statement or report furnished by any Loan Party
to any other party pursuant to the terms of any indenture, loan, stock
purchase or credit or similar agreement and not otherwise required to be
furnished to the Agent and the Lenders pursuant to any other subsection
of this Section 8.1;
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(l) Notice of Material Adverse Effect. Within five Business
Days after any Loan Party becomes aware thereof, written notice of any
matter that could reasonably be expected to have a Material Adverse
Effect;
(m) Proxy Statements, Etc. As soon as available, one copy of
each financial statement, report, notice or proxy statement sent by any
Loan Party to its stockholders generally and one copy of each regular,
periodic or special report, registration statement or prospectus filed
by any Loan Party with any securities exchange or the Securities and
Exchange Commission or any successor agency, and of all press releases
and other statements made by any of the Loan Parties to the public
containing material developments in its business;
(n) Notice of New Properties and Subsidiaries. Concurrently
with the delivery of each of the financial statements referred to in
Sections 8.1(a) and 8.1(b), notice of (i) any real Property acquired by
the Borrower or any of its Subsidiaries, (ii) any additional patents,
copyrights and trademarks of a material nature, and any other
Intellectual Property of a material nature of which the Agent should be
aware in order to ensure its Lien thereon, acquired by the Borrower or
any of its Subsidiaries, and (iii) the creation or acquisition of any
Subsidiary of Borrower or any of its Subsidiaries after the Closing Date
of which the Agent has not been previously informed in writing;
(o) Appraisals. From time to time if the Agent or any Lender
determines that such appraisals are required to comply with applicable
Governmental Requirements, appraisals of the real Properties of the
Borrower and its Subsidiaries reasonably satisfactory in form and
substance to the Agent (which appraisals shall be at the expense of the
Borrower except if and to the extent that such appraisals are required
on more than two occasions during any fiscal year of the Borrower),
together with any documents related to such appraisals as the Agent or
any Lender may reasonably request from time to time;
(p) Insurance. Within 60 days prior to the end of each fiscal
year of the Borrower, a report in form and substance reasonably
satisfactory to the Agent summarizing all material insurance coverage
maintained by the Borrower and its Subsidiaries as of the date of such
report and all material insurance coverage planned to be maintained by
such Persons in the subsequent fiscal year;
(q) Plan Information. From time to time, as reasonably
requested by the Agent or any Lender, such books, records and other
documents relating to any Pension Plan or Canadian Pension Plan as the
Agent or any Lender shall specify; prior to any termination, partial
termination or merger of a Pension Plan or Canadian Pension Plan
covering employees of any Loan Party or any ERISA Affiliate, or a
transfer of assets of a Pension Plan or Canadian Pension Plan covering
employees of any Loan Party or any ERISA Affiliate, written notification
thereof; promptly upon any Loan Party's receipt thereof, a copy of any
determination letter or advisory opinion regarding any Pension Plan or
Canadian Pension Plan received from any Governmental Authority and any
amendment or modification thereto as may be necessary as a condition to
obtaining a favorable determination letter or advisory opinion; and
promptly upon the occurrence thereof, written notification of any action
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requested by any Governmental Authority to be taken as a condition to
any such determination letter or advisory opinion;
(r) Environmental Assessments and Notices. Promptly after the
receipt thereof, a copy of each environmental assessment (including any
analysis relating thereto) prepared with respect to any real Property of
any Loan Party and each notice sent by any Governmental Authority
relating to any failure or alleged failure to comply with any
Environmental Law or any liability with respect thereto;
(s) Purchase Price Adjustment. Within five days after any
material post-closing adjustment to the purchase price is agreed to in
connection with any Acquisition, notification of such post-closing
adjustment to the purchase price agreed to in accordance with any such
Acquisition Agreement; and
(t) General Information. Promptly, such other information
concerning the Loan Parties and their respective Subsidiaries, the
creditworthiness of the Loan Parties and/or the Collateral as the Agent
or any Lender may from time to time reasonably request.
Section 8.2 Maintenance of Existence; Conduct of Business. Each of
the Loan Parties will, and will cause each of its Subsidiaries to, preserve and
maintain its corporate or other entity existence (except for mergers of
Subsidiaries permitted by Section 9.3) and all of its material leases,
privileges, licenses, Permits, franchises, qualifications, Intellectual
Property, intangible Property and rights that are necessary or appropriate in
the ordinary conduct of its business. Each of the Loan Parties will, and will
cause each of its Subsidiaries to, conduct its business in an orderly and
efficient manner in accordance with good business practices.
Section 8.3 Maintenance of Properties. Each of the Loan Parties will,
and will cause each of its Subsidiaries to, maintain, keep and preserve all of
its material Properties necessary or appropriate in the proper conduct of its
business in good repair, working order and condition (ordinary wear and tear
excepted) and make all necessary repairs, renewals, replacements, betterments
and improvements thereof.
Section 8.4 Taxes and Claims. Each of the Loan Parties will, and will
cause each of its Subsidiaries to, pay or discharge at or before maturity or
before becoming delinquent (a) all taxes, levies, assessments and governmental
charges imposed on it or its income or profits or any of its Property and (b)
all lawful claims for labor, material and supplies, which, if unpaid, might
become a Lien upon any of its Property; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to pay or discharge any
tax, levy, assessment or governmental charge or claim for labor, material or
supplies whose amount, applicability or validity is being contested in good
faith by appropriate proceedings being diligently pursued and for which
adequate reserves have been established under GAAP.
Section 8.5 Insurance. (a) Each of the Loan Parties will, and will
cause each of its Subsidiaries to, keep insured by financially sound and
reputable insurers all Property of a character usually insured by responsible
corporations engaged in the same or a similar business similarly situated
against loss or damage of the kinds and in the amounts customarily insured
against by such
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corporations or entities and carry such other insurance as is usually carried
by such corporations or entities, provided that in any event each of the
Borrower and its Subsidiaries (as appropriate) will maintain:
(i) Property Insurance -- Insurance against loss or damage covering
substantially all of the tangible real and personal Property and
improvements of the Borrower and each of its Subsidiaries by
reason of any Peril (as defined below) in such amounts (subject
to any deductibles as shall be reasonably satisfactory to the
Agent) as shall be reasonable and customary and sufficient to
avoid the insured named therein from becoming a co-insurer of any
loss under such policy, but in any event in such amounts as are
reasonably available as determined by the Borrower's independent
insurance broker reasonably acceptable to the Agent.
(ii) Automobile Liability Insurance for Bodily Injury and Property
Damage -- Insurance in respect of all vehicles (whether owned,
hired or rented by the Borrower or any of its Subsidiaries) at
any time located at, or used in connection with, its Properties
or operations against liabilities for bodily injury and Property
damage in such amounts as are then customary for vehicles used in
connection with similar Properties and businesses, but in any
event to the extent required by applicable law.
(iii) Comprehensive General Liability Insurance -- Insurance against
claims for bodily injury, death or Property damage occurring on,
in or about the Property (and adjoining streets, sidewalks and
waterways) of the Borrower and its Subsidiaries, in such amounts
as are then customary for Property similar in use in the
jurisdictions where such Properties are located.
(iv) Worker's Compensation Insurance -- Worker's compensation
insurance (including employers' liability insurance) to the
extent required by applicable law, which may be self-insurance to
the extent permitted by applicable law.
Such insurance shall be written by financially responsible companies selected
by the Borrower and having an A.M. Best Rating of "A-" or better and being in a
financial size category of "VI" or larger, or by other companies reasonably
acceptable to the Agent. Each policy referred to in this Section 8.5 shall
provide that it will not be canceled, amended or reduced except after not less
than 30 days' prior written notice to the Agent and shall also provide that the
interests of the Agent and the Lenders shall not be invalidated or reduced by
any act, omission or negligence of the Borrower or any of its Subsidiaries.
The Borrower will advise the Agent promptly of any policy cancellation,
reduction or amendment. For purposes hereof, the term "Peril" shall mean,
collectively, fire, lightning, flood, windstorm, hail, explosion, riot and
civil commotion, vandalism and malicious mischief, damage from aircraft,
vehicles and smoke and other perils covered by the "all-risk" endorsement then
in use in the jurisdictions where the Properties of the Borrower and its
Subsidiaries are located.
(b) The Borrower will cause each Insurance Recovery (other than any
portion of an Insurance Recovery payable to a landlord to repair or replace
Property leased by the Borrower or any of its Subsidiaries) payable by any
insurance company to be deposited promptly with the Agent as security for the
Obligations if a Default has then occurred and is continuing.
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(c) If a Default shall have occurred and be continuing, the Borrower
will cause all proceeds of insurance paid on account of the loss of or damage
to any Property of the Borrower or any of its Subsidiaries and all awards of
compensation for any Property of the Borrower or any of its Subsidiaries taken
by condemnation or eminent domain to be paid directly to the Agent to be
applied against or held as security for the Obligations, at the election of the
Agent and the Required Lenders.
Section 8.6 Inspection Rights. Each of the Loan Parties will, and
will cause each of its Subsidiaries to, permit representatives and agents of
the Agent and each Lender, during normal business hours and upon reasonable
notice to the Borrower, to examine, copy and make extracts from its books and
records, to visit and inspect its Properties and to discuss its business,
operations and financial condition with its officers and independent certified
public accountants. The Borrower will authorize its accountants in writing
(with a copy to the Agent) to comply with this Section 8.6. The Agent or its
representatives may, at any time and from time to time at the Borrower's
expense, conduct field exams for such purposes as the Agent may reasonably
request; provided, however, that, prior to the occurrence of a Default, no more
than three such field exams during any fiscal year shall be at the Borrower's
expense.
Section 8.7 Keeping Books and Records. Each of the Loan Parties will,
and will cause each of its Subsidiaries to, maintain appropriate books of
record and account in accordance with GAAP consistently applied in which true,
full and correct entries will be made of all their respective dealings and
business affairs. If any changes in accounting principles from those used in
the preparation of the financial statements referenced in Section 8.1 are
hereafter required or permitted by GAAP and are adopted by the Borrower or any
of its Subsidiaries with the concurrence of its independent certified public
accountants and such changes in GAAP result in a change in the method of
calculation or the interpretation of any of the financial covenants, standards
or terms found in Section 8.1 or Article 10 or any other provision of this
Agreement, the Borrower and the Required Lenders agree to amend any such
affected terms and provisions so as to reflect such changes in GAAP with the
result that the criteria for evaluating the Borrower's or such Subsidiaries'
financial condition shall be the same after such changes in GAAP as if such
changes in GAAP had not been made; provided that, until any necessary
amendments have been made, the certificate required to be delivered under
Section 8.1(c) hereof demonstrating compliance with Article 10 shall include
calculations setting forth the adjustments from the relevant items as shown in
the current financial statements based on the changes to GAAP to the
corresponding items based on GAAP as used in the financial statements
referenced in Section 7.2(a), in order to demonstrate how such financial
covenant compliance was derived from the current financial statements.
Section 8.8 Compliance with Laws. Each of the Loan Parties will, and
will cause each of its Subsidiaries to, comply with all applicable Governmental
Requirements, except for instances of noncompliance that could not have,
individually or in the aggregate, a Material Adverse Effect.
Section 8.9 Compliance with Agreements. Each of the Loan Parties
will, and will cause each of its Subsidiaries to, comply with all agreements,
documents and instruments binding on it or affecting its Properties or
business, except for instances of noncompliance that could not have,
individually or in the aggregate, a Material Adverse Effect. Each of the Loan
Parties will comply
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with all terms and provisions of the Subordinated Debt Documents which are
intended to benefit the holders of the Loans or any other senior Debt.
Section 8.10 Further Assurances. Each of the Loan Parties will, and
will cause each of its Subsidiaries to, execute and deliver such further
agreements, documents and instruments and take such further action as may be
requested by the Agent to carry out the provisions and purposes of this
Agreement and the other Loan Documents, to evidence the Obligations and to
create, preserve, maintain and perfect the Liens of the Agent for the benefit
of itself and the Lenders in and to the Collateral and the required priority of
such Liens.
Section 8.11 ERISA; Canadian Plans. Each of the Loan Parties will, and
will cause the Borrower and each of its ERISA Affiliates to, comply with all
minimum funding requirements and all other material requirements of ERISA and
Canadian Pension and Benefits Law, if applicable, so as not to give rise to any
liability thereunder.
Section 8.12 Trade Accounts Payable. Each of the Loan Parties will,
and will cause the Borrower and each of its Subsidiaries to, pay all trade
accounts payable before the same become more than 90 days past due, except (a)
trade accounts payable contested in good faith or (b) trade accounts payable in
an aggregate amount not to exceed at any time outstanding $250,000 and with
respect to which no proceeding to enforce collection has been commenced or, to
the knowledge of any Loan Party, threatened.
Section 8.13 Unified Cash Management System. If required by the Agent,
the Borrower and each of its Subsidiaries will maintain a unified cash
management system and will ensure, and will cause the Borrower and each of its
Subsidiaries to ensure, that all proceeds of all Collateral are (a) deposited
directly, as received, into a collection account of the Borrower or such
Subsidiary (as applicable) and (b) on a daily basis after such deposit,
transferred into a Concentration Account of the Borrower or such Subsidiary (as
applicable). If required by the Agent, each of the Loan Parties will maintain
in effect, and will cause each of its Subsidiaries to maintain in effect, an
agreement governing each of its collection accounts and its Concentration
Account in form and substance satisfactory to the Agent with a depository bank
satisfactory to the Agent.
Section 8.14 Indemnifications under Acquisition Documents. In the
event that, after the occurrence and during the continuation of a Default, the
Borrower or any of its Subsidiaries is or becomes aware of any material right
or claim (or probable right or claim) of indemnification in favor of it arising
under any of the Acquisition Documents which it does not intend to pursue
within reasonable promptness after it has become aware thereof, then (a) the
Borrower will promptly notify the Agent and the Lenders of such fact and the
basis of such right or claim in reasonable detail and (b) upon the request of
the Agent or the Required Lenders, the Borrower will execute and deliver and/or
cause its appropriate Subsidiary to execute and deliver (as applicable) a power
of attorney in form and substance reasonably satisfactory to the Agent pursuant
to which the Agent may, in the name of the Borrower or any of its Subsidiaries
(as applicable), take all actions that may be necessary or appropriate to
diligently pursue such right or claim.
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Section 8.15 Ownership of Subsidiaries. Except if and to the extent
that such Loan Parties are merged or wound-up as permitted by Section 9.3 of
this Agreement, (a) the Borrower shall at all times on and after the Closing
Date own all issued and outstanding Capital Stock of Dynamex Canada, Dynamex
East, Dynamex West and Road Runner, and (b) Dynamex Canada shall at all times
on and after the Closing Date own all issued and outstanding Capital Stock of
Parcelway B.C and Regina Mail.
Section 8.16 Interest Rate Protection Agreements. The Borrower shall,
commencing on or before September 1, 1997 and continuing through and including
the Maturity Date, maintain in full force and effect one or more Interest Rate
Protection Agreements reasonably satisfactory to the Agent with one or more of
the Lenders or with one or more other counter parties rated as specified in
Section 9.1(d) and otherwise reasonably acceptable to the Agent that enable the
Borrower to fix or place a limit upon the rate of interest payable with respect
to not less than an aggregate notional amount of 50% of the aggregate
outstanding principal amount of the Loans from time to time (the "required
notional amount"), provided, however, that the required notional amount shall
not be required to exceed $24,000,000 for the period from September 1, 1997,
through November 30, 1997, and, thereafter, shall not be required to be
increased from time to time except in connection with, and within 60 days
after, each increase in the aggregate outstanding principal amount of the Loans
by $10,000,000 or more (whether such increase occurs at a particular time or
over a period of time).
Section 8.17 Documentation relating to Future Acquisitions. The
Borrower will, and will cause each of its Subsidiaries to, as applicable,
execute and/or deliver (as applicable) to the Agent and the Lenders on or
before the date of the consummation of any Future Acquisition and, in the event
that any proceeds of any Loan are to be used or any Letter of Credit is to be
issued to finance the payment of any portion of the purchase price of any
Future Acquisition, on or before the date of the making of such Loan or the
issuance of such Letter of Credit, all of the following; provided, however,
that the Agent may agree to waive the execution or delivery of any of the
following for a period of 30 days or less:
(a) Certificate. A certificate executed by the Borrowers and
the Loan Parties (i) certifying that such Future Acquisition constitutes
a Permitted Acquisition (the "Subject Permitted Acquisition"), (ii)
demonstrating (with calculations attached in reasonable detail) pro
forma compliance with the financial covenants contained in Article 10 of
this Agreement, (iii) attaching a true and correct copy of all Permitted
Acquisition Documents relating to such Permitted Acquisition (the
"Subject Permitted Acquisition Documents"), (iv) certifying that all
representations and warranties of the Borrower and the other Loan
Parties (including, without limitation, the Acquired Entity being
acquired pursuant to such Permitted Acquisition (the "Subject Acquired
Entity")) contained in this Agreement and the other Loan Documents are
and shall continue to be true and correct as of the date of and of the
giving effect to the Subject Permitted Acquisition as if such
representations and warranties had been made on and as of such date, (v)
certifying that, both immediately prior to and immediately after giving
effect to such Permitted Acquisition, no Default has occurred and is
continuing, and (vi) if applicable, certifying as to the satisfaction of
all conditions precedent to the making of any Loan or the issuance of
any Letter of Credit made or to be
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made or issued or to be issued, respectively, to finance (in whole or in
part) or otherwise in connection with such Permitted Acquisition;
(b) Documents. All Loan Documents (fully executed, if
applicable) required to be executed and/or delivered by the Borrower
and/or any of its Subsidiaries (including, without limitation, each
Subject Acquired Entity), if any, in accordance with Sections 5.3 and
5.4 in connection with the Subject Permitted Acquisition and, with
respect to each Subject Acquired Entity, a Joinder Agreement executed by
such Acquired Entity;
(c) Resolutions. Resolutions of the Board of Directors of
each Subject Acquired Entity (if any) certified by its Secretary or an
Assistant Secretary which authorize the execution, delivery and
performance by such Acquired Entity of the Loan Documents to be executed
and/or delivered by it;
(d) Incumbency Certificate. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of each Loan Party
that is a party to any Loan Document to be executed in connection with
the Subject Permitted Acquisition (including, without limitation, each
Subject Acquired Entity), if any, certifying as to the name of each
officer of such Loan Party who is authorized to sign the Loan Documents
to be executed in connection with such Permitted Acquisition;
(e) Articles or Certificates of Incorporation, etc. With
respect to each Subject Acquired Entity (if any), copies of the articles
or certificate of incorporation or other applicable constitutional
document of such Loan Party, in each case certified by the appropriate
Governmental Authority of such Loan Party's jurisdiction of
incorporation or organization;
(f) Bylaws. With respect to each Subject Acquired Entity (if
any), a true and correct copy of the bylaws (if applicable) of such Loan
Party certified by the Secretary or an Assistant Secretary of such Loan
Party;
(g) Governmental Certificates. Certificates of appropriate
officials as to the existence and good standing of each Subject Acquired
Entity (if any) in the jurisdiction of its incorporation or
organization;
(h) Lien Releases. Payoff letters in form and substance
reasonably acceptable to the Agent or duly executed releases or
assignments of Liens and financing statements in recordable form as may
be necessary to reflect that the Liens created by the Security Documents
affecting the assets acquired in connection with the Subject Permitted
Acquisition are first priority Liens (except for Permitted Liens, if
any, which are expressly permitted by the Loan Documents to have
priority over the Liens in favor of the Agent);
(i) Lien Searches. Lien searches in the name of each Subject
Acquired Entity (in the case of an acquisition of Capital Stock) or in
the name of each Person transferring any assets being acquired (in the
case of an asset acquisition) pursuant to the Subject Permitted
Acquisition in each jurisdiction in which such Person maintains an
office or has Property,
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showing no financing statements or other Lien instruments of record
except for Permitted Liens or Liens being released concurrently with
such Permitted Acquisition;
(j) Regulatory Approvals. Copies of any and all filings,
consents or approvals with or of Governmental Authorities necessary to
consummate the Subject Permitted Acquisition, including, without
limitation, all filings, consents or approvals (if any) required under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the Investment
Canada Act (Canada) and the Competition Act (Canada), and evidence that
all waiting periods with respect thereto have lapsed;
(k) Financial Statements; No Material Adverse Effect or
Change. The financial statements (relating to the assets and/or Persons
to be acquired pursuant to the Subject Permitted Acquisition) delivered
or to be delivered pursuant to the Subject Permitted Acquisition
Documents, and such other financial statements, pro forma financial
statements and financial projections as of and for such periods as the
Agent may reasonably request;
(l) Legal Opinions. Favorable opinions of counsel for the
Loan Parties, in form and substance satisfactory to the Agent, with
respect to the Subject Permitted Acquisition and the Loan Documents to
be executed and/or delivered in connection therewith;
(m) Reliance Letters. Copies of all legal opinions (if any)
issued in connection with the Subject Permitted Acquisition and (except
if and to the extent that the Loan Parties are not able to obtain such
letters after exercising their reasonable efforts to do so) letters from
counsel that issued such opinions stating that such opinions may be
relied upon by the Agent and the Lenders; and
(n) Other Documents. Such other agreements, documents,
instruments and certificates as the Agent may reasonably request.
ARTICLE 9
Negative Covenants
Each of the Borrower and each of its Subsidiaries jointly and severally
covenants and agrees that, as long as the Obligations or any part thereof are
outstanding or any Lender has any Commitment hereunder or any Letter of Credit
remains outstanding, it will perform and observe, or cause to be performed and
observed, the following covenants:
Section 9.1 Debt. Each of the Loan Parties will not, and will not
permit or any of its Subsidiaries to, incur, create, assume or permit to exist
any Debt, except:
(a) Debt of the Borrower and its Subsidiaries to the Lenders
pursuant to the Loan Documents;
(b) Permitted Subordinated Debt;
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(c) intercompany Debt between or among the Borrower and any of
its Wholly-Owned Subsidiaries incurred in the ordinary course of
business (including, without limitation, Debt owed by the Wholly-Owned
Subsidiaries of the Borrower to the Borrower in connection with loans of
proceeds of the Loans made by the Borrower to such Subsidiaries, the
proceeds of which loans are used for the purposes permitted by Section
2.10), subject to the following requirements: any and all of the Debt
permitted pursuant to this Section 9.1(c) shall be unsecured, shall be
evidenced by instruments satisfactory to the Agent which will be pledged
to the Agent for the benefit of the Agent and the Lenders and shall be
subordinated to the Obligations pursuant to a subordination agreement in
form and substance satisfactory to the Agent, provided, however, that
temporary advances made from time to time in the ordinary course of
business not to exceed $100,000 in aggregate principal amount at any
time owing by any Wholly-Owned Subsidiary of the Borrower to the
Borrower shall not be required to be so evidenced, pledged or
subordinated;
(d) unsecured Debt arising under, created by and consisting of
Interest Rate Protection Agreements and/or Currency Hedge Agreements not
to exceed in aggregate notional amount the aggregate principal amount of
the Commitments in effect from time to time (and, in any event, not less
than the amount required by this Agreement), provided that each counter
party shall be a Lender or shall be rated in one of the two highest
rating categories of Standard and Poors Corporation or Moody's Investors
Service, Inc.;
(e) (i) existing Debt described on Schedule 7.10 hereto and
renewals, extensions or refinancings of such Debt which do not increase
the outstanding principal amount of such Debt and the terms and
provisions of which are not materially more onerous than the terms and
conditions of such Debt on the Closing Date, (ii) purchase money Debt
secured by purchase money Liens, which Debt and Liens are permitted
under and meet all of the requirements of clause (g) of the definition
of Permitted Liens contained in Section 1.1, and (iii) additional
unsecured Debt; provided, however, that the aggregate principal amount
of the Debt referred to in this Section 9.1(e) shall not exceed
$5,000,000 in aggregate amount at any time outstanding; and
(f) liabilities of the Loan Parties in respect of unfunded
vested benefits under any Plan if and to the extent that the existence
of such liabilities will not constitute, cause or result in a Default.
Section 9.2 Limitation on Liens. Each of the Loan Parties will not,
and will not permit any of its Subsidiaries to, incur, create, assume or permit
to exist any Lien upon any of its Property or revenues, whether now owned or
hereafter acquired, except Permitted Liens. With respect to the Capital Stock
of Dynamex Canada and the other Canadian Subsidiaries (or portion thereof, as
applicable) which is not required to be pledged as security for the
Obligations, the Loan Parties will, if requested by the Agent, cause an
appropriate legend, in form and substance satisfactory to the Agent, to be
placed on the stock certificates evidencing such Capital Stock which shall
evidence the Lien prohibitions contained in this Section 9.2.
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Section 9.3 Mergers, Etc. Each of the Loan Parties will not, and will
not permit any of its Subsidiaries to, (a) become a party to a merger,
consolidation, amalgamation or wind-up (b) wind-up, dissolve or liquidate
itself, or (c) purchase or acquire all or a material or substantial part of the
Capital Stock or business or Properties of any Person (other than pursuant to
the Prior Acquisitions); provided, however, that:
(i) any Subsidiary of the Borrower may merge with or wind-
up into the Borrower or a Wholly-Owned Subsidiary of the Borrower
if (but only if) (A) the Borrower or such Wholly-Owned
Subsidiary, respectively, is the surviving entity in such merger
or wind-up, (B) the surviving entity in such merger or wind-up,
if a Wholly-Owned Subsidiary of the Borrower, shall be
incorporated or organized in a state of the U.S. unless all non-
surviving entities in such merger or wind-up are not incorporated
or organized in a state of the U.S., (C) at the time of such
merger or wind-up, each of the Subsidiaries of the Borrower which
are parties to such merger or wind-up is Solvent, and (D) no
Default exists at the time of such merger or wind-up or would
result therefrom; and
(ii) the Borrower and its Wholly-Owned Subsidiaries may,
subject to compliance with the requirements of this Agreement
(including, without limitation, Sections 5.3, 5.4 and 8.17), make
or consummate Permitted Acquisitions;
provided, however, that no Permitted Acquisitions may be made if a Default
exists at the time of such Permitted Acquisition or would result therefrom.
Section 9.4 Restricted Payments. Each of the Loan Parties will not,
and will not permit any of its Subsidiaries to, make any Restricted Payments,
except:
(a) subject to the subordination provisions relating thereto,
(i) the Borrower may make regularly scheduled payments of interest
accrued on any Permitted Subordinated Debt and may pay principal of
Permitted Subordinated Debt if and to the extent (but only if and to the
extent) permitted by the express terms of the Subordinated Debt
Documents governing such Permitted Subordinated Debt, which terms have
been expressly approved in writing by the Agent and (ii) Subsidiaries
of the Borrower may make payments of principal and interest accrued on
subordinated intercompany Debt which is permitted to be incurred in
accordance with Section 9.1(c) if and to the extent (but only if and to
the extent) that such payments are permitted by the terms of the
documents governing such subordinated intercompany Debt, which terms
have been expressly approved in writing by the Agent;
(b) Subsidiaries of the Borrower owned by the Borrower may
declare and pay dividends to the Borrower to the extent permitted by
applicable law;
(c) Subsidiaries of the Borrower owned by Subsidiaries of the
Borrower may declare and pay dividends to their parent Subsidiaries to
the extent permitted by applicable law;
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(d) the Borrower may purchase shares of Dynamex Common Stock
from employees of the Borrower or its Subsidiaries upon the termination
of the employment of such employees, provided that the amount paid
therefor shall not exceed the fair market value of such shares to be
purchased and shall not exceed $100,000 in the aggregate during any
fiscal year;
(e) the Borrower may declare and pay dividends to its
shareholders during any fiscal year in an aggregate amount not to exceed
25% of Net Income during the immediately preceding fiscal year; and
(f) the Borrower and its Subsidiaries may make Loans to any
officer, director or shareholder of the Borrower or any of its
Subsidiaries (other than a shareholder consisting of the Borrower or a
Subsidiary of the Borrower) which, when aggregated with all such other
loans, do not exceed $200,000 in aggregate amount at any time
outstanding;
provided, however, that no Restricted Payments may be made pursuant to clauses
(a), (d) or (e) preceding if a Default exists at the time of such Restricted
Payment or would result therefrom.
Section 9.5 Investments. Each of the Loan Parties will not, and will
not permit any of its Subsidiaries to, make or permit to remain outstanding any
advance, loan, extension of credit or capital contribution to or investment in
any Person, or purchase or own any stock, bonds, notes, debentures or other
securities of any Person, or be or become a joint venturer with or partner of
any Person (all such transactions being herein called "Investments"), except:
(a) Investments in obligations or securities received in
settlement of debts (created in the ordinary course of business) owing
to the Borrower or any of its Subsidiaries;
(b) existing Investments identified on Schedule 9.5 hereto;
(c) Investments in securities issued or guaranteed by the U.S.
or, with respect to the Canadian Subsidiaries, Canada or any agency
thereof with maturities of one year or less from the date of
acquisition;
(d) Investments in certificates of deposit and Eurodollar time
deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six
months and overnight bank deposits, in each case with any Lender or with
any domestic commercial bank having capital and surplus in excess of
$500,000,000;
(e) Investments in repurchase obligations with a term of not
more than seven days for securities of the types described in clause (c)
preceding with any Lender or with any domestic commercial bank having
capital and surplus in excess of $500,000,000;
(f) Investments in commercial paper of a domestic issuer rated
A-1 or better or P-1 or better by Standard & Poor's Corporation or
Moody's Investors Services, Inc., respectively, maturing not more than
six months from the date of acquisition;
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(g) (i) Investments (other than Intercompany Debt referred to
in clause (h) below) by a Loan Party in its Subsidiaries existing on the
Closing Date and (ii) additional Investments by a Loan Party in its
Subsidiaries made after the Closing Date in an aggregate amount, as to
each such Borrower, not to exceed $1,000,000 at any time outstanding,
exclusive of Investments resulting from purchases and acquisitions
permitted pursuant to clause (ii) of Section 9.3; provided, however,
that the aggregate amount of Investments that may be made after the
Closing Date in Dynamex Canada or any of its Subsidiaries or in any
other non-U.S. Subsidiary of the Borrower shall not exceed $500,000;
(h) Intercompany Debt permitted pursuant to Section 9.1(e);
(i) Investments by the Borrower or its Subsidiary in companies
whose Capital Stock or assets are proposed to be purchased or acquired
by the Borrower or such Subsidiary in accordance with clause (ii) of
Section 9.3 not to exceed $500,000 in aggregate amount during any fiscal
year; provided, however, that the Borrower shall promptly notify the
Agent of any such Investment exceeding $100,000 in aggregate amount; and
(j) Investments by the Borrower or its Wholly-Owned
Subsidiaries resulting from purchases and acquisitions permitted
pursuant to clause (ii) of Section 9.3;
provided, however, that no Investments may be made by any Loan Party pursuant
to clauses (g), (h), (i) or (j) preceding if a Default exists at the time of
such Investment or would result therefrom.
Section 9.6 Limitation on Issuance of Capital Stock of Subsidiaries.
Each of the Loan Parties will not permit any of the Subsidiaries of the
Borrower to at any time issue, sell, assign or otherwise dispose of (a) any of
its Capital Stock, (b) any securities exchangeable for or convertible into or
carrying any rights to acquire any of its Capital Stock, or (c) any option,
warrant or other right to acquire any of its Capital Stock; provided, however,
that, if and to the extent not otherwise prohibited by this Agreement or the
other Loan Documents (i) a Subsidiary of the Borrower may issue additional
shares of its Capital Stock to the Borrower for full and fair consideration and
(ii) any Subsidiary of a Subsidiary of the Borrower may issue additional shares
of its Capital Stock to such parent Subsidiary or another Subsidiary of the
Borrower if and to the extent that the percentage ownership of such Capital
Stock owned by the owners thereof as of the Closing Date does not change;
provided, further, however, that, except to the extent not required in
accordance with Sections 5.1 and 5.3 with respect to Capital Stock issued by
any Canadian Subsidiary, all of such additional shares of Capital Stock
referred to in clauses (i) and (ii) preceding shall be pledged to the Agent, on
behalf of the Agent and the Lenders, as security for the Obligations pursuant
to a pledge agreement in form and substance reasonably satisfactory to the
Agent.
Section 9.7 Transactions with Affiliates. Except for (a) the payment
of salaries in the ordinary course of business consistent with prudent business
practices and (b) the furnishing of employment benefits in the ordinary course
of business consistent with prudent business practices, each of the Loan
Parties will not, and will not permit any of its Subsidiaries to, enter into
any transaction, including, without limitation, the purchase, sale or exchange
of Property or the rendering of any service, with any Affiliate of such Loan
Party or such Subsidiary except in the ordinary course of and pursuant to the
reasonable requirements of such Loan Party's or such Subsidiary's business
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and upon fair and reasonable terms no less favorable to such Loan Party or such
Subsidiary, respectively, than would be obtained in a comparable arms-length
transaction with a Person not an Affiliate of such Loan Party or such
Subsidiary, respectively.
Section 9.8 Disposition of Property. Each of the Loan Parties will
not, and will not permit any of its Subsidiaries to, sell, lease, assign,
transfer or otherwise dispose of any of its Property, except:
(a) dispositions of Inventory in the ordinary course of
business;
(b) Asset Dispositions of Property, other than accounts and
Receivables, by the Borrower and its Subsidiaries to Persons other than
the Borrower and its Subsidiaries made in the ordinary course of
business if each of the following conditions have been satisfied: (i)
the Net Proceeds from any single Asset Disposition or series of related
Asset Dispositions in any fiscal year of the Borrower do not exceed
$250,000 and the cumulative Net Proceeds from all Asset Dispositions do
not exceed $1,000,000, (ii) the Borrower or its Subsidiary (as
applicable) receives fair consideration for such assets, and (iii) no
Default exists at the time of or will result from such Asset
Disposition;
(c) Asset Dispositions of Property, other than accounts and
Receivables, by the Borrower and its Subsidiaries to any Wholly-Owned
Subsidiary of the Borrower if each of the following conditions have been
satisfied: (i) the aggregate fair market value of the assets sold,
disposed of or otherwise transferred by the Borrower and its
Subsidiaries and transferred to a Wholly-Owned Subsidiary of the
Borrower shall not exceed $250,000 in aggregate amount during any fiscal
year, exclusive of assets acquired pursuant to purchases and
acquisitions permitted pursuant to clause (ii) of Section 9.3 which are
transferred by the purchaser of such assets to the Borrower or any
Wholly-Owned Subsidiary of the Borrower, (ii) the assets sold, disposed
of or otherwise transferred to a Wholly-Owned Subsidiary of the Borrower
shall continue to be subject to a perfected, first priority Lien (except
for Permitted Liens, if any, which are expressly permitted by the Loan
Documents to have priority over the Liens in favor of the Agent) in
favor of the Agent and the Lenders, and (iii) no Default exists at the
time of or will result from such Asset Disposition; and
(d) dispositions of Property, other than accounts and
Receivables, no longer used or useful in the ordinary course of
business.
Section 9.9 Sale and Leaseback. Each of the Loan Parties will not,
and will not permit any of its Subsidiaries to, enter into any arrangement with
any Person pursuant to which it leases from such Person real or personal
Property that has been or is to be sold or transferred, directly or indirectly,
by it to such Person.
Section 9.10 Lines of Business. Each of the Loan Parties will not, and
will not permit any of its Subsidiaries to, (a) engage in any line or lines of
business activity other than the businesses in which they are engaged on the
Closing Date and lines of business reasonably related thereto or (b)
discontinue any line or lines of business which provide material revenues to
the Borrower (on a consolidated basis) in which they are engaged on the Closing
Date.
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Section 9.11 Environmental Protection. Each of the Loan Parties will
not, and will not permit any of its Subsidiaries to, (a) use (or permit any
tenant to use) any of its Properties for the handling, processing, storage,
transportation or disposal of any Hazardous Material except in compliance with
applicable Environmental Laws, (b) generate any Hazardous Material except in
compliance with applicable Environmental Laws, (c) conduct any activity that is
likely to cause a Release or threatened Release of any Hazardous Material in
violation of any Environmental Law, or (d) otherwise conduct any activity or
use any of its Properties in any manner, that violates or is likely to violate
any Environmental Law or create any Environmental Liabilities for which the
Borrower or any of its Subsidiaries would be responsible, except for
circumstances or events described in clauses (a) through (d) preceding that
could not, individually or in the aggregate, have a Material Adverse Effect.
Section 9.12 Intercompany Transactions. Except as may be expressly
permitted or required by the Loan Documents, each of the Loan Parties will not,
and will not permit any of its Subsidiaries to, create or otherwise cause or
permit to exist or become effective any consensual encumbrance or restriction
of any kind on the ability of the Borrower or any Subsidiary to (a) pay
dividends or make any other distribution to the Borrower or any of its
Subsidiaries in respect of such Subsidiary's Capital Stock or with respect to
any other interest or participation in, or measured by, its profits, (b) pay
any indebtedness owed to the Borrower or any of its Subsidiaries, (c) make any
loan or advance to the Borrower or any of its Subsidiaries, (d) participate in
the Unified Cash Management System, (e) sell, lease or transfer any of its
Property to the Borrower or any of its Subsidiaries, or (f) grant any Lien on
any of its Properties.
Section 9.13 Modification of Other Agreements. Each of the Loan
Parties will not, and will not permit any of its Subsidiaries to, consent to or
implement any termination, amendment, modification, supplement or waiver of (a)
the Acquisition Documents, (b) the certificate or articles of incorporation or
bylaws (or analogous constitutional documents) of the Borrower or any of its
Subsidiaries, (c) any Subordinated Debt Documents or (d) any other Material
Contract to which it is a party or any Permit which it possesses; provided,
however, that the Borrower and its Subsidiaries may amend or modify (i) the
documents referred to in clause (b) preceding if and to the extent that such
amendment or modification is not substantive or material and could not be
adverse to the Agent or the Lenders and (ii) the Material Contracts referred to
in clause (d) preceding if and to the extent that such amendment or
modification could not reasonably be expected to be materially adverse to the
Borrower and its Subsidiaries or the Agent and the Lenders.
Section 9.14 Bank Accounts. Each of the Loan Parties will not, and
will not permit any of its Subsidiaries to, create or maintain any bank
accounts other than those listed on Schedule 7.23 hereto or consented to in
writing by the Agent, which consent shall not be unreasonably withheld.
Section 9.15 ERISA and Canadian Plans. Each of the Loan Parties will
not, and will not permit any of its Subsidiaries to:
(a) allow, or take (or permit any ERISA Affiliate to take) any
action which would cause, any unfunded or unreserved liability for
benefits under any Plan (exclusive of any Multiemployer Plan) or
Canadian Plan to exist or to be created that exceeds $250,000 with
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respect to any such Plan or $500,000 with respect to all such Plans or
Canadian Plans in the aggregate on either a going concern or a wind-up
basis; or
(b) with respect to any Multiemployer Plan, allow, or take (or
permit any ERISA Affiliate to take) any action which would cause, any
unfunded or unreserved liability for benefits under any Multiemployer
Plan to exist or to be created, either individually as to any such Plan
or in the aggregate as to all such Plans, that could, upon any partial
or complete withdrawal from or termination of any such Multiemployer
Plan or Plans, have a Material Adverse Effect.
ARTICLE 10
Financial Covenants
Each of the Borrower and each of its Subsidiaries jointly and severally
covenants and agrees that, as long as the Obligations or any part thereof are
outstanding or any Lender has any Commitment hereunder or any Letter of Credit
remains outstanding, it will perform and observe, or cause to be performed and
observed, the following covenants:
Section 10.1 Maximum Ratio of Total Debt to EBITDA. The Borrower and
its consolidated Subsidiaries will not permit the ratio, calculated as of the
end of each fiscal quarter of the Borrower commencing with the fiscal quarter
ended April 30, 1997, and in accordance with Section 1.4, of (i) Total Debt to
(ii) EBITDA for the four fiscal quarters of the Borrower then ended to be
greater than the ratio set forth below for the applicable fiscal quarter end:
--------------------------------------------------------
Fiscal Quarter Ended Maximum Ratio
-------------------- -------------
--------------------------------------------------------
April 30, 1997, July 31,
1997, October 31, 1997,
January 31, 1998 and 3.25 to 1.00
April 30, 1998
--------------------------------------------------------
July 31, 1998 and each
fiscal quarter end 3.00 to 1.00
thereafter
--------------------------------------------------------
Section 10.2 Minimum Net Worth. The Borrower and its consolidated
Subsidiaries will at all times maintain Net Worth in an amount equal to not
less than the sum of (a) $33,000,000 plus (b) 75% of cumulative Net Income, if
positive for any fiscal quarter (i.e., exclusive of any negative Net Income for
any fiscal quarter), for any fiscal quarter commencing after April 30, 1997,
plus (c) all Net Proceeds of each Equity Issuance which occurs after April 30,
1997.
Section 10.3 Minimum Fixed Charge Coverage Ratio. The Borrower and its
consolidated Subsidiaries will not permit the Fixed Charge Coverage Ratio,
calculated as of the end of each fiscal quarter of the Borrower commencing with
the fiscal quarter ended April 30, 1997, and in accordance with Section 1.4,
for the four fiscal quarters of the Borrower then ended to be less than the
ratio set forth below for the applicable fiscal quarter end:
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--------------------------------------------------------
Fiscal Quarter Ended Minimum Ratio
-------------------- -------------
--------------------------------------------------------
April 30, 1997, July 31,
1997, October 31, 1997, 1.50 to 1.00
January 31, 1998 and
April 30, 1998
--------------------------------------------------------
July 31, 1998 and
each fiscal quarter end
thereafter 1.65 to 1.00
--------------------------------------------------------
Section 10.4 Capital Expenditures. The Borrower and its Subsidiaries
will not permit the aggregate Capital Expenditures of the Borrower and its
Subsidiaries during any fiscal year (exclusive of any purchase or acquisition
of Capital Stock or assets permitted by clause (ii) of Section 9.3) to exceed
$2,000,000.
ARTICLE 11
Default
Section 11.1 Events of Default. Each of the following shall be deemed
an "Event of Default":
(a) (i) The Borrower shall fail to pay, repay or prepay when
due any amount of principal or interest owing to the Agent or any Lender
pursuant to this Agreement or any other Loan Document, or (ii) any Loan
Party shall fail to pay within five days after the due date thereof any
fee, expense, Reimbursement Obligation or other amount (other than
principal or interest) or other Obligation (other than principal or
interest) owing to the Agent or any Lender pursuant to this Agreement or
any other Loan Document.
(b) Any representation or warranty made or deemed made by or
on behalf of the Borrower or any of its Subsidiaries or by any Loan
Party in any Loan Document or in any certificate, report, notice or
financial statement furnished at any time in connection with this
Agreement or any other Loan Document shall be false, misleading or
erroneous in any material respect when made or deemed to have been made.
(c) The Borrower or any of its Subsidiaries shall fail to
perform, observe or comply with any covenant, agreement or term
contained in Sections 5.1, 5.2, 8.1(i), 8.1(l), 8.2 (other than the last
sentence of Section 8.2), 8.6, 8.7, 8.8, 8.9 or 8.10, Article 9 or
Article 10 of this Agreement; the Borrower or any of its Subsidiaries
shall fail to perform, observe or comply with any covenant, agreement or
term contained in Sections 5.3, 8.1 (other than Sections 8.1(i) or
8.1(l)), 8.4, 8.5, 8.13 or 8.14 and such failure is not remedied or
waived within ten days after such failure commenced; the Borrower or any
of its Subsidiaries shall fail to perform, observe or comply with any
covenant, agreement or term contained in any Security Agreement, subject
to any (if any) grace period applicable to such covenant, agreement or
term contained in such Security Agreement; any Guarantor shall fail to
perform, observe or comply with any covenant, agreement or term
contained in its Guaranty,
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subject to any (if any) grace period applicable to such covenant,
agreement or term in this Agreement to the extent this Agreement is
incorporated therein by reference; or any Loan Party shall fail to
perform, observe or comply with any other covenant, agreement or term
contained in this Agreement or any other Loan Document (other than
covenants to pay the Obligations) and such failure is not remedied or
waived within the earlier to occur of 30 days after such failure
commenced or, if a different grace period is expressly made applicable
in such other Loan Documents, such applicable grace period.
(d) Any of the Loan Parties ceases to be Solvent or shall
admit in writing its inability to, or be generally unable to, pay its
debts as such debts become due.
(e) Any Loan Party shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee, examiner, liquidator, administrator or the like of itself or of
all or any substantial part of its Property, (ii) admit in writing its
inability to, or be generally unable to, pay its debts as such debts
become due, subject to any applicable grace periods, (iii) make a
general assignment for the benefit of its creditors, (iv) commence a
voluntary case under the United States Bankruptcy Code or the Bankruptcy
and Insolvency Act (Canada) (individually and collectively, as now or
hereafter in effect, the "Bankruptcy Code"), (v) institute any
proceeding or file a petition seeking to take advantage of any other law
providing for the relief of debtors or relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution, arrangement or
winding-up or composition or readjustment of debts, (vi) fail to
controvert in a timely and appropriate manner, or acquiesce in writing
to, any petition filed against it in an involuntary case under the
Bankruptcy Code, or (vii) take any corporate or other action for the
purpose of effecting any of the foregoing.
(f) A proceeding or case shall be commenced, without the
application, approval or consent of any of the Loan Parties, in any
court of competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution, arrangement or winding-up, or the composition
or readjustment of its debts, (ii) the appointment of a receiver,
custodian, trustee, examiner, liquidator, administrator or the like of
any of the Loan Parties or of all or any substantial part of its
Property, or (iii) similar relief in respect of any of the Loan Parties
under any law providing for the relief of debtors or relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up or composition or readjustment of debts, and
such proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of 60 or more
days; or an order for relief against any of the Loan Parties shall be
entered in an involuntary case under the Bankruptcy Code.
(g) Any of the Loan Parties shall fail to discharge within a
period of 30 days after the commencement thereof any attachment,
sequestration, forfeiture or similar proceeding or proceedings involving
an aggregate amount in excess of $250,000 against any of its Properties.
(h) A final judgment or judgments for the payment of money in
excess of $250,000 in the aggregate shall be rendered by a court or
courts against the Loan Parties or any of them on claims not covered by
insurance or as to which the insurance carrier has
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denied responsibility and the same shall not be discharged or bonded, or
a stay of execution thereof shall not be procured, within five days from
the date of entry thereof and the Loan Parties shall not, within said
period of five days, or such longer period during which execution of the
same shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal.
(i) Any of the Loan Parties shall fail to pay when due any
principal of or interest on any Debt (other than the Obligations) having
(either individually or in the aggregate) a principal amount of at least
$500,000, or the maturity of any such Debt shall have been accelerated,
or any such Debt shall have been required to be prepaid prior to the
stated maturity thereof, or any event shall have occurred (and shall not
have been waived or otherwise cured) that permits (or, with the giving
of notice or lapse of time or both, would permit) any holder or holders
of such Debt or any Person acting on behalf of such holder or holders to
accelerate the maturity thereof or require any such prepayment.
(j) This Agreement or any other Loan Document shall cease to
be in full force and effect or shall be declared null and void or the
validity or enforceability thereof shall be contested or challenged by
any Loan Party or any of its shareholders, or any Loan Party shall deny
that it has any further liability or obligation under any of the Loan
Documents, or any Lien created or purported to be created by the Loan
Documents shall for any reason cease to be or fail to be a valid, first
priority perfected Lien (except for Permitted Liens, if any, which are
expressly permitted by the Loan Documents to have priority over the
Liens in favor of the Agent) upon any of the Collateral purported to be
covered thereby.
(k) Any of the following events shall occur or exist with
respect to any Loan Party or any ERISA Affiliate: (i) any Prohibited
Transaction involving any Plan or any event or investment which could
reasonably be expected to render any Loan Party, Canadian Plan or
funding agent thereof liable for any tax or penalty under Canadian
Pension and Benefits Law; (ii) any Reportable Event with respect to any
Pension Plan; (iii) the filing under Section 4041 of ERISA or under
Canadian Pension and Benefits Law of a notice of intent to terminate any
Pension Plan or Canadian Pension Plan or the termination of any Pension
Plan or Canadian Pension Plan; (iv) any event or circumstance that could
reasonably be expected to constitute grounds entitling the PBGC or a
Canadian Pension Authority under Canadian Pension and Benefits Law to
institute proceedings under Section 4042 of ERISA or under Canadian
Pension and Benefits Law for the termination of, or for the appointment
of a trustee to administer, any Pension Plan or Canadian Pension Plan,
or the institution by the PBGC or a Canadian Pension Authority under
Canadian Pension and Benefits Law of any such proceedings; (v) any
"accumulated funding deficiency" (as defined in Section 406 of ERISA or
Section 412 of the Code), whether or not waived, shall exist with
respect to any Plan; or (vi) complete or partial withdrawal under
Section 4201 or 4204 of ERISA from a Plan or the reorganization,
insolvency or termination of any Pension Plan or Canadian Pension Plan;
and in each case above, such event or condition, together with all other
events or conditions, if any, have subjected or could in the reasonable
opinion of Required Lenders subject any Loan Party or any ERISA
Affiliate to any tax, penalty or other liability to a Plan, a
Multiemployer Plan, the PBGC, a Canadian Plan, the PBGF or otherwise (or
any combination thereof) which in the aggregate exceed or could
reasonably be expected to exceed $500,000.
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(l) If, at any time, the subordination provisions of any of
the Subordinated Debt Documents shall be invalidated or shall otherwise
cease to be in full force and effect.
(m) The occurrence of (i) a default under (including, without
limitation, a "Default" as such term is used or defined in) any
Subordinated Debt Document, unless (A) such default has been waived,
cured or consented to in accordance with such documents, (B) such
default is not a payment default, (C) the maturity of the Debt affected
thereby has not been accelerated, (D) a blockage under such Subordinated
Debt Document has not been invoked, and (E) such waiver or consent is
not made in connection with any amendment or modification of any such
Subordinated Debt Documents or in connection with any payment to the
holders of any Subordinated Debt, (ii) a payment default under
(including, without limitation, a payment "Default" as such term is used
or defined in) any Subordinated Debt Document, (iii) an event of
default under (including, without limitation, an "Event of Default" as
such term is used or defined in) any Subordinated Debt Document, or (iv)
any acceleration of the maturity of any Subordinated Debt.
(n) If, at any time, any event or circumstance shall occur
which gives any holder of any Subordinated Debt the right to request or
require the Borrower or any of its Subsidiaries to redeem, purchase or
prepay any Subordinated Debt.
(o) The occurrence of any Material Adverse Effect.
(p) Richard K. McClelland shall cease to be the chief
executive officer of the Borrower and shall not be promptly replaced in
such capacity by an individual acceptable to the Required Lenders.
(q) The occurrence of any Change of Control.
Section 11.2 Remedies. If any Event of Default shall occur and be
continuing, the Agent may and, if directed by the Required Lenders, the Agent
shall do any one or more of the following:
(a) Acceleration. Declare all outstanding principal of and
accrued and unpaid interest on the Loans and all other amounts payable
by any Loan Party under the Loan Documents immediately due and payable,
and the same shall thereupon become immediately due and payable, without
notice, demand, presentment, notice of dishonor, notice of acceleration,
notice of intent to accelerate, protest or other formalities of any
kind, all of which are hereby expressly waived by the Loan Parties;
(b) Termination of Commitments. Terminate the Commitments
(including, without limitation, any obligation of the Issuing Bank to
issue Letters of Credit) without notice to the Borrowers or any other
Loan Party;
(c) Judgment. Reduce any claim to judgment;
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(d) Foreclosure. Foreclose or otherwise enforce any Lien
granted to the Agent for the benefit of the Agent and the Lenders to
secure payment and performance of the Obligations in accordance with the
terms of the Loan Documents; or
(e) Rights. Exercise any and all rights and remedies afforded
by the laws of the State of Texas, Canada or any other jurisdiction, by
any of the Loan Documents, by equity or otherwise;
provided, however, that (i) upon the occurrence of an Event of Default under
Section 11.1(e) or Section 11.1(f), the Commitments of all of the Lenders
(including, without limitation, any obligation of the Issuing Bank to issue
Letters of Credit) shall immediately and automatically terminate, and the
outstanding principal of and accrued and unpaid interest on the Loans and all
other amounts payable by the Loan Parties under the Loan Documents shall
thereupon become immediately and automatically due and payable, and (ii) upon
the occurrence of an Event of Default under clause (iv) of Section 11.1(m) or
under Section 11.1(n), the outstanding principal of and accrued and unpaid
interest on the Loans and all other amounts payable by the Loan Parties under
the Loan Documents shall thereupon become immediately and automatically due and
payable, all (with respect to each of clause (i) and (ii) preceding) without
notice, demand, presentment, notice of dishonor, notice of acceleration, notice
of intent to accelerate, protest or other formalities of any kind, all of which
are hereby expressly waived by the Loan Parties.
Section 11.3 Performance by the Agent. If any Loan Party shall fail to
perform any covenant or agreement in accordance with the terms of the Loan
Documents, the Agent may, at the direction of the Required Lenders, perform or
attempt to perform, or may cause any Lender (with the consent of such Lender)
to perform or attempt to perform, such covenant or agreement on behalf of such
Loan Party. In such event, the Borrower shall, at the request of the Agent,
promptly pay any amount expended by the Agent or the Lenders in connection with
such performance or attempted performance to the Agent at the Principal Office,
together with interest thereon at the applicable Default Rate from and
including the date of such expenditure to but excluding the date such
expenditure is paid in full. Notwithstanding the foregoing, it is expressly
agreed that neither the Agent nor any Lender shall have any liability or
responsibility for the performance of any obligation of the Borrower or any
other Loan Party under this Agreement or any of the other Loan Documents.
Section 11.4 Judgment Currency. If, for the purpose of obtaining
judgment in any court in any jurisdiction with respect to this Agreement or any
other Loan Document or the Collateral, it becomes necessary to convert into the
currency of such jurisdiction (herein called the "Judgment Currency") any
amount due hereunder in any currency other than the Judgment Currency, then
conversion shall be made at the rate of exchange prevailing on the Business Day
before the day on which judgment is given. For this purpose, "rate of
exchange" means the rate at which the Agent is able, on the relevant date, to
sell the currency of the amount due hereunder in Toronto, Ontario against the
Judgment Currency. In the event that there is a change in the rate of exchange
prevailing between the Business Day before the day on which the judgment is
given and the date of payment of the amount due, the Borrower agrees that it
will, on the date of payment, pay such additional amounts (if any) as may be
necessary to ensure that the amount paid on such date is the amount in the
Judgment Currency which, when converted at the rate of exchange prevailing on
the date of payment, is the amount then due under this Agreement in Cdn.
Dollars or Dollars, as the case may
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be. Any additional amount due under this Section 11.4 will be due as a
separate indebtedness and shall not be affected by judgment being obtained for
any other sums due under or in respect of this Agreement or any other Loan
Document.
Section 11.5 Cash Collateral. If an Event of Default shall have
occurred and be continuing, the Borrower shall, if requested by the Agent or
the Required Lenders, pledge to the Agent as security for the Obligations an
amount in immediately available funds equal to the then outstanding Letter of
Credit Liabilities, such funds to be held in a cash collateral account
satisfactory to the Agent without any right of withdrawal by the Borrower.
ARTICLE 12
The Agent
Section 12.1 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Loan Documents with such powers as are specifically delegated
to the Agent by the terms of this Agreement and the other Loan Documents,
together with such other powers as are reasonably incidental thereto. Neither
the Agent nor any of its Affiliates, officers, directors, employees, attorneys
or agents shall be liable for any action taken or omitted to be taken by any of
them hereunder or otherwise in connection with this Agreement or any of the
other Loan Documents except for its or their own gross negligence or willful
misconduct. Without limiting the generality of the preceding sentence, the
Agent (a) may treat the payee of any Note as the holder thereof until the Agent
receives written notice of the assignment or transfer thereof signed by such
payee and in form satisfactory to the Agent, (b) shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
other Loan Documents, and shall not by reason of this Agreement or any other
Loan Document be a trustee or fiduciary for any Lender, (c) shall not be
required to initiate any litigation or collection proceedings hereunder or
under any other Loan Document except to the extent requested by the Required
Lenders, (d) shall not be responsible to the Lenders for any recitals,
statements, representations or warranties contained in this Agreement or any
other Loan Document, or any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any other
Loan Document, or for the value, validity, effectiveness, enforceability or
sufficiency of this Agreement or any other Loan Document or any other document
referred to or provided for herein or therein or for any failure by any Person
to perform any of its obligations hereunder or thereunder, (e) may consult with
legal counsel (including counsel for any Loan Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts, and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing reasonably believed by it
to be genuine and signed or sent by the proper party or parties. As to any
matters not expressly provided for by this Agreement, the Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Required Lenders, and such
instructions of the Required Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders; provided, however,
that the Agent shall not be required to take any action which exposes the Agent
to liability or which is contrary to this Agreement or any other Loan Document
or applicable law.
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Section 12.2 Rights of Agent as a Lender. With respect to its
Commitment, the Loans made by it and the Note issued to it, NationsBank (and
any successor acting as Agent) in its capacity as a Lender hereunder shall have
the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not acting as the Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the Agent in-
its individual capacity. The Agent and its Affiliates may (without having to
account therefor to any Lender) accept deposits from, lend money to, act as
trustee under indentures of, provide merchant banking services to, own
securities of, and generally engage in any kind of banking, trust or other
business with, the Loan Parties or any of their Affiliates and any other Person
who may do business with or own securities of the Loan Parties or any of their
Affiliates, all as if it were not acting as the Agent and without any duty to
account therefor to the Lenders.
Section 12.3 Defaults. The Agent shall not be deemed to have knowledge
or notice of the occurrence of a Default (other than the non-payment of
principal of or interest on the Loans or of commitment fees) unless the Agent
has received notice from a Lender or the Borrower specifying such Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice of the occurrence of a Default, the Agent shall give
prompt notice thereof to the Lenders (and shall give each Lender prompt notice
of each such non-payment). The Agent shall (subject to Section 12.1) take such
action with respect to such Default as shall be directed by the Required
Lenders, provided that unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall seem
advisable and in the best interest of the Lenders.
SECTION 12.4 INDEMNIFICATION. EACH LENDER HEREBY AGREES TO INDEMNIFY
THE AGENT FROM AND HOLD THE AGENT HARMLESS AGAINST (TO THE EXTENT NOT
REIMBURSED UNDER SECTIONS 13.1 AND 13.2, BUT WITHOUT LIMITING THE OBLIGATIONS
OF THE LOAN PARTIES UNDER SECTIONS 13.1 AND 13.2), RATABLY IN ACCORDANCE WITH
ITS PRO RATA SHARE (CALCULATED ON THE BASIS OF ITS COMMITMENT PERCENTAGE), ANY
AND ALL LIABILITIES (INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES),
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES,
SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS' FEES) AND DISBURSEMENTS OF ANY
KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY OR ASSERTED
AGAINST THE AGENT IN ANY WAY RELATING TO OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY THE AGENT UNDER OR IN
RESPECT OF ANY OF THE LOAN DOCUMENTS; PROVIDED, FURTHER, THAT NO LENDER SHALL
BE LIABLE FOR ANY PORTION OF THE FOREGOING TO THE EXTENT CAUSED BY THE AGENT'S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING,
IT IS THE EXPRESS INTENTION OF THE LENDERS THAT THE AGENT SHALL BE INDEMNIFIED
HEREUNDER FROM AND HELD HARMLESS AGAINST ALL OF SUCH LIABILITIES (INCLUDING,
WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES), OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING
ATTORNEYS' FEES) AND DISBURSEMENTS OF ANY KIND OR NATURE DIRECTLY OR INDIRECTLY
ARISING
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OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF THE AGENT
(EXCEPT TO THE EXTENT THE SAME ARE CAUSED BY THE AGENT'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT). WITHOUT LIMITING ANY OTHER PROVISION OF THIS SECTION
12.4, EACH LENDER AGREES TO REIMBURSE THE AGENT PROMPTLY UPON DEMAND FOR ITS
PRO RATA SHARE (CALCULATED ON THE BASIS OF ITS COMMITMENT PERCENTAGE) OF ANY
AND ALL OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEYS' FEES) INCURRED BY THE
AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION,
MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL
PROCEEDINGS OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR
RESPONSIBILITIES UNDER, THE LOAN DOCUMENTS, TO THE EXTENT THAT THE AGENT IS NOT
PROMPTLY REIMBURSED FOR SUCH EXPENSES BY THE BORROWER.
Section 12.5 Independent Credit Decisions. Each Lender agrees that it
has independently and without reliance on the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Borrower and its Subsidiaries and the other Loan
Parties and its own decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and
based upon such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under this Agreement or any of the other Loan Documents. The Agent
shall not be required to keep itself informed as to the performance or
observance by any Loan Party of this Agreement or any other Loan Document or to
inspect the Properties or books of any Loan Party. Except for notices, reports
and other documents and information expressly required to be furnished to the
Lenders by the Agent hereunder or under the other Loan Documents, the Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other financial information concerning the affairs, financial condition or
business of any Loan Party (or any of its Affiliates) which may come into the
possession of the Agent or any of its Affiliates.
Section 12.6 Several Commitments. The Commitments and other
obligations of the Lenders under this Agreement are several. The default by
any Lender in making a Loan in accordance with its Commitment shall not relieve
the other Lenders of their obligations under this Agreement. In the event of
any default by any Lender in making any Loan, each nondefaulting Lender shall
be obligated to make its Loan but shall not be obligated to advance the amount
which the defaulting Lender was required to advance hereunder. In no event
shall any Lender be required to advance an amount or amounts with respect to
any of the Loans which would in the aggregate exceed such Lender's Commitment
with respect to such Loans. No Lender shall be responsible for any act or
omission of any other Lender.
Section 12.7 Successor Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders will have the right to appoint another Lender
as a successor Agent. If no successor Agent shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Agent's giving of notice of resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a
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successor Agent, which shall be a commercial bank organized under the laws of
the U.S. or any state thereof or of a foreign country if acting through its
U.S. branch and having combined capital and surplus of at least $100,000,000.
Upon the acceptance of its appointment as successor Agent, such successor Agent
shall thereupon succeed to and become vested with all rights, powers,
privileges, immunities and duties of the resigning Agent, and the resigning
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. After any Agent's resignation as Agent, the
provisions of this Article 12 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was the
Agent. Each Agent (including each successor Agent) agrees that, so long as it
is acting as Agent under this Agreement, it shall be a Lender under this
Agreement. The Borrower, the Agent and the Lenders agree that, except for
successor Agents appointed in accordance with this Section 12.7, no agents or
co-agents other than the Agent may be appointed under this Agreement or any
other Loan Document without the prior written consent of the Agent and
NationsBanc Capital Markets, Inc.
ARTICLE 13
Miscellaneous
Section 13.1 Expenses. Whether or not the transactions contemplated
hereby are consummated, the Borrower hereby agrees, on demand, to pay or
reimburse the Agent and each of the Lenders for paying: (a) all reasonable out-
of-pocket costs and expenses of the Agent accrued in connection with the
preparation, negotiation, execution and delivery of this Agreement and the
other Loan Documents, and any and all waivers, amendments, modifications,
renewals, extensions and supplements thereof and thereto, and the syndication
of the Commitments and the Loans, including, without limitation, the reasonable
fees and expenses of legal counsel for the Agent, (b) all out-of-pocket costs
and expenses of the Agent and the Lenders in connection with any Default, the
exercise of any right or remedy and the enforcement of this Agreement or any
other Loan Document or any term or provision hereof or thereof, including,
without limitation, the fees and expenses of all legal counsel for the Agent
and/or any Lender (unless, with respect to legal counsel of any Lender other
than NationsBank, the Agent has not approved of the payment by the Borrower of
the fees and expenses of such counsel), (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any Governmental
Authority in respect of this Agreement or any of the other Loan Documents, (d)
all costs, expenses, assessments and other charges incurred in connection with
any filing, registration, recording or perfection of any Lien contemplated by
this Agreement or any other Loan Document, and (e) all reasonable out-of-pocket
costs and expenses incurred by the Agent in connection with due diligence,
computer services, copying, appraisals, environmental audits, collateral
audits, field exams, insurance, consultants and search reports.
SECTION 13.2 INDEMNIFICATION. EACH OF THE LOAN PARTIES HEREBY JOINTLY
AND SEVERALLY AGREES TO INDEMNIFY THE AGENT AND EACH LENDER AND EACH AFFILIATE
THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND
AGENTS FROM, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES,
LIABILITIES (INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES), CLAIMS,
DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS AND EXPENSES (INCLUDING
REASONABLE ATTORNEYS' AND CONSULTANTS' FEES) TO WHICH ANY OF THEM
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MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) THE
NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION OR ENFORCEMENT OF
ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN
DOCUMENTS, (C) THE RELATED TRANSACTIONS, (D) ANY BREACH BY ANY LOAN PARTY OF
ANY REPRESENTATION, WARRANTY, COVENANT OR OTHER AGREEMENT CONTAINED IN ANY OF
THE LOAN DOCUMENTS, (E) THE USE OR PROPOSED USE OF ANY LOAN OR LETTER OF
CREDIT, (F) ANY AND ALL TAXES, LEVEES, DEDUCTIONS AND CHARGES IMPOSED ON THE
AGENT, THE ISSUING BANK OR ANY LENDER IN RESPECT OF ANY LOAN OR LETTER OF
CREDIT, (G) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL OR
CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN OR AFFECTING ANY OF
THE PROPERTIES OF ANY LOAN PARTY, EXCEPT TO THE EXTENT THAT THE LOSS, DAMAGE OR
CLAIM IS THE DIRECT RESULT OF AN INTENTIONAL AND AFFIRMATIVE ACT BY THE PERSON
TO BE INDEMNIFIED THAT CONSTITUTES GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
SUCH PERSON, OR (H) ANY INVESTIGATION, LITIGATION OR OTHER PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION OR
OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING; BUT EXCLUDING ANY OF THE
FOREGOING TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
THE PERSON TO BE INDEMNIFIED. WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT
OR OF ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES
HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION 13.2 SHALL BE
INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES
(INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES), CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS AND EXPENSES (INCLUDING REASONABLE
ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY
NEGLIGENCE OF SUCH PERSON. WITHOUT PREJUDICE TO THE SURVIVAL OF ANY OTHER TERM
OR PROVISION OF THIS AGREEMENT, THE OBLIGATIONS OF THE LOAN PARTIES UNDER THIS
SECTION 13.2 SHALL SURVIVE THE REPAYMENT OF THE LOANS AND OTHER OBLIGATIONS AND
TERMINATION OF THE COMMITMENTS.
Section 13.3 Limitation of Liability. None of the Agent, any Lender or
any Affiliate, officer, director, employee, attorney or agent thereof shall be
liable for any error of judgment or act done in good faith, or be otherwise
liable or responsible under any circumstances whatsoever (including such
Person's negligence), except for such Person's gross negligence or willful
misconduct. None of the Agent, any Lender or any Affiliate, officer, director,
employee, attorney or agent thereof shall have any liability with respect to,
and each of the Loan Parties hereby waives, releases and agrees not to sue any
of them upon, any claim for any special, indirect, incidental or consequential
damages suffered or incurred by the Borrower or any other Loan Party in
connection with, arising out of or in any way related to this Agreement or any
of the other Loan Documents, or any of the transactions contemplated by this
Agreement or any of the other Loan Documents. Each of the Loan Parties hereby
waives, releases and agrees not to sue the Agent or any Lender or any of
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their respective Affiliates, officers, directors, employees, attorneys or
agents for exemplary or punitive damages in respect of any claim in connection
with, arising out of or in any way related to this Agreement or any of the
other Loan Documents, or any of the transactions contemplated by this Agreement
or any of the other Loan Documents.
Section 13.4 No Duty. All attorneys, accountants, appraisers and other
professional Persons and consultants retained by the Agent and the Lenders
shall have the right to act exclusively in the interest of the Agent and the
Lenders and shall have no duty of disclosure, duty of loyalty, duty of care or
other duty or obligation of any type or nature whatsoever to the Borrower or
any of its Subsidiaries or any of their shareholders or Affiliates or any other
Person.
Section 13.5 No Fiduciary Relationship. The relationship between each
Loan Party and each Lender is solely that of debtor and creditor, and neither
the Agent nor any Lender has any fiduciary or other special relationship with
the Borrower or any other Loan Party, and no term or condition of any of the
Loan Documents shall be construed so as to deem the relationship between the
Borrower and any Lender, or any other Loan Party and any Lender, to be other
than that of debtor and creditor. No joint venture or partnership is created
by this Agreement among the Lenders or among the Borrower or any other Loan
Party and the Lenders.
Section 13.6 Equitable Relief. Each of the Loan Parties recognizes
that, in the event it fails to pay, perform, observe or discharge any or all of
the Obligations, any remedy at law may prove to be inadequate relief to the
Agent and the Lenders. Each of the Loan Parties therefore agrees that the
Agent and the Lenders, if the Agent or the Lenders so request, shall be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving actual damages.
Section 13.7 No Waiver; Cumulative Remedies. No failure on the part of
the Agent or any Lender to exercise and no delay in exercising, and no course
of dealing with respect to, any right, power or privilege under this Agreement
or any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under this
Agreement or any other Loan Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies provided for in this Agreement and the other Loan Documents are
cumulative and not exclusive of any rights and remedies provided by law.
Section 13.8 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Neither the
Borrower nor any other Loan Party may assign or transfer any of its rights or
obligations under this Agreement or any other Loan Document without the prior
written consent of the Agent and the Lenders. Any Lender may sell
participations in all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, all or a
portion of its Commitment and the Loans owing to it); provided, however, that
(i) such Lender's obligations under this Agreement and the other Loan Documents
(including, without limitation, its Commitment) shall remain unchanged, (ii)
such Lender shall remain solely responsible to the Borrower for the performance
of such obligations, (iii) such Lender shall remain the holder of its Note for
all purposes of this Agreement, (iv) the Loan Parties shall continue to deal
solely and directly with such Lender in connection with such Lender's rights
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and obligations under this Agreement and the other Loan Documents, and (v) the
Lenders shall not grant any participation under which the participant shall
have the right to approve (or under which the consent of the participant must
be obtained prior to the Lenders being able to approve) any amendment or waiver
of this Agreement or the other Loan Documents, except to the extent that such
amendment or waiver (A) increases any Commitment, (B) reduces the interest rate
or the amount of principal or fees applicable to the Loans in which such
participant is participating, (C) extends the Maturity Date, (D) releases any
of the Collateral (except as provided for herein or in any Loan Document) or
any guaranty of the Obligations, or (E) releases the Borrower from any of its
monetary Obligations under any of the Loan Documents.
(b) Each of the Loan Parties and each of the Lenders agree that any
Lender (the "Assigning Lender") may at any time assign to one or more Eligible
Assignees all, or a proportionate part of all, of its rights and/or obligations
under this Agreement and the other Loan Documents (including, without
limitation, its Commitment and/or Loans) (each an "Assignee"); provided,
however, that (i) each such assignment may be of a varying percentage of the
Assigning Lender's rights and/or obligations under this Agreement and the other
Loan Documents and may relate to some but not all of such rights and/or
obligations, (ii) except in the case of an assignment of all of a Lender's
rights and obligations under this Agreement and the other Loan Documents, the
amount of the Commitment and/or Loans of the Assigning Lender being assigned
pursuant to each assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be less than the
lesser of (A) an amount equal to $5,000,000 calculated based upon the
Commitment assigned (or, if such Commitment has terminated or expired, the
aggregate outstanding principal amount of the Loans and the Letter of Credit
Liabilities assigned), or (B) an amount equal to ten percent of the aggregate
Commitments (or, if such Commitments have terminated or expired, the aggregate
outstanding principal amount of the Loans and the Letter of Credit
Liabilities), and (iii) the parties to each such assignment shall execute and
deliver to the Agent for its acceptance and recording in the Register (as
defined below), an Assignment and Acceptance, together with the Note subject to
such assignment, and a processing and recordation fee of $3,500. Upon such
execution, delivery, acceptance and recording, from and after the effective
date specified in each Assignment and Acceptance, which effective date shall be
at least five Business Days after the execution thereof or such other date as
may be approved by the Agent, (1) the Assignee thereunder shall be a party
hereto as a "Lender" and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder and under the Loan Documents, and
(2) the Assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement and the other Loan Documents (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of a Lender's rights and
obligations under the Loan Documents, such Lender shall cease to be a party
thereto, provided that such Lender's rights under Article 4, Section 13.1 and
Section 13.2 accrued through the date of assignment shall continue).
(c) By executing and delivering an Assignment and Acceptance, the
Assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such Assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Loan Documents or the
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execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Loan Documents or any other instrument or document furnished
pursuant thereto; (ii) such Assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
or results of operations of any Loan Party or the performance or observance by
any Loan Party of its obligations under the Loan Documents; (iii) such Assignee
confirms that it has received a copy of the Loan Documents, together with
copies of the financial statements referred to in Section 7.2 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
Assignee will, independently and without reliance upon the Agent or such
Assigning Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents; (v) such
Assignee confirms that it is an Eligible Assignee; (vi) such Assignee appoints
and authorizes the Agent to take such action as agent on its behalf and
exercise such powers under the Loan Documents as are delegated to the Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto; and (vii) such Assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.
(d) The Agent shall maintain at its Principal Office a copy of each
Assignment and Acceptance delivered to and accepted by it and a register for
the recordation of the names and addresses of the Lenders and the Commitment
of, and principal amount of the Loans owing to, each Lender from time to time
(the "Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Loan Parties, the Agent and
the Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes under the Loan Documents. The Register shall
be available for inspection by any Loan Party or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assigning Lender and Assignee representing that it is an Eligible Assignee,
together with the Note subject to such assignment, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form
of Exhibit A hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, and (iii) give prompt written
notice thereof to the Borrower. Within five Business Days after its receipt of
such notice, the Borrower, at its expense, shall execute and deliver to the
Agent in exchange for each surrendered Note evidencing the Loans assigned, a
new Note evidencing such Loans payable to the order of such Eligible Assignee
in an amount equal to such Loans assigned to it and, if the Assigning Lender
has retained any Loans, a new Note evidencing each such Loans payable to the
order of the Assigning Lender in the amount of such Loans retained by it (each
such promissory note shall constitute a "Note" for purposes of the Loan
Documents). Such new Notes shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
Exhibit B hereto.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
13.8, disclose to the Assignee or participant or proposed Assignee or
participant any information relating to the Borrower or any of its Subsidiaries
or Affiliates or any other Loan Party furnished to such Lender by or on behalf
of the Borrower or any
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of its Subsidiaries or Affiliates or any other Loan Party; provided that each
such actual or proposed Assignee or participant shall agree to be bound by the
provisions of Section 13.20.
(g) Any Lender may assign and pledge the Note held by it to any
Federal Reserve Bank or the U.S. Treasury as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and any
operating circular issued by such Federal Reserve System and/or Federal Reserve
Bank; provided, however, that any payment made by the Borrower for the benefit
of such assigning and/or pledging Lender in accordance with the terms of the
Loan Documents shall satisfy the Borrower's obligations under the Loan
Documents in respect thereof to the extent of such payment. No such assignment
and/or pledge shall release the assigning and/or pledging Lender from its
obligations hereunder.
Section 13.9 Survival. All representations and warranties made or
deemed made in this Agreement or any other Loan Document or in any document,
statement or certificate furnished in connection with this Agreement shall
survive the execution and delivery of this Agreement and the other Loan
Documents and the making of the Loans, and no investigation by the Agent or any
Lender or any closing shall affect the representations and warranties or the
right of the Agent or any Lender to rely upon them. Without prejudice to the
survival of any other obligation of any Loan Party hereunder, the obligations
of such Loan Party under Article 4 and Sections 13.1 and 13.2 shall survive
repayment of the Loans and the Reimbursement Obligations and the other
Obligations.
SECTION 13.10 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES AND THE OTHER
LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, TERM SHEETS,
AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES HERETO.
Section 13.11 Amendments. No amendment or waiver of any provision of
this Agreement, the Notes or any other Loan Document to which any Loan Party is
a party, nor any consent to any departure by such Loan Party therefrom, shall
in any event be effective unless the same shall be agreed or consented to by
the Required Lenders and the applicable Loan Party or Loan Parties in writing,
and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no amendment, waiver or consent shall, unless in writing and signed by all of
the Lenders and the applicable Loan Party or Loan Parties, do any of the
following: (a) increase the Commitments of the Lenders or subject the Lenders
to any additional obligations; (b) reduce the principal of, or interest on, the
Loans or any fees or other amounts payable hereunder; (c) postpone any date
fixed for any payment (including, without limitation, any mandatory prepayment)
of principal of, or interest on, the Loans or any fees or other amounts payable
hereunder; (d) waive any of the conditions precedent specified in Article 6;
(e) change the Commitment Percentages or the aggregate unpaid principal amount
of the Loans or the number or interests of the Lenders which shall be required
for the Lenders or any of them to take any action under this Agreement; (f)
change any provision contained in Section 3.2, Section 9.13 or
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this Section 13.11 or modify the definition of "Required Lenders" contained in
Section 1.1; or (g) except as expressly authorized by this Agreement, release
any Collateral from any of the Liens created by the Security Documents or
release any guaranty of all or any portion of the Obligations; and provided
further, however, that no amendment, waiver or consent relating to Sections
12.1, 12.2, 12.3, 12.4 or 12.5 shall require the agreement of any Loan Party.
Notwithstanding anything to the contrary contained in this Section 13.11, no
amendment, waiver or consent shall be made with respect to Article 12 hereof
without the prior written consent of the Agent.
Section 13.12 Maximum Interest Rate.
(a) No interest rate specified in this Agreement or any other Loan
Document shall at any time exceed the Maximum Rate. If at any time the
interest rate (the "Contract Rate") for any Obligation shall exceed the Maximum
Rate, thereby causing the interest accruing on such Obligation to be limited to
the Maximum Rate, then any subsequent reduction in the Contract Rate for such
Obligation shall not reduce the rate of interest on such Obligation below the
Maximum Rate until the aggregate amount of interest accrued on such Obligation
equals the aggregate amount of interest which would have accrued on such
Obligation if the Contract Rate for such Obligation had at all times been in
effect.
(b) Notwithstanding anything to the contrary contained in this
Agreement or the other Loan Documents, none of the terms and provisions of this
Agreement or the other Loan Documents shall ever be construed to create a
contract or obligation to pay interest at a rate in excess of the Maximum Rate;
and neither the Agent nor any Lender shall ever charge, receive, take, collect,
reserve or apply, as interest on the Obligations, any amount in excess of the
Maximum Rate. The parties hereto agree that any interest, charge, fee, expense
or other obligation provided for in this Agreement or in the other Loan
Documents which constitutes interest under applicable law shall be, ipso facto
and under any and all circumstances, limited or reduced to an amount equal to
the lesser of (i) the amount of such interest, charge, fee, expense or other
obligation that would be payable in the absence of this Section 13.12(b) or
(ii) an amount, which when added to all other interest payable under this
Agreement and the other Loan Documents, equals the Maximum Rate. If,
notwithstanding the foregoing, the Agent or any Lender ever contracts for,
charges, receives, takes, collects, reserves or applies as interest any amount
in excess of the Maximum Rate, such amount which would be deemed excessive
interest shall be deemed a partial payment or prepayment of principal of the
Obligations and treated hereunder as such; and if the Obligations, or
applicable portions thereof, are paid in full, any remaining excess shall
promptly be paid to the applicable Loan Party or Loan Parties (as appropriate).
In determining whether the interest paid or payable, under any specific
contingency, exceeds the Maximum Rate, the Loan Parties, the Agent and the
Lenders shall, to the maximum extent permitted by applicable law, (i)
characterize any nonprincipal payment as an expense, fee or premium rather than
as interest, (ii) exclude voluntary prepayments and the effects thereof, and
(iii) amortize, prorate, allocate and spread in equal or unequal parts the
total amount of interest throughout the entire contemplated term of the
Obligations, or applicable portions thereof, so that the interest rate does not
exceed the Maximum Rate at any time during the term of the Obligations;
provided that, if the unpaid principal balance is paid and performed in full
prior to the end of the full contemplated term thereof, and if the interest
received for the actual period of existence thereof exceeds the Maximum Rate,
the Agent and/or the Lenders, as appropriate, shall refund to the applicable
Loan Party or Loan Parties (as appropriate) the amount of such excess and,
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in such event, the Agent and the Lenders shall not be subject to any penalties
provided by any laws for contracting for, charging, receiving, taking,
collecting, reserving or applying interest in excess of the Maximum Rate. In
addition to the foregoing, each of the Loan Parties agrees that no provision of
this Agreement or any other Loan Document shall have the effect of imposing on
any Loan Party any obligation to pay interest (as such term is defined in
Section 347 of the Criminal Code of Canada) at a rate in excess of the rate
permitted by the laws of Canada if and to the extent (if any) that such laws
are applicable, after taking into account all other amounts which must be taken
into account for the purpose of such laws, and the obligations of the Loan
Parties to pay interest under this Agreement and the other Loan Documents is so
limited.
(c) Pursuant to Article 15.10(b) of Chapter 15, Subtitle 79, Revised
Civil Statutes of Texas 1925, as amended, each of the Loan Parties agrees that
such Chapter 15 (which regulates certain revolving credit loan accounts and
revolving tri-party accounts) shall not govern or in any manner apply to the
Obligations.
Section 13.13 Notices. All notices and other communications provided
for in this Agreement and the other Loan Documents to which the Borrower or any
of its Subsidiaries is a party shall be given or made by telecopy or in writing
and telecopied, mailed by certified mail return receipt requested or delivered
to the intended recipient at the "Address for Notices" specified below its name
on the signature pages hereof (or, with respect to a Lender that becomes a
party to this Agreement pursuant to an assignment made in accordance with
Section 13.8, in the Assignment and Acceptance executed by it); or, as to any
party, at such other address as shall be designated by such party in a notice
to each other party given in accordance with this Section 13.13. Except as
otherwise provided in this Agreement, all such communications shall be deemed
to have been duly given when transmitted by telecopy or personally delivered
or, in the case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid; provided, however, that notices to the Agent shall be
deemed given when received by the Agent.
SECTION 13.14 GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE OF
PROCESS. EXCEPT AS MAY BE EXPRESSLY STATED TO THE CONTRARY IN CERTAIN LOAN
DOCUMENTS, THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS
(WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES) AND APPLICABLE LAWS OF THE
U.S. EACH OF THE BORROWER AND EACH OF ITS SUBSIDIARIES HEREBY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF EACH OF (1) THE U.S. DISTRICT COURT FOR THE
NORTHERN DISTRICT OF TEXAS, AND (2) ANY TEXAS STATE COURT SITTING IN DALLAS
COUNTY, TEXAS, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. EACH OF THE BORROWER AND EACH OF ITS
SUBSIDIARIES HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS
IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO
SUCH PERSON AT ITS ADDRESS SET FORTH UNDERNEATH ITS SIGNATURE HERETO. EACH OF
THE BORROWER AND EACH OF ITS SUBSIDIARIES HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY
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OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORM.
Section 13.15 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 13.16 Severability. Any provision of this Agreement held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 13.17 Headings. The headings, captions and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 13.18 Construction. Each of the Borrower and each of its
Subsidiaries, the Agent and each Lender acknowledges that it has had the
benefit of legal counsel of its own choice and has been afforded an opportunity
to review this Agreement and the other Loan Documents with its legal counsel
and that this Agreement and the other Loan Documents shall be construed as if
jointly drafted by the parties hereto.
Section 13.19 Independence of Covenants. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Default if such action is taken or such condition
exists.
Section 13.20 Confidentiality. Each Lender agrees to exercise its best
efforts to keep any information delivered or made available by any Loan Party
to it which is clearly indicated to be confidential information, confidential
from anyone other than Persons employed or retained by such Lender who are or
are expected to become engaged in evaluating, approving, structuring or
administering the Loans; provided that nothing herein shall prevent any Lender
from disclosing such information (a) to any other Lender, (b) to any Person if
reasonably incidental to the administration of the Loans, (c) upon the order of
any court or administrative agency, (d) upon the request or demand of any
regulatory agency or authority having jurisdiction over such Lender, (e) which
has been publicly disclosed other than as a result of a disclosure by such
Lender which is not otherwise permitted by this Section 13.20, (f) in
connection with any litigation to which the Agent, any Lender or their
respective Affiliates may be a party, (g) to the extent reasonably required in
connection with the exercise of any right or remedy under the Loan Documents,
(h) to such Lender's legal counsel, independent auditors and affiliates, and
(i) to any actual or proposed participant or Assignee of all or part of its
rights hereunder, so long as such actual or proposed participant or Assignee
agrees to be bound by the provisions of this Section 13.20.
SECTION 13.21 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY
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IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY OR THE ACTIONS OF ANY LOAN PARTY, THE AGENT OR ANY LENDER
IN THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT THEREOF.
Section 13.22 Approvals and Consent. Except as may be expressly
provided to the contrary in this Agreement or in the other Loan Documents (as
applicable), in any instance under this Agreement of the other Loan Documents
where the approval, consent or exercise of judgment of the Agent or any Lender
is requested or required, (a) the granting or denial of such approval or
consent and the exercise of such judgment shall be within the sole discretion
of the Agent or such Lender, respectively, and the Agent and such Lender shall
not, for any reason or to any extent, be required to grant such approval or
consent or to exercise such judgment in any particular manner, regardless of
the reasonableness of the request or the action or judgment of the Agent or
such Lender, and (b) no approval or consent of the Agent or any Lender shall in
any event be effective unless the same shall be in writing and the same shall
be effective only in the specific instance and for the specific purpose for
which given.
Section 13.23 Agent for Services of Process. Each of the Subsidiaries
of the Borrower hereby irrevocably designates the Borrower, whose address is
1431 Greenway Drive, Suite 345, Irving, Texas 75038, to receive, for and on
behalf of such Person, service of process in the State of Texas, such service
being hereby acknowledged by such Person to be effective and binding service in
every respect. In the event that the Borrower resigns or ceases to serve as
such Person's agent for service of process hereunder, such Person agrees
forthwith (a) to designate another agent for service of process in Texas, and
(b) to give prompt written notice to the Agent of the name and address of such
agent. Each of the Subsidiaries of the Borrower agrees that the failure of its
agent for service of process to give any notice of any such service of process
to such Person shall not impair or affect the validity of such service or of
any judgment based thereon. If, despite the foregoing, there is for any reason
no agent for service of process of such Person available to be served, then
such Person further irrevocably consents to the service of process by the
mailing thereof by the Agent or the Required Lenders by registered or certified
mail, postage prepaid, to such Person at its address listed on the signature
pages hereof. Nothing in this Section 13.23 shall affect the right of the
Agent or the Lenders to serve legal process in any other manner permitted by
law or affect the right of the Agent or any Lender to bring any action or
proceeding against the Borrower or any of its Subsidiaries or its Property in
the court of any jurisdiction.
Section 13.24 Joint and Several Obligations. Each and every
representation, warranty, covenant or agreement of the Loan Parties or any two
or more Loan Parties or of the Borrower and its Subsidiaries contained herein
shall be, and shall be deemed to be, the joint and several representation,
warranty, covenant and agreement of each of the Loan Parties or such Loan
Parties or of the Borrower and each of its Subsidiaries, respectively, and of
all such Persons.
Section 13.25 Amendment and Restatement of Existing Agreement.
Effective as of the Closing Date and upon payment of the Existing Loans and all
other Obligations (as defined in the Existing Agreement) in full and
termination of all Commitments (as defined in the Existing Agreement), this
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Agreement shall constitute an amendment and restatement of, but not an
extinguishment of the Obligations (as defined in the Existing Agreement)
outstanding under, the Existing Agreement in its entirety; provided, however,
that the Existing Agreement shall remain in full force and effect unless and
until such amendment and restatement occurs.
[THIS SPACE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
DYNAMEX INC.
By: /s/ Robert P. Capps
--------------------------------
Name: Robert P. Capps
Title: Vice President and Chief
Financial Officer
Address for Notices:
-------------------
1431 Greenway Drive, Suite 345
Irving, Texas 75038
Telecopy No.: (972) 756-8199
Telephone No.: (972) 756-8180
Attention: Chief Financial Officer
DYNAMEX CANADA INC.
By: /s/ Robert P. Capps
------------------------------
Name: Robert P. Capps
Title: Vice President
Address for Notices:
-------------------
1431 Greenway Drive, Suite 345
Irving, Texas 75038
Telecopy No.: (972) 756-8199
Telephone No.: (972) 756-8180
Attention: Chief Financial Officer
DYNAMEX OPERATIONS EAST, INC.
By: /s/ Robert P. Capps
------------------------------
Name: Robert P. Capps
Title: Vice President
Address for Notices:
-------------------
1431 Greenway Drive, Suite 345
Irving, Texas 75038
Telecopy No.: (972) 756-8199
Telephone No.: (972) 756-8180
Attention: Chief Financial Officer
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DYNAMEX OPERATIONS WEST, INC.
By: /s/ Robert P. Capps
------------------------------
Name: Robert P. Capps
Title: Vice President
Address for Notices:
-------------------
1431 Greenway Drive, Suite 345
Irving, Texas 75038
Telecopy No.: (972) 756-8199
Telephone No.: (972) 756-8180
Attention: Chief Financial Officer
PARCELWAY COURIER SYSTEMS
(B.C.) LTD.
By: /s/ Robert P. Capps
------------------------------
Name: Robert P. Capps
Title: Vice President
Address for Notices:
-------------------
1431 Greenway Drive, Suite 345
Irving, Texas 75038
Telecopy No.: (972) 756-8199
Telephone No.: (972) 756-8180
Attention: Chief Financial Officer
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ROAD RUNNER TRANSPORTATION, INC.
By: /s/ Robert P. Capps
------------------------------
Name: Robert P. Capps
Title: Vice President
Address for Notices:
-------------------
1431 Greenway Drive, Suite 345
Irving, Texas 75038
Telecopy No.: (972) 756-8199
Telephone No.: (972) 756-8180
Attention: Chief Financial Officer
AGENT:
-----
NATIONSBANK OF TEXAS, N.A., as Agent
By: /s/ Russell P. Hartsfield
------------------------------
Name: Russell P. Hartsfield
Title: Senior Vice President
Address for Notices:
-------------------
NationsBank of Texas, N.A.
901 Main Street, 7th Floor
Dallas, Texas 75202
Telecopy No.: (214) 508-3139
Telephone No.: (214) 508-0339
Attention: Dallas Commercial Banking
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LENDERS:
-------
NATIONSBANK OF TEXAS, N.A.
Commitment: $35,000,000 By: /s/ Russell P. Hartsfield
- ---------- ------------------------------
Name: Russell P. Hartsfield
Title: Senior Vice President
Address for Notices:
-------------------
NationsBank of Texas, N.A.
901 Main Street, 7th Floor
Dallas, Texas 75202
Telecopy No.: (214) 508-3139
Telephone No.: (214) 508-0339
Attention: Dallas Commercial Banking
Lending Office for ABR Loans:
----------------------------
NationsBank of Texas, N.A.
901 Main Street, 7th Floor
Dallas, Texas 75202
Attention: Dallas Commercial Banking
Lending Office for Eurodollar Loans:
-----------------------------------
NationsBank of Texas, N.A.
901 Main Street, 7th Floor
Dallas, Texas 75202
Attention: Dallas Commercial Banking
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BANKBOSTON, N.A.,
individually and as a Co-Agent
Commitment: $15,000,000 By: /s/ Michael J. Blake
- ---------- ---------------------------
Name:
--------------------------
Title:
--------------------------
Address for Notices:
-------------------
BankBoston, N.A.
100 Federal Street, MS 01-08-01
Boston, Massachusetts 02110
Telecopy No.: (617) 434-1955
Telephone No.: (617) 434-0670
Attention: Michael J. Blake
Director
Lending Office for ABR Loans:
----------------------------
BankBoston, N.A.
100 Federal Street, MS 01-08-01
Boston, Massachusetts 02130
Telecopy No.: (617) 434-9820
Telephone No.: (617) 434-9626
Attention: Ed Swiatek
Loan Administrator
Lending Office for Eurodollar Loans:
-----------------------------------
BankBoston, N.A.
100 Federal Street, MS 01-08-01
Boston, Massachusetts 02130
Telecopy No.: (617) 434-9820
Telephone No.: (617) 434-9626
Attention: Ed Swiatek
Loan Administrator
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THE BANK OF NOVA SCOTIA
Commitment: $10,000,000 By: /s/ F.C.H. Ashby
- ---------- ---------------------------
Name:
--------------------------
Title:
--------------------------
Address for Notices:
-------------------
The Bank of Nova Scotia
600 Peachtree Street N.E., Suite 2700
Atlanta, Georgia 30088
Telecopy No.: (404) 888-8998
Telephone No.: (404) 877-1552
Attention: Phyllis Walker
Loan Operations Officer
with a copy to:
The Bank of Nova Scotia
1100 Louisiana, Suite 3000
Houston, Texas 77002
Telecopy No.: (713) 752-2425
Telephone No.: (713) 759-3443
Attention: Paul G. Gonin
Senior Relationship
Manager
Lending Office for ABR Loans:
----------------------------
The Bank of Nova Scotia
600 Peachtree Street N.E., Suite 2700
Atlanta, Georgia 30088
Telecopy No.: (404) 888-8998
Telephone No.: (404) 877-1552
Attention: Phyllis Walker
Loan Operations Officer
Lending Office for Eurodollar Loans:
-----------------------------------
The Bank of Nova Scotia
600 Peachtree Street N.E., Suite 2700
Atlanta, Georgia 30088
Telecopy No.: (404) 888-8998
Telephone No.: (404) 877-1552
Attention: Phyllis Walker
Loan Operations Officer
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CREDITANSTALT-BANKVEREIN,
individually and as a Co-Agent
Commitment: $15,000,000 By: /s/ John G. Taylor
- ---------- ---------------------------
Name:
--------------------------
Title:
--------------------------
By: /s/ Craig Strawn
--------------------------
Name:
--------------------------
Title:
--------------------------
Address for Notices:
-------------------
Creditanstalt-Bankverein
Two Ravinia Drive, Suite 1680
Atlanta, Georgia 30346
Telecopy No.: (770) 390-1851
Telephone No.: (770) 390-1850
Attention: John Taylor
Lending Office for ABR Loans:
----------------------------
Creditanstalt-Bankverein
Two Greenwich Plaza
Greenwich, Connecticut 06830
Telecopy No.: (770) 390-1851
Telephone No.: (770) 390-1850
Attention: Pat Kennedy
Lending Office for Eurodollar Loans:
-----------------------------------
Creditanstalt-Bankverein
Two Greenwich Plaza
Greenwich, Connecticut 06830
Telecopy No.: (770) 390-1851
Telephone No.: (770) 390-1850
Attention: Pat Kennedy
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