Exhibit 99.1
$225,000,000
FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of
July 8, 2004
among
LANDSTAR SYSTEM HOLDINGS, INC.
LANDSTAR SYSTEM, INC.
The Subsidiaries of the
Borrower Signatories Hereto
The Several Lenders
from Time to Time Parties Hereto
SunTrust Bank
FLEET NATIONAL BANK, and
Wachovia Bank, National Association,
as Co-Syndication Agents and
JPMORGAN CHASE BANK,
as Administrative Agent
J.P. MORGAN SECURITIES INC.,
as Sole Lead Arranger and Bookrunner
TABLE OF CONTENTS
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SECTION I. DEFINITIONS.......................................................................1
1.1. Defined Terms.........................................................................1
1.2. Other Definitional Provisions........................................................16
SECTION II. AMOUNT AND TERMS OF COMMITMENTS..................................................17
2.1. Revolving Credit Commitments.........................................................17
2.2. Procedure for Revolving Credit Borrowing.............................................17
2.3. Commitment Fee.......................................................................19
2.4. Optional Termination or Reduction of Commitments.....................................19
2.5. Swing Line Commitments...............................................................19
2.6. Conversion and Continuation Options..................................................20
2.7. Minimum Amounts and Maximum Number of Tranches.......................................21
2.8. Repayment of Loans; Evidence of Debt.................................................21
2.9. Interest Rates and Payment Dates.....................................................22
2.10. Computation of Interest and Fees.....................................................23
2.11. Inability to Determine Interest Rate.................................................23
2.12. Pro Rata Treatment and Payments......................................................24
2.13. Illegality...........................................................................25
2.14. Requirements of Law..................................................................25
2.15. Taxes................................................................................27
2.16. Indemnity............................................................................30
2.17. Certain Exclusions...................................................................31
2.18. Replacement of Lender................................................................31
SECTION III. LETTERS OF CREDIT................................................................31
3.1. L/C Commitment.......................................................................31
3.2. Procedure for Issuance of Letters of Credit..........................................32
3.3. Fees, Commissions and Other Charges..................................................32
3.4. L/C Participations...................................................................33
3.5. Reimbursement Obligation.............................................................34
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TABLE OF CONTENTS
(continued)
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3.6. Obligations Absolute.................................................................34
3.7. Letter of Credit Payments............................................................35
3.8. Application..........................................................................35
SECTION IV. REPRESENTATIONS AND WARRANTIES...................................................35
4.1. Financial Condition..................................................................35
4.2. No Change............................................................................36
4.3. Corporate Existence; Compliance with Law.............................................36
4.4. Corporate Power; Authorization; Enforceable Obligations..............................36
4.5. No Legal Bar.........................................................................37
4.6. No Material Litigation...............................................................37
4.7. No Default...........................................................................37
4.8. Ownership of Property; Liens.........................................................37
4.9. Intellectual Property................................................................37
4.10. No Burdensome Restrictions...........................................................38
4.11. Taxes................................................................................38
4.12. Federal Regulations..................................................................38
4.13. ERISA................................................................................38
4.14. Investment Company Act; Other Regulations............................................39
4.15. Subsidiaries.........................................................................39
4.16. Purpose of Loans.....................................................................39
4.17. Environmental Matters................................................................39
SECTION V. CONDITIONS PRECEDENT.............................................................40
5.1. Conditions to Effectiveness..........................................................40
5.2. Conditions to Each Extension of Credit...............................................43
SECTION VI. AFFIRMATIVE COVENANTS............................................................43
6.1. Financial Statements.................................................................43
6.2. Certificates; Other Information......................................................44
6.3. Payment of Obligations...............................................................45
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TABLE OF CONTENTS
(continued)
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6.4. Conduct of Business and Maintenance of Existence.....................................45
6.5. Maintenance of Property; Insurance...................................................45
6.6. Inspection of Property; Books and Records; Discussions...............................45
6.7. Notices..............................................................................46
6.8. Environmental Laws...................................................................46
6.9. Additional Subsidiaries..............................................................47
SECTION VII. NEGATIVE COVENANTS...............................................................47
7.1. Financial Condition Covenants........................................................47
7.2. Limitation on Indebtedness...........................................................47
7.3. Limitation on Liens..................................................................50
7.4. Limitation on Guarantee Obligations..................................................52
7.5. Limitation on Fundamental Changes....................................................53
7.6. Limitation on Sale of Assets.........................................................53
7.7. Limitation on Leases.................................................................54
7.8. Limitation on Dividends..............................................................54
7.9. Limitation on Capital Expenditures...................................................55
7.10. Limitation on Investments, Loans and Advances........................................56
7.11. Limitation on Optional Payments and Modifications of Debt Instruments................58
7.12. Limitation on Transactions with Affiliates...........................................58
7.13. Limitation on Sales and Leasebacks...................................................59
7.14. Limitation on Changes in Fiscal Year.................................................59
7.15. Limitation on Negative Pledge Clauses................................................59
7.16. Limitation on Lines of Business......................................................60
7.17. Limitation on Formation of Subsidiaries..............................................60
7.18. Limitation on Non-Guarantor Subsidiaries.............................................60
SECTION VIII. EVENTS OF DEFAULT................................................................61
SECTION IX. THE ADMINISTRATIVE AGENT.........................................................64
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TABLE OF CONTENTS
(continued)
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9.1. Appointment..........................................................................64
9.2. Delegation of Duties.................................................................64
9.3. Exculpatory Provisions...............................................................64
9.4. Reliance by Administrative Agent.....................................................65
9.5. Notice of Default....................................................................65
9.6. Non-Reliance on Administrative Agent and Other Lenders...............................65
9.7. Indemnification......................................................................66
9.8. Administrative Agent in Its Individual Capacity......................................66
9.9. Successor Administrative Agent.......................................................67
SECTION X. MISCELLANEOUS....................................................................67
10.1. Amendments and Waivers...............................................................67
10.2. Notices..............................................................................68
10.3. No Waiver; Cumulative Remedies.......................................................69
10.4. Survival of Representations and Warranties...........................................69
10.5. Payment of Expenses and Taxes........................................................69
10.6. Successors and Assigns; Participations and Assignments...............................70
10.7. Adjustments; Set-off.................................................................73
10.8. Counterparts; Effectiveness..........................................................74
10.9. Severability.........................................................................74
10.10. Integration..........................................................................74
10.11. GOVERNING LAW........................................................................74
10.12. Submission To Jurisdiction...........................................................74
10.13. Waivers..............................................................................74
10.14. Acknowledgements.....................................................................75
10.15. WAIVERS OF JURY TRIAL................................................................75
10.16. Confidentiality......................................................................75
10.17. USA PATRIOT Act......................................................................76
10.18. Foreign Assets Control Regulations, Etc..............................................76
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SCHEDULES
Schedule 1.1(a) Commitments
Schedule 1.1(b) Subsidiary Guarantors
Schedule 1.1(c) Pricing Grid
Schedule 4.15 Subsidiaries
Schedule 7.2 Existing Indebtedness
Schedule 7.3 Existing Liens
Schedule 7.4 Existing Guarantee Obligations
EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Swing Line Note
Exhibit C-1 Form of Fourth Amended and Restated Parent Guarantee
Exhibit C-2 Form of Fourth Amended and Restated Subsidiaries Guarantee
Exhibit C-3 Form of L/C Guarantee
Exhibit D Form of Borrowing Certificate
Exhibit E-1 Form of Opinion of Debevoise & Plimpton
Exhibit E-2 Form of Opinion of Borrower Counsel
Exhibit E-3 Form of Opinion of Maples and Calder
Exhibit F Form of Assignment and Acceptance
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FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, dated as of July
8, 2004, among Landstar System Holdings, Inc., a Delaware corporation (the
"Borrower"), Landstar System, Inc., a Delaware corporation (the "Parent"), the
Subsidiaries of the Borrower which are signatories hereto, the several banks and
other financial institutions from time to time parties to this Agreement (such
banks and other financial institutions, the "Lenders"), SunTrust Bank, as
co-syndication agent, Fleet National Bank, as co-syndication agent, Wachovia
Bank, National Association, as co-syndication agent and JPMorgan Chase Bank
("JPMorgan Chase Bank"), as administrative agent for the Lenders hereunder (in
such capacity, the "Administrative Agent").
W I T N E S S E T H
WHEREAS, the Borrower, the Parent, certain lenders (the
"Existing Lenders") and the Administrative Agent are parties to the Third
Amended and Restated Credit Agreement, dated as of December 20, 2001, as amended
(the "Existing Credit Agreement"); and
WHEREAS, the Borrower, the Administrative Agent, the Existing
Lenders that will have commitments hereunder (the "Continuing Lenders"), and
certain additional lenders signatories hereto (the "New Lenders") desire that
the Existing Credit Agreement be amended and restated in its entirety, and that
the New Lenders become the Lenders parties thereto, all upon the terms and
subject to the conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto hereby agree that,
effective upon the Closing Date, the Existing Credit Agreement shall be amended
and restated to read in its entirety as follows:
SECTION I. DEFINITIONS
1.1. DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect on
such day, (b) the Base CD Rate in effect on such day plus 1% and (c) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean the rate of interest per annum publicly announced from
time to time by JPMorgan Chase Bank as its prime rate in effect at its principal
office in New York City (the Prime Rate not being intended to be the lowest rate
of interest charged by JPMorgan Chase Bank in connection with extensions of
credit to debtors); "Base CD Rate" shall mean the sum of (a) the product of (i)
the Three-Month Secondary CD Rate and (ii) a fraction, the numerator of which is
one and the denominator of which is one minus the C/D Reserve Percentage and (b)
the C/D Assessment Rate; "Three-Month Secondary CD Rate" shall mean, for any
day, the secondary market rate for three-month certificates of deposit reported
as being in effect on such day (or, if such day shall not be a Business Day, the
next preceding
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Business Day) by the Board of Governors of the Federal Reserve System (the
"Board") through the public information telephone line of the Federal Reserve
Bank of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day), or, if such rate shall not be so reported on such day or
such next preceding Business Day, the average of the secondary market quotations
for three-month certificates of deposit of major money center banks in New York
City received at approximately 10:00 A.M., New York City time, on such day (or,
if such day shall not be a Business Day, on the next preceding Business Day) by
the Administrative Agent from three New York City negotiable certificate of
deposit dealers of recognized standing selected by it; and "Federal Funds
Effective Rate" shall mean, for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it. If for any reason
the Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Base CD
Rate or the Federal Funds Effective Rate, or both, for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient quotations
in accordance with the terms thereof, the ABR shall be determined without regard
to clause (b) or (c), or both, of the first sentence of this definition, as
appropriate, until the circumstances giving rise to such inability no longer
exist. Any change in the ABR due to a change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate shall be effective as of
the opening of business on the effective day of such change in the Prime Rate,
the Three-Month Secondary CD Rate or the Federal Funds Effective Rate,
respectively.
"ABR Loans": Loans the rate of interest applicable to which is based
upon the ABR.
"Account Receivable Indebtedness": any obligation arising in connection
with a Permitted Receivables Transaction (including, without limitation, any
such obligation that may not be reflected in financial statements). To the
extent a Permitted Receivables Transaction is outstanding and is accounted for
as a sale of accounts receivable under GAAP, Account Receivable Indebtedness
shall also include the additional Indebtedness, determined on a consolidated
basis, which would have been outstanding had such Permitted Receivables
Transaction been accounted for as a borrowing, and the discount rate in such
Permitted Receivables Transaction shall be treated as interest.
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either to (a)
vote 10% or more of the securities having ordinary voting power for the election
of directors of such Person or (b) direct or cause the
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direction of the management and policies of such Person, whether by contract or
otherwise.
"Agreement": this Fourth Amended and Restated Credit Agreement, as
amended, supplemented or otherwise modified from time to time.
"Applicable Margin": for each Type of Loan on any date during any
fiscal quarter of the Parent, the rate per annum for such Type of Loan set forth
in Schedule 1.1(c) for the Leverage Ratio as of the end of the preceding fiscal
quarter of the Parent.
"Application": an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to open a Letter of
Credit.
"Assignee": as defined in subsection 10.6(c).
"Available Revolving Credit Commitment": as to any Lender at any time,
an amount equal to the excess, if any, of (a) the amount of such Lender's
Revolving Credit Commitment over (b) the then Outstanding Revolving Extensions
of Credit of such Lender.
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified in a notice pursuant to
subsection 2.2 or 2.5 as a date on which the Borrower requests the Lenders to
make Loans hereunder.
"Business": as defined in subsection 4.17(b).
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close.
"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants or options to purchase any of the foregoing.
"Cash Equivalents": (a) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed or insured by the United
States Government or any agency thereof; (b) certificates of deposit, time
deposits, eurodollar time deposits, overnight bank deposits, bankers'
acceptances and repurchase agreements having maturities of one year or less from
the date of acquisition issued by any Lender or by any commercial bank organized
under the laws of the United States of America or any state thereof having
combined capital and surplus of not less than $100,000,000; (c) commercial paper
of an issuer rated at least A-1 by Standard & Poor's Corporation or P-1 by
Moody's Investors Service, Inc., or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of investments, and, in either case, maturing within
six months from the date of acquisition; (d) commercial paper of any Lender or
an affiliate of any Lender rated at
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least A-2 by Standard & Poor's Corporation or P-2 by Moody's Investors Service,
Inc., or carrying an equivalent rating by a nationally recognized rating agency,
if both of the two named rating agencies cease publishing ratings of
investments, and, in either case, maturing within six months from the date of
acquisition; (e) shares of money market mutual funds that invest solely in
instruments described in the foregoing clauses (a) through (d) and that are
rated AA or better by Standard & Poor's Corporation or Aa2 by Moody's Investors
Service, Inc.; and (f) marketable direct general obligations issued by any
state, county or municipality, or any agency or instrumentality of any thereof,
with maturities of one year or less from the date of acquisition and that are
rated AA- or better by Standard & Poor's Corporation or Aa3 by Moody's Investors
Service, Inc.
"C/D Assessment Rate": for any day as applied to any ABR Loan, the net
annual assessment rate (rounded upward to the nearest 1/100th of 1%) determined
by JPMorgan Chase Bank to be payable on such day to the Federal Deposit
Insurance Corporation or any successor ("FDIC") for FDIC's insuring time
deposits made in Dollars at offices of JPMorgan Chase Bank in the United States.
"C/D Reserve Percentage": for any day as applied to any ABR Loan, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) (the "Board"), for determining the maximum reserve requirement for a
Depositary Institution (as defined in Regulation D of the Board) in respect of
new non-personal time deposits in Dollars having a maturity of 30 days or more.
"Closing Date": the date on which the conditions precedent set forth in
subsection 5.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment Fee Rate": on any date during any fiscal quarter of the
Parent, the rate per annum set forth in Schedule 1.1(c) under the column heading
"Commitment Fee" opposite the row heading describing the Leverage Ratio as of
the end of the preceding fiscal quarter of the Parent.
"Commodity Price Protection Agreement": any futures agreement or
commodity price protection agreement or other commodity hedge arrangement
entered into in the ordinary course of business by the Borrower or any of its
Subsidiaries in order to protect them against fluctuations in fuel prices.
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group which includes the Borrower and which is
treated as a single employer under Section 414 of the Code.
"Consolidated Current Assets": at a particular date, all amounts which
would, in conformity with GAAP, be included under current assets on a
consolidated balance sheet of the Parent and its Subsidiaries as at such date.
4
"Consolidated EBITDA": for any period, Consolidated Net Income of the
Parent and its Subsidiaries for such period plus, without duplication and to the
extent reflected as a charge or expense in the calculation of such Consolidated
Net Income for such period, the sum of (i) total income tax expense, (ii)
interest expense, amortization or writeoff of debt discount and debt issuance
costs and commissions, discounts and other fees and charges associated with
Indebtedness (including the Loans), (iii) depreciation and amortization expense,
(iv) amortization of intangibles (including, but not limited to, goodwill) and
organization costs, (v) any non-cash expenses and charges, (vi) any non-cash
loss associated with the sale or write-down of assets not in the ordinary
course, (vii) any extraordinary or non-recurring expenses or losses (including,
without limitation, losses on sales of assets outside of the ordinary course of
business and in respect of Permitted Receivables Transactions, whether or not
such losses are otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period) and (viii) any charges relating to
expensing employee stock options or other stock based compensation and minus any
extraordinary or non-recurring income or gains (including, whether or not
otherwise includable as a separate item in the statement of such Consolidated
Net Income for such period, gains on the sales of assets outside of the ordinary
course of business and in respect of Permitted Receivables Transactions).
"Consolidated Interest Expense": for any period, the consolidated
amount of interest expense of the Parent and its Subsidiaries with respect to
such period, determined on a consolidated basis in accordance with GAAP (but
excluding for purposes of calculating the amount of such interest expense for
any such period the effect of any interest income for such period) including,
without limitation, the interest component of payments made under Financing
Leases and the discount rate in any Permitted Receivables Transaction, as such
consolidated amount is increased or decreased, as the case may be, to give
effect to any costs or benefits arising under any Interest Rate Protection
Agreements during such period.
"Consolidated Lease Expense": for any period, the aggregate rental
expenses of the Parent and its Subsidiaries, determined on a consolidated basis
in accordance with GAAP, payable in respect of such period under leases (other
than Financing Leases) for real and/or personal property (net of income from
subleases thereof), provided that for the purposes of subsection 7.7,
"Consolidated Lease Expense" shall not include payments to independent
contractors based on a percentage of revenue generated or on miles driven in
connection with hauling freight using tractors and/or trailing equipment
provided by such independent contractors.
"Consolidated Long-Term Indebtedness": at any date, consolidated
Indebtedness of the Parent or any of its Subsidiaries for borrowed money
maturing more than twelve months after the incurrence thereof as of such date,
including, without limitation, (i) obligations under Financing Leases, (ii)
current maturities of any such Indebtedness and (iii) the Loans, in all cases as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income": for any period, the consolidated net income
(or loss) of the Parent and its Subsidiaries, determined on a consolidated basis
in accordance with
5
GAAP; provided that there shall be excluded the income (or deficit) of any other
Person (other than a Subsidiary) in which the Parent or any of its Subsidiaries
has an ownership interest, except to the extent that any such income is actually
received by the Parent or such Subsidiary in the form of dividends or similar
distributions.
"Consolidated Net Worth": at any date, an amount equal to (x)
Consolidated Total Assets as at such date minus (y) Consolidated Total
Liabilities as at such date.
"Consolidated Total Assets": at any date, the amount, computed in
accordance with GAAP, of the total assets of the Parent and its consolidated
Subsidiaries as at such date.
"Consolidated Total Liabilities": at any date, the amount, computed in
accordance with GAAP, of the total liabilities of the Parent and its
consolidated Subsidiaries as at such date.
"Continuing Lenders": as defined in the recitals hereto.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Default": any of the events specified in Section 8, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment, as now or may at
any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates (expressed as
a decimal fraction) of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto) dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate
6
for deposits in Dollars for a period equal to such Interest Period commencing on
the first day of such Interest Period appearing on Page 3750 of the Telerate
screen as of 11:00 A.M., London time, two Business Days prior to the beginning
of such Interest Period. In the event that such rate does not appear on Page
3750 of the Telerate screen (or otherwise on such screen), the "Eurodollar Base
Rate" shall be determined by reference to such other comparable publicly
available service for displaying eurodollar rates as may be selected by the
Administrative Agent or, in the absence of such availability, by reference to
the rate at which the Administrative Agent is offered Dollar deposits at or
about 11:00 A.M., New York City time, two Business Days prior to the beginning
of such Interest Period in the interbank eurodollar market where its eurodollar
and foreign currency and exchange operations are then being conducted for
delivery on the first day of such Interest Period for the number of days
comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 8, provided
that any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Existing Credit Agreement": as defined in the recitals hereto.
"Exiting Lenders": as defined in subsection 2.2(b).
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"Financing Vehicle": any direct or indirect wholly-owned Subsidiary of
the Parent formed for the sole purpose of engaging in the Operator Financing
Program, and which engages in no business activities other than those related to
the Operator Financing Program.
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time; provided that for purposes of
determining compliance with the covenants set forth in subsection 7.1, 7.7 and
7.9, "GAAP" means such generally accepted accounting principles as utilized in
preparing the audited financial statements delivered pursuant to the first
sentence of subsection 4.1.
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"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Guarantees": the collective reference to the Parent Guarantee, the
Subsidiaries Guarantee and the L/C Guarantee.
"Guarantor": any Person delivering a Guarantee pursuant to this
Agreement.
"Indebtedness": of any Person (the "Debtor") at any date, without
duplication, (a) all indebtedness of the Debtor for borrowed money or for the
deferred purchase price of property or services (other than current trade
liabilities, accrued compensation and other liabilities, costs or fees incurred
in the ordinary course of business and payable in accordance with customary
practices), (b) any other indebtedness of such Debtor which is evidenced by a
note, bond, debenture or similar instrument, (c) all obligations of such Debtor
under Financing Leases, (d) all obligations of such Debtor in respect of
acceptances issued or created for the account of such Debtor, (e) all
liabilities of any other Person or Persons secured by any Lien on any property
owned by the Debtor even
8
though the Debtor has not assumed or otherwise become liable for the payment
thereof, and (f) all Account Receivable Indebtedness of such Debtor.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Insurance Subsidiary": one or more wholly owned corporate Subsidiaries
of the Borrower organized under the insurance laws of the Cayman islands for the
purpose of engaging in the Insurance Subsidiary Business.
"Insurance Subsidiary Business": the business of (X) providing
insurance or reinsurance to (a) the Borrower, its Subsidiaries and/or
independent contractors doing business with the Borrower and/or any of its
Subsidiaries and/or (b) any other Persons principally engaged in trucking or a
similar business, including independent contractors who do not do business with
the Borrower and/or any of its Subsidiaries, and/or (Y) providing other
reinsurance to other Persons.
"Intellectual Property": as defined in subsection 4.9.
"Interest Payment Date": (a) as to any ABR Loan, the last day of each
March, June, September and December to occur while such Loan is outstanding, (b)
as to any Eurodollar Loan having an Interest Period of three months or less, the
last day of such Interest Period, and (c) as to any Eurodollar Loan having an
Interest Period longer than three months, each day which is three months, or a
whole multiple thereof, after the first day of such Interest Period and the last
day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three, six or, if available, twelve months
thereafter, as selected by the Borrower in its notice of borrowing or
notice of conversion, as the case may be, given with respect thereto;
and
(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three, six or, if available, twelve months thereafter,
as selected by the Borrower by irrevocable notice to the Administrative
Agent not less than three Business Days prior to the last day of the
then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless the
result of such extension
9
would be to carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately preceding
Business Day;
(2) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date, as the case may be;
and
(3) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of a calendar month.
"Interest Rate Protection Agreement": any interest rate cap agreement
or interest rate swap agreement or other interest rate hedge arrangement entered
into by the Borrower or any Subsidiary in order to protect the Borrower or such
Subsidiary, as the case may be, against fluctuations in interest rates in
respect of any obligations.
"Investment Grade": a rating of BBB or higher from Standard & Poor's
Corporation and Baa or higher from Moody's Investors Service, Inc.
"Issuing Lender": JPMorgan Chase Bank, in its capacity as issuer of any
Letter of Credit.
"ISP": International Standby Practices 1998 (International Chamber of
Commerce Publication Number 590) and any subsequent revision thereof adhered to
by JPMorgan Chase Bank.
"JPMorgan Chase Bank": as defined in the preamble hereto.
"L/C Commitment": $75,000,000.
"L/C Fee Payment Date": the last day of each March, June, September and
December.
"L/C Fee Rate": on any date of determination for any Letter of Credit,
the rate per annum equal to the Applicable Margin for Eurodollar Loans in effect
on such date multiplied by the average daily aggregate amount available to be
drawn under such Letter of Credit during the period for which such determination
is made.
"L/C Guarantee": the Guarantee to be executed and delivered by the
Parent, substantially in the form of Exhibit C-3, as the same may be amended,
supplemented or otherwise modified from time to time.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to subsection 3.5.
10
"L/C Participants": the collective reference to all the Lenders other
than the Issuing Lender.
"Lender Affiliate": (a) with respect to any Lender, (i) an Affiliate of
such Lender or (ii) any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender and (b) any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of
credit in the ordinary course of its business and that is administered or
managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an
Affiliate of an entity that administers or manages a Lender.
"Lenders": as defined in the preamble hereto.
"Letters of Credit": as defined in subsection 3.1(a).
"Leverage Ratio": as defined in subsection 7.1(b).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Financing Lease
having substantially the same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Notes, if any, the Applications
and the Guarantees.
"Loan Parties": the Parent, the Borrower and each Subsidiary of the
Borrower which is a party to a Loan Document.
"Material Adverse Effect": a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise) of the
Parent and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"Material Environmental Amount": an amount payable by the Borrower
and/or its Subsidiaries for remedial costs, compliance costs, compensatory
damages, punitive damages, fines, penalties or any combination thereof, which,
after deducting the portion thereof, if any, that is covered by insurance (with
respect to which coverage the Lenders shall have been provided evidence of such
coverage), is equal to at least $10,000,000.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic
11
substances, materials or wastes, defined or regulated as such in or under any
Environmental Law, including, without limitation, asbestos, polychlorinated
biphenyls and urea-formaldehyde insulation.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"New Lenders": as defined in the recitals hereto.
"Non-Excluded Taxes": as defined in subsection 2.15.
"Notes": the collective reference to any promissory note evidencing
Loans substantially in the form of Exhibits A and B.
"Offshore Joint Venture": any Subsidiary Guarantor, all of the Capital
Stock of which is at all times owned directly or indirectly by the Insurance
Subsidiary and one or more of the Parent or the Borrower, formed under the laws
of any jurisdiction other than the United States or any political subdivision
thereof for the sole purpose of making Permitted Insurance Company Investments.
"Operator Financing Program": a program pursuant to which the Operator
Financing Subsidiary or the Financing Vehicle, as the case may be, may provide
financing to independent contractors doing business with the Borrower and its
Subsidiaries to enable such independent contractors to purchase tractors,
trailers and related transportation equipment expected to be used in connection
with the business of the Borrower and its Subsidiaries.
"Operator Financing Subsidiary": Landstar Contractor Financing, Inc.
"Outstanding Permitted Line of Credit Indebtedness": at any time, the
aggregate principal amount of Indebtedness described in subsection 7.2(o)
outstanding at such time.
"Outstanding Revolving Extensions of Credit": as to any Lender at any
time, an amount equal to the sum of (a) the aggregate principal amount of all
Revolving Credit Loans made by such Lender then outstanding, (b) such Lender's
Revolving Credit Percentage of the L/C Obligations then outstanding and (c) such
Lender's Revolving Credit Percentage of the Swing Line Loans then outstanding.
"Parent": as defined in the preamble hereto.
"Parent Guarantee": the Fourth Amended and Restated Guarantee to be
executed and delivered by the Parent, substantially in the form of Exhibit C-1,
as the same may be amended, supplemented or otherwise modified from time to
time.
"Participants": as defined in subsection 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
12
"Percentage": as to any Lender at any time, the percentage which such
Lender's Revolving Credit Percentage then constitutes of the aggregate Revolving
Credit Percentages.
"Percentage-Based Leases": those tractor, trailer and related equipment
leases where rent is based on a percentage of the revenues derived from such
equipment.
"Permitted Acquisition": any acquisition described in subsection
7.10(g) which satisfies all of the terms and conditions set forth therein.
"Permitted Insurance Company Investments": any investments (i) in Cash
Equivalents, (ii) in preferred equity securities of any corporation provided
that (A) at the time any such investment is made, such investment is rated
either (x) one, two or three by the Securities Valuation Office of the National
Association of Insurance Commissioners or (y) Investment Grade and (B)
immediately after giving effect to any such investment, the aggregate amount of
all investments made in reliance on this clause (ii) shall not exceed 10% of the
Insurance Subsidiary's and the Offshore Joint Venture's combined total assets at
the time such investment is made, (iii) constituting loans and advances to the
Borrower or any of its Subsidiaries, (iv) constituting the acquisition of loans
made by the Operator Financing Subsidiary or the Financing Vehicle, as the case
may be, in an aggregate amount not to exceed at any time 25% of the Insurance
Subsidiary's total assets at the time such investment is made, (v) in tractors,
trailers and other fixed assets used in the operations of the Borrower and its
Subsidiaries provided that the Insurance Subsidiary leases such assets to one or
more of the Borrower's Subsidiaries and (vi) in obligations which, at the time
the investment in question is made, are rated either (X) one, two or three by
the Securities Valuation Office of the National Association of Insurance
Commissioners or (Y) Investment Grade.
"Permitted Receivables Transaction": any sale or sales of, and/or
securitization of, or transfer of, any accounts receivable and related records,
collateral and rights of the Borrower and/or any of its Subsidiaries (the
"Receivables") pursuant to which (a) the Receivables SPV realizes aggregate net
proceeds of not more than $75,000,000 at any one time outstanding, including,
without limitation, any revolving purchase(s) of Receivables where the maximum
aggregate uncollected purchase price (exclusive of any deferred purchase price)
for such Receivables at any time outstanding does not exceed $75,000,000, (b)
the Receivables shall be transferred or sold to the Receivables SPV at fair
market value or at a market discount, and shall not exceed the greater of (i)
$100,000,000 in the aggregate or (ii) the Receivables of Landstar Ranger, Inc.
at the time such transfer or sale, as the case may be, takes place and (c)
obligations arising therefrom shall be non-recourse to the Borrower and its
Subsidiaries (other than the Receivables SPV).
"Permitted Specified Additional Debt": unsecured Indebtedness issued by
the Borrower which is payable with interest and fees at rates consistent with
those prevailing in the relevant market at the time of issuance (as determined
in good faith by the Borrower) and (i) no part of the principal of which is
scheduled to be paid (whether by way of mandatory sinking fund, mandatory
redemption, mandatory prepayment or
13
otherwise) prior to July 9, 2009 and (ii) the other terms and conditions of
which, taken as a whole, including, without limitation, the covenants, default
provisions and representations and warranties, are not more restrictive than the
terms and conditions of this Agreement (as determined in good faith by the
Borrower).
"Person": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Receivables SPV": any one or more direct or indirect wholly-owned
Subsidiary of the Parent formed for the sole purpose of engaging in Permitted
Receivables Transactions, and which engages in no business activities other than
those related to Permitted Receivables Transactions.
"Registration Statement": the Borrower's Registration Statement on Form
S-1 (Registration No. 33-57174) as filed with the Securities and Exchange
Commission on January 19, 1993 and as amended from time to time.
"Reference Lender": JPMorgan Chase Bank.
"Refunded Swing Line Loans": as defined in subsection 2.5(b).
"Register": as defined in subsection 10.6(d).
"Regulation U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Reimbursement Obligation": the obligation of the Borrower or the
applicable Subsidiary Guarantor to reimburse the Issuing Lender pursuant to
subsection 3.5 for amounts drawn under Letters of Credit.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. Section
2615.
"Required Lenders": at any time, Lenders the Percentages of which
aggregate at least 51%.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty,
14
rule or regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to and binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Responsible Officer": the Chief Executive Officer, the President or
any Vice President of the Borrower or, with respect to financial matters, the
Chief Financial Officer or the Controller of the Borrower.
"Revolving Credit Commitment": as to any Lender, the obligation of such
Lender to make Revolving Credit Loans (including Revolving Credit Loans in
connection with subsection 2.5(b)) to and/or issue or participate in Letters of
Credit issued on behalf of the Borrower hereunder in an aggregate principal
amount at any one time outstanding not to exceed the amount set forth under the
heading "Revolving Credit Commitment" opposite such Lender's name on Schedule
1.1(a), as such amount may be reduced from time to time in accordance with the
provisions of this Agreement.
"Revolving Credit Commitment Period": the period from and including the
Closing Date to but not, including the Termination Date then in effect or such
earlier date on which the Revolving Credit Commitments shall terminate as
provided herein.
"Revolving Credit Loans": as defined in subsection 2.1(a).
"Revolving Credit Percentage": as to any Lender at any time, the
percentage which such Lender's Revolving Credit Commitment then constitutes of
the aggregate Revolving Credit Commitments (or, at any time after the Revolving
Credit Commitments shall have expired or terminated, the percentage which the
aggregate principal amount of such Lender's Revolving Credit Loans then
outstanding constitutes of the aggregate principal amount of the Revolving
Credit Loans then outstanding).
"Short Term Leases": leases (other than Financing Leases and
Percentage-Based Leases) to which the Parent or any of its Subsidiaries is a
party for tractors, trailers and related equipment expiring twelve months or
less after the date thereof.
"Single Employer Plan": any Plan which is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
"Subsidiaries Guarantee": the Fourth Amended and Restated Guarantee to
be executed and delivered by each Subsidiary Guarantor, substantially in the
form of Exhibit C-2, as the same may be amended, supplemented or otherwise
modified from time to time.
"Subsidiary Guarantors": the Subsidiaries of the Borrower listed on
Schedule 1.1(b) hereto, the Insurance Subsidiary, the Offshore Joint Venture and
each other Subsidiary which shall become a party to the Subsidiaries Guarantee
subsequent to the Closing Date excluding, in all cases, the Operator Financing
Subsidiary, the Financing Vehicle and the Receivables SPV.
15
"Subsidiary": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.
"Swing Line Loan": as defined in subsection 2.5(a).
"Termination Date": July 8, 2009.
"Total Capitalization": the sum of Consolidated Long-Term Indebtedness
of the Parent and its Subsidiaries and shareholders' equity of the Parent.
"Total Indebtedness": at any date, consolidated Indebtedness of the
Parent and its Subsidiaries, as at such date, determined on a consolidated basis
in accordance with GAAP, plus to the extent not otherwise included, Account
Receivable Indebtedness.
"Tranche": the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Loans shall originally have been
made on the same day); Tranches may be identified as "Eurodollar Tranches".
"Transferee": as defined in subsection 10.6(f).
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.
"UCP": the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500, as the same
may be amended or superseded from time to time.
1.2. OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto,
accounting terms relating to the Borrower and its Subsidiaries not
defined in subsection 1.1 and accounting terms partly defined in
subsection 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP.
(c) The words "hereof" "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and
16
not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement
unless otherwise specified.
(d) The word "including" when used in this Agreement means
including, without limitation.
(e) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION II. AMOUNT AND TERMS OF COMMITMENTS
2.1. REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms
and conditions hereof, each Lender severally agrees to make revolving credit
loans ("Revolving Credit Loans") to the Borrower from time to time during the
Revolving Credit Commitment Period in an aggregate principal amount at any one
time outstanding, when added to (i) such Lender's Revolving Credit Percentage of
the then outstanding L/C Obligations and (ii) the aggregate unpaid principal
amount at such time of all Swing Line Loans outstanding multiplied by such
Lender's Revolving Credit Percentage (net of the portion, if any, of the
proceeds of such Revolving Credit Loans that are applied at the time they are
made to repay such Swing Line Loans) not to exceed the amount of such Lender's
Revolving Credit Commitment. During the Revolving Credit Commitment Period the
Borrower may use the Revolving Credit Commitments by borrowing, prepaying the
Revolving Credit Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as
determined by the Borrower and notified to the Administrative Agent in
accordance with subsections 2.2 and 2.6, provided that no Revolving
Credit Loan shall be made as a Eurodollar Loan after the day that is
one month prior to the Termination Date.
2.2. PROCEDURE FOR REVOLVING CREDIT BORROWING. (a) The
Borrower may borrow under the Revolving Credit Commitments during the Revolving
Credit Commitment Period on any Business Day, provided that the Borrower shall
give the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 12:30 P.M., New York City time, (a) three
Business Days prior to the requested Borrowing Date, if all or any part of the
requested Revolving Credit Loans are to be initially Eurodollar Loans or (b) one
Business Day prior to the requested Borrowing Date, otherwise), specifying (i)
the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether the
borrowing is to be of Eurodollar Loans, ABR Loans or a combination thereof and
(iv) if the borrowing is to be entirely or partly of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Periods therefor. Each borrowing under the Revolving Credit
Commitments shall be in an amount equal to (x) in the case of ABR Loans,
$1,000,000 or a whole multiple of $100,000 in excess thereof (or, if the then
Available Revolving Credit Commitments are less than $1,000,000, such lesser
amount) and (y) in the case of Eurodollar Loans, $1,500,000 or a whole multiple
of $100,000 in excess thereof. Upon
17
receipt of any such notice from the Borrower, the Administrative Agent shall
promptly notify each Lender thereof. Each Lender will make the amount of its pro
rata share of each borrowing available to the Administrative Agent for the
account of the Borrower at the office of the Administrative Agent specified in
subsection 10.2 prior to 1:00 P.M., New York City time, on the Borrowing Date
requested by the Borrower in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the Administrative
Agent by the Lenders and in like funds as received by the Administrative Agent.
(b) In the case of borrowings on the Closing Date, the
Borrower shall give to the Administrative Agent notice as provided in
subsection 2.2(a) above with respect to the aggregate principal amount
of Revolving Credit Loans that it wishes to have outstanding on the
Closing Date. If any Lender's Revolving Credit Percentage of the
Revolving Credit Loans to be so outstanding on the Closing Date exceeds
the aggregate amount of Revolving Credit Loans, if any, made by such
Lender outstanding under the Existing Credit Agreement on the Closing
Date before giving effect to this Agreement, such Lender shall make the
amount of such excess available, as a Revolving Credit Loan, in
immediately available funds to the Administrative Agent prior to 10:00
A.M. on the Closing Date at such office of the Administrative Agent. If
any Lender's Revolving Credit Percentage of the Revolving Credit Loans
to be so outstanding on the Closing Date is less than the aggregate
amount of Revolving Credit Loans made by such Lender outstanding under
the Existing Credit Agreement on the Closing Date before giving effect
to this Agreement, or if any Exiting Lender (the Existing Lenders that
will not have commitments hereunder, are hereinafter defined as the
"Exiting Lenders") shall have Revolving Credit Loans made by it
outstanding under the Existing Credit Agreement on the Closing Date
before giving effect to this Agreement, the Administrative Agent shall,
on the Closing Date, make funds in the amount of such difference or, in
the case of each such Exiting Lender, in the amount of such outstanding
loans, available to such Lender or Exiting Lender, as the case may be,
on the Closing Date to the extent such funds are made available to the
Administrative Agent pursuant to the immediately foregoing sentence,
and the Borrower shall concurrently pay to such Lender any interest,
fees and other amounts due under the Existing Credit Agreement with
respect to the loans outstanding under the Existing Credit Agreement
and repaid on the Closing Date (including, without limitation, amounts
due under subsection 2.15 of the Existing Credit Agreement). If the
aggregate amount of Revolving Credit Loans to be outstanding on the
Closing Date exceeds the aggregate amount of Revolving Credit Loans
outstanding under the Existing Credit Agreement on the Closing Date
before giving effect to this Agreement, the Administrative Agent will
make proceeds of such Revolving Credit Loans in the amount of such
excess available to the Borrower on the Closing Date by crediting the
account of the Borrower at the office of the Administrative Agent
specified in subsection 10.2.
18
2.3. COMMITMENT FEE. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee for the
period from and including the first day of the Revolving Credit Commitment
Period to the Termination Date, computed at the Commitment Fee Rate on the
average daily amount of the Available Revolving Credit Commitment of such Lender
during the period for which payment is made, payable quarterly in arrears on the
last day of each March, June, September and December and on the Termination Date
or such earlier date as the Revolving Credit Commitments shall terminate as
provided herein, commencing on the first of such dates to occur after the date
hereof.
2.4. OPTIONAL TERMINATION OR REDUCTION OF COMMITMENTS. The
Borrower shall have the right, upon not less than three Business Days' notice to
the Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time, to reduce the amount of the Revolving Credit Commitments, provided
that (a) no such termination or reduction of the Revolving Credit Commitments
shall be permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans and the Swing Line Loans made on the effective date
thereof, the Available Revolving Credit Commitment would be less than zero. Any
such reduction shall be in an amount equal to $1,000,000 or a whole multiple
thereof and shall reduce permanently the Revolving Credit Commitments then in
effect.
2.5. SWING LINE COMMITMENTS. (a) Subject to the terms and
conditions hereof and provided no Default or Event of Default shall have
occurred and be continuing, JPMorgan Chase Bank agrees to make swing line loans
(individually, a "Swing Line Loan"; collectively, the "Swing Line Loans")
available to the Borrower from time to time during the Revolving Credit
Commitment Period in an aggregate principal amount at any one time outstanding
not to exceed $5,000,000, provided that JPMorgan Chase Bank shall have no
obligation to and shall not issue any Swing Line Loan if, after giving effect to
such issuance, the Available Revolving Credit Commitment with respect to any
Lender would be less than zero. Amounts borrowed by the Borrower under this
subsection 2.5 may be repaid and, through but excluding the Termination Date,
reborrowed. All Swing Line Loans shall be made as ABR Loans and shall not be
entitled to be converted into Eurodollar Loans. Each borrowing of Swing Line
Loans shall be in an amount equal to $100,000 or a whole multiple of $100,000 in
excess thereof. The Borrower shall give JPMorgan Chase Bank irrevocable notice
(which notice must be received by JPMorgan Chase Bank prior to 12:00 Noon, New
York City time) on the requested Borrowing Date specifying the amount of the
requested Swing Line Loan. The proceeds of each Swing Line Loan will be made
available by JPMorgan Chase Bank to the Borrower at the office of JPMorgan Chase
Bank specified in subsection 10.2 by crediting the account of the Borrower at
such office with such proceeds.
(b) JPMorgan Chase Bank at any time in its sole and absolute
discretion, may, and on each Monday (or if such day is not a Business
Day, the next Business Day) shall, on behalf of the Borrower (which
hereby irrevocably directs JPMorgan Chase Bank to act on its behalf)
request prior to 12:00 Noon (New York City time) each Lender, including
JPMorgan Chase Bank, to make a Revolving Credit Loan in an amount equal
to such Lender's Revolving Credit
19
Percentage of the amount of the Swing Line Loans (the "Refunded Swing
Line Loans") outstanding on the date such notice is given. Unless any
of the events described in paragraph (f) of Section 8 shall have
occurred (in which event the procedures of paragraph (c) of this
subsection 2.5 shall apply) each Lender shall make the proceeds of its
Revolving Credit Loan available to JPMorgan Chase Bank for the account
of JPMorgan Chase Bank at the office of JPMorgan Chase Bank specified
in subsection 10.2 prior to 2:00 P.M. (New York City time) in funds
immediately available on the date such notice is given. The proceeds of
such Revolving Credit Loans shall be immediately applied to repay the
Refunded Swing Line Loans. Each Revolving Credit Loan made pursuant to
this subsection 2.5(b) shall be an ABR Loan.
(c) If prior to the making of a Revolving Credit Loan pursuant
to paragraph (b) of this subsection 2.5 one of the events described in
paragraph (f) of Section 8 shall have occurred, each Lender will on the
date such Revolving Credit Loan was to have been made, purchase an
undivided participating interest in the Refunded Swing Line Loan in an
amount equal to its Revolving Credit Percentage of such Refunded Swing
Line Loan. Each Lender will immediately transfer to JPMorgan Chase
Bank, in immediately available funds, the amount of its participation
and upon receipt thereof JPMorgan Chase Bank will deliver to such
Lender a Swing Line Loan participation certificate dated the date of
receipt of such funds and in such amount.
(d) Whenever, at any time after JPMorgan Chase Bank has
received from any Lender such Lender's participating interest in a
Refunded Swing Line Loan, JPMorgan Chase Bank receives any payment on
account thereof, JPMorgan Chase Bank will distribute to such Lender its
participating interest in such amount (appropriately adjusted in the
case of interest payments, to reflect the period of time during which
such Lender's participating interest was outstanding and funded);
provided, however, that in the event that such payment received by
JPMorgan Chase Bank is required to be returned, such Lender will return
to JPMorgan Chase Bank any portion thereof previously distributed by
JPMorgan Chase Bank to it.
(e) Each Lender's obligation to purchase participating
interests pursuant to this subsection 2.5 shall be absolute and
unconditional and shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense
or other right which such Lender or the Borrower may have against
JPMorgan Chase Bank, the Borrower or anyone else for any reason
whatsoever; (ii) the occurrence or continuance of an Event of Default;
(iii) any adverse change in the condition (financial or otherwise) of
the Borrower; (iv) any breach of this Agreement by the Borrower or any
other Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
2.6. CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving the
20
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto (or on any other
day if the conversion referred to herein is accompanied by all amounts payable
by the Borrower pursuant to subsection 2.16). The Borrower may elect from time
to time to convert Revolving Credit Loans that are ABR Loans to Eurodollar Loans
by giving the Administrative Agent at least three Business Days' prior
irrevocable notice of such election. Any such notice of conversion to Eurodollar
Loans shall specify the length of the initial interest Period or Interest
Periods therefor. Upon receipt of any such notice the Administrative Agent shall
promptly notify each Lender thereof. All or any part of outstanding Eurodollar
Loans and ABR Loans may be converted as provided herein, provided that (i) no
Loan may be converted into a Eurodollar Loan when any Event of Default has
occurred and is continuing and the Administrative Agent has or the Required
Lenders have determined that such a conversion is not appropriate, (ii) no Loan
may be converted into a Eurodollar Loan after the date that is one month prior
to the Termination Date and (iii) no Swing Line Loan may be converted into a
Eurodollar Loan.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by
the Borrower giving notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth
in subsection 1.1, of the length of the next Interest Period to be
applicable to such Loans, provided that no Eurodollar Loan may be
continued as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent has or the Required Lenders
have determined that such a continuation is not appropriate or (ii)
after the date that is one month prior to the Termination Date and
provided, further, that if the Borrower shall fail to give any required
notice as described above in this paragraph or if such continuation is
not permitted pursuant to the preceding proviso such Loans shall be
automatically converted to ABR Loans on the last day of such then
expiring Interest Period.
2.7. MINIMUM AMOUNTS AND MAXIMUM NUMBER OF TRANCHES. All
borrowings, conversions and continuations of Loans hereunder and all selections
of Interest Periods hereunder shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, (a) the aggregate principal
amount of the Loans comprising each Eurodollar Tranche shall be equal to
$1,500,000 or a whole multiple of $100,000 in excess thereof and (b) there shall
be no more than ten Eurodollar Tranches in existence at any time.
2.8. REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrower
hereby unconditionally promises to pay (i) to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Revolving Loan
on the Termination Date, (ii) to the Swingline Lender the then unpaid principal
amount of any Swingline Loan outstanding on the Termination Date; PROVIDED that
on each date that a Revolving Borrowing is made, the Borrower shall repay all
Swingline Loans then outstanding. All such payments shall be made together with
any and all accrued and unpaid interest and fees thereon, and any other amounts
owing hereunder.
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(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the
Borrower to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Type
thereof and the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder and (iii) the amount of any
sum received by the Administrative Agent hereunder for the account of
the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be PRIMA FACIE evidence of
the existence and amounts of the obligations recorded therein; PROVIDED
that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loans in accordance with the
terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced
by a Note, substantially in the form of Exhibit A or Exhibit B hereto,
and, the Borrower shall execute and deliver to such Lender a Note
payable to the order of such Lender (or, if requested by such Lender,
to such Lender and its registered assigns) and in a form approved by
the Administrative Agent. Thereafter, the Loans evidenced by such Note
and interest thereon shall at all times (including after assignment
pursuant to Section 10.6) be represented by one or more Notes in such
form payable to the order of the payee named therein (or, if such Note
is a registered Note, to such payee and its registered assigns).
2.9. INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the Applicable Margin.
(c) If all or a portion of (i) the principal amount of any
Loan, (ii) any interest payable thereon or (iii) any commitment fee or
other amount payable hereunder shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), such overdue amount
shall bear interest at a rate per annum which is (x) in the case of
overdue principal, the rate that would otherwise be applicable thereto
pursuant to the foregoing provisions of this subsection plus 2% per
annum or (y) in the case of overdue interest, commitment fee or other
amount, the rate described in paragraph (b) of this subsection plus 2%
per annum,
22
in each case from the date of such non-payment until such amount is
paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c)
of this subsection shall be payable from time to time on demand.
2.10. COMPUTATION OF INTEREST AND FEES. (a) Commitment fees,
letter of credit commissions and, whenever it is calculated on the basis of the
ABR, interest shall be calculated on the basis of a 365- (or 366-, as the case
may be) day year for the actual days elapsed; and, otherwise, interest shall be
calculated on the basis of a 360-day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of each determination of a Eurodollar Rate. Any change in the interest
rate on a Loan resulting from a change in the ABR, the Eurocurrency Reserve
Requirements, the C/D Assessment Rate or the C/D Reserve Percentage shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall
be conclusive and binding on the Borrower in the absence of manifest
error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to
subsection 2.9(a) or (c).
(c) If the Reference Lender shall for any reason no longer
have a Revolving Credit Commitment or any Loans, the Reference Lender
shall thereupon cease to be the Reference Lender, and the
Administrative Agent (after consultation with the Borrower and the
Lenders) shall, by notice to the Borrower and the Lenders, designate
another Lender as the Reference Lender.
(d) The Reference Lender shall use its best efforts to furnish
quotations of rates to the Administrative Agent as contemplated hereby.
2.11. INABILITY TO DETERMINE INTEREST RATE. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of any changes arising on or after the date hereof affecting
the interbank eurodollar market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Required Lenders that, by reason of any changes arising on or after
the date hereof affecting the interbank eurodollar market, the
Eurodollar Rate determined
23
or to be determined for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (as conclusively certified by
such Lenders) of making or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof
confirmed in writing to the Borrower and the Lenders as soon as practicable
thereafter, and in any case at least one Business Day prior to the first day of
such Interest Period. If such notice is given (x) any Eurodollar Loans requested
to be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans that were to have been converted on the first day of such Interest
Period to Eurodollar Loans shall be converted to or continued as ABR Loans and
(z) any outstanding Eurodollar Loans shall be converted, on the first day of
such Interest Period, to ABR Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Loans to Eurodollar
Loans.
2.12. PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing of
Revolving Credit Loans by the Borrower from the Lenders hereunder (other than
Swing Line Loans) and each payment by the Borrower on account of any commitment
fee in respect of the Revolving Credit Commitments hereunder shall be made pro
rata according to the respective Revolving Credit Percentages of the Lenders.
Each payment (including each prepayment) by the Borrower on account of principal
of the Revolving Credit Loans shall be made first to the repayment of Swing Line
Loans before any payment may be made on account of the principal of the
Revolving Credit Loans. Subject to the immediately foregoing sentence, each
payment (including each prepayment) by the Borrower on account of the principal
of and interest on the Revolving Credit Loans shall be made pro rata according
to the respective outstanding principal amounts of the Revolving Credit Loans
then held by the Lenders. All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without set off or counterclaim and shall be made prior
to 1:00 P.M., New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Administrative Agent's office
specified in subsection 10.2, in Dollars and in immediately available funds. The
Administrative Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds as received. If any payment hereunder (other than payments
on the Eurodollar Loans) becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next succeeding Business Day, and,
with respect to payments of principal, interest thereon shall be payable at the
then applicable rate during such extension. If any payment on a Eurodollar Loan
becomes due and payable on a day other than a Business Day, the maturity thereof
shall be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day.
(b) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not
make the amount that would constitute its Percentage of such borrowing
available to the Administrative Agent, the Administrative Agent may
assume that such Lender is
24
making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such amount is not
made available to the Administrative Agent by the required time on the
Borrowing Date therefor, such Lender shall pay to the Administrative
Agent, on demand, such amount with interest thereon at a rate equal to
the daily average Federal Funds Effective Rate for the period until
such Lender makes such amount immediately available to the
Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error. If
such Lender's Revolving Credit Percentage of such borrowing is not made
available to the Administrative Agent by such Lender within three
Business Days of such Borrowing Date, the Administrative Agent shall
also be entitled to recover such amount with interest thereon at the
rate per annum applicable to ABR Loans hereunder, on demand, from the
Borrower. Nothing contained in this subsection 2.12(b) shall relieve
any Lender that has failed to make available its Revolving Credit
Commitment Percentage of any borrowing hereunder from its obligation to
do so in accordance with the terms hereof.
2.13. ILLEGALITY. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law (other than the
certificate of incorporation, by-laws or other organizational or governing
documents with respect to any Lender) or in the interpretation or application
thereof occurring after the date hereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) such
Lender shall forthwith give telephonic or telecopy notice of such circumstances,
confirmed in writing, to the Borrower (which notice shall be withdrawn by such
Lender when such Lender shall reasonably determine that it shall no longer be
illegal for such Lender to make or maintain Eurodollar Loans or to convert ABR
Loans to Eurodollar Loans), (b) the commitment of such Lender hereunder to make
Eurodollar Loans, continue Eurodollar Loans as such and convert ABR Loans to
Eurodollar Loans shall forthwith be cancelled and, until such time as it shall
no longer be unlawful for such Lender to make or maintain Eurodollar Loans, such
Lender shall then have a commitment only to make an ABR Loan when a Eurodollar
Loan is requested and (c) such Lender's Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to ABR Loans on the respective
last days of the then current Interest Periods with respect to such Loans or
within such earlier period as required by law. If any such conversion of a
Eurodollar Loan occurs on a day which is not the last day of the then current
Interest Period with respect thereto, the Borrower shall pay to such Lender such
amounts, if any, as may be required pursuant to subsection 2.16.
2.14. REQUIREMENTS OF LAW. (a) If the adoption of or any
change in any Requirement of Law (other than the certificate of incorporation,
by-laws or other organizational or governing documents with respect to any
Lender) or in the interpretation or application thereof occurring after the date
on which any Lender becomes a Lender or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority, in each case, made subsequent to the date
hereof:
25
(i) shall subject such Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes as defined in subsection 2.15 (including
Non-Excluded Taxes imposed solely by reason of any failure of such
Lender to comply with its obligations under subsection 2.15(b) or
2.15(c)) and changes in respect of taxes on or measured by the overall
net income of such Lender or any applicable lending office, branch or
affiliate thereof (or changes in any franchise, capital, branch
profits, excise, doing business or net worth taxes or similar taxes
imposed in lieu of such net income taxes) ("Net Income Taxes") imposed
by a jurisdiction as a result of a present or former connection between
such jurisdiction, any political subdivision or any taxing authority
thereof or therein, and such Lender, or any applicable lending office,
branch or affiliate thereof (other than a connection arising solely
from such Lender having executed, delivered or performed its
obligations, or received payment under or enforced, this Agreement or
any other Loan Document));
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition
(excluding the imposition of any tax);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrower from such Lender
through the Administrative Agent in accordance herewith, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable with
respect to such Eurodollar Loans or Letters of Credit, provided that, in any
such case, the Borrower may elect to convert Eurodollar Loans made by such
Lender hereunder to ABR Loans by giving the Administrative Agent at least two
Business Days' notice of such election, in which case such Borrower shall
promptly pay to such Lender, upon demand, without duplication, amounts
theretofore required to be paid to such Lender pursuant to this subsection
2.14(a) and such amounts, if any, as may be required pursuant to subsection
2.16. If any Lender becomes entitled to claim any additional amounts pursuant to
this subsection, it shall promptly give notice to the Borrower, through the
Administrative Agent certifying that (x) one of the events described in this
paragraph (a) has occurred and the nature of such event, (y) the increased cost
or reduced amount resulting from such event and (z) the additional amounts
demanded by such Lender and a reasonably detailed explanation of the calculation
thereof. A certificate as to any additional amounts payable pursuant to this
subsection submitted by such Lender,
26
through the Administrative Agent, to the Borrower shall be conclusive in the
absence of manifest error. This covenant shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or
in the interpretation or application thereof or compliance by such
Lender or any corporation controlling such Lender with any request or
directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority, in each case, made subsequent
to the date hereof (or, in the case of any Lender that becomes a Lender
subsequent to the date hereof, subsequent to the date on which such
Lender becomes a Lender) does or shall have the effect of reducing the
rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any
Letter of Credit to a level below that which such Lender or such
corporation could have achieved but for such change or compliance
(taking into consideration such Lender's or such corporation's policies
with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, after submission by such Lender to
the Borrower (with a copy to the Administrative Agent) of a written
request therefor certifying that (x) one of the events described in
this paragraph (b) has occurred and the nature of such event (in
reasonable detail), (y) the reduced rate of return on such Lender's or
such corporation's capital resulting from such event and (z) the
additional amounts demanded by such Lender and a reasonably detailed
explanation of the calculation thereof, the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender
for such reduction.
(c) Each Lender which becomes entitled to claim any amounts
pursuant to this subsection 2.14 agrees, upon the request of the
Borrower, to use its best efforts to take steps reasonably available to
it and acceptable to the Borrower, including designating an alternative
lending office or booking the affected Loan through another branch or
affiliate, if by doing so any such additional amounts will be avoided
or materially reduced, provided that taking such steps results in no
additional costs to such Lender (other than costs that are paid by the
Borrower) and is not otherwise materially disadvantageous to such
Lender, in such Lender's sole discretion determined in good faith.
2.15. TAXES. (a) All payments made by the Borrower under this
Agreement (or by any Guarantor under any Guarantee) shall be made free and clear
of, and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding any Net Income
Taxes and any such items imposed on the Administrative Agent or any Lender as a
result of a present or former connection between the Administrative Agent, such
Lender, or any applicable lending office, branch or affiliate thereof, and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
27
connection arising solely from the Administrative Agent or such Lender having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document) ("Non-Excluded Taxes"). If
any Non-Excluded Taxes are required to be withheld from any amounts payable to
the Administrative Agent or any Lender hereunder or under any other Loan
Document, the amounts so payable to the Administrative Agent or such Lender
shall be increased to the extent necessary to yield to the Administrative Agent
or such Lender (after payment of all Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall be entitled, to the extent
required by law, to deduct and withhold any Non-Excluded Taxes and shall not be
required to increase any such amounts payable to the Administrative Agent or any
Lender if the Administrative Agent or such Lender or, to the extent that the
Lender has transferred a Participation to any Participant, such Participant,
fails to comply with the requirements of paragraph (b) of this subsection.
Whenever any Non-Excluded Taxes are payable by the Borrower, as promptly as
possible thereafter the Borrower shall send to the Administrative Agent for its
own account or for the account of such Lender, as the case may be, a certified
copy of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any such failure, except in the case in which such failure
of the Borrower is due to a Lender's failure to fully comply with requirements
set forth in paragraph (b) of this subsection. The agreements in this subsection
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
(b) (i) The Administrative Agent and each Lender that is
organized under the laws of the United States of America or a state
thereof hereby confirms that it is so organized;
(ii) Each Lender that is not organized under the laws
of the United States of America or a state thereof shall:
(A) on or before the first day upon which a payment
is made hereunder to such Lender, deliver to the Borrower and
the Administrative Agent two duly completed copies of United
States Internal Revenue Service Form W-8BEN or W-8ECI, or
successor applicable form, as the case may be;
(B) deliver to the Borrower and the Administrative
Agent two further copies of any such form or certification on
or before the date that any such form, certification or
statement expires or becomes obsolete and after the occurrence
of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
28
(C) obtain such extensions of time for filing and
complete such forms, certifications or statements as may
reasonably be requested by the Borrower or the Administrative
Agent;
unless in any such case any change in treaty, law or regulation, or the
application or interpretation thereof, has occurred after the date on which such
Person became a Lender hereunder which renders all such forms inapplicable or
which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the
Administrative Agent. Each time such Lender is required to deliver a form,
certificate or statement under this clause (ii), such Lender shall certify on
such Form W-8BEN or W-8ECI, as the case may be, or successor applicable form,
and as may otherwise be required under applicable law, that (A) it is entitled
to receive payments under this Agreement or any other Loan Document without
deduction or withholding of any United States federal income taxes and (B) it is
entitled to an exemption from United States backup withholding tax.
(iii) Each Person that shall become a Lender or a
Participant pursuant to subsection 10.6 shall, upon the effectiveness
of the related transfer, be required to provide all of the forms,
certifications and statements required pursuant to this paragraph (b),
provided that in the case of a Participant the obligations of such
Participant pursuant to this subsection shall be determined as if such
Participant were a Lender except that such Participant shall furnish
all such required forms, certifications and statements to the Lender
from which the related participation shall have been purchased.
(c) Upon the request, and at the expense, of the Borrower, the
Administrative Agent, each Lender to which the Borrower is required to
pay any additional amount pursuant to subsection 2.14(a)(i) or 2.15,
and any Participant in respect of whose participation such payment is
required, shall take reasonable steps to (i) afford the Borrower the
opportunity to contest, and (ii) cooperate with the Borrower in
contesting, the imposition of any taxes giving rise to such requirement
to pay. The Administrative Agent and each Lender to which the Borrower
is required to pay any additional amount pursuant to subsection
2.14(a)(i) or 2.15 agrees, upon the request of the Borrower, to use its
best efforts to take steps reasonably available to it and acceptable to
the Borrower, including designating an alternative lending office or
booking the affected Loan through another branch or an affiliate, if by
doing so any such additional amounts will be avoided or materially
reduced, provided that taking such steps results in no additional costs
to such Lender (other than costs that are paid by the Borrower) and is
not otherwise materially disadvantageous to such Lender, in such
Lender's sole discretion determined in good faith.
(d) If, under subsection 2.15(b), a Lender or Participant
fails to timely provide, or provides an incorrect, form, certificate or
statement (or fails to timely provide a correct form, certificate or
statement after the existing form, certificate or statement expires,
becomes obsolete, or is rendered incorrect by the occurrence of any
event) and, as a result thereof, the Borrower fails to withhold or
deduct tax,
29
such Lender or Participant shall indemnify the Borrower against any
liability arising from such failure in excess of the amount the
Borrower would have been required to pay such Lender or Participant as
an additional amount pursuant to this Agreement had such form,
certificate or statement been correct or duly or timely provided, as
the case may be.
(e) If a Lender or the Administrative Agent receives a refund
attributable to taxes for which the Borrower has made additional
payments under subsection 2.14(a)(1) or 2.15, which refund in the sole,
good faith judgment of such Lender or Administrative Agent is allocable
to such payments, the Administrative Agent or such Lender, as the case
may be, shall timely pay such refund (together with any interest
thereto received from the relevant taxing authority) to the Borrower,
net of all reasonable out-of-pocket expenses of such Lender or
Administrative Agent; provided, however, that the Borrower shall
promptly return such refund (free of all Non-Excluded Taxes) to the
Administrative Agent or the relevant Lender, as the case may be, upon
receipt of written notice that such refund is required to be repaid to
the relevant taxing authority.
2.16. INDEMNITY. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurodollar
Loans or a conversion of Eurodollar Loans to ABR Loans on a day which is not the
last day of an Interest Period with respect thereto. Such indemnification may
include, in the case of any event described in clause (a) or (c) of the next
preceding sentence, an amount equal to the excess, if any, of (i) the amount of
interest which would have accrued on the amount so prepaid, or not so borrowed,
converted or continued, for the period from the date of such prepayment or of
such failure to borrow, convert or continue to the last day of such Interest
Period (or, in the case of a failure to borrow, convert or continue, the
Interest Period that would have commenced on the date of such failure) in each
case at the applicable rate of interest for such Loans provided for herein
(excluding, however, the Applicable Margin included therein, if any) over (ii)
the amount of interest (as reasonably determined by such Lender) which would
have accrued to such Lender on such amount by placing such amount on deposit for
a comparable period with leading banks in the interbank eurodollar market. If
any Lender becomes entitled to claim any amounts under the indemnity contained
in this subsection 2.16, it shall provide prompt notice thereof to the Borrower,
through the Administrative Agent, stating (X) that one or more of the events
described in clause (a), (b), or (c) has occurred and describing in reasonable
detail the nature of such event or events, (Y) as to the amount of the loss or
expense sustained or incurred by such Lender as a consequence thereof and (Z) as
to the amount for which such Lender seeks indemnification hereunder and a
reasonably detailed explanation of the calculation thereof. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
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2.17. CERTAIN EXCLUSIONS. (a) If a Lender changes its
applicable lending office (unless required to do so by a Governmental Authority
or other regulatory authority) and the effect of that change, as of the date of
the change, is to cause the Borrower to become obligated to pay any additional
amount under subsection 2.14 or 2.15, the Borrower shall not be obligated to pay
such additional amount.
(b) If, as a result of an assignment pursuant to subsection
10.6(c), the Borrower would, immediately upon the effectiveness of such
assignment, be obligated to pay an additional amount under subsection
2.14 or 2.15, the Borrower shall not be obligated to pay such
additional amount.
(c) For purposes of subsections 2.14 and 2.15, the entry into
force and implementation of any treaty between the United States and
another country that has been signed as of the date hereof but has not
yet been ratified shall not be treated as a change in treaty, law,
regulation or application or interpretation thereof.
2.18. REPLACEMENT OF LENDER. If the Borrower becomes obligated
to pay additional amounts described in subsections 2.14 or 2.15 as a result of
any condition described in such subsections and payment of such amount is
demanded by any Lender, then the Borrower may, on ten Business Days' prior
written notice to the Administrative Agent and such Lender, cause such Lender to
(and such Lender shall) assign pursuant to subsection 10.6(c) all of its rights
and obligations under this Agreement to a Lender or other entity selected by the
Borrower and acceptable to the Administrative Agent for a purchase price equal
to the outstanding principal amount of such Lender's Loans and all accrued
interest and fees and other amounts then due to such Lender hereunder, together
with all losses and expenses of the types referred to in subsection 2.16 payable
with respect thereto.
SECTION III. LETTERS OF CREDIT
3.1. L/C COMMITMENT. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Lenders
set forth in subsection 3.4(a), agrees to issue standby and commercial letters
of credit ("Letters of Credit") for the account of the Borrower or any
Subsidiary Guarantor on any Business Day during the Revolving Credit Commitment
Period in such form as may be approved from time to time by the Issuing Lender;
provided that the Issuing Lender shall have no obligation to and shall not issue
any Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed the L/C Commitment or (ii) the Available Revolving
Credit Commitment with respect to any Lender would be less than zero. Each
Letter of Credit shall (i) be denominated in Dollars and shall be a standby or
commercial letter of credit issued to support obligations of the Borrower or the
respective Subsidiary Guarantor and its respective Subsidiaries, contingent or
otherwise, arising in the ordinary course of business and (ii) expire no later
than the Termination Date.
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(b) Each Letter of Credit shall be subject to the UCP or the
ISP, as applicable, and, to the extent not inconsistent therewith, the
laws of the State of New York.
(c) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict
with, or cause the Issuing Lender or any L/C Participant to exceed any
limits imposed by, any applicable Requirement of Law.
3.2. PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT. The Borrower
or any Subsidiary Guarantor may from time to time request that the Issuing
Lender issue a Letter of Credit by delivering to the Issuing Lender at its
address for notices specified herein an Application therefor, completed to the
reasonable satisfaction of the Issuing Lender, and such other certificates,
documents and other papers and information as the Issuing Lender may reasonably
request. Upon receipt of any Application, the Issuing Lender will process such
Application and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary
procedures and shall promptly issue the Letter of Credit requested thereby (but
in no event shall the Issuing Lender be required to issue any Letter of Credit
earlier than three Business Days after its receipt of the Application therefor
and all such other certificates, documents and other papers and information
relating thereto) by issuing the original of such Letter of Credit to the
beneficiary thereof or as otherwise may be agreed by the Issuing Lender and the
Borrower or the respective Subsidiary Guarantor. The Issuing Lender shall
furnish a copy of such Letter of Credit to the Borrower and/or to the respective
Subsidiary Guarantor promptly following the issuance thereof, and shall notify
the Lenders of the issuance thereof.
3.3. FEES, COMMISSIONS AND OTHER CHARGES.
(a) The Borrower or the respective Subsidiary Guarantor shall
pay (i) to the Administrative Agent, for the account of the Issuing
Lender and the L/C Participants, a letter of credit commission with
respect to each Letter of Credit, computed for the period from the
Closing Date (in the case of the first such payment) or the date on
which the last such payment was due (in all other cases) to the date
upon which such payment is due hereunder at the L/C Fee Rate, payable
to the Issuing Lender and the L/C Participants to be shared ratably
among them in accordance with their respective Revolving Credit
Commitment Percentages and (ii) to the Issuing Lender, a letter of
credit commission with respect to each Letter of Credit, computed for
the period from the Closing Date (in the case of the first such
payment) or the date on which the last such payment was due (in all
other cases) to the date upon which such payment is due hereunder at
the rate of 1/10% per annum of the average daily aggregate amount
available to be drawn under such Letter of Credit during the period for
which such fee is calculated, payable to the Issuing Lender. Such
commissions shall be payable in arrears on each L/C Fee Payment Date
and shall be nonrefundable.
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(b) In addition to the foregoing fees and commissions, the
Borrower or the respective Subsidiary Guarantor shall pay or reimburse
the Issuing Lender for such normal and customary costs and expenses as
are incurred or charged by the Issuing Lender in issuing, effecting
payment under, amending or otherwise administering any Letter of
Credit.
(c) The Administrative Agent shall, promptly following its
receipt thereof, distribute to the Issuing Lender and the L/C
Participants all fees and commissions received by the Administrative
Agent for their respective accounts pursuant to this subsection.
3.4. L/C PARTICIPATIONS. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce the
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Credit Commitment Percentage in the Issuing Lender's
obligations and rights under each Letter of Credit issued hereunder and the
amount of each draft paid by the Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft
is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrower or the respective Subsidiary Guarantor in
accordance with the terms of this Agreement, such L/C Participant shall pay to
the Issuing Lender upon demand at the Issuing Lender's address for notices
specified herein an amount equal to such L/C Participant's Revolving Credit
Commitment Percentage of the amount of such draft, or any part thereof, which is
not so reimbursed. Any demand pursuant to the preceding sentence received after
2:00 P.M. New York City time on any Business Day shall be deemed to have been
received on the next succeeding Business Day.
(b) If any amount required to be paid by any L/C Participant
to the Issuing Lender pursuant to subsection 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under
any Letter of Credit is paid to the Issuing Lender within three
Business Days after the date such payment is due, such L/C Participant
shall pay to the Issuing Lender on demand an amount equal to the
product of (i) such amount, times (ii) the daily average Federal funds
rate, as quoted by the Issuing Lender, during the period from and
including the date such payment is required to the date on which such
payment is immediately available to the Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse
during such period and the denominator of which is 360. If any such
amount required to be paid by any L/C Participant pursuant to
subsection 3.4(a) is not in fact made available to the Issuing Lender
by such L/C Participant within three Business Days after the date such
payment is due, the Issuing Lender shall be entitled to recover from
such L/C Participant, on demand, such amount with interest thereon
calculated from such due date at the rate per annum applicable to ABR
Loans hereunder. A certificate of the Issuing Lender submitted to any
L/C Participant with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error.
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(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C
Participant its pro rata share of such payment in accordance with
subsection 3.4(a), the Issuing Lender receives any payment related to
such Letter of Credit (whether directly from the Borrower or the
respective Subsidiary Guarantor or otherwise, including proceeds of
collateral applied thereto by the Issuing Lender), or any payment of
interest on account thereof, the Issuing Lender will as soon as
practicable distribute to such L/C Participant its pro rata share
thereof; provided, however, that in the event that any such payment
received by the Issuing Lender shall be required to be returned by the
Issuing Lender, such L/C Participant shall return to the Issuing Lender
the portion thereof previously distributed by the Issuing Lender to it.
3.5. REIMBURSEMENT OBLIGATION. The Borrower or the Subsidiary
Guarantor agrees to reimburse the Issuing Lender on each date on which the
Issuing Lender notifies the Borrower or the respective Subsidiary Guarantor of
the date and amount of a draft presented under any Letter of Credit and paid by
the Issuing Lender for the amount of (a) such draft so paid and (b) any taxes,
fees, charges or other costs or expenses reasonably incurred by the Issuing
Lender in connection with any payment made by the Issuing Lender under, or with
respect to, such Letter of Credit. Each such payment shall be made to the
Issuing Lender at its address for notices specified herein in lawful money of
the United States of America and in immediately available funds. Interest shall
be payable on any and all amounts remaining unpaid by the Borrower under this
subsection from the date such amounts become payable (whether at stated
maturity, by acceleration or otherwise) until payment in full at the rate which
would be payable on any outstanding ABR Loans which were then overdue.
Notwithstanding anything herein to the contrary, the Borrower shall have joint
and several liability with the respective Subsidiary Guarantor for all Letter of
Credit Reimbursement Obligations with respect to Letter of Credit obligations of
such Subsidiary Guarantor.
3.6. OBLIGATIONS ABSOLUTE. The Borrower's and the respective
Subsidiary Guarantor's obligations under this Section 3 shall be absolute and
unconditional under any and all circumstances and irrespective of any set-off,
counterclaim or defense to payment which the Borrower and the respective
Subsidiary Guarantor may have or have had against the Issuing Lender or any
beneficiary of a Letter of Credit. The Borrower and the respective Subsidiary
Guarantor also agree with the Issuing Lender that the Issuing Lender shall not
be responsible for, and the Borrower's and the respective Subsidiary Guarantor's
Reimbursement Obligations under subsection 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower or the
respective Subsidiary Guarantor and any beneficiary of any Letter of Credit or
any other party to which such Letter of Credit may be transferred or any claims
whatsoever of the Borrower or the respective Subsidiary Guarantor against any
beneficiary of such Letter of Credit or any such transferee provided that this
paragraph shall not relieve the Issuing Lender of any liability resulting from
the gross negligence or willful misconduct of the Issuing Lender, or otherwise
affect any defenses or other right that the Borrower may have as a result of any
such gross negligence or willful misconduct. The Issuing Lender
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shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions caused by the Issuing Lender's gross negligence or willful misconduct.
The Borrower and the respective Subsidiary Guarantor agree that any action taken
or omitted by the Issuing Lender under or in connection with any Letter of
Credit or the related drafts or documents, if done in the absence of gross
negligence of willful misconduct and in accordance with the standards or care
specified in the ICP or UCP, as applicable, shall be binding on the Borrower and
on the respective Subsidiary Guarantor and shall not result in any liability of
the Issuing Lender to the Borrower or the respective Subsidiary Guarantor.
3.7. LETTER OF CREDIT PAYMENTS. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Lender shall
promptly notify the Borrower or the respective Subsidiary Guarantor of the date
and amount thereof. The responsibility of the Issuing Lender to the Borrower or
the respective Subsidiary Guarantor in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.
3.8. APPLICATION. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Agreement, the provisions of this Agreement shall apply.
SECTION IV. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Borrower hereby represents and warrants to the
Administrative Agent and each Lender that:
4.1. FINANCIAL CONDITION. The consolidated balance sheet of
the Parent and its consolidated Subsidiaries as at December 27, 2003 and the
related consolidated statements of income and of cash flows for the fiscal year
ended on such date, reported on by KPMG L.L.P. copies of which have heretofore
been furnished to each Lender, present fairly the consolidated financial
condition of the Parent and its consolidated Subsidiaries as at such date, and
the consolidated results of their operations and their consolidated cash flows
for the fiscal year then ended. All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by such
accountants and as disclosed therein). The unaudited consolidated balance sheet
of the Parent and its consolidated Subsidiaries as at March 27, 2004 and the
related unaudited consolidated statements of income and of cash flows for the
quarter ended on such date, certified by a Responsible Officer, copies of which
have heretofore been furnished to each Lender, have been prepared in accordance
with GAAP (except as permitted by Form 10-Q under the Securities and Exchange
Act of 1934, as amended)
35
applied consistently throughout the periods involved, and present fairly the
consolidated financial condition of the Parent and its consolidated Subsidiaries
as at such date, and the consolidated results of their operations and their
consolidated cash flows for the quarter then ended (subject to normal year-end
audit adjustments). Neither the Parent nor any of its consolidated Subsidiaries
had, at March 27, 2004, any material Guarantee Obligation, contingent liability
or liability for taxes, or any long-term lease or unusual forward or long-term
commitment, including, without limitation, any interest rate or foreign currency
swap or exchange transaction, which is not reflected in the foregoing statements
or in the notes thereto. During the period from March 27, 2004 to and including
the Closing Date there has been no sale, transfer or other disposition by the
Parent or any of its consolidated Subsidiaries of any material part of its
business or property and no purchase or other acquisition of any business or
property (including any capital stock of any other Person) material in relation
to the consolidated financial condition of the Parent and its consolidated
Subsidiaries at March 27, 2004.
4.2. NO CHANGE. Since March 27, 2004 (a) there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect and (b) except as permitted by subsection 7.8 or
subsection 7.8 of the Existing Credit Agreement, no dividends or other
distributions have been declared, paid or made upon the Capital Stock of the
Borrower or the Parent nor has any of the Capital Stock of the Borrower or the
Parent been redeemed, retired, purchased or otherwise acquired for value by the
Borrower or any of its Subsidiaries.
4.3. CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the
Parent and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization under the name
(as of the date hereof) set forth in its respective signature line hereto, (b)
has the corporate power and authority to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except where the failure to so qualify, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
4.4. CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each Loan Party has the corporate power and authority to make, deliver and
perform the Loan Documents to which it is a party and, in the case of the
Borrower, to borrow hereunder and has taken all corporate action necessary to be
taken by it to authorize the execution, delivery and performance of the Loan
Documents to which it is a party and in the case of the Borrower, to authorize
the borrowings on the terms and conditions of this Agreement, the Applications
and the other Loan Documents. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required to be made or obtained by the Borrower or any other
Loan Party in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of this Agreement or any other
Loan Documents
36
except (a) consents and filings which will have been obtained or made and will
be in full force and effect on the Closing Date and (b) such consents and
filings which, individually or in the aggregate, if not obtained, could not
reasonably be expected to have a Material Adverse Effect. This Agreement has
been, and, as of the Closing Date, each other Loan Document will be, duly
executed and delivered on behalf of each Loan Party thereto. This Agreement
constitutes, and each other Loan Document when executed and delivered will
constitute, a legal, valid and binding obligation of each Loan Party thereto,
enforceable against such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5. NO LEGAL BAR. The execution, delivery and performance of
the Loan Documents, the borrowings hereunder and the use of the proceeds thereof
will not violate any Requirement of Law or Contractual Obligation of the Parent
or of any of its Subsidiaries and will not result in, or require, the creation
or imposition of any Lien on any of its or their respective properties or
revenues pursuant to any such Requirement of Law or Contractual Obligation (it
being understood that the use of the proceeds of the borrowings to provide a
portion of the funds necessary to purchase any asset with respect to which the
remainder of the purchase price is financed by Indebtedness permitted under
subsections 7.2(c), 7.2(e) or 7.2(r) that is secured by a Lien on such asset
permitted by subsections 7.3(g) or 7.3(h) does not constitute the use of the
proceeds of a borrowing resulting in the creation or imposition of any Lien for
purposes of this subsection).
4.6. NO MATERIAL LITIGATION. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Parent or any of
its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) which could reasonably be
expected to have a Material Adverse Effect.
4.7. NO DEFAULT. Neither the Parent nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
4.8. OWNERSHIP OF PROPERTY; LIENS. Each of the Parent and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by subsection 7.3.
4.9. INTELLECTUAL PROPERTY. The Parent and each of its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). No claim has been asserted
37
and is pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does the Borrower know of any valid basis for any such claim
except for any such claim which could not reasonably be expected to have a
Material Adverse Effect. The use of such Intellectual Property by the Parent and
its Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
4.10. NO BURDENSOME RESTRICTIONS. No Requirement of Law or
Contractual Obligation of the Parent or any of its Subsidiaries could reasonably
be expected to have a Material Adverse Effect.
4.11. TAXES. Each of the Parent and its Subsidiaries has filed
or caused to be filed all Federal and other material tax returns which, to the
knowledge of the Parent or the Borrower, are required to be filed and has paid
all taxes shown to be due and payable on said returns or on any assessments (of
which notice has been received by it) made against it or any of its property and
all other material taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of the Parent or its Subsidiaries, as the case may be); no material tax
Lien has been filed, and, to the knowledge of the Parent or the Borrower, no
claim is being asserted, with respect to any such tax, fee or other charge.
4.12. FEDERAL REGULATIONS. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U of the Board
of Governors of the Federal Reserve System as now and from time to time
hereafter in effect or for any purpose which violates the provisions of the
regulations of such Board of Governors.
4.13. ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Single Employer Plan, and, to the knowledge of the Borrower, each
Multiemployer Plan, has complied in all material respects with the applicable
provisions of ERISA and the Code. No termination of a Single Employer Plan has
occurred other than a standard termination pursuant to Section 4041(b) of ERISA,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits. Neither the Borrower nor any Commonly Controlled Entity
would become subject to any liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made, which (in the aggregate with the
liabilities which have been incurred with respect to all such withdrawals which
38
have occurred since the Closing Date) would exceed $10,000,000. No such
Multiemployer Plan is in Reorganization or Insolvent. Neither the Borrower nor
any Commonly Controlled Entity has or could have any obligation to contribute
to, or any liability with respect to, any Plan, program or arrangement providing
for post-retirement welfare benefits, except as may be required pursuant to
Section 4980B of the Code or Section 601 of ERISA.
4.14. INVESTMENT COMPANY ACT; OTHER REGULATIONS. The Borrower
is not an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
The Borrower is not subject to regulation under any Federal or State statute or
regulation which limits its ability to incur Indebtedness.
4.15. SUBSIDIARIES. The Subsidiaries listed on Schedule 4.15
hereto constitute all the Subsidiaries of the Borrower and the Parent at the
date hereof.
4.16. PURPOSE OF LOANS. The proceeds of the Revolving Credit
Loans shall be used by the Borrower to repay indebtedness outstanding under the
Existing Credit Agreement and to provide funding for the general corporate
purposes of the Borrower and the Subsidiary Guarantors, including working
capital.
4.17. ENVIRONMENTAL MATTERS. To the knowledge of the Borrower,
each of the representations and warranties set forth in paragraphs (a) through
(f) of this subsection is true and correct, except to the extent that such
failures to be so true and correct were disclosed in the Registration Statement:
(a) The facilities and properties owned, leased or operated by
the Parent or any of its Subsidiaries (the "Properties") do not
contain, and have not previously contained, any Materials of
Environmental Concern in amounts or concentrations which (i) constitute
or constituted a violation of, or (ii) could reasonably be expected to
give rise to liability under, any Environmental Law except in either
case insofar as such violation or liability, or any aggregation
thereof, is not reasonably likely to result in the payment of a
Material Environmental Amount.
(b) The Properties and all operations at the Properties are in
compliance, and have in the last 5 years been in compliance, in all
material respects with all applicable Environmental Laws, and there is
no contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business
operated by the Parent or any of its Subsidiaries (the "Business")
which could reasonably be expected to materially interfere with the
continued operation of, or materially impair the fair saleable value
of, the Properties taken as a whole.
(c) Neither the Parent nor any of its Subsidiaries has
received any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or
compliance with Environmental Laws
39
with regard to any of the Properties or the Business, nor does the
Parent or the Borrower have knowledge or reason to believe that any
such notice will be received or is being threatened except insofar as
such notice or threatened notice, or any aggregation thereof, does not
involve a matter or matters that is or are reasonably likely to result
in the payment of a Material Environmental Amount.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a
manner or to a location which could reasonably be expected to give rise
to liability under, any Environmental Law, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of
at, on or under any of the Properties in violation of, or in a manner
that could reasonably be expected to give rise to liability under, any
applicable Environmental Law except insofar as any such violation or
liability referred to in this paragraph, or any aggregation thereof, is
not reasonably likely to result in the payment of a Material
Environmental Amount.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Parent or the Borrower,
threatened, under any Environmental Law to which the Parent or any of
its Subsidiaries is or will be named as a party with respect to the
Properties or the Business, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business except
insofar as such proceeding, action, decree, order or other requirement,
or any aggregation thereof, is not reasonably likely to result in the
payment of a material Environmental Amount.
(f) There has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of the Parent or any of its
Subsidiaries in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a
manner that could reasonably be expected to give rise to liability
under Environmental Laws except insofar as any such violation or
liability referred to in this paragraph, or any aggregation thereof, is
not reasonably likely to result in the payment of a Material
Environmental Amount.
SECTION V. CONDITIONS PRECEDENT
5.1. CONDITIONS TO EFFECTIVENESS. The amendment and
restatement of the Existing Credit Agreement provided for herein shall become
effective on the date upon which the following conditions precedent shall have
been satisfied (or waived by the Lenders):
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of the Borrower and the Parent, with a counterpart
for each Lender, and (ii) each of the
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Guarantees, each executed and delivered by a duly authorized officer of
the parties thereto, with a counterpart or a conformed copy for each
Lender.
(b) Borrowing Certificate. The Administrative Agent shall have
received a certificate of the Borrower, dated the Closing Date,
substantially in the form of Exhibit D, with appropriate insertions and
attachments, reasonably satisfactory in form and substance to the
Administrative Agent, executed by the President or any Vice President
and the Secretary or any Assistant Secretary of the Borrower.
(c) Corporate Proceedings of the Borrower. The Administrative
Agent shall have received a copy of the resolutions, in form and
substance reasonably satisfactory to the Administrative Agent, of the
Board of Directors of the Borrower authorizing (i) the execution,
delivery and performance of this Agreement and the other Loan Documents
to which it is a party and (ii) the borrowings contemplated hereunder,
certified by the Secretary or an Assistant Secretary of the Borrower as
of the Closing Date, which certificate shall be in form and substance
reasonably satisfactory to the Administrative Agent and shall state
that the resolutions thereby certified have not been amended, modified,
revoked or rescinded.
(d) Borrower Incumbency Certificate. The Administrative Agent
shall have received a certificate of the Borrower, dated the Closing
Date, as to the incumbency and signature of the officers of the
Borrower executing any Loan Document reasonably satisfactory in form
and substance to the Administrative Agent, executed by the President or
any Vice President and the Secretary or any Assistant Secretary of the
Borrower.
(e) Corporate Proceedings of the Parent. The Administrative
Agent shall have received a copy of the resolutions, in form and
substance reasonably satisfactory to the Administrative Agent, of the
Board of Directors of the Parent authorizing the execution, delivery
and performance of this Agreement and the other Loan Documents to which
the Parent is a party, certified by the Secretary or an Assistant
Secretary of the Parent as of the Closing Date, which certificate shall
be in form and substance reasonably satisfactory to the Administrative
Agent and shall state that the resolutions thereby certified have not
been amended, modified, revoked or rescinded.
(f) Parent Incumbency Certificate. The Administrative Agent
shall have received a certificate of the Parent, dated the Closing
Date, as to the incumbency and signature of the officers of the Parent
executing this Agreement and any other Loan Document reasonably
satisfactory in form and substance to the Administrative Agent,
executed by the President or any Vice President and the Secretary or
any Assistant Secretary of the Parent.
(g) Corporate Proceedings of Subsidiaries. The Administrative
Agent shall have received a copy of the resolutions, in form and
substance reasonably
41
satisfactory to the Administrative Agent, of the Board of Directors of
each Subsidiary of the Borrower which is a party to a Loan Document
authorizing the execution, delivery and performance of the Loan
Documents to which it is a party, certified by the Secretary or an
Assistant Secretary of each such Subsidiary as of the Closing Date,
which certificate shall be in form and substance reasonably
satisfactory to the Administrative Agent and shall state that the
resolutions thereby certified have not been amended, modified, revoked
or rescinded.
(h) Subsidiary Incumbency Certificates. The Administrative
Agent shall have received a certificate of each Subsidiary of the
Borrower which is a Loan Party, dated the Closing Date, as to the
incumbency and signature of the officers of such Subsidiaries executing
any Loan Document, reasonably satisfactory in form and substance to the
Administrative Agent, executed by the President or any Vice President
and the Secretary or any Assistant Secretary of each such Subsidiary.
(i) Corporate Documents. The Administrative Agent shall have
received true and complete copies of the certificate of incorporation
and by-laws of each Loan Party, certified as of the Closing Date as
complete and correct copies thereof by the Secretary or an Assistant
Secretary of such Loan Party.
(j) Fees. The Administrative Agent and the Lenders shall have
received the fees to be received on the Closing Date as separately
agreed between the Administrative Agent and the Borrower.
(k) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions addressed to the
Administrative Agent and the Lenders:
(i) the executed legal opinion of Debevoise &
Plimpton, New York counsel to the Borrower and the other Loan Parties,
substantially in the form of Exhibit E-1;
(ii) the executed legal opinion of Dennis Owen,
general counsel of the Borrower, substantially in the form of Exhibit
E-2; and
(iii) the executed legal opinion of Maples and
Calder, Cayman Islands counsel to the Borrower and the other Loan
Parties, substantially in the form of Exhibit E-3. Each such legal
opinion shall cover such other matters incident to the transactions
contemplated by this Agreement as the Administrative Agent may
reasonably require.
(l) Insurance. The Administrative Agent shall have received
evidence reasonably satisfactory to it as to the adequacy of the
insurance program of the Loan Parties and that each Loan Party has
obtained the insurance coverage required by subsection 6.5 hereof.
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(m) Existing Credit Agreement. The loans outstanding under the
Existing Credit Agreement on the Closing Date prior to giving effect to
this Agreement shall have been repaid in accordance with the procedures
set forth in subsection 2.2(a) and (b), and all interest, fees and
other amounts payable under the Existing Credit Agreement (including,
without limitation, amounts due under subsection 2.15 of the Existing
Credit Agreement) shall have been paid.
5.2. CONDITIONS TO EACH EXTENSION OF CREDIT. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including, without limitation, its initial extensions of credit) is
subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Loan Parties in or pursuant
to the Loan Documents shall be true and correct in all material
respects on and as of such date as if made on and as of such date (or,
if stated to relate to an earlier date, as of such earlier date).
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
Loans requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
subsection 5.2 have been satisfied.
SECTION VI. AFFIRMATIVE COVENANTS
Each of the Parent and the Borrower hereby agrees that, so
long as the Revolving Credit Commitments remain in effect, any Letter of Credit
remains outstanding or any Loan or any other amount is owing to any Lender or
the Administrative Agent hereunder, the Parent and the Borrower shall and, in
the case of the agreements set forth in subsections 6.3, 6.4, 6.5, 6.6 and 6.8,
shall cause each of the Borrower's Subsidiaries to:
6.1. FINANCIAL STATEMENTS. Furnish to each Lender:
(a) as soon as available, but in any event within 70 days (or
in the case of consolidating statements, 75 days) after the end of each
fiscal year of the Parent, a copy of the consolidated balance sheet and
consolidating balance sheet information of the Parent and its
consolidated Subsidiaries as at the end of such year, the related
consolidated statements of income and changes in Shareholders Equity
and of cash flows for such year and the related consolidating
statements of income and of cash flows information for such year,
setting forth in each case in comparative form the figures for the
previous year, reported on, in the case of the consolidated financial
statements, without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by
KPMG
43
L.L.P. or other independent certified public accountants of nationally
recognized standing; and
(b) as soon as available, but in any event not later than 40
days (or in the case of consolidating statements, 45 days) after the
end of each of the first three quarterly periods of each fiscal year of
the Parent, a copy of the unaudited consolidated balance sheet and
consolidating balance sheet information of the Parent and its
consolidated Subsidiaries as at the end of such quarter, the related
unaudited consolidated statements of income and changes in Shareholders
Equity and of cash flows of the Parent and its consolidated
Subsidiaries for such quarter and the related consolidating statements
of income and of cash flows information for such year and the portion
of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly stated in all
material respects (subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
(except, in the case of the financial statements referred to in subparagraph
(b), such financial statements need not contain footnotes) applied consistently
throughout the periods reflected therein and with prior periods (except as
approved by such accountants or officer, as the case may be, and disclosed
therein).
6.2. CERTIFICATES; OTHER INFORMATION. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsections 6.1(a) and 6.1(b), a certificate of a
Responsible Officer stating that, to the best of such Officer's
knowledge, each of the Parent and the Borrower during such period has
observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other
Loan Documents to which it is a party to be observed, performed or
satisfied by it, and that such Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate,
and setting forth in reasonable detail computations of compliance with
the provisions of subsection 7.1 (including, without limitation, any
reconciliation of such financial statements with generally accepted
accounting principles as utilized in preparing the audited financial
statements delivered pursuant to the first sentence of subsection 4.1);
(b) within five days after the same are sent, copies of all
financial statements and reports which the Parent or the Borrower sends
to its stockholders, and within five days after the same are filed,
copies of all financial statements and reports which the Parent or the
Borrower may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental Authority; and
(c) promptly, such additional financial and other information
as the Administrative Agent may from time to time reasonably request.
44
6.3. PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Parent or its Subsidiaries, as the case may be.
6.4. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
Continue to engage in business of the same general type as now conducted by it
(except that the Insurance Subsidiary shall be permitted to engage in the
Insurance Subsidiary Business, Parent, the Borrower, the Subsidiaries and the
Receivables SPV shall be permitted to engage in Permitted Receivables
Transactions and the Borrower and its Subsidiaries, including the Operator
Financing Subsidiary and the Financing Vehicle, as the case may be, shall be
permitted to engage in the Operator Financing Program and the various other
activities related thereto, in each case, subject to the applicable terms and
conditions of Section 7) and preserve, renew and keep in full force and effect
its corporate existence and take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business except as otherwise permitted pursuant to subsection 7.5; comply with
all Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, be reasonably expected
to have a Material Adverse Effect.
6.5. MAINTENANCE OF PROPERTY; INSURANCE. Keep all property
useful and necessary in its business in good working order and condition;
maintain with financially sound and reputable insurance companies insurance on
all its property in at least such amounts (not less than $35,000,000 per
occurrence in the case of comprehensive general liability and automobile
liability) and against at least such risks (but including in any event public
liability) as are usually insured against in the same general area by companies
engaged in the same or a similar business, including, without limitation,
insurance covering comprehensive general liability, automobile liability,
workers' compensation claims and employer's liability, provided that the Parent,
the Borrower and any Subsidiary may self-insure against any risk required to be
insured pursuant to this subsection 6.5 in an aggregate amount of up to
$10,000,000 per occurrence and provided further that in the event that the
Parent or any of its Subsidiaries self-insures against any risks required to be
insured against pursuant to this subsection 6.5 in an aggregate amount in excess
of $10,000,000 per occurrence, such self-insurance shall be in amounts
satisfactory to the Administrative Agent; and furnish to each Lender, upon
written request, full information as to the insurance carried.
6.6. INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and permit
representatives of the Administrative Agent (acting on its own or at the request
of any Lender) to visit and inspect any of its properties and examine and make
abstracts from any of its books and records at any reasonable time and as often
as may reasonably be requested and to discuss the business, operations,
properties and financial and other condition of the Parent and its Subsidiaries
45
with officers and employees of the Parent and its Subsidiaries and with its
independent certified public accountants.
6.7. NOTICES. Promptly give notice to the Administrative Agent
and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any material
Contractual Obligation of the Parent or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between the Parent or any of its Subsidiaries and any Governmental
Authority, which in the case of clause (i) or (ii) immediately above,
if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Parent or any
of its Subsidiaries in which (i) the amount involved is $10,000,000 or
more and not covered by insurance or (ii) in which injunctive or
similar relief is sought;
(d) the following events, as soon as possible and in any event
within 30 days after the Parent or the Borrower knows or has reason to
know thereof: (i) the occurrence or expected occurrence of any
Reportable Event with respect to any Plan; a failure to make any
required contribution to a Plan which failure is sufficient to result
in the imposition of a Lien on any property of the Borrower pursuant to
Section 302(f) or ERISA or Section 412(n) of the Code, the creation of
any Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action
by the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan other than a
standard termination pursuant to Section 4041(b) of ERISA; and
(e) any development or event which could reasonably be
expected by the Parent or any of its Subsidiaries to have a Material
Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
6.8. ENVIRONMENTAL LAWS. (a) Comply with, and ensure
compliance by all tenants, subtenants, agents and subcontractors, if any, with,
all applicable Environmental Laws and obtain and comply in all material respects
with and maintain, and ensure that all tenants, subtenants, agents and
subcontractors obtain and comply in all material respects with and maintain, any
and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws except to the extent that failure to do so could
not be reasonably expected to have a Material Adverse Effect.
46
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with
all lawful orders and directives of all Governmental Authorities
regarding Environmental Laws except to the extent that the same are
being contested in good faith by appropriate proceedings and the
pendency of such proceedings could not be reasonably expected to have a
Material Adverse Effect.
6.9. ADDITIONAL SUBSIDIARIES. Cause each Subsidiary (other
than any Subsidiary permitted pursuant to the first proviso to subsection 7.17
and the Receivables SPV) created after the Closing Date and having assets equal
to or greater than $500,000 and each Subsidiary which acquires, after the
Closing Date, assets which, when aggregated with the assets of such Subsidiary
prior to the Closing Date, are equal to or greater than $500,000 to execute a
joinder agreement pursuant to which such Subsidiary becomes a party to the
Subsidiaries Guarantee.
SECTION VII. NEGATIVE COVENANTS
Each of the Parent and the Borrower hereby agrees that, so
long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender or the
Administrative Agent hereunder, each of the Parent and the Borrower shall not,
and shall not permit any of its Subsidiaries (other than in the case of
subsection 7.8) to, directly or indirectly:
7.1. FINANCIAL CONDITION COVENANTS.
(a) Maintenance of Net Worth. Permit Consolidated Net Worth on
the last day of any fiscal quarter of the Parent to be less than
$80,000,000.
(b) Total Indebtedness to Consolidated EBITDA. Permit the
ratio (the "Leverage Ratio") of Total Indebtedness as of the last day
of any fiscal period of the Borrower to Consolidated EBITDA for the
period of four consecutive fiscal quarters of the Borrower then ending,
to be greater than 3.0 to 1.0.
(c) Fixed Charge Coverage. Permit as of the last day of any
fiscal quarter, the ratio of (i) Consolidated EBITDA for the period of
four consecutive fiscal quarters then ending, minus the amount of
expenditures during such period in respect of the purchase or other
acquisition of fixed or capital assets permitted pursuant to subsection
7.9 that are not made with Indebtedness described in subsection 7.2(c)
to (ii) the sum of Consolidated Interest Expense for such period, plus
all principal installments due during such period with respect to
Financing Leases to be less than the 2.00 to 1.0.
7.2. LIMITATION ON INDEBTEDNESS. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent and any of its Subsidiaries
under this Agreement and the other Loan Documents;
47
(b) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary Guarantor to the Borrower or any other Subsidiary;
(c) Indebtedness of the Borrower and any of its Subsidiaries
incurred to finance any acquisition of fixed or capital assets
permitted by subsection 7.9 (whether pursuant to a loan, a Financing
Lease or otherwise); provided that the principal amount of such
Indebtedness does not exceed the aggregate purchase price of such
property at the time it was acquired, and renewals, extensions and
refinancings of such Indebtedness, provided that the amount of such
Indebtedness outstanding at the time of such renewal, extension or
refinancing is not increased;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2 and renewals, extensions and refinancings thereof,
provided that the amount of such Indebtedness outstanding at the time
of such renewal, extension or refinancing is not increased;
(e) Indebtedness of a Person that becomes a Subsidiary of the
Borrower after the date hereof, Indebtedness secured by property or
assets acquired by any Subsidiary after the date hereof, Indebtedness
assumed in connection with acquisitions of assets permitted by
subsection 7.10(g) and any Indebtedness incurred to refinance any such
Indebtedness previously referred to in this paragraph, provided that
(i) such Indebtedness existed at the time such Person became a
Subsidiary or such property or assets were acquired, as the case may
be, and was not created in anticipation thereof or such Indebtedness is
created to refinance any such existing Indebtedness and does not
increase the outstanding principal amount thereof, (ii) any such
refinanced Indebtedness is payable with interest and fees at rates
consistent with those prevailing in the relevant market at the time of
issuance (as determined in good faith by the Borrower), (iii) the other
terms and conditions of any such refinanced Indebtedness referred to in
this paragraph, taken as a whole, including, without limitation, the
covenants, default provisions and representations and warranties, are
not more restrictive than the terms and conditions of this Agreement
(as determined in good faith by the Borrower), provided that nothing in
this clause shall be deemed to prevent such Indebtedness from being
secured by Liens permitted by subsection 7.3(g), and (iv) immediately
after giving effect to the acquisition of such Person, property or
assets or such refinancing, as the case may be, no Default or Event of
Default shall have occurred and be continuing;
(f) Indebtedness of the Parent, the Borrower or any Subsidiary
under any Interest Rate Protection Agreement or any Commodity Price
Protection Agreement permitted pursuant to subsection 7.10;
(g) Indebtedness of the Parent to the Borrower or any of its
Subsidiaries incurred to purchase, repurchase, redeem or retire the
Parent's Capital Stock, which Indebtedness is incurred when no Default
or Event of Default has occurred and is continuing or would result
therefrom and such purchase, repurchase, redemption or retirement is
made in compliance with 7.8(i);
48
(h) so long as no Default or Event of Default shall have
occurred and be continuing, Indebtedness of the Parent to the Borrower
or any of its Subsidiaries incurred to cover reasonable and necessary
expenses incurred by the Parent in connection with registration, public
offerings and exchange listing of securities;
(i) Indebtedness of the Parent to the Borrower and its
Subsidiaries in an amount sufficient to pay tax liabilities of the
Parent which are paid in cash by the Parent to any taxing authority and
which are attributable to income, business, properties or activities
of, or distribution of earnings by, the Parent or its Subsidiaries;
provided that the Parent shall repay such Indebtedness upon receipt of
any refunds of such tax payments in an amount equal to such refunds;
(j) Indebtedness of the Parent to the Borrower and its
Subsidiaries (in addition to Indebtedness otherwise permitted by this
subsection 7.2) incurred to pay expenses in the ordinary course of
business in an aggregate amount not to exceed in any fiscal year, when
added to all dividends made by the Borrower pursuant to subsection
7.8(b) during such fiscal year, $250,000;
(k) Indebtedness of the Parent to the Borrower and its
Subsidiaries incurred to pay premiums to insurance companies for
directors' and officers' insurance with respect to the Parent;
(l) Indebtedness of the Parent to the Borrower and its
Subsidiaries incurred to pay for the printing and distribution of
financial reports of the Parent, proxy solicitations and other
communications with shareholders of the Parent and for filings with the
Securities and Exchange Commission and costs directly related to the
annual meeting of shareholders of the Parent;
(m) Indebtedness of the Parent to the Borrower and its
Subsidiaries incurred to pay directors' fees and expenses to directors
of the Parent;
(n) Indebtedness of the Parent to the Borrower and its
Subsidiaries incurred to pay fees owed by the Parent to its transfer
agent;
(o) Indebtedness of the Borrower under unsecured lines of
credit not extended pursuant to this Agreement and not exceeding
$25,000,000 in aggregate principal amount at any one time outstanding;
(p) Permitted Specified Additional Debt in an aggregate
principal amount, when added to the aggregate amount of all then
existing Guarantee Obligations permitted by subsection 7.4(f), not to
exceed $150,000,000 at any time outstanding;
(q) Indebtedness of the Parent to the Borrower and its
Subsidiaries (in addition to Indebtedness otherwise permitted by this
subsection 7.2) the proceeds of which are used to pay fees to the
Parent's independent auditors, tax advisors and outside attorneys in
the ordinary course of business;
49
(r) Indebtedness incurred to exercise purchase options under
leases (other than Financing Leases and Short Term Leases) for
tractors, trailers and related equipment which leases are assumed or
acquired subsequent to July 1, 2004 in connection with Permitted
Acquisitions, provided that (i) such Indebtedness is payable with
interest and fees at rates consistent with those prevailing in the
relevant market at the time of issuance (as determined in good faith by
the Borrower), (ii) the other terms and conditions of such
Indebtedness, taken as a whole, including, without limitation, the
covenants, default provisions and representations and warranties, are
not more restrictive than the terms and conditions of this Agreement
(as determined in good faith by the Borrower), provided that nothing in
this clause shall be deemed to prevent such Indebtedness from being
secured by Liens permitted by subsection 7.3(h), and (iii) immediately
after giving effect to the exercise of such purchase option, no Default
or Event of Default shall have occurred and be continuing;
(s) Indebtedness of the Operator Financing Subsidiary or the
Financing Vehicle, as the case may be, to the Borrower in an aggregate
principal amount not to exceed $10,000,000 at any one time outstanding;
(t) Additional Indebtedness of the Parent or any of its
Subsidiaries not exceeding $10,000,000 in an aggregate principal amount
at any one time outstanding;
(u) Account Receivable Indebtedness of the Parent or any of
its Subsidiaries not exceeding $75,000,000 in an aggregate principal
amount at any one time outstanding; and
(v) Indebtedness of any Receivables SPV arising out of any
investment in such Receivables SPV made by the Parent, the Borrower or
any Subsidiary of the Borrower in accordance with ss.7.10(q).
7.3. LIMITATION ON LIENS. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:
(a) Liens for taxes which are not yet due or which are being
contested in good faith by appropriate proceedings or with respect to
which the failure to pay could not reasonably be expected to have a
Material Adverse Effect, provided that adequate reserves with respect
thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers' warehousemen's, mechanics' materialmen's,
repairmen's, supplier's, or other Liens arising in the ordinary course
of business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits
50
securing liability to insurance carriers under insurance or
self-insurance arrangements;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or such Subsidiary;
(f) Liens in existence on the date hereof listed on Schedule
7.3, securing Indebtedness permitted by subsection 7.2(d), provided
that no such Lien is spread to cover any additional property after the
Closing Date and that the amount of Indebtedness secured thereby is not
increased;
(g) Liens securing Indebtedness of the Borrower and its
Subsidiaries permitted by subsection 7.2(c) incurred to finance or
refinance the acquisition of fixed or capital assets, provided that (i)
such Liens shall be created substantially simultaneously with the
acquisition or refinancing of such fixed or capital assets, (ii) such
Liens do not at any time encumber any property other than the property
financed or refinanced by such Indebtedness, (iii) the amount of
Indebtedness secured thereby is not increased and (iv) the principal
amount of Indebtedness secured by any such Lien shall at no time exceed
the aggregate purchase price of such property at the time it was
acquired;
(h) Liens securing Indebtedness permitted by subsections
7.2(e) and (r) on the property or assets of a corporation which becomes
a Subsidiary after the date hereof, on property or assets acquired by
any Subsidiary after the date hereof, on assets acquired as permitted
by subsection 7.10(g) and on assets previously the subject of leases
referred to in subsection 7.2(r), provided that (i) such Liens existed
at the time such corporation became a Subsidiary or such property or
assets were acquired, as the case may be, and were not created in
anticipation thereof or, as the case may be, are created at the time
such Indebtedness is assumed or created, (ii) no such Lien is spread to
cover any additional property or assets, and (iii) the amount of
Indebtedness secured thereby is not increased;
(i) Liens of landlords or of mortgagees of landlords arising
solely by operation of law, on fixtures located on premises leased in
the ordinary course of business, provided that the rental payments
secured thereby are not yet due;
(j) Any attachment, judgment or similar Lien, unless the writ
or judgment or other process it secures shall not, within 60 days after
the entry
51
thereof, have been discharged or execution thereof stayed pending
appeal, or shall not have been discharged within 60 days after the
expiration of any such stay;
(k) Liens on the property or assets of the Insurance
Subsidiary securing the payment of claims in the aggregate amount of
not more than $75,000,000;
(l) Liens securing Account Receivable Indebtedness of the
Borrower and its Subsidiaries permitted by subsection 7.2(u); provided
that such Liens attach only to the accounts receivable that are the
subject of such Indebtedness and to the stock of the Receivables SPV;
and
(m) Liens securing Permitted Specified Additional Debt or
Outstanding Permitted Line of Credit Indebtedness, as the case may be,
provided that pari passu Liens on the assets subject thereto are also
created to secure the obligations and liabilities of the Loan Parties
hereunder and under the other Loan Documents, that the Permitted
Specified Additional Debt or Outstanding Permitted Line of Credit
Indebtedness as the case may be, is secured equally and ratably with
the Indebtedness and other obligations and liabilities of the Loan
Parties under this Agreement and the other Loan Documents.
7.4. LIMITATION ON GUARANTEE OBLIGATIONS. Create, incur,
assume or suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and
listed on Schedule 7.4;
(b) the Guarantees and Reimbursement Obligations;
(c) Guarantee Obligations entered into in the ordinary course
of business of any obligations (including Financing Leases and
operating leases) of the Borrower or any Subsidiary Guarantor;
(d) Guarantee Obligations of the Borrower and any of its
Subsidiaries of loans or advances to employees for moving, relocation,
travel and entertainment expenses, drawing accounts and similar
expenditures made in the ordinary course of business and in an
aggregate amount not exceeding, when added to loans and advances at any
time outstanding pursuant to subsection 7.10(c), $10,000,000
outstanding at such time;
(e) Guarantee Obligations in respect of Interest Rate
Protection Agreements and Commodities Price Protection Agreements to
the extent permitted pursuant to subsection 7.10;
(f) Guarantee Obligations of the Parent, the Borrower or any
Subsidiary of the Parent in respect of loans made pursuant to the
Operator Financing Program which are sold as permitted under Section
7.6(g), provided
52
that such Guarantee Obligations do not, in the aggregate, exceed
$50,000,000 at any one time outstanding;
(g) Guarantee Obligations of the Parent of the performance of
obligations of the Borrower or any of its Subsidiaries under
Contractual Obligations in existence at the time of any Permitted
Acquisition and not created in anticipation thereof under which the
Borrower or such Subsidiary becomes obligated as a result of such
Permitted Acquisition;
(h) Guarantee Obligations relating to obligations of any kind
of the Borrower, the Parent, or any of the Parent's Subsidiaries that
are not prohibited by this Agreement; and
(i) other Guarantee Obligations incurred after the date hereof
in an aggregate amount not to exceed $5,000,000 at any one time
outstanding.
7.5. LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
one or more wholly owned Subsidiaries of the Borrower (provided that
the wholly owned Subsidiary or Subsidiaries shall be the continuing or
surviving corporation and provided, further, that if any of such
Subsidiaries is a Subsidiary Guarantor, the surviving corporation shall
be a Subsidiary Guarantor);
(b) any wholly owned Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any other wholly owned
Subsidiary of the Borrower; and
(c) the Parent may be merged or consolidated with or into the
Borrower or the Borrower may be merged or consolidated with or into the
Parent (provided that if the Parent shall be the continuing or
surviving corporation, it shall have assumed all of the Borrower's
obligations hereunder pursuant to an agreement satisfactory in form and
substance to the Administrative Agent).
7.6. LIMITATION ON SALE OF ASSETS. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person other than the
Borrower or any wholly owned Subsidiary, except:
(a) the sale or other disposition of obsolete or worn out
property in the ordinary course of business;
53
(b) the sale or other disposition of any property in the
ordinary course of business, provided that (other than inventory and
other than dispositions permitted by subsection 7.6(a), (d) or (f)) the
aggregate book value of all assets so sold or disposed of in any period
of twelve consecutive months shall not exceed 10% of consolidated total
assets of the Borrower and its Subsidiaries as at the beginning of such
twelve-month period;
(c) the sale of inventory in the ordinary course of business;
(d) the sale or discount without recourse of accounts
receivable which are overdue for more than 60 days arising in the
ordinary course of business in connection with the compromise or
collection thereof;
(e) as permitted by subsection 7.5(b);
(f) the sale, lease, assignment, transfer or other disposition
of accounts receivable in connection with any Accounts Receivable
Indebtedness permitted pursuant to subsection 7.2(u);
(g) the sale (without recourse to the Operator Financing
Subsidiary or the Financing Vehicle, as the case may be) of loans made
pursuant to the Operator Financing Program by the Operator Financing
Subsidiary or the Financing Vehicle, as the case may be, to Persons
other than the Parent and its Subsidiaries or to the Insurance
Subsidiary or the Offshore Joint Venture to the extent (and only to the
extent) such purchase by the Insurance Subsidiary or the Offshore Joint
Venture, as the case may be, would constitute a Permitted Insurance
Company Investment;
(h) the sale of the real property referred to in clause (ii)
to the proviso to Section 7.13; and
(j) the sale and leaseback of all, or any portion, of the real
and personal property of the Borrower and its Subsidiaries referred to
in clauses (i) and (ii) of Section 7.13.
7.7. LIMITATION ON LEASES. Permit (a) Consolidated Lease
Expense (other than under leases for tractors, trailers and related equipment)
for any fiscal year of the Borrower to exceed $40,000,000 or (b) Consolidated
Lease Expense with respect to Short Term Leases in any fiscal year of the
Borrower to exceed $40,000,000.
7.8. LIMITATION ON DIVIDENDS. Declare or pay any dividend
(other than dividends payable solely in common stock of the Borrower or the
Parent) on, or make any payment on account of, or set apart assets for a sinking
or other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any shares of any class of Capital Stock of the Borrower
or the Parent, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Parent, the Borrower or any Subsidiary
except that:
54
(a) the Borrower may pay cash dividends to the Parent in an
amount sufficient to pay tax liabilities of the Parent which are paid
in cash by the Parent to any taxing authority and which are
attributable to income, business, properties or activities of or
distribution of earnings by, the Parent or its Subsidiaries; provided
that the Parent shall contribute to the Borrower the amount of any
refunds of such tax payments upon receipt thereof;
(b) the Borrower may pay cash dividends to the Parent, in
addition to dividends otherwise permitted by this subsection 7.8, to
enable the Parent to pay expenses in the ordinary course of business in
an aggregate amount not to exceed in any fiscal year, when added to all
Indebtedness of the Parent incurred in such fiscal year pursuant to
subsection 7.2(j), $250,000;
(c) the Borrower may pay cash dividends to the Parent to
enable the Parent to pay premiums to insurance companies for directors'
and officers' insurance with respect to the Parent;
(d) the Borrower may pay cash dividends to the Parent to
enable the Parent to pay for the printing and distribution of financial
reports of the Parent, proxy solicitations and other communications
with shareholders of the Parent and for filings with the Securities and
Exchange Commission and costs directly related to the annual meeting of
shareholders of the Parent;
(e) the Borrower may pay cash dividends to the Parent to
enable the Parent to pay directors' fees and expenses to directors of
the Parent;
(f) the Borrower may pay cash dividends to the Parent to
enable the Parent to pay fees owed by the Parent to its transfer agent;
(g) the Borrower may pay cash dividends to the Parent to pay
fees to the Parent's independent auditors, tax advisors and outside
attorneys in the ordinary course of business;
(h) the Borrower may pay cash dividends to the Parent to pay
obligations of the Parent incurred under any Interest Rate Protection
Agreement or Commodity Price Protection Agreement permitted pursuant to
subsection 7.10(1); and
(i) so long as no Default or Event of Default shall have
occurred and be continuing or would result therefrom, the Borrower may
purchase, repurchase, redeem or retire any share of its Capital Stock
and/or pay cash dividends to the Parent, and the Parent may purchase,
repurchase, redeem or retire any share of its Capital Stock and/or pay
cash dividends to its shareholders.
7.9. LIMITATION ON CAPITAL EXPENDITURES. Make or commit to
make (by way of the acquisition of securities of a Person or otherwise) any
expenditure in respect of the purchase or other acquisition of fixed or capital
assets (excluding (i) any such asset acquired in connection with normal
replacement and maintenance programs
55
properly charged to current operations or which are payable from the proceeds of
insurance received by the Parent, the Borrower or any Subsidiary, (ii) any such
asset acquired in connection with a Permitted Acquisition, (iii) any such asset
constituting a tractor, trailer or related item of transportation equipment
acquired for the purpose of reselling the same to an independent contractor
doing business with the Borrower and its Subsidiaries but only to the extent
that the purchase price of such tractor, trailer or related item of equipment,
when added to the aggregate purchase price of all such other tractors, trailers
and related items of equipment then owned by the Borrower and its Subsidiaries,
does not exceed $5,000,000 and (iv) expenditures of up to $30,000,000 each with
respect to the assets referred to in clauses (i) and (ii) to the proviso in
Section 7.13, except for expenditures not exceeding, when added to the value of
all assets (determined in accordance with GAAP) rented under leases (other than
Financing Leases and Short Term Leases) for tractors, trailers and related
equipment entered into during any fiscal year of the Parent, in the aggregate
for the Parent and its Subsidiaries during any such fiscal year, the amount of
$60,000,000, provided, that, in the event that the amount permitted pursuant to
this subsection for any fiscal year exceeds the actual amount of all capital
expenditures for such fiscal year (whether permitted by virtue of a carry-over
pursuant to this proviso or otherwise), the amount of such excess up to an
amount not to exceed $5,000,000 may be carried over for expenditure in that
portion of the fiscal year immediately following such fiscal year that follows
delivery of the financial statements delivered pursuant to subsection 6.1(a)
with respect to such fiscal year.
7.10. LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any Person,
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents, investments by the
Insurance Subsidiary in Permitted Insurance Company Investments and
investments by the Offshore Joint Venture in Permitted Insurance
Company Investments;
(c) loans and advances to employees of the Borrower or its
Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business in an aggregate amount for the Borrower and
its Subsidiaries not to exceed, when added to Guarantee Obligations at
any time outstanding pursuant to subsection 7.4(d), $10,000,000
outstanding at such time;
(d) investments by the Parent in the Borrower or any
Subsidiary Guarantor, investments by the Borrower in any Subsidiary
Guarantor and investments by any Subsidiary in the Borrower or in any
Subsidiary Guarantor;
(e) advances in the ordinary course of business (excluding
those permitted by subsection 7.10(1)) to any independent contractor
performing services for it or for any of its agents not to exceed
$20,000,000 in the aggregate
56
for the Parent and its Subsidiaries at any time outstanding maturing
not later than seven years after the incurrence thereof;
(f) short term loans (excluding those permitted by subsection
7.10 (1)) and compensation advances to any independent contractor
performing services for it or for any of its agents made in the
ordinary course of business that do not exceed the projected revenues
to be paid to such independent contractor within two months of such
loans or advances, and in the case of loans, which mature not later
than two months after the making of such loans;
(g) any acquisition of all or a portion of the assets or
Capital Stock of any Person that constitutes a business engaged
primarily in the same business in which the Borrower and its
Subsidiaries are engaged on the date of this Agreement or a business
that is directly related thereto, provided that (i) the aggregate
purchase price paid by the Borrower for any such acquisition (including
the amount of any deferred purchase price, and all amounts applied
within one year of the consummation of such acquisition to the
refinancing of any Financing Leases to which such assets or Person is
subject on the date of the consummation of such acquisition, other than
Indebtedness so applied to such refinancing) shall not exceed
$150,000,000, it being understood that a series of related transactions
that are acquisitions of assets or Capital Stock of the same Person or
business shall constitute a single acquisition for the purposes of this
clause (i); (ii) neither the Borrower nor any Subsidiary shall offer to
purchase more than 10% of the Capital Stock of such Person in
connection with any such acquisition unless such transaction has been
approved by either all the Lenders or a majority of the board of
directors of such Person; and (iii) the requirements of subsection 7.1
would be satisfied by the Parent and its Subsidiaries on a pro forma
combined basis as at the end of the most recently ended fiscal quarter
of the Parent for which financial statements have been delivered
pursuant to subsection 6.1 if each such acquisition had been completed
on or prior to the first day of the fourth fiscal quarter period ended
with such most recently ended fiscal quarter (excluding in such pro
forma calculation any extraordinary or non-recurring items related to
such acquisition).
(h) investments in notes and other securities received in the
settlement of overdue debts and accounts payable in the ordinary course
of business and for amounts which, individually or in the aggregate, do
not exceed $10,000,000 at any time outstanding;
(i) investments by the Borrower or any of its Subsidiaries in
Commodity Price Protection Agreements and Interest Rate Protection
Agreements; provided such investments in such Commodity Price
Protection Agreements are made solely for the purpose of hedging
purchase prices of fuel and not for speculation;
(j) investments of the Borrower or any Subsidiary in the
Parent that constitute Indebtedness of the Parent pursuant to
subsection 7.2(g)-(n) or (q).
57
(k) investments, loans and advances by the Borrower in an
amount not to exceed $10,000,000 in the aggregate in connection with
the formation of partnerships, limited liability companies, joint
ventures and other business organizations that do not constitute
Subsidiaries;
(l) investments, loans and/or advances by the Borrower in or
to the Operator Financing Subsidiary or the Financing Vehicle, as the
case may be, in an aggregate amount not to exceed $10,000,000 at any
one time outstanding, the proceeds of which shall be used by the
Operator Financing Subsidiary or the Financing Vehicle, as the case may
be, to make loans to independent contractors pursuant to the Operator
Financing Program;
(m) loans by the Operator Financing Subsidiary or the
Financing Vehicle, as the case may be, to independent contractors to
finance such contractor's acquisition of tractors, trailers, and
related transportation equipment;
(n) other investments not to exceed $5,000,000 at any one time
outstanding;
(o) loans to its employees for the purpose of exercising
employee stock options to purchase common stock of the Parent, which
loans may be non-recourse;
(p) loans to its employees to purchase common stock of the
Parent, which loans may be non-recourse, provided all such loans may
not exceed $5,000,000 at any one time outstanding; and
(q) the formation and funding of Receivables SPVs to engage in
Permitted Receivables Transactions including, without limitation,
investments in and loans to any Receivables SPVs in connection with a
Permitted Receivables Transaction, provided that the Receivables SPV
shall not have cash in excess of $5,000,000 for more than a 30 day
period at any time.
7.11. LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF
DEBT INSTRUMENTS. (a) Make any optional payment or prepayment on or redemption
of any Indebtedness (other than (i) the Loans, (ii) Indebtedness incurred
pursuant to subsection 7.2(c), (iii) Financing Leases that are refinanced with
Indebtedness incurred pursuant to subsection 7.2(c)), (iv) any Account
Receivable Indebtedness permitted pursuant to subsection 7.2(u) and (v)
Outstanding Permitted Line of Credit Indebtedness permitted pursuant to
subsection 7.2(0) or (b) amend, modify or change, or consent or agree to any
amendment, modification or change to any of the terms relating to the payment or
prepayment or principal of or interest on any such Indebtedness (other than any
such amendment, modification or change which would extend the maturity or reduce
the amount of any payment of principal thereof or which would reduce the rate or
extend the date for payment of interest thereon).
7.12. LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of
58
property or the rendering of any service, with any Affiliate (other than the
Parent, the Borrower or any Subsidiary) unless such transaction is (a) otherwise
permitted under this Agreement, (b) in the ordinary course of the Parent's, the
Borrower's or such Subsidiary's business and (c) upon fair and reasonable terms
no less favorable to the Parent, the Borrower or such Subsidiary, as the case
may be, than it would obtain in a comparable arm's length transaction with a
Person which is not an Affiliate.
7.13. LIMITATION ON SALES AND LEASEBACKS. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary except with respect to any such transactions which shall not have an
aggregate fair market value in excess of $10,000,000 in any fiscal year and
$15,000,000 in the aggregate; provided, however, that, in addition to the
foregoing the Borrower may enter into such arrangements with respect to (i) the
headquarters facility in Jacksonville, Florida, for aggregate consideration of
up to $30,000,000 and (ii) real and personal property located or to be
constructed adjacent to such headquarters facility, as identified by the
Borrower to the Administrative Agent prior to the date hereof, for aggregate
consideration of $30,000,000.
7.14. LIMITATION ON CHANGES IN FISCAL YEAR. Permit the fiscal
year of the Borrower or the Parent to end on a day other than the last Saturday
in December.
7.15. LIMITATION ON NEGATIVE PLEDGE CLAUSES. (a) Enter into
with any Person any agreement which prohibits or limits the ability of the
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, other than (A) this Agreement, (B) any such agreement with
respect to (i) any Account Receivable Indebtedness permitted pursuant to
subsection 7.2(u), (ii) any industrial revenue bonds, (iii) any purchase money
mortgages and (iv) any Financing Leases permitted by this Agreement (in which
cases, any prohibition or limitation shall be effective only against the assets
financed thereby) and (C) any such agreement in respect of Permitted Specified
Additional Debt or Outstanding Permitted Line of Credit Indebtedness, as the
case may be, but only to the extent that such Indebtedness is permitted pursuant
to subsection 7.2 and such agreements comply with subsection 7.15(b); or
(b) enter into any agreement with respect to Permitted
Specified Additional Debt or Outstanding Permitted Line of Credit
Indebtedness, as the case may be, that prohibits or limits the ability
of the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, to secure the obligations of
the Borrower to the Administrative Agent or any Lender hereunder or
under the other Loan Documents (including, without limitation, any
advances or extensions of credit made hereunder prior to or subsequent
to the creation of such Lien) or to secure any Loan Party's obligations
to the Administrative Agent or any Lender under any Loan Document to
which it is a
59
party, provided that the Borrower may enter into any such agreement
which would permit any such Lien but only to the extent that the
Permitted Specified Additional Debt and/or Outstanding Permitted Line
of Credit Indebtedness, as the case may be, will be equally and ratably
secured with any and all other obligations which are secured in
connection with the creation of such Lien.
7.16. LIMITATION ON LINES OF BUSINESS. Enter into any
business, either directly or through any Subsidiary, except for those businesses
in which the Borrower and its Subsidiaries are engaged on the date of this
Agreement or which are directly related thereto (including purchasing and
selling of tractors, trailers and related transportation equipment, operating
the Operator Financing Program, warehousing, logistics, brokerage, freight
forwarding (including by ocean shipment), common carriage, contract carriage,
dispatching, transportation out-sourcing services, intermodal business, surface
expedited business, consulting on transportation matters, and truck stops
operated primarily to service vehicles operated by or for the Borrower and its
Subsidiaries), provided that, subject to the other provisions of this Agreement,
the foregoing shall not prohibit the Borrower or any Subsidiary from entering
into the partnership or joint venture permitted pursuant to subsection 7.10(k);
provided, further, that the Insurance Subsidiary shall be permitted to engage in
the Insurance Subsidiary Business, provided that, in the case of insurance for
independent contractors, the premiums charged by the Insurance Subsidiary in
connection therewith are consistent in all material respects with those
prevailing in the industry for similar risks (based on the good faith judgment
of the Insurance Subsidiary) and provided, further, that of the total insurance
premiums received by the Insurance Subsidiary during any period of four
consecutive fiscal quarters (inclusive of any reinsurance premiums), (A) no more
than one-third of such total premiums may derive from insurance or reinsurance
provided by the Insurance Subsidiary in reliance on clause (X) (b) of the
definition of Insurance Subsidiary Business, (B) no more than one-third of such
total premiums may derive from reinsurance provided by the Insurance Subsidiary
in reliance on clause (Y) of the definition of Insurance Subsidiary Business and
(C) no more than one-half of such total premiums may derive from the sum of the
premiums described in subclauses (A) and (B) above.
7.17. LIMITATION ON FORMATION OF FOREIGN SUBSIDIARIES. Form
any Subsidiary on or after the Closing Date under the laws of any jurisdiction
other than any state of the United States of America; provided that the Borrower
shall be permitted to form Subsidiaries under the laws of Mexico or Canada if
the aggregate assets of all such Subsidiaries do not at any time exceed an
amount equal to $5,000,000; provided, further, that the Borrower shall be
permitted to form the Insurance Subsidiary and the Offshore Joint Venture.
7.18. LIMITATION ON NON-GUARANTOR SUBSIDIARIES. Permit at any
time Subsidiaries (other than the Operator Financing Subsidiary, the Financing
Vehicle or the Receivables SPV) that are not parties to the Subsidiaries
Guarantee to have assets equal to more than $10,000,000 in the aggregate.
60
SECTION VIII. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan
or the Borrower shall fail to pay any Reimbursement Obligation when due
in accordance with the terms thereof or hereof; or the Borrower shall
fail to pay any interest on any Loan, or the Borrower shall fail to pay
any other amount payable hereunder, within five days after any such
interest or other amount becomes due in accordance with the terms
thereof or hereof; or
(b) Any representation or warranty made or deemed made by the
Borrower or any other Loan Party herein or in any other Loan Document
or which is contained in any certificate, document or financial or
other statement furnished by it at any time under or in connection with
this Agreement or any such other Loan Document shall prove to have been
incorrect in any material respect on or as of the date made or deemed
made; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in subsection 6.9
or Section 7 of this Agreement, section 10 of the Parent Guarantee (to
the extent such Section incorporates by reference the covenants
contained in subsection 6.9 or Section 7 hereof), Section 11 of the
Subsidiaries Guarantee (to the extent such Section incorporates by
reference the covenants contained in subsection 6.9 or Section 7
hereof) or Section 10 of the L/C Guarantee (to the extent such Section
incorporates by reference the covenants contained in subsection 6.9 or
Section 7 hereof); or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days; or
(e) The Parent, the Borrower or any of its Subsidiaries shall
(i) default in any payment of principal of or interest of any
Indebtedness (other than the Loans) or in the payment of any Guarantee
Obligation, the aggregate principal amount of which exceeds $5,000,000,
beyond the period of grace (not to exceed 30 days), if any, provided in
the instrument or agreement under which such Indebtedness or Guarantee
Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of
61
notice if required, such Indebtedness to become due prior to its stated
maturity or such Guarantee Obligation to become payable; or
(f) (i) The Parent, the Borrower or any of its Subsidiaries
shall commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it as bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any
substantial part of its assets, or the Parent, the Borrower or any of
its Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Parent, the
Borrower or any of its Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against the
Parent, the Borrower or any of its Subsidiaries any case, proceeding or
other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) the Parent, the
Borrower or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) the Parent, the Borrower or any of its Subsidiaries
shall generally not, or shall be unable to, or shall admit in writing
its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is reasonably likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA,
(v) the Borrower or any Commonly Controlled Entity shall incur, or is
reasonably likely to incur, any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other similar event or condition shall
occur or exist with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other
such events or conditions, if any, would reasonably be expected to
subject
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the Borrower, or any Commonly Controlled Entity to any tax, penalty or
other liabilities in an aggregate amount in excess of $10,000,000; or
(h) One or more judgments or decrees shall be entered against
the Parent, the Borrower or any of its Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance) of
$10,000,000 or more, and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 60
days from the entry thereof; or
(i) Any Guarantee shall cease, for any reason, to be in full
force and effect or any Guarantor shall so assert in writing; or
(j) (i) The Parent shall cease to own, free and clear of any
Liens, 100% of the Capital Stock of the Borrower or (ii) any Person or
"group" (within the meaning of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended) (A) shall have acquired beneficial
ownership of 25% or more of any outstanding class of Capital Stock
having ordinary voting power in the election of directors of the Parent
or (B) shall obtain the power (whether or not exercised) to elect a
majority of the Parent's directors or (iii) the Board of Directors of
the Parent shall not consist of a majority of Continuing Directors; as
used in this paragraph "Continuing Directors" shall mean the directors
of the Parent on the Closing Date and each other director, if such
other director's nomination for election to the Board of Directors of
the Parent is recommended by a majority of the then Continuing
Directors;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, which shall be applied as set forth in the next
succeeding paragraph, whether or not the beneficiaries of the then outstanding
Letters of Credit shall have presented the documents required thereunder) shall
immediately become due and payable, and (B) if such event is any other Event of
Default, either or both of the following actions may be taken: (i) with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including,
without limitation, all amounts of L/C Obligations, which shall be applied as
set forth in the next succeeding paragraph, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable.
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With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit in
a cash collateral account opened by the Administrative Agent an amount equal to
the aggregate then undrawn and unexpired amount of such Letters of Credit.
Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower.
Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
SECTION IX. THE ADMINISTRATIVE AGENT
9.1. APPOINTMENT. Each Lender hereby irrevocably designates
and appoints JPMorgan Chase Bank as the Administrative Agent of such Lender
under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes JPMorgan Chase Bank, as the Administrative Agent for such
Lender, to take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise such powers and perform such duties
as are expressly delegated to the Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
9.2. DELEGATION OF DUTIES. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
9.3. EXCULPATORY PROVISIONS. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document
64
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or for any failure of
the Borrower to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
9.4. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans.
9.5. NOTICE OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
9.6. NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
has made any representations or warranties to it and that no act by the
Administrative Agent hereinafter
65
taken, including any review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower which may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
9.7. INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Percentages in effect on the date on which
indemnification is sought under this subsection (or, if indemnification is
sought after the date upon which the Revolving Credit Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with their Percentages immediately prior to such date), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (whether before or after the payment of the Loans) be imposed on, incurred
by or asserted against the Administrative Agent in any way relating to or
arising out of this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent's gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Loans and all other amounts payable
hereunder.
9.8. ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Administrative Agent were not the Administrative Agent hereunder and under the
other Loan Documents With respect to its Loans made or renewed by it and with
respect to any Letter of Credit issued or participated in by it, the
Administrative Agent shall have the same rights and
66
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
9.9. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent
may resign as Administrative Agent upon 30 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders, agreeing to become a successor agent, a
successor agent for the Lenders, which successor agent shall be approved by the
Borrower, whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.
SECTION X. MISCELLANEOUS
10.1. AMENDMENTS AND WAIVERS. Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. The Required Lenders may, or, with the written consent of the
Required Lenders (receipt of which has been confirmed in writing by the
Administrative Agent to the Borrower), the Administrative Agent may, from time
to time, (a) enter into with the Loan Parties written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights or obligations of the Lenders or of the Borrower hereunder or
thereunder or (b) waive, on such terms and conditions as the Required Lenders or
the Administrative Agent, as the case may be, may specify in such instrument,
any of the requirements of this Agreement or the other Loan Documents or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall (i) reduce
the amount or extend the scheduled date of maturity of any Loan or of any
installment thereof, or reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof or increase the
amount or extend the expiration date of any Lender's Commitment, in each case
without the consent of each Lender affected thereby, (ii) amend, modify or waive
any provision of this subsection or reduce the percentage specified in the
definition of Required Lenders, or consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement and the other
Loan Documents or release any Guarantor, in each case without the written
consent of all the Lenders, (iii) amend, modify or waive any provision of
Section 9 without the written consent of the then Administrative Agent or (iv)
amend, modify or waive any provision of Section 3 without the written consent of
the then Issuing Lender. Any such waiver and
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any such amendment, supplement or modification shall apply equally to each of
the Lenders and shall be binding upon the Borrower, the Lenders, the
Administrative Agent and all future holders of the Loans. In the case of any
waiver, the Borrower, the Lenders and the Administrative Agent shall be restored
to their former position and rights hereunder and any other Loan Documents, and
any Default or Event of Default waived shall be deemed to be cured and not:
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
10.2. NOTICES. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or three days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, or, in the case of delivery by a nationally-recognized overnight
courier, when received, addressed as follows in the case of the Borrower, the
Parent and the Administrative Agent, and as set forth in Schedule 1.1(a) in the
case of the other parties hereto, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the Loans:
The Borrower: Landstar System Holdings, Inc.
13410 Sutton Park Drive South
Jacksonville, Florida 32224
Attention: Robert C. LaRose
Telecopy: (904) 390-1323
The Parent: Landstar System, Inc.
13410 Sutton Park Drive South
Jacksonville, Florida 32224
Attention: Robert C. LaRose
Telecopy: (904) 390-1323
The Administrative Agent: JPMorgan Chase Bank
270 Park Avenue
New York, New York 10017
Attention: Richard Duker
Telecopy: (212) 270-5127
With a copy to: JPMorgan Chase Bank
Loan & Agency Services
1111 Fannin, 10th Floor
Houston, Texas 77002
Attention: Khuyen K. Ta
Telecopy: (713) 750-2938
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 2.2, 2.4, 2.6, 2.12 or 3.2 shall not be
effective until received.
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(b) Notices and other communications to the Lenders hereunder
may be delivered or furnished by electronic communications pursuant to
procedures approved by the Administrative Agent; provided that the
foregoing shall not apply to notices pursuant to Article II and Article
III unless otherwise agreed by the Administrative Agent and the
applicable Lender. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved
by it; provided that approval of such procedures may be limited to
particular notices or communications.
(c) It is acknowledged that the Administrative Agent may
provide notices and other communications to the Lenders using
"Intralinks" (www.intralinks.com) or a similar, reputable forum on the
internet, and such notices or communications will be deemed to have
been given on the date of notification by electronic mail of posting to
such forum.
(d) Any party hereto may change its address or telecopy number
for notices and other communications hereunder by notice to the other
parties hereto. All notices and other communications given to any party
hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt.
10.3. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
10.5. PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a)
to pay or reimburse the Administrative Agent for all its reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent, (b) to
pay or reimburse each Lender and the Administrative
69
Agent for all its reasonable costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any such other documents, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent and to
the several Lenders (but excluding any transfer or similar taxes arising solely
from the event of an assignment by a Lender under subsection 10.6(c)), (c) to
pay, indemnify, and hold each Lender and the Administrative Agent harmless from,
any and all recording and filing fees and any and all liabilities with respect
to, or resulting from any delay in paying, stamp, excise and other similar
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents (but excluding any such taxes
arising solely from the event of an assignment by a Lender under subsection
10.6(c)), and (d) to pay, indemnify, and hold each Lender and the Administrative
Agent harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
other Loan Documents and any such other documents, including, without
limitation, any of the foregoing relating to the violation of, noncompliance
with or liability under, any Environmental Law applicable to the operations of
the Borrower or any of its Subsidiaries (all the foregoing in this clause (d),
collectively, the "indemnified liabilities"), provided, that the Borrower shall
have no obligation hereunder to the Administrative Agent or any Lender with
respect to indemnified liabilities arising from (i) the gross negligence or
willful misconduct of the Administrative Agent or any Lender or (ii) legal
proceedings commenced against the Administrative Agent or any Lender by any
security holder or creditor thereof arising out of and based upon rights
afforded any such security holder or creditor solely in its capacity as such.
Notwithstanding the foregoing, except as provided in clause (c) above, the
Borrower shall have no obligation under this subsection 10.5 to the
Administrative Agent or any Lender with respect to any tax, levy, impost, duty,
charge, fee, deduction or withholding imposed, levied, collected, withheld or
assessed by any Governmental Authority. The agreements in this subsection shall
survive repayment of the Loans and all other amounts payable hereunder.
10.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.
(a) This Agreement shall be binding upon and inure to the benefit of each of the
Loan Parties, the Lenders, the Administrative Agent, all future holders of the
Loans and their respective successors and assigns, except that no Loan Party may
assign or transfer (other than in connection with a merger, liquidation or
consolidation permitted by subsection 7.5) any of its rights or obligations
under this Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender any Commitment
of such Lender or any other interest of such Lender hereunder and under
the other Loan Documents, provided, that the amount
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of the Commitment sold to such Participant pursuant to such
participation (determined as of the date of the Assignment and
Assumption with respect to such participation) shall not be less than
$2,500,000. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations
under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such
Loan (and any Note evidencing such Loan) for all purposes under this
Agreement and the other Loan Documents, the Borrower and the
Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations
under this Agreement and the other Loan Documents and such Participant
shall have no right to approve any amendment or waiver of any provision
of any Loan Document, or to consent to any departure by any Loan Party
therefrom, except to the extent that such amendment, waiver or consent
would extend the maturity of or reduce the principal of, or interest
on, the Loans or any fees payable hereunder, in each case to the extent
subject to such participation. The Borrower agrees that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to
have the right of setoff in respect of its participating interest in
amounts owing under this Agreement to the same extent as if the amount
of its participating interest were owing directly to it as a Lender
under this Agreement, provided that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with
the Lenders the proceeds thereof as provided in subsection 10.7(a) as
fully as if it were a Lender hereunder. The Borrower also agrees that
each Participant shall be entitled to the benefits of subsections 2.14
and 2.15 with respect to its participation in the Commitments and the
Loans outstanding from time to time as if it was a Lender; provided
that, in the case of subsection 2.15, such Participant shall have
complied with the requirements of said subsection and provided,
further, that the Borrower shall not be required to pay, in respect of
the amount of the participation transferred by such transferor Lender
to such Participant, any greater amount pursuant to any such
subsections than the Borrower would have been required to pay in
respect of the amount of the Loans subject to such participation had no
such transfer occurred.
(c) Any Lender may assign to one or more assignees (an
"Assignee") all or a portion of its rights and obligations under this
Agreement and the Loan Documents (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld) of (a)
the Borrower, PROVIDED that no consent of -------- the Borrower shall
be required for an assignment to a Lender or a Lender Affiliate or, if
an Event of Default has occurred and is continuing, any other Assignee,
and (b) the Administrative Agent and (c) the Issuing Lender, pursuant
to an Assignment and Acceptance, substantially in the form of Exhibit
F, executed by such Assignee, such assigning Lender, the Administrative
Agent and the Issuing Lender (and, in the case of an Assignee that is
not then a Lender or a Lender Affiliate, by the Borrower, unless an
Event of Default has occurred and is
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continuing) and delivered to the Administrative Agent for its
acceptance and recording in the Register, provided, that the amount of
the Revolving Credit Commitment of the assigning Lender assigned
pursuant to such assignment (determined as of the date of the
Assignment and Assumption with respect to such assignment) shall not be
less than $2,500,000. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to
such Assignment and Acceptance, (x) the Assignee thereunder shall be a
party hereto and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder with
a Commitment as set forth therein, and (y) the assigning Lender
thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and,
in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under
this Agreement, such assigning Lender shall cease to be a party hereto
and shall have no further rights except as set forth in the Assignment
and Acceptance).
(d) The Administrative Agent shall maintain at its address
referred to in subsection 10.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "Register") for the recordation of
the names and addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, and Notes, if any, evidencing
such Loans held by, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each
Person whose name is recorded in the Register as the owner of the Loan
recorded therein for all purposes of this Agreement. The Register shall
be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee
that is not then a Lender or an affiliate thereof, by the
Administrative Agent) together with payment to the Administrative Agent
of a registration and processing fee of $3,500, the Administrative
Agent shall (i) promptly accept such Assignment and Acceptance and (ii)
on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such
acceptance and recordation to the Lenders and the Borrower. On or prior
to such effective date, the Borrower, at its own expense, shall, upon
receipt of a written request from the Assignee, execute and deliver to
the Administrative Agent a Note to the order of such Assignee in an
amount equal to the Commitment assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained a
Commitment hereunder and so requests it, a replacement Note to the
order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes shall be dated the
Closing Date and otherwise shall be in the form of Exhibit A or Exhibit
B hereto. The Note or Notes surrendered by the assigning Lender shall
be returned by the Administrative Agent to the Borrower marked
"cancelled".
72
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective
Transferee (subject to the provisions of subsection 10.16 hereof) any
and all financial information in such Lender's possession concerning
the Borrower and its Affiliates which has been delivered to such Lender
by or on behalf of the Borrower pursuant to this Agreement or which has
been delivered to such Lender by or on behalf of the Borrower in
connection with such Lender's credit evaluation of the Borrower and its
Affiliates prior to becoming a party to this Agreement.
(g) Nothing herein shall prohibit any Lender from pledging or
assigning any Note, together with its rights hereunder, to any Federal
Reserve Bank in accordance with applicable law.
10.7. ADJUSTMENTS; SET-OFF. (a) If any Lender (a "Benefitted
Lender") shall at any time receive any payment of all or part of its Loans or
the Reimbursement Obligations owing to it, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in subsection 8(f),
or otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender's Loans or
the Reimbursement Obligations owing to it, or interest thereon, such Benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Loan or the Reimbursement
Obligations owing to it, or shall provide such other Lenders with the benefits
of any such collateral, or the proceeds thereof, as shall be necessary to cause
such Benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, however, that
if all or any portion of such excess payment or benefits is thereafter recovered
from such Benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice
to the Borrower, any such notice being expressly waived by the Borrower
to the extent permitted by applicable law, upon any amount becoming due
and payable by the Borrower hereunder or under any other Loan Document
and the expiration of any applicable period of grace provided for
herein or in any other Loan Document (whether at the stated maturity,
by acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for
the credit or the account of the Borrower. Each Lender agrees promptly
to notify the Borrower and the Administrative Agent after any such
set-off and application made by such Lender, provided that the failure
to give such notice shall not affect the validity of such set-off and
application.
73
10.8. COUNTERPARTS; EFFECTIVENESS. This Agreement may be
executed by one or more of the parties to Agreement on any number of separate
counterparts (and by telecopy), and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. A set of the copies
of this Agreement signed by all the parties shall be lodged with the Borrower
and the Administrative Agent. Except as provided in Section 5.1, this Agreement
shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
10.9. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10. INTEGRATION. This Agreement and the other Loan
Documents and any separate letter agreements with respect to fees payable to the
Administrative Agent and the Lenders represent the agreement of the Loan
Parties, the Parent, the Administrative Agent and the Lenders with respect to
the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Loan Parties, Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
10.11. GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
10.12. SUBMISSION TO JURISDICTION. Each of the Administrative
Agent, Lenders and Loan Parties hereby irrevocably and unconditionally submits
for itself and its property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof.
10.13. WAIVERS. Each of the Loan Parties hereby irrevocably
and unconditionally
(a) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or
74
proceeding was brought in an inconvenient court and agrees not to plead
or claim the same;
(b) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to any Loan Party, Administrative Agent or Lender, as
applicable, at its address set forth in subsection 10.2 or at such
other address of which the Administrative Agent, Lender or Loan Party
shall have been notified pursuant thereto;
(c) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
(d) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or
consequential damages.
10.14. ACKNOWLEDGEMENTS. Each Loan Party hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to any Loan Party arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agent and Lenders, on one
hand, and the Borrower and the Parent, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among any Loan Party and the
Lenders.
10.15. WAIVERS OF JURY TRIAL. THE LOAN PARTIES, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR THE NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.16. CONFIDENTIALITY. Each Lender and the Administrative
Agent agrees to take normal and reasonable precautions to maintain the
confidentiality of information designated in writing as confidential and
provided to it by the Parent, the Borrower or any Subsidiary in connection with
this Agreement or any other Loan Document; provided, however, that any Lender
may disclose such information (a) at the request of any regulatory authority or
in connection with an examination of such Lender by any such authority, (b)
pursuant to subpoena or other court process, (c) when required to do so in
accordance with the provisions of any applicable law, (d) at the discretion of
75
any other Governmental Authority, (e) to such Lender's Affiliates and
independent auditors and other professional advisors or (f) to any Transferee or
potential Transferee; provided that such Transferee agrees to comply with the
provisions of this subsection 10.16.
10.17. USA PATRIOT ACT. Each Lender hereby notifies the
Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) the ("Act"), it is required
to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Lender to identify the Borrower in accordance with the Act.
10.18. FOREIGN ASSETS CONTROL REGULATIONS, ETC. None of the
requesting or borrowing of the Loans, the requesting or issuance, extension or
renewal of any Letters of Credit or the use of the proceeds of any thereof will
violate the Trading With the Enemy Act (50 U.S.C. ss. 1 et seq., as amended)
(the "TRADING WITH THE ENEMY ACT") or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) (the "FOREIGN ASSETS CONTROL REGULATIONS") or any
enabling legislation or executive order relating thereto (which for the
avoidance of doubt shall include, but shall not be limited to (a) Executive
Order 13224 of September 21, 2001 Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg.
49079 (2001)) (the "EXECUTIVE ORDER") and (b) the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (Public Law 107-56)). Furthermore, neither the Borrower
nor any of its Subsidiaries or other Affiliates (a) is or will become a "blocked
person" as described in the Executive Order, the Trading With the Enemy Act or
the Foreign Assets Control Regulations or (b) engages or will engage in any
dealings or transactions, or be otherwise associated, with any such "blocked
person".
76
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
LANDSTAR SYSTEM HOLDINGS, INC.
State of New York )
) s.s.:
County of New York ) By:
-------------------------------------
Name:
Sworn before me this Title:
__ day of July, 2004
Address for Notices:
13410 Sutton Park Drive South
- ------------------------------ Jacksonville, Florida 32224
Notary Public
WITNESSETH Attention: Robert C. LaRose
1.____________________________ Telephone: (904) 390-1295
Telecopy: (904) 390-1323
2.____________________________
Address of principal
place of business (if different than above):
[------------]
Taxpayer Identification Number:
[------------]
LANDSTAR SYSTEM, INC.
By:
-------------------------------------
Title:
77
JPMORGAN CHASE BANK,
as Administrative Agent and as a Lender
By:
-------------------------------------
Title:
78
[State of New York ) LANDSTAR ACQUISITION CORPORATION
) s.s.:
County of New York ) LANDSTAR CAPACITY SERVICES, INC.
Sworn before me this LANDSTAR CARRIER SERVICES, INC.
__ day of _________, 2001 (f..k.a Landstar Expedited, Inc.)
__________________________ LANDSTAR CORPORATE SERVICES, INC.
Notary Public
WITNESSETH LANDSTAR EXPRESS AMERICA, INC.
1. _______________________ LANDSTAR GEMINI, INC.
(f.k.a. Gemini Transportation Services,
Inc.)
2. _______________________]
LANDSTAR INWAY, INC.
(f.k.a. Independent Freightway, Inc.)
LANDSTAR LIGON, INC. (f.k.a. Ligon
Nationwide, Inc.)
LANDSTAR LOGISTICS, INC. (f.k.a. Landstar
Transportation Services, Inc.)
LANDSTAR RANGER, INC. (f.k.a. Ranger
Transportation, Inc.)
LANDSTAR T.L.C., INC.
RISK MANAGEMENT CLAIM SERVICES, INC.
SIGNATURE INSURANCE COMPANY
SIGNATURE TECHNOLOGY SERVICES, INC.
By:
-------------------------------------
Title:
79
SCHEDULE 1.1(A) TO CREDIT AGREEMENT
COMMITMENTS
NAME AND ADDRESS OF LENDER REVOLVING CREDIT COMMITMENT
JPMorgan Chase Bank $ 37,000,000
SunTrust Bank $ 36,000,000
Fleet National Bank $ 36,000,000
Wachovia Bank, National Association $ 36,000,000
Comerica Bank $ 25,000,000
Compass Bank $ 20,000,000
Branch Banking and Trust Co. $ 20,000,000
The Bank of New York $ 15,000,000
TOTAL: $225,000,000
80
SCHEDULE 1.1(B)
SUBSIDIARY GUARANTORS
Landstar Acquisition Corporation
Landstar Capacity Services, Inc.
Landstar Carrier Services, Inc.
Landstar Corporate Services, Inc.
Landstar Express America, Inc.
Landstar Gemini, Inc.
Landstar Inway, Inc.
Landstar Ligon, Inc.
Landstar Logistics, Inc.
Landstar Ranger, Inc.
Landstar T.L.C., Inc.
Risk Management Claim Services, Inc.
Signature Insurance Company
Signature Technology Services, Inc.
81
SCHEDULE 1.1(C) TO CREDIT AGREEMENT
PRICING GRID
LEVERAGE RATI O* ABR LOAN EURODOLLAR
MARGIN** LOAN MARGIN** COMMITMENT FEE
Greater than 2.25 to 1 0 1.125% .300%
Less than or equal to 2.25 to 1 but 0 .875% .250%
greater than 1.25 to 1
Less than or equal to 1.25 to 1 but 0 .750% .200%
greater than 0.50 to 1
Less than or equal to 0.50 to 1 0 .625% .200%
* As defined in subsection 7.1(b) of the Credit Agreement.
** Plus .125% if utilization of the total aggregate Revolving Credit
Commitments exceeds 50% of the total aggregate Revolving Credit
Commitments.
82
SCHEDULE 4.15
SUBSIDIARIES
DIRECT SUBSIDIARIES OF PARENT JURISDICTION OF INCORPORATION
Landstar System Holdings, Inc. Delaware
DIRECT SUBSIDIARIES OF BORROWER JURISDICTION OF INCORPORATION
Landstar Acquisition Corporation Alabama
Landstar Capacity Services, Inc. Delaware
Landstar Carrier Services, Inc. Delaware
Landstar Contractor Financing, Inc. Delaware
Landstar Express America, Inc. North Carolina
Landstar Inway, Inc. Delaware
Landstar Ligon, Inc. Delaware
Landstar Logistics, Inc Delaware
Landstar Ranger, Inc. Delaware
Risk Management Claim Services, Inc. Kentucky
Signature Insurance Company Cayman Islands
Signature Technology Services, Inc. Delaware
INDIRECT SUBSIDIARIES OF BORROWER JURISDICTION OF INCORPORATION
Landstar Corporate Services, Inc. Delaware
Landstar Gemini, Inc. Delaware
Landstar T.L.C., Inc. Delaware
83
SCHEDULE 7.2
EXISTING INDEBTEDNESS
Indebtedness of Landstar System, Inc.
Indebtedness of Landstar System, Inc. to Landstar System Holdings, Inc. not
exceeding $2,000,000.
Indebtedness of Landstar Systems Holdings, Inc.
Indebtedness under the Existing Credit Agreement
84
SCHEDULE 7.3
EXISTING LIENS
None.
85
SCHEDULE 7.4
EXISTING GUARANTEE OBLIGATIONS
None.
86
EXHIBIT A TO CREDIT AGREEMENT
FORM OF REVOLVING CREDIT NOTE
$_____________ New York, New York
July __, 2004
FOR VALUE RECEIVED, LANDSTAR SYSTEM HOLDINGS, INC., a Delaware
corporation (the "Borrower"), promises to pay to the order of ____________ (the
"Lender") on the Termination Date, at the office of JPMorgan Chase Bank, 270
Park Avenue, New York, New York 10017, in lawful money of the United States of
America and in immediately available funds, the principal amount of the lesser
of (a) __________ DOLLARS ($ ____________) and (b) the aggregate unpaid
principal amount of all Revolving Credit Loans made by the Lender to the
Borrower. The Borrower further agrees to pay interest at said office, in like
money, from the date hereof on the unpaid principal amount hereof at the rates
and on the dates specified in subsection 2.9 of the Fourth Amended and Restated
Credit Agreement, dated as of July __, 2004, among the Borrower, Landstar
System, Inc., the Subsidiaries of the Borrower signatories thereto, the Lender,
the several other banks and other financial institutions from time to time
parties thereto and JPMorgan Chase Bank, as administrative agent (as the same
may from time to time be amended, modified or supplemented, the "Credit
Amendment"; terms defined therein being used herein as so defined).
This Note is one of the Revolving Credit Notes referred to in the
Credit Agreement, is entitled to the benefits thereof and is subject to optional
prepayment in whole or in part as provided therein.
The holder of this Note is authorized to record the date, amount and
Type of each Revolving Credit Loan made by the Lender to the Borrower pursuant
to subsection 2.1(a) of the Credit Agreement, each continuation thereof, each
conversion of all or a portion thereof to another Type, the date and amount of
each payment or prepayment of principal thereof, and the length of each Interest
Period with respect thereto, on the schedule annexed hereto and made a part
hereof, and any such recordation or any such information recorded on such
Lender's internal books and records and then attached to this Note in the form
of the schedule attached hereto shall constitute prima facie evidence of the
accuracy of the information so recorded, provided that the failure of the Lender
to make such recordation (or any error in such recordation) shall not affect the
obligations of the Borrower hereunder or under the Credit Agreement.
Payment and performance of this Note is guaranteed as set forth in the
Subsidiaries Guarantee and the Parent Guarantee.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable all as
provided therein.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
87
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
LANDSTAR SYSTEM HOLDINGS, INC.
By:
-------------------------------------
Name:
Title:
88
SCHEDULE A TO NOTE
LOANS, CONVERSIONS AND PAYMENTS
WITH RESPECT TO ABR LOANS
Amount of ABR Loans Amount of ABR
Made or Converted Loans Paid or
from Eurodollar Converted into Unpaid Principal
Date Loans Eurodollar Loans Balance of ABR Loans Notation Made By
---- -------------------- ---------------- -------------------- ----------------
89
SCHEDULE B TO NOTE
LOANS, CONVERSIONS AND PAYMENTS
WITH RESPECT TO EURODOLLAR LOANS
Amount of Interest Period Amount of
Eurodollar Loans and Eurodollar Eurodollar Loans
Made or Converted Rate with Respect Paid or Converted
Date from ABR Loans Thereto into ABR Loans Notation Made By
---- ----------------- ----------------- ----------------- ----------------
90
EXHIBIT B TO CREDIT AGREEMENT
FORM OF SWING LINE NOTE
$5,000,000 New York, New York
July __, 2004
FOR VALUE RECEIVED, LANDSTAR SYSTEM HOLDINGS, INC., a Delaware
corporation (the "Borrower"), promises to pay to the order of JPMORGAN CHASE
BANK (the "Lender") on the Termination Date, at its offices at 270 Park Avenue,
New York, New York 10017, in lawful money of the United States of America and in
immediately available funds, the principal amount of the lesser of (a) FIVE
MILLION DOLLARS ($5,000,000) and (b) the aggregate unpaid principal amount of
all Swing Line Loans made by the Lender to the Borrower. The Borrower further
agrees to pay interest at said office, in like money, from the date hereof on
the unpaid principal amount hereof at the rates and on the dates specified in
subsection 2.9 of the Fourth Amended and Restated Credit Agreement, dated as of
July __, 2004, among the Borrower, Landstar System, Inc., the Subsidiaries of
the Borrower signatories thereto, the Lender, the several other banks and other
financial institutions from time to time parties thereto and JPMorgan Chase
Bank, as administrative agent (as the same may from time to time be amended,
modified or supplemented, the "Credit Amendment"; terms defined therein being
used herein as so defined).
This Note is the Swing Line Note referred to in the Credit Agreement,
is entitled to the benefits thereof and is subject to optional prepayment in
whole or in part as provided therein.
The holder of this Note is authorized to record the date and amount of
each Swing Line Loan made by the Lender to the Borrower pursuant to subsection
2.5 of the Credit Agreement and the date and amount of each payment or
prepayment of principal thereof, on the schedule annexed hereto and made a part
hereof, and any such recordation or any such information recorded on such
Lender's internal books and records and then attached to this Note in the form
of the schedule attached hereto shall constitute prima facie evidence of the
accuracy of the information so recorded, provided that the failure of the Lender
to make such recordation (or any error in such recordation) shall not affect the
obligations of the Borrower hereunder or under the Credit Agreement.
Payment and performance of this Note is guaranteed as set forth in the
Subsidiaries Guarantee and the Parent Guarantee.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable all as
provided therein.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
91
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
LANDSTAR SYSTEM HOLDINGS, INC.
By:
-------------------------------------
Name:
Title:
92
SCHEDULE A To Note
LOANS AND PAYMENTS
Unpaid Principal
Amount of Swing Amount of Swing Balance of Swing Notation Made By
Date Line Loans Line Loans Paid Line Loans Notation Made By
---- --------------- --------------- ---------------- ----------------
93
EXHIBIT C-1 TO CREDIT AGREEMENT
FORM OF FOURTH AMENDED AND RESTATED PARENT GUARANTEE
FOURTH AMENDED AND RESTATED PARENT GUARANTEE, dated as of July __,
2004, by LANDSTAR SYSTEM, INC., a Delaware corporation (the "Guarantor"), in
favor of JPMORGAN CHASE BANK, as administrative agent (in such capacity, the
"Administrative Agent") for the Lenders (the "Lenders") that are parties to the
Credit Agreement described below.
WITNESSETH:
WHEREAS, Landstar System Holdings, Inc., a Delaware corporation (the
"Borrower"), is party to the Third Amended and Restated Credit Agreement, dated
as of December 20, 2001, with Landstar System, Inc., the Administrative Agent
and the lenders parties thereto (as amended, the "Existing Credit Agreement");
WHEREAS, the Existing Credit Agreement is being amended and restated
pursuant to the Fourth Amended and Restated Credit Agreement, dated as of July
__, 2004, among the Borrower, the Guarantor, the Subsidiaries of the Borrower
signatories thereto, the Lenders and the Administrative Agent (the "Credit
Agreement");
WHEREAS, in connection with the Existing Credit Agreement, the
Guarantor previously executed and delivered to the Administrative Agent the
Third Amended and Restated Parent Guarantee, dated as of December 20, 2001 (the
"Existing Parent Guarantee");
WHEREAS, the Guarantor owns directly all of the issued and outstanding
stock of the Borrower and expects to derive substantial benefits from the Credit
Agreement;
WHEREAS, in connection with the Credit Agreement, the Guarantor, the
Administrative Agent and the beneficiaries of the Existing Parent Guarantee wish
to amend and restate the Existing Parent Guarantee as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises, the Guarantor and the
Administrative Agent, with the consent of and for the ratable benefit of the
Lenders, hereby agree that, effective as of the Closing Date, the Existing
Parent Guarantee is hereby restated in its entirety as follows:
1. DEFINED TERMS. As used in this Guarantee, terms defined in the
Credit Agreement are used herein as therein defined, and the following terms
shall have the following meanings:
"Guarantee" shall mean this Fourth Amended and Restated Parent
Guarantee, as amended, supplemented or otherwise modified from time to time.
"Obligations" shall mean the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Loans and interest accruing
94
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Borrower, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding) the Loans and all other obligations and liabilities of the Borrower
to the Administrative Agent or the Lenders, whether direct or indirect, absolute
or contingent, due or to become due, now existing or hereafter incurred, which
may arise under, out of, or in connection with, the Credit Agreement, the
Letters of Credit, the Applications, any Interest Rate Protection Agreements
entered into with any Lender in respect of the Loans, the other Loan Documents
or any other document made, delivered or given in connection therewith, whether
on account of principal, interest, Reimbursement Obligations, fees, indemnities,
costs, expenses (including, without limitation, all reasonable fees and
disbursements of counsel to the Administrative Agent or any Lender that are
required to be paid by the Borrower pursuant to the terms of the Credit
Agreement) or otherwise.
2. GUARANTEE. (a) The Guarantor hereby unconditionally and irrevocably,
guarantees to the Administrative Agent and the Lenders and their respective
successors, indorsees, transferees and assigns, the prompt and complete payment
by the Borrower when due (whether at the stated maturity, by acceleration or
otherwise) of the obligations, and the Guarantor further agrees to pay any and
all expenses (including, without limitation, all reasonable fees and
disbursements of counsel) which may be paid or incurred by the Administrative
Agent or any Lender in enforcing, or obtaining advice of counsel in respect of,
any rights with respect to, or collecting, any or all of the Obligations and/or
enforcing any rights with respect to, or collecting against, the Guarantor under
this Guarantee. This Guarantee shall remain in full force and effect until the
Obligations are paid in full and the Revolving Credit Commitments are
terminated, notwithstanding that from time to time prior thereto the Borrower
may be free from any obligations.
(b) No payment or payments made by the Borrower, the Guarantor
or any other Person or received or collected by the Administrative Agent or any
Lender from the Borrower, the Guarantor or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application at any time
or from time to time in reduction of or in payment of the Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of the
Guarantor hereunder which shall, notwithstanding any such payment or payments
other than payments made by the Guarantor in respect of the obligations or
payments received or collected from the Guarantor in respect of the obligations,
remain liable for the obligations until the obligations are paid in full and the
Revolving Credit Commitments are terminated.
(c) The Guarantor agrees that whenever, at any time, or from
time to time, it shall make any payment to the Administrative Agent or any
Lender on account of its liability hereunder, it will notify the Administrative
Agent in writing that such payment is made under this Guarantee for such
purpose.
3. RIGHT OF SET-OFF. Upon the occurrence of any Event of Default
specified in the Credit Agreement, the Guarantor hereby irrevocably authorizes
each Lender at any time and from time to time without notice to the Guarantor,
any such notice being
95
expressly waived by the Guarantor, to set off and appropriate and apply any and
all deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender to or for the credit or the
account of the Guarantor, or any part thereof in such amounts as such Lender may
elect, against and on account of the obligations and liabilities of the
Guarantor to such Lender hereunder and claims of every nature and description of
such Lender against the Guarantor, in any currency, whether arising hereunder,
under the Credit Agreement, the other Loan Documents or otherwise, as such
Lender may elect, whether or not the Administrative Agent or any Lender has made
any demand for payment and although such obligations, liabilities and claims may
be contingent or unmatured. Each Lender agrees to notify the Guarantor promptly
of any such set-off and the application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this paragraph are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which such Lender may have.
4. NO SUBROGATION, CONTRIBUTION, REIMBURSEMENT OR INDEMNITY.
Notwithstanding anything to the contrary in this Guarantee, the Guarantor hereby
irrevocably waives all rights which may have arisen in connection with this
Guarantee to be subrogated to any of the rights (whether contractual, under the
Bankruptcy Code, including Section 509 thereof, under common law or otherwise)
of the Administrative Agent or any Lender against the Company or against the
Administrative Agent or any Lender for the payment of the Obligations. The
Guarantor hereby further irrevocably waives all contractual, common law,
statutory or other rights of reimbursement, contribution, exoneration or
indemnity (or any similar right) from or against the Borrower, any Subsidiary
Guarantor, or any other Person which may have arisen in connection with this
Guarantee. So long as the Obligations remain outstanding, if any amount shall be
paid by or on behalf of the Borrower, or any Subsidiary Guarantor, to the
Guarantor on account of any of the rights waived in this paragraph, such amount
shall be held by the Guarantor in trust, segregated from other funds of the
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the Administrative Agent in the exact form received by the Guarantor (duly
indorsed by the Guarantor to the Administrative Agent, if required), to be
applied against the obligations, whether matured or unmatured, in such order as
the Administrative Agent may determine. The provisions of this paragraph shall
survive the term of this Guarantee and the payment in full of the Obligations
and the termination of the Revolving Credit Commitments.
5. AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS; WAIVER OF RIGHTS.
The Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against the Guarantor and without notice to or further
assent by the Guarantor, any demand for payment of any of the Obligations made
by the Administrative Agent or any Lender may be rescinded by such party and any
of the Obligations continued, and the obligations, or the liability of any other
party upon or for any part thereof, or any guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Administrative Agent
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or any Lender and the Credit Agreement, the other Loan Documents or other
guarantee or document in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Administrative Agent
and/or any Lender may deem advisable from time to time, and any guarantee or
right of offset at any time held by the Administrative Agent or any Lender for
the payment of the Obligations may be sold, exchanged, waived, surrendered or
released. Neither the Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held as security for the
obligations or for this Guarantee or any property subject thereto. When making
any demand hereunder against the Guarantor, the Administrative Agent or any
Lender may, but shall be under no obligation to, make a similar demand on the
Borrower or any guarantor, and any failure by the Administrative Agent or any
Lender to make any such demand or to collect any payments from the Borrower or
such other guarantor or any release of the Borrower or such other guarantor
shall not relieve the Guarantor, and shall not impair or affect the rights and
remedies, express or implied, or as a matter of law, of the Administrative Agent
or any Lender against the Guarantor. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings.
6. GUARANTEE ABSOLUTE AND UNCONDITIONAL. The Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Administrative Agent or
any Lender upon this Guarantee or acceptance of this Guarantee, the obligations,
and any of them, shall conclusively be deemed to have been created, contracted
or incurred, or renewed, extended, amended or waived, in reliance upon this
Guarantee; and all dealings between the Borrower or the Guarantor and the
Administrative Agent or any Lender shall likewise be conclusively presumed to
have been had or consummated in reliance upon this Guarantee. The Guarantor
waives diligence, presentment, protest, demand for payment and notice of default
or nonpayment to or upon the Borrower or the Guarantor with respect to the
Obligations. The Guarantor understands and agrees that this Guarantee shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity, regularity or enforceability of the Credit
Agreement, any other Loan Document, any of the Obligations or any collateral
security therefor or guarantee or right of offset with respect thereto at any
time or from time to time held by the Administrative Agent or any Lender (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower against the Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Borrower
or the Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrower for the obligations, or of the
Guarantor under this Guarantee, in bankruptcy or in any other instance. When
pursuing its rights and remedies hereunder against the Guarantor, the
Administrative Agent and any Lender may, but shall be under no obligation to,
pursue such rights and remedies as it may have against the Borrower or any other
Person or against any collateral security or guarantee for the obligations or
any right of offset with respect thereto, and any failure by the Administrative
Agent or any Lender to pursue such other rights or remedies or to collect any
payments from the Borrower or any such other Person or to realize upon any such
guarantee or to exercise any such right of offset, or any release of the
Borrower or any such other Person or any such collateral security, guarantee or
right of offset, shall not
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relieve the Guarantor of any liability hereunder, and shall not impair or affect
the rights and remedies, whether express, implied or available as a matter of
law, of the Administrative Agent or any Lender against the Guarantor. This
Guarantee shall remain in full force and effect and be binding in accordance
with and to the extent of its terms upon the Guarantor and the successors and
assigns thereof, and shall inure to the benefit of the Administrative Agent and
the Lenders, and their respective successors, indorsees, transferees and
assigns, until all the obligations and the obligations of the Guarantor under
this Guarantee shall have been satisfied by payment in full and the Revolving
Credit Commitments shall be terminated, notwithstanding that from time to time
during the term of the Credit Agreement the Borrower may be free from any
Obligations.
7. REINSTATEMENT. This Guarantee shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Administrative Agent or any Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower or the Guarantor, or
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, the Borrower or the Guarantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
8. PAYMENTS. The Guarantor hereby guarantees that payments hereunder
will be paid to the Administrative Agent without set-off or counterclaim in U.S.
Dollars at the office of the Administrative Agent located at 270 Park Avenue,
New York, New York 10017, U.S.A.
9. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and
warrants that the representations and warranties set forth in Section 4 of the
Credit Agreement as they relate to the Guarantor, each of which is hereby
incorporated herein by reference, are true and correct, and the Administrative
Agent and each Lender shall be entitled to rely on each of them as if they were
fully set forth herein, provided that each reference in each such representation
and warranty to the Borrower's knowledge shall, for the purposes of this
paragraph, be deemed to be a reference to the Guarantor's knowledge.
The Guarantor agrees that the foregoing representations and warranties
shall be deemed to have been made by the Guarantor on the date of each borrowing
by the Borrower, and on the date of issuance of each Letter of Credit, under the
Credit Agreement on and as of such date of borrowing or issuance as though made
hereunder on and as of such date (or, if stated to relate to an earlier date, as
of such earlier date).
10. COVENANTS. The Guarantor hereby agrees that, from and after the
Closing Date and so long as the Revolving Credit Commitments remain in effect,
any Loan or Letter of credit remains outstanding and unpaid or any other amount
is owing to any Lender or the Administrative Agent under the Credit Agreement or
any other Loan Document, the Guarantor shall take, or shall refrain from taking,
as the case may be, all actions that are necessary to be taken or not taken so
that no violation of any provision, covenant or agreement contained in Section 6
or 7 of the Credit Agreement, and so that
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no Default or Event of Default, is caused by any act or failure to act of the
Guarantor or any of its Subsidiaries.
11. SEVERABILITY. Any provision of this Guarantee which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12. PARAGRAPH HEADINGS. The paragraph headings used in this Guarantee
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
13. NO WAIVER; CUMULATIVE REMEDIES. Neither the Administrative Agent
nor any Lender shall by any act (except by a written instrument pursuant to
paragraph 14 hereof), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by law.
14. INTEGRATION; WAIVERS AND AMENDMENTS; SUCCESSORS AND ASSIGNS;
GOVERNING LAW. This Guarantee and the other Loan Documents represent the
agreement of the Guarantor with respect to the subject matter hereof, and there
are no promises or representations by the Administrative Agent or any Lender
relative to the subject matter hereof not reflected herein or in the other Loan
Documents. None of the terms or provisions of this Guarantee may be waived,
amended or supplemented or otherwise modified except by a written instrument
executed by the Guarantor and the Administrative Agent, provided that any
provision of this Guarantee may be waived by the Administrative Agent and the
Lenders in a letter or agreement executed by the Administrative Agent or by
telex or facsimile transmission from the Administrative Agent. This Guarantee
shall be binding upon the successors and assigns of the Guarantor and shall
inure to the benefit of the Administrative Agent and the Lenders and their
respective successors and assigns. This Guarantee shall be governed by and be
construed and interpreted in accordance with the law of the State of New York.
15. NOTICES. All notices, requests and demands to or upon the Guarantor
or the Administrative Agent or any Lender to be effective shall be in writing
(including by telecopy), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered by hand, or, in the
case of mail, 3 days after deposit
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in the postal system, first class postage prepaid, or, in the case of telecopy
notice, when received, addressed to a party at the address set forth in the
Credit Agreement, in the case of the Administrative Agent or the Lenders or, in
the case of the Guarantor, to the following address:
Landstar System, Inc.
13410 Sutton Park Drive South
Jacksonville, Florida 32224
Attention: Robert C. LaRose
Telecopy: (904) 390-1323
16. COUNTERPARTS. This Guarantee may be executed by one or more of the
parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed and delivered by its duly authorized officer as of the day and year
first above written.
LANDSTAR SYSTEM, INC.
By:
-------------------------------------
Name:
Title:
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EXHIBIT C-2 TO CREDIT AGREEMENT
FORM OF FOURTH AMENDED AND RESTATED SUBSIDIARIES
GUARANTEE
FOURTH AMENDED AND RESTATED SUBSIDIARIES GUARANTEE, dated as of July
__, 2004, by each of the corporations that are signatories hereto (the
"Subsidiary Guarantors") in favor of JPMORGAN CHASE BANK, as administrative
agent (in such capacity, the "Administrative Agent") for the Lenders (the
"Lenders") that are parties to the Credit Agreement described below.
WITNESSETH:
WHEREAS, Landstar System Holdings, Inc., a Delaware corporation (the
"Borrower"), is party to the Third Amended and Restated Credit Agreement, dated
as of December 20, 2001, with Landstar System, Inc., the Administrative Agent
and the lenders parties thereto (as amended, the "Existing Credit Agreement");
WHEREAS, the Existing Credit Agreement is being amended and restated
pursuant to the Fourth Amended and Restated Credit Agreement, dated as of July
__, 2004, among the Borrower, Landstar System, Inc., the Subsidiaries of the
Borrower signatories thereto, the Lenders and the Administrative Agent (the
"Credit Agreement");
WHEREAS, in connection with the Existing Credit Agreement, the
subsidiaries of the Borrower previously executed and delivered to the
Administrative Agent the Third Amended and Restated Subsidiaries Guarantee,
dated as of December 20, 2001 (the "Existing Subsidiaries Guarantee");
WHEREAS, the Borrower owns directly or indirectly all of the issued and
outstanding stock of each Subsidiary Guarantor;
WHEREAS, the Borrower and the Subsidiary Guarantors are engaged in
related businesses, and each Subsidiary Guarantor will derive substantial direct
and indirect benefit from the making of the Extensions of Credit; and
WHEREAS, in connection with the Credit Agreement, the Subsidiary
Guarantors, the Administrative Agent and the beneficiaries of the Existing
Subsidiaries Guarantee wish to amend and restate the Existing Subsidiaries
Guarantee as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises, each Subsidiary
Guarantor and the Administrative Agent, with the consent of and for the ratable
benefit of the Lenders, hereby agree that, effective as of the Closing Date, the
Existing Subsidiaries Guarantee is hereby restated in its entirety as follows:
1. DEFINED TERMS. As used in this Guarantee, terms defined in the
Credit Agreement are used herein as therein defined, and the following terms
shall have the following meanings:
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"Guarantee" shall mean this Fourth Amended and Restated Subsidiaries
Guarantee, as amended, supplemented or otherwise modified from time to time.
"Obligations" shall mean the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Loans and interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower or Reimbursement Obligations of any Subsidiary
Guarantor to the Administrative Agent or the Lenders, whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter incurred, which may arise under, out of, or in connection with, the
Credit Agreement, the Letters of Credit, the Applications, any Interest Rate
Protection Agreements entered into with any Lender in respect of the Loans, the
other Loan Documents or any other document made, delivered or given in
connection therewith, whether on account of principal, interest, Reimbursement
Obligations, fees, indemnities, costs, expenses (including, without limitation,
all reasonable fees and disbursements of counsel to the Administrative Agent or
any Lender that are required to be paid by the Borrower or such Subsidiary
Guarantor pursuant to the terms of the Credit Agreement) or otherwise.
2. GUARANTEE. (a) Subject to the provisions of paragraph (b), each of
the Subsidiary Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantees to the Administrative Agent, for the ratable benefit of
the Lenders and their respective successors, indorsees, transferees and assigns,
the prompt and complete payment and performance by the Borrower when due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations and by the respective Subsidiary Guarantor of its Reimbursement
Obligations.
(b) Anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Subsidiary Guarantor
hereunder and under the other Loan Documents shall in no event exceed the amount
which can be guaranteed by such Subsidiary Guarantor under applicable federal
and state laws relating to the insolvency of debtors.
(c) Each Subsidiary Guarantor further agrees to pay any and
all expenses (including, without limitation, all fees and disbursements of
counsel) which may be paid or incurred by the Administrative Agent or any Lender
in enforcing, or obtaining advice of counsel in respect of, any rights with
respect to, or collecting, any or all of the Obligations and/or enforcing any
rights with respect to, or collecting against, such Subsidiary Guarantor under
this Guarantee. This Guarantee shall remain in full force and effect until the
Obligations are paid in full and the Revolving Credit Commitments are
terminated, notwithstanding that from time to time prior thereto the Borrower
may be free from any Obligations.
(d) Each Subsidiary Guarantor agrees that the obligations may
at any time and from time to time exceed the amount of the liability of such
Subsidiary
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Guarantor hereunder without impairing this Guarantee or affecting the rights and
remedies of the Administrative Agent or any Lender hereunder.
(e) No payment or payments made by the Borrower, any of the
Subsidiary Guarantors, any other guarantor or any other Person or received or
collected by the Administrative Agent or any Lender from the Borrower, any of
the Subsidiary Guarantors, any other guarantor or any other Person by virtue of
any action or proceeding or any set-off or appropriation or application at any
time or from time to time in reduction of or in payment of the Obligations shall
be deemed to modify, reduce, release or otherwise affect the liability of any
Subsidiary Guarantor hereunder which shall, notwithstanding any such payment or
payments other than payments made by such Subsidiary Guarantor in respect of the
Obligations or payments received or collected from such Subsidiary Guarantor in
respect of the Obligations, remain liable for the obligations up to the maximum
liability of such Subsidiary Guarantor hereunder until the Obligations are paid
in full and the Revolving Credit Commitments are terminated.
(f) Each Subsidiary Guarantor agrees that whenever, at any
time, or from time to time, it shall make any payment to the Administrative
Agent or any Lender on account of its liability hereunder, it will notify the
Administrative Agent in writing that such payment is made under this Guarantee
for such purpose.
3. RIGHT OF CONTRIBUTION. Each Subsidiary Guarantor hereby agrees that
to the extent that a Subsidiary Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against any other
Subsidiary Guarantor hereunder who has not paid its proportionate share of such
payment. Each Subsidiary Guarantor's right of contribution shall be subject to
the terms and conditions of Paragraph 5 hereof. The provisions of this Paragraph
3 shall in no respect limit the obligations and liabilities of any Subsidiary
Guarantor to the Administrative Agent and the Lenders, and each Subsidiary
Guarantor shall remain liable to the Administrative Agent and the Lenders for
the full amount guaranteed by such Subsidiary Guarantor hereunder.
4. RIGHT OF SET-OFF. Upon the occurrence of any Event of Default
specified in the Credit Agreement, each Subsidiary Guarantor hereby irrevocably
authorizes each Lender at any time and from time to time without notice to such
Subsidiary Guarantor or any other Subsidiary Guarantor, any such notice being
expressly waived by each Subsidiary Guarantor, to set off and appropriate and
apply any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender to or for the
credit or the account of such Subsidiary Guarantor, or any part thereof in such
amounts as such Lender may elect, against and on account of the obligations and
liabilities of such Subsidiary Guarantor to such Lender hereunder and claims of
every nature and description of such Lender against such Subsidiary Guarantor,
in any currency, whether arising hereunder, under the Credit Agreement, the
other Loan Documents or otherwise, as such Lender may elect, whether or not the
Administrative Agent or any Lender has made any demand for payment and although
such obligations,
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liabilities and claims may be contingent or unmatured. Each Lender agrees to
notify such Subsidiary Guarantor promptly of any such set-off and the
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Lender under this paragraph are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which such Lender may
have.
5. NO SUBROGATION. Notwithstanding any payment or payments made by any
of the Subsidiary Guarantors hereunder or any set-off or application of funds of
any of the Subsidiary Guarantors by any Lender, no Subsidiary Guarantor shall be
entitled to be subrogated to any of the rights of the Administrative Agent or
any Lender against the Borrower or any other Guarantor or any guarantee or right
of offset held by any Lender for the payment of the Obligations, nor shall any
Subsidiary Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by such Subsidiary Guarantor hereunder, until all amounts owing to the
Administrative Agent and the Lenders on account of the Obligations are paid in
full and the Revolving Credit Commitments are terminated. If any amount shall be
paid to any Subsidiary Guarantor on account of such subrogation rights at any
time when all of the Obligations shall not have been paid in full, such amount
shall be held by such Subsidiary Guarantor in trust for the Administrative Agent
and the Lenders, segregated from other funds of such Subsidiary Guarantor, and
shall, forthwith upon receipt by such Subsidiary Guarantor, be turned over to
the Administrative Agent in the exact form received by such Subsidiary Guarantor
(duly indorsed by such Subsidiary Guarantor to the Administrative Agent, if
required), to be applied against the obligations, whether matured or unmatured,
in such order as the Administrative Agent may determine.
6. AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS; WAIVER OF RIGHTS.
Each Subsidiary Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Subsidiary Guarantor and without
notice to or further assent by any Subsidiary Guarantor, any demand for payment
of any of the Obligations made by the Administrative Agent or any Lender may be
rescinded by such party and any of the obligations continued, and the
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent or any Lender and the Credit Agreement, the other Loan
Documents, any other collateral security document or other guarantee or document
in connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Administrative Agent and/or any Lender may deem
advisable from time to time, and any guarantee or right of offset at any time
held by the Administrative Agent or any Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Agent nor any Lender shall have any obligation to protect, secure, perfect or
insure any Lien at any time held as security for the Obligations or for this
Guarantee or any property subject thereto. When making any demand hereunder
against any of the Subsidiary Guarantors, the Administrative Agent or any Lender
may, but shall be under no obligation to, make a similar demand on
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the Borrower or any other Subsidiary Guarantor or guarantor, and any failure by
the Administrative Agent or any Lender to make any such demand or to collect any
payments from the Borrower or any such other Subsidiary Guarantor or guarantor
or any release of the Borrower or such other Subsidiary Guarantor or guarantor
shall not relieve any of the Subsidiary Guarantors in respect of which a demand
or collection is not made or any of the Subsidiary Guarantors not so released of
their several obligations or liabilities hereunder, and shall not impair or
affect the rights and remedies, express or implied, or as a matter of law, of
the Administrative Agent or any Lender against any of the Subsidiary Guarantors.
For the purposes hereof "demand" shall include the commencement and continuance
of any legal proceedings.
7. GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Subsidiary Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Obligations and notice of or proof of reliance by the Administrative
Agent or any Lender upon this Guarantee or acceptance of this Guarantee, the
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Guarantee; and all dealings between the Borrower or any of the
Subsidiary Guarantors and the Administrative Agent or any Lender shall likewise
be conclusively presumed to have been had or consummated in reliance upon this
Guarantee. Each Subsidiary Guarantor waives diligence, presentment, protest,
demand for payment and notice of default or nonpayment to or upon the Borrower
or any of the Subsidiary Guarantors with respect to the Obligations. Each
Subsidiary Guarantor understands and agrees that this Guarantee shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity, regularity or enforceability of the Credit
Agreement, any other Loan Document, any of the obligations or any guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any Lender (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by the Borrower against the Administrative Agent or
any Lender, or (c) any other circumstance whatsoever (with or without notice to
or knowledge of the Borrower or such Subsidiary Guarantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge of the
Borrower for the Obligations, or of such Subsidiary Guarantor under this
Guarantee, in bankruptcy or in any other instance. When pursuing its rights and
remedies hereunder against any Subsidiary Guarantor, the Administrative Agent
and any Lender may, but shall be under no obligation to, pursue such rights and
remedies as it may have against the Borrower or any other Person or against any
guarantee for the Obligations or any right of offset with respect thereto, and
any failure by the Administrative Agent or any Lender to pursue such other
rights or remedies or to collect any payments from the Borrower or any such
other Person or to realize upon such guarantee or to exercise any such right of
offset, or any release of the Borrower or any such other Person or such
guarantee or right of offset, shall not relieve such Subsidiary Guarantor of any
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Administrative
Agent or any Lender against such Subsidiary Guarantor. This Guarantee shall
remain in full force and effect and be binding in accordance with and to the
extent of its terms upon each Subsidiary Guarantor and the successors and
assigns thereof, and shall inure to the benefit of the Administrative Agent and
the
105
Lenders, and their respective successors, indorsees, transferees and assigns,
until all the Obligations and the obligations of each Subsidiary Guarantor under
this Guarantee shall have been satisfied by payment in full and the Revolving
Credit Commitments shall be terminated, notwithstanding that from time to time
during the term of the Credit Agreement the Borrower may be free from any
Obligations.
8. REINSTATEMENT. This Guarantee shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Administrative Agent or any Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower or any Subsidiary
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or any
Subsidiary Guarantor or any substantial part of its property, or otherwise, all
as though such payments had not been made.
9. PAYMENTS. Each Subsidiary Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in U.S. Dollars at the office of the Administrative Agent located
at 270 Park Avenue, New York, New York 10017, U.S.A.
10. REPRESENTATIONS AND WARRANTIES. Each Subsidiary Guarantor hereby
represents and warrants that the representations and warranties set forth in
Section 4 of the Credit Agreement as they relate to such Subsidiary Guarantor,
each of which is hereby incorporated herein by reference, are true and correct,
and the Administrative Agent and each Lender shall be entitled to rely on each
of them as if they were fully set forth herein, provided that each reference in
each such representation and warranty to the Borrower's knowledge shall, for the
purposes of this paragraph, be deemed to be a reference to such Subsidiary
Guarantor's knowledge.
Each Subsidiary Guarantor agrees that the foregoing representations and
warranties shall be deemed to have been made by such Subsidiary Guarantor on the
date of each borrowing by the Borrower, and on the date of issuance of each
Letter of Credit, under the Credit Agreement on and as of such date of borrowing
or issuance as though made hereunder on and as of such date (or, if stated to
relate to an earlier date, as of such earlier date).
11. COVENANTS. Each Subsidiary Guarantor hereby agrees that, from and
after the Closing Date and so long as the Revolving Credit Commitments remain in
effect, any Loan or Letter of Credit remains outstanding and unpaid or any other
amount is owing to any Lender or the Administrative Agent under the Credit
Agreement or any other Loan Document, such Subsidiary Guarantor shall take, or
shall refrain from taking, as the case may be, all actions that are necessary to
be taken or not taken so that no violation of any provision, covenant or
agreement contained in Section 6 or 7 of the Credit Agreement, and so that no
Default or Event of Default, is caused by any act or failure to act of such
Subsidiary Guarantor or any of its Subsidiaries.
106
12. SEVERABILITY. Any provision of this Guarantee which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13. PARAGRAPH HEADINGS. The paragraph headings used in this Guarantee
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
14. NO WAIVER; CUMULATIVE REMEDIES. Neither the Administrative Agent
nor any Lender shall by any act (except by a written instrument pursuant to
paragraph 15 hereof), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by law.
15. INTEGRATION; WAIVERS AND AMENDMENTS; SUCCESSORS AND ASSIGNS;
GOVERNING LAW. This Guarantee and the other Loan Documents represent the
agreement of each Subsidiary Guarantor with respect to the subject matter
hereof, and there are no promises or representations by the Administrative Agent
or any Lender relative to the subject matter hereof not reflected herein or in
the other Loan Documents. None of the terms or provisions of this Guarantee may
be waived, amended or supplemented or otherwise modified except by a written
instrument executed by each Subsidiary Guarantor and the Administrative Agent,
provided that any provision of this Guarantee may be waived by the
Administrative Agent and the Lenders in a letter or agreement executed by the
Administrative Agent or by telex or facsimile transmission from the
Administrative Agent. This Guarantee shall be binding upon the successors and
assigns of each Subsidiary Guarantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their respective successors and
assigns. This Guarantee shall be governed by and be construed and interpreted in
accordance with the law of the State of New York.
16. NOTICES. All notices, requests and demands to or upon the
Subsidiary Guarantors or the Administrative Agent or any Lender to be effective
shall be in writing (including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to by hand, or, in the case of mail, 3 first
class postage prepaid, or, in addressed to a party at the address Schedule I
hereto, as the case may have been duly given or made when
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delivered days after deposit in the postal system, the case of telecopy notice,
when received, set forth in the Credit Agreement or Schedule I hereto, as the
case may be.
17. COUNTERPARTS. This Guarantee may be executed by one or more of the
parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
to be duly executed and delivered by its duly authorized officer as of the day
and year first above written.
LANDSTAR ACQUISITION CORPORATION
LANDSTAR CAPACITY SERVICES, INC.
LANDSTAR CARRIER SERVICES, INC.
(f.k.a. Landstar Expedited, Inc.)
LANDSTAR CORPORATE SERVICES, INC.
LANDSTAR EXPRESS AMERICA, INC.
LANDSTAR GEMINI, INC. (f.k.a. Gemini
Transportation Services, Inc.)
LANDSTAR INWAY, INC. (f.k.a. Independent
Freightway, Inc.)
LANDSTAR LIGON, INC. (f.k.a. Ligon
Nationwide, Inc.)
LANDSTAR LOGISTICS, INC. (f.k.a.
Landstar Transportation Service, Inc.)
LANDSTAR RANGER, INC.
(f.k.a. Ranger Transportation, Inc.)
LANDSTAR T.L.C., INC.
RISK MANAGEMENT CLAIM SERVICES, INC.
SIGNATURE INSURANCE COMPANY
SIGNATURE TECHNOLOGY SERVICES, INC.
By:
-------------------------------------
Name:
Title:
108
EXHIBIT A TO SUBSIDIARIES GUARANTEE
SUBSIDIARIES GUARANTEE SUPPLEMENT
Reference is made to the Fourth Amended and Restated Subsidiaries Guarantee,
dated as of July __, 2004 (as amended, supplemented or otherwise modified from
time to time, the "Subsidiaries Guarantee"; terms defined therein being used
herein as therein defined), made by the parties thereto in favor of JPMorgan
Chase Bank, as administrative agent (in such capacity, the "Administrative
Agent") for the lenders (the "Lenders") parties to the Fourth Amended and
Restated Credit Agreement, dated as of July __, 2004, among Landstar System
Holdings, Inc., Landstar System, Inc., the Subsidiaries of the Borrower
signatories thereto, the Lenders and the Administrative Agent.
The undersigned hereby acknowledges that it has received and reviewed a copy of
the Subsidiaries Guarantee, and hereby agrees, effective as of the date hereof:
(a) to join the Subsidiaries Guarantee as a Subsidiary
Guarantor party thereto;
(b) to be bound by all covenants, agreements and
acknowledgements attributable to a Subsidiary Guarantor in the Subsidiaries
Guarantee;
(c) to perform all obligations required of it as a
Subsidiaries Guarantor by the Subsidiaries Guarantee; and
(d) that the undersigned shall be deemed to be a Subsidiary
Guarantor under the Credit Agreement and that Schedule 1.1(b) of the Credit
Agreement is hereby supplemented by adding at the end thereof, under the heading
"Subsidiary Guarantor", the name "[NAME OF NEW SUBSIDIARY]" and under the
heading "Jurisdiction of Incorporation", the word "[STATE OF INCORPORATION]".
The undersigned hereby represents and warrants that the representations
and warranties with respect to it contained in, or made or deemed made by it in,
Section 10 of the Subsidiaries Guarantee are true and correct on the date
hereof.
THIS SUBSIDIARIES GUARANTEE SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Subsidiaries
Guarantee Supplement to be duly executed and delivered in New York, New York by
its proper and duly authorized officer as of this _ day of
[NAME OF NEW SUBSIDIARY]
By:
-------------------------------------
Name:
Title:
109
Date: _______________
ACCEPTED AND AGREED:
LANDSTAR ACQUISITION CORPORATION
LANDSTAR CAPACITY SERVICES, INC.
LANDSTAR CARRIER SERVICES, INC.
(f.k.a. Landstar Expedited, Inc.)
LANDSTAR CORPORATE SERVICES, INC.
LANDSTAR EXPRESS AMERICA, INC.
LANDSTAR GEMINI, INC. (f.k.a. Gemini
Transportation Services, Inc.)
LANDSTAR INWAY, INC. (f.k.a.
Independent Freightway, Inc.)
LANDSTAR LIGON, INC. (f.k.a.
Ligon Nationwide, Inc.)
LANDSTAR LOGISTICS, INC. (f.k.a. Landstar
Transportation Service, Inc.)
LANDSTAR RANGER, INC. (f.k.a. Ranger
Transportation, Inc.)
LANDSTAR T.L.C., INC.
RISK MANAGEMENT CLAIM SERVICES, INC.
SIGNATURE INSURANCE COMPANY
SIGNATURE TECHNOLOGY SERVICES, INC.
By:
-------------------------------------
Name:
Title:
110
EXHIBIT C-3 TO CREDIT AGREEMENT
FORM OF L/C GUARANTEE
L/C GUARANTEE, dated as of July __, 2004 by LANDSTAR SYSTEM, INC., a
Delaware corporation (the "Guarantor"), in favor of JPMORGAN CHASE BANK, as
administrative agent (in such capacity, the "Administrative Agent") for the
Lenders (the "Lenders") that are parties to the Credit Agreement described
below.
WITNESSETH:
WHEREAS, the Subsidiary Guarantors (as listed on Schedule I hereto) are
parties to the Third Amended and Restated Credit Agreement, dated as of December
20, 2001, with Landstar System Holdings, Inc., the Guarantor, the Administrative
Agent and the lenders parties thereto (the "Existing Credit Agreement");
WHEREAS, the Existing Credit Agreement is being amended and restated
pursuant to the Fourth Amended and Restated Credit Agreement, dated as of July
__, 2004, among Landstar System Holdings, Inc., the Guarantor, the Subsidiaries
of the Borrower signatories thereto, the Lenders and the Administrative Agent
(the "Credit Agreement");
WHEREAS, the Guarantor owns directly or indirectly all of the issued
and outstanding stock of each Subsidiary Guarantor and expects to derive
substantial benefits from the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective loans to the Borrower under the
Credit Agreement, the Guarantor hereby agrees with the Administrative Agent, for
the for the ratable benefit of the Lenders, as follows:
1. DEFINED TERMS. As used in this Guarantee, terms defined in the
Credit Agreement are used herein as therein defined, and the following terms
shall have the following meanings:
"Guarantee" shall mean this L/C Guarantee, as amended, supplemented or
otherwise modified from time to time.
"Obligations" shall mean the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Loans and interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, owing by
the respective Subsidiary Guarantor, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of the respective Subsidiary Guarantor to the
Administrative Agent or the Lenders, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred, which may
arise under, out of, or in connection with, the Credit Agreement, the Letters of
Credit, the
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Applications entered into with the Issuing Lender in respect of the Loans, the
other Loan Documents or any other document made, delivered or given in
connection therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without limitation,
all reasonable fees and disbursements of counsel to the Administrative Agent,
the Issuing Lender or any L/C Participant that are required to be paid by the
Respective Subsidiary Guarantor pursuant to the terms of the Credit Agreement)
or otherwise.
2. GUARANTEE. (a) The Guarantor hereby unconditionally and irrevocably,
guarantees to the Administrative Agent, the Issuing Lender and the L/C
Participants and their respective successors, indorsees, transferees and
assigns, the prompt and complete payment by the respective Subsidiary Guarantor
when due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations, and the Guarantor further agrees to pay any and all. expenses
(including, without limitation, all reasonable fees and disbursements of
counsel) which may be paid or incurred by the Administrative Agent, the Issuing
Lender or any L/C Participant in enforcing, or obtaining advice of counsel in
respect of, any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or collecting against,
the Guarantor under this Guarantee. This Guarantee shall remain in full force
and effect until the obligations are paid in full and the Revolving Credit
Commitments are terminated, notwithstanding that from time to time prior thereto
the Borrower may be free from any Obligations.
(b) No payment or payments made by any Subsidiary Guarantor,
the Guarantor or any other Person or received or collected by the Administrative
Agent, the Issuing Lender or any L/C Participant from any Subsidiary Guarantor,
the Guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of the Guarantor hereunder which
shall, notwithstanding any such payment or payments other than payments made by
the Guarantor in respect of the Obligations or payments received or collected
from the Guarantor in respect of the obligations, remain liable for the
Obligations until the obligations are paid in full and the Revolving Credit
Commitments are terminated.
(c) The Guarantor agrees that whenever, at any time, or from
time to time, it shall make any payment to the Administrative Agent, the Issuing
Lender or any L/C Participant on account of its liability hereunder, it will
notify the Administrative Agent in writing that such payment is made under this
Guarantee for such purpose.
3. RIGHT OF SET-OFF. Upon the occurrence of any Event of Default
specified in the Credit Agreement, the Guarantor hereby irrevocably authorizes
the Issuing Lender or any L/C Participant at any time and from time to time
without notice to the Guarantor, any such notice being expressly waived by the
Guarantor, to set off and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Issuing Lender or such L/C Participant to or for the credit or the
account
112
of the Guarantor, or any part thereof in such amounts as the Issuing Lender or
such L/C Participant may elect, against and on account of the obligations and
liabilities of the Guarantor to the Issuing Lender or such L/C Participant
hereunder and claims of every nature and description of the Issuing Lender or
such L/C Participant against the Guarantor, in any currency, whether arising
hereunder, under the Credit Agreement, the other Loan Documents or otherwise, as
such Lender may elect, whether or not the Administrative Agent, the Issuing
Lender or any L/C Participant has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured. The Issuing
Lender and each L/C Participant agree to notify the Guarantor promptly of any
such set-off and the application made by the Issuing Lender or such L/C
Participant, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Issuing Lender and
each L/C Participant under this paragraph are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Issuing Lender and such L/C Participant may have.
4. NO SUBROGATION, CONTRIBUTION, REIMBURSEMENT OR INDEMNITY.
Notwithstanding anything to the contrary in this Guarantee, the Guarantor hereby
irrevocably waives all rights which may have arisen in connection with this
Guarantee to be subrogated to any of the rights (whether contractual, under the
Bankruptcy Code, including section 509 thereof, under common law or otherwise)
of the Administrative Agent, the Issuing Lender or any L/C Participant against
the Company or against the Administrative Agent, the Issuing Lender or any L/C
Participant for the payment of the obligations. The Guarantor hereby further
irrevocably waives all contractual, common law, statutory or other rights of
reimbursement, contribution, exoneration or indemnity (or any similar right)
from or against any Subsidiary Guarantor or any other Person which may have
arisen in connection with this Guarantee. So long as the obligations remain
outstanding, if any amount shall be paid by or on behalf of any Subsidiary
Guarantor to the Guarantor on account of any of the rights waived in this
paragraph, such amount shall be held by the Guarantor in trust, segregated from
other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Administrative Agent in the exact form received
by the Guarantor (duly indorsed by the Guarantor to the Administrative Agent, if
required), to be applied against the Obligations, whether matured or unmatured,
in such order as the Administrative Agent may determine. The provisions of this
paragraph shall survive the term of this Guarantee and the payment in full of
the obligations and the termination of the Revolving Credit Commitments.
5. AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS; WAIVER OF RIGHTS.
The Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against the Guarantor and without notice to or further
assent by the Guarantor, any demand for payment of any of the Obligations made
by the Administrative Agent, Issuing Lender or any L/C Participant may be
rescinded by such party and any of the obligations continued, and the
Obligations, or the liability of any other party upon or for any part thereof,
or any guarantee therefor or right of offset with respect thereto, may, from
time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent, the Issuing Lender or any L/C Participant and the Credit
113
Agreement, the other Loan Documents or other guarantee or document in connection
therewith may be amended, modified, supplemented or terminated, in whole or in
part, as the Administrative Agent, the Issuing Lender and/or any L/C Participant
may deem advisable from time to time, and any guarantee or right of offset at
any time held by the Administrative Agent, the Issuing Lender or any L/C
Participant for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. When making any demand hereunder against the Guarantor,
the Administrative Agent, the Issuing Lender or any L/C Participant may, but
shall be under no obligation to, make a similar demand on the respective
Subsidiary Guarantor or any guarantor, and any failure by the Administrative
Agent or any Lender to make any such demand or to collect any payments from such
respective Subsidiary Guarantor or such other guarantor or any release of such
respective Subsidiary Guarantor or such other guarantor shall not relieve the
Guarantor, and shall not impair or affect the rights and remedies, express or
implied, or as a matter of law, of the Administrative Agent, the Issuing Lender
or any L/C Participant against the Guarantor. For the purposes hereof "demand"
shall include the commencement and continuance of any legal proceedings.
6. GUARANTEE ABSOLUTE AND UNCONDITIONAL. The Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Administrative Agent, the
Issuing Lender or any L/C Participant upon this Guarantee or acceptance of this
Guarantee, the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon this Guarantee; and all dealings between the respective
Subsidiary Guarantor or the Guarantor and the Administrative Agent, the Issuing
Lender or any L/C Participant shall likewise be conclusively presumed to have
been had or consummated in reliance upon this Guarantee. The Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the respective Subsidiary Guarantor or the Guarantor with
respect to the Obligations. The Guarantor understands and agrees that this
Guarantee shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity, regularity or
enforceability of the Credit Agreement, any other Loan Document, any of the
Obligations or guarantee or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent, the Issuing Lender or any
L/C Participant, (b) any defense, set-off or counterclaim (other than a defense
of payment or performance) which may at any time be available to or be asserted
by the respective Subsidiary Guarantor against the Administrative Agent, the
Issuing Lender or any L/C Participant, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the respective Subsidiary Guarantor
or the Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the respective Subsidiary Guarantor for the
Obligations, or of the Guarantor under this Guarantee, in bankruptcy or in any
other instance. When pursuing its rights and remedies hereunder against the
Guarantor, the Administrative Agent, the Issuing Lender and any L/C Participant
may, but shall be under no obligation to, pursue such rights and remedies as it
may have against the respective Subsidiary Guarantor or any other Person or
against any guarantee for the obligations or any right of offset with respect
thereto, and any failure by the Administrative Agent, the Issuing Lender or any
L/C Participant to pursue such other rights or remedies or to collect any
payments from the respective Subsidiary Guarantor or
114
any such other Person or to realize upon any such guarantee or to exercise any
such right of offset, or any release of the respective Subsidiary Guarantor or
any such other Person or any such guarantee or right of offset, shall not
relieve the Guarantor of any liability hereunder, and shall not impair or affect
the rights and remedies, whether express, implied or available as a matter of
law, of the Administrative Agent, the Issuing Lender or any L/C Participant
against the Guarantor. This Guarantee shall remain in full force and effect and
be binding in accordance with and to the extent of its terms upon the Guarantor
and the successors and assigns thereof, and shall inure to the benefit of the
Administrative Agent, the Issuing Lender and the L/C Participants, and their
respective successors, indorsees, transferees and assigns, until all the
Obligations and the obligations of the Guarantor under this Guarantee shall have
been satisfied by payment in full and the Revolving Credit Commitments shall be
terminated, notwithstanding that from time to time during the term of the Credit
Agreement the respective Subsidiary Guarantor may be free from any Obligations.
7. REINSTATEMENT. This Guarantee shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Administrative Agent, the Issuing Lender or any L/C Participant upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
respective Subsidiary Guarantor or the Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the respective Subsidiary Guarantor or the Guarantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
8. PAYMENTS. The Guarantor hereby guarantees that payments hereunder
will be paid to the Administrative Agent without set-off or counterclaim in U.S.
Dollars at the office of the Administrative Agent located at 270 Park Avenue,
New York, New York 10017, U.S.A.
9. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and
warrants that the representations and warranties set forth in section 4 of the
Credit Agreement as they relate to the Guarantor, each of which is hereby
incorporated herein by reference, are true and correct, and the Administrative
Agent, the Issuing Lender and each L/C Participant shall be entitled to rely on
each of them as if they were fully set forth herein, provided that each
reference in each such representation and warranty to the respective Subsidiary
Guarantor's knowledge shall, for the purposes of this paragraph, be deemed to be
a reference to the Guarantor's knowledge.
The Guarantor agrees that the foregoing representations and warranties
shall be deemed to have been made by the Guarantor on the date of issuance of
each Letter of Credit, under the Credit Agreement on and as of such date of
issuance as though made hereunder on and as of such date (or, if stated to
relate to an earlier date, as of such earlier date).
10. COVENANTS. The Guarantor hereby agrees that, from and after the
Closing Date and so long as any Letter of Credit remains outstanding and unpaid
or any other
115
amount is owing to the Issuing Lender, any L/C Participant or the Administrative
Agent under the Credit Agreement or any other Loan Document, the Guarantor shall
take, or shall refrain from taking, as the case may be, all actions that are
necessary to be taken or not taken so that no violation of any provision,
covenant or agreement contained in Section 6 or 7 of the Credit Agreement, and
so that no Default or Event of Default, is caused by any act or failure to act
of the Guarantor or any of its Subsidiaries.
11. SEVERABILITY. Any provision of this Guarantee which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12. PARAGRAPH HEADINGS. The paragraph headings used in this Guarantee
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
13. NO WAIVER; CUMULATIVE REMEDIES. Neither the Administrative Agent,
the Issuing Lender nor any L/C Participant shall by any act (except by a written
instrument pursuant to paragraph 14 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent, the Issuing Lender or any
L/C Participant, any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent,
the Issuing Lender or any L/C Participant of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy which
the Administrative Agent, the Issuing Lender or such L/C Participant would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any rights or remedies provided by law.
14. INTEGRATION; WAIVERS AND AMENDMENTS; SUCCESSORS AND ASSIGNS;
GOVERNING LAW. This Guarantee and the other Loan Documents represent the
agreement of the Guarantor with respect to the subject matter hereof, and there
are no promises or representations by the Administrative Agent, the Issuing
Lender or any L/C Participant relative to the subject matter hereof not
reflected herein or in the other Loan Documents. None of the terms or provisions
of this Guarantee may be waived, amended or supplemented or otherwise modified
except by a written instrument executed by the Guarantor and the Administrative
Agent, provided that any provision of this Guarantee may be waived by the
Administrative Agent, the Issuing Lender and the L/C Participants in a letter or
agreement executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent. This Guarantee shall be binding upon
the successors and assigns of the Guarantor and shall inure to the benefit of
the Administrative Agent, the Issuing Lender and the L/C Participants and their
respective
116
successors and assigns. This Guarantee shall be governed by and be construed and
interpreted in accordance with the law of the State of New York.
15. NOTICES. All notices, requests and demands to or upon the Guarantor
or the Administrative Agent, the Issuing Lender or any L/C Participant to be
effective shall be in writing (including by telecopy), and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when
delivered by hand, or, in the case of mail, 3 days after deposit in the postal
system, first class postage prepaid, or, in the case of telecopy notice, when
received, addressed to a party at the address set forth in the Credit Agreement,
in the case of the Administrative Agent, the Issuing Lender or the L/C
Participants or, in the case of the Guarantor, to the following address:
Landstar System, Inc.
13410 Sutton Park Drive South
Jacksonville, Florida 32224
Attention: Robert C. LaRose
Telecopy: (904) 390-1323
16. COUNTERPARTS. This Guarantee may be executed by one or more of the
parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed and delivered by its duly authorized officer as of the day and year
first above written.
LANDSTAR SYSTEM HOLDINGS, INC.
By:
-------------------------------------
Name:
Title:
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EXHIBIT D TO CREDIT AGREEMENT
FORM OF BORROWING CERTIFICATE
This Borrowing Certificate is delivered to you by the undersigned
pursuant to subsection 5.1(b) of the Fourth Amended and Restated Credit
Agreement, dated as of July __, 2004 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Landstar System
Holdings, Inc. (the "Borrower"), Landstar System, Inc., the Subsidiaries of the
Borrower signatories thereto, certain Lenders parties thereto and JPMorgan Chase
Bank, as Administrative Agent. Unless otherwise defined herein, terms used
herein have the meanings provided in the Credit Agreement.
The undersigned, being the duly elected and acting Vice President and
Secretary, respectively, of the Borrower, hereby certify to the Administrative
Agent and the Lenders that:
i. The representations and warranties of the Borrower and the
Parent set forth in the Credit Agreement or which are contained in any
certificate, document or financial or other statement furnished
pursuant to or in connection with the Credit Agreement are correct in
all. material respects on and as of the date hereof as if made on and
as of such date (or, if stated to relate to an earlier date, as of such
earlier date).
ii. Immediately prior to and immediately after the making of
the extensions of credit under the Credit Agreement on the Closing
Date, no Default or Event of Default has occurred and is continuing
under the Credit Agreement.
iii. On and as of the date hereof, no strikes or other labor
disputes are pending or, to the knowledge of the undersigned,
threatened against the Parent, the Borrower or any of its Subsidiaries,
and neither the Parent, the Borrower nor any of its Subsidiaries are in
violation of the Fair Labor Standards Act or any other applicable
Requirement of Law dealing with labor or employment matters (including,
without limitation, employee benefits) that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse
Effect.
In witness whereof, we have hereto set our names on this _ th day of
July, 2004.
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
118
EXHIBIT E-1 TO CREDIT AGREEMENT
FORM OF OPINION OF DEBEVOISE & PLIMPTON
[TO BE IN FORM ACCEPTABLE TO THE ADMINISTRATIVE AGENT]
119
EXHIBIT E-2 TO CREDIT AGREEMENT
FORM OF OPINION OF BORROWER COUNSEL
[TO BE IN FORM ACCEPTABLE TO THE ADMINISTRATIVE AGENT]
120
EXHIBIT E-3 TO CREDIT AGREEMENT
FORM OF OPINION OF MAPLES AND CALDER
[TO BE IN FORM ACCEPTABLE TO THE ADMINISTRATIVE AGENT]
121
EXHIBIT F TO CREDIT AGREEMENT
FORM OF
ASSIGNMENT AND ACCEPTANCE
This Assignment and Acceptance (the "ASSIGNMENT AND ACCEPTANCE") is
dated as of the Effective Date set forth below and is entered into by and
between [__________] (the "ASSIGNOR") and [__________] (the "ASSIGNEE").
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (as amended, the "CREDIT
AGREEMENT"), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Acceptance as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (a) all of the Assignor's rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including without limitation any letters of credit,
guarantees, and swingline loans included in such facilities) and (b) to the
extent permitted to be assigned under applicable law, all claims, suits, causes
of action and any other right of the Assignor (in its capacity as a Lender)
against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract claims,
tort claims, malpractice claims, statutory claims and all other claims at law or
in equity related to the rights and obligations sold and assigned pursuant to
clause (a) above (the rights and obligations sold and assigned pursuant to
clauses (a) and (b) above being referred to herein collectively as, the
"Assigned Interest"). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Acceptance,
without representation or warranty by the Assignor.
1. Assignor:
-----------------------------------
2. Assignee:
-----------------------------------
[and is an Affiliate of _____________]
3. Borrower: LANDSTAR SYSTEM HOLDINGS, INC.
------------------------------
4. Administrative Agent: JPMORGAN CHASE BANK
-------------------
as the administrative agent under the
Credit Agreement
5. Credit Agreement: Fourth Amended and Restated Credit
Agreement dated as of July __, 2004
among Landstar System Holdings, Inc.,
Landstar System, Inc., the Subsidiaries
of the Borrower signatories
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thereto, the Lenders parties thereto,
JPMorgan Chase Bank, as Administrative
Agent, and the other agents parties
thereto
6. Assigned Interest:
Aggregate Amount of Amount of
Commitment/Loans Commitment/Loans Percentage Assigned of
Facility Assigned(1) for all Lenders* Assigned* Commitment/Loans(2)
- -------------------- ------------------- ---------------- ----------------------
$ $ %
$ $ %
$ $ %
[7. Trade Date: ______________](3)3
Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
- -------------------------
(1) Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g.
"Tranche A Commitment," "Tranche B Commitment," etc.)
* Amount to be adjusted by the counterparties to take into account any
payments or prepayments made between the Trade Date and the Effective Date.
(2) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
(3) To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.
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The terms set forth in this Assignment and Acceptance are hereby agreed to:
ASSIGNOR
By:
-------------------------------------
Title:
ASSIGNEE
By:
-------------------------------------
Title:
Consented to and Accepted:
JPMORGAN CHASE BANK, as
Administrative Agent
By:
--------------------------------------------
Title:
Consented to:
JPMORGAN CHASE BANK, as
Issuing Lender
By:
--------------------------------------------
Title:
LANDSTAR SYSTEM HOLDINGS, INC., as
Borrower
By:
--------------------------------------------
Title:
124
ANNEX 1
The Fourth Amended and Restated Credit Agreement dated as of July __,
2004 among Landstar System Holdings, Inc., Landstar System, Inc., the
Subsidiaries of the Borrower which are signatories thereto, the Lenders parties
thereto and JPMorgan Chase Bank, as Administrative Agent.
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ACCEPTANCE
1. REPRESENTATIONS AND WARRANTIES.
------------------------------
1.1 ASSIGNOR. The Assignor (a) represents and warrants that
(i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Acceptance and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.
1.2. ASSIGNEE. The Assignee (a) represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Acceptance and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) it meets all requirements of an Eligible Assignee under the
Credit Agreement (subject to receipt of such consents as may be required under
the Credit Agreement), (iii) from and after the Effective Date, it shall be
bound by the provisions of the Credit Agreement as a Lender thereunder and, to
the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to ss.ss.6.1
and 6.2 thereof, as applicable, and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Acceptance and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on the Administrative Agent or any other Lender, and (v) attached to
the Assignment and Acceptance is any documentation required to be delivered by
it pursuant to the terms of the Credit Agreement, duly completed and
125
executed by the Assignee; and (b) agrees that (i) it will, independently and
without reliance on the Administrative Agent, the Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.
2. PAYMENTS. From and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignee whether such amounts have accrued prior to, on or after the Effective
Date. The Assignor and the Assignee shall make all appropriate adjustments in
payments by the Administrative Agent for periods prior to the Effective Date or
with respect to the making of this assignment directly between themselves.
3. GENERAL PROVISIONS. This Assignment and Acceptance shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Acceptance may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Acceptance by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Acceptance. This Assignment
and Acceptance shall be governed by, and construed in accordance with, the laws
of the State of New York.
126