EXHIBIT 4.1
EXECUTION COPY
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SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of
October 10, 1997
among
LANDSTAR SYSTEM HOLDINGS, INC.
LANDSTAR SYSTEM, INC.
The Subsidiaries of the
Borrow Signatories Hereto
The Several Lenders
from Time to Time Parties Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
==========================
CHASE SECRUITIES INC.,
as Arranger
TABLE OF CONTENTS
PAGE
SECTION I. DEFINITIONS
1.1 Defined Terms 1
1.2 Other Definitional Provisions 17
SECTION II. AMOUNT AND TERMS OF COMMITMENTS 18
2.1 Revolving Credit Commitments 18
2.2 Revolving Credit Notes 18
2.3 Procedure for Revolving Credit Borrowing 19
2.4 Commitment Fee 21
2.5 Optional termination or Reduction of Commitments 21
2.6 Swing Line Commitments 21
2.7 Conversion and Continuation Options 23
2.8 Minimum Amounts and Maximum Number of Tranches 24
2.9 Interest Rates and Payment Dates 24
2.10 Computation of Interest and Fees 24
2.11 Inability to determine Interest Rate 25
2.12 Pro Rata Treatment and Payments 25
2.13 Illegality 26
2.14 Requirements of Law 27
2.15 Taxes 28
2.16 Indemnity 31
2.17 Certain Exclusions 31
2.18 Replacement of Lender 31
SECTION III. LETTERS OF CREDIT
3.1 L/C Commitment 32
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
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 Conditions 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 37
4.11 Taxes 37
4.12 Federal Regulations 38
4.13 ERISA 38
4.14 Investment Company Act; Other Regulations 38
4.15 Subsidiaries 38
4.16 Purpose of Loans 38
4.17 Environmental Matters 39
SECTION V. CONDITIONS PRECEDENT 40
5.1 Conditions to Effectiveness 40
5.2 Conditions to Each Tranche B Loan 43
5.3 Conditions to Each Extension of Credit 44
SECTION VI. AFFIRMATIVE COVENANTS 45
6.1 Financial Statements 45
6.2 Certificates; Other Information 46
6.3 Payments of Obligations 47
6.4 Conduct of Business and Maintenance of Existence 47
6.5 Maintenance of Property; Insurance 47
6.6 Inspection of Property 47
6.7 Notices 47
6.8 Environmental Laws 48
6.9 Additional Subsidiaries 49
SECTION VII. NEGATIVE COVENANTS 49
7.1 Financial Condition Covenants 49
7.2 Limitation on Indebtedness 50
7.3 Limitation on Liens 52
7.4 Limitation on Guarantee Obligations 54
7.5 Limitation on Fundamental Changes 55
7.6 Limitation on Sale of Assets 55
7.7 Limitation on Leases 56
7.8 Limitation on Dividends 56
7.9 Limitation on Capital Expenditures 57
7.10 Limitation on Investments, loans and Advances 58
7.11 Limitation on Optional Payments and Modifications of
Debt Instruments 59
7.12 Limitation on Transactions with Affiliates 60
7.13 Limitation on Sales and Leasebacks 60
7.14 Limitation on Changes in Fiscal year 60
7.15 Limitation on Negative Pledge Clauses 60
7.16 Limitation on Lines of Business 60
7.17 Limitation on Formation of Subsidiaries 61
7.18 Limitation on Non-Guarantor Subsidiaries 61
SECTION VIII. EVENTS OF DEFAULT 61
SECTION IX. THE ADMINISTRATIVE AGENT 64
9.1 Appointment 64
9.2 Delegation of Duties 65
9.3 Exculpatory Provisions 65
9.4 Reliance by Administrative Agent 65
9.5 Notice of Default 66
9.6 Non-Reliance on Administrative Agent and Other Lenders 66
9.7 Indemnification 66
9.8 Administrative Agent in Its Individual Capacity 67
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 72
10.8 Counterparts 73
10.9 Severability 73
10.10 Integration 73
10.11 GOVERNING LAW 73
10.12 Submission To Jurisdiction; Waivers 73
10.13 Acknowledgments 74
10.14 WAIVERS OF JURY TRIAL 74
10.15 Confidentiality 75
10.16 Matters Relating to insurance Subsidiary 75
SCHEDULES
Schedule 1.1(a) Commitments 79
Schedule 1.1(b) Subsidiary Guarantors 81
Schedule 1.1(c) Pricing Grids 82
Schedule 4.15 Subsidiaries 83
Schedule 7.2 Existing Indebtedness 85
Schedule 7.3 Existing Liens 86
Schedule 7.4 Existing Guarantee Obligations 87
EXHIBITS
Exhibit A-1 Form of Tranche A Revolving Credit Note 88
Exhibit A-2 Form of Tranche B Revolving Credit Note 92
Exhibit B Form of Swing Line Note 96
Exhibit C-1 Form of Second Amended and Restated Parent Guarantee 99
Exhibit C-2 Form of Second Amended and Restated Subsidiaries
Guarantee 106
Exhibit C-3 Form of L/C Guarantee 116
Exhibit D Form of Borrowing Certificate 123
Exhibit E-1 Form of Opinion of Debevoise & Xxxxxxxx 124
Exhibit E-2 Form of Opinion of Borrower Counsel 130
Exhibit F Form of Assignment and Acceptance 135
SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as
of October 10, 1997, 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 other than the Exiting Lenders (as defined
below), the "Lenders") and The Chase Manhattan Bank ("Chase"), 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 Amended
and Restated Credit Agreement, dated as of October 7, 1994, as amended (the
"Existing Credit Agreement"); and
WHEREAS, the Borrower, the Administrative Agent, the Existing
Lenders that will have commitments hereunder (the "Continuing Lenders"), the
Existing Lenders that will not have commitments hereunder (the "Exiting
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
I.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 Chase 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 Chase 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
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effect on such day (or, if such day shall not be a Business Day, the
next preceding 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
based upon the ABR.
"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 direction of the management
and policies of such Person, whether by contract or otherwise.
"Agreement": this Second Amended and Restated Credit
Agreement, as amended, supplemented or otherwise modified from time to
time.
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"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.
"Asset Sale": any sale or other disposition or series of
related sales or other dispositions by the Borrower or any of its
Subsidiaries of any asset or assets of the Borrower or such
Subsidiary.
"Assignee": as defined in subsection 10.6(c).
"Available Revolving Credit Commitment": as to any Lender at
any time, an amount equal to the sum of such Lender's then Available
Tranche A Revolving Credit Commitment and then Available Tranche B
Revolving Credit Commitment.
"Available Tranche A 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 Tranche A Revolving Credit Commitment over (b)
the sum of (i) the then Outstanding Tranche A Revolving Extensions of
Credit of such Lender and (ii) except for the purpose of the
application of the term "Available Revolving Credit Commitments" as
used in subsection 2.4, such Lender's Tranche A Revolving Credit
Commitment Percentage of the then Outstanding Permitted Line of Credit
Indebtedness.
"Available Tranche B 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 Tranche B Revolving Credit Commitment over (b)
the then Outstanding Tranche B 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 2.3 or 2.6 as a date on which the Borrower
requests the Lenders to make Loans hereunder.
"Business": as defined in subsection 4.17.
"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.
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"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 Xxxxx'x 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 least A-2 by Standard & Poor's Corporation or P-2 by
Xxxxx'x 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 Xxxxx'x 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 Xxxxx'x 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 Chase 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 Chase 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.
"Chase": as defined in the preamble hereto.
"Closing Date": the date on which the conditions precedent
set forth in subsection 5.1 shall be satisfied, provided that such
date is no later than October 17, 1997.
"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
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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.
"Consolidated Current Liabilities": at a particular date, all
amounts which would, in conformity with GAAP, be included under
current liabilities on a consolidated balance sheet of the Parent and
its Subsidiaries as at such date, but in any event including the
amounts of (a) all Indebtedness of any such Person payable on demand
or, at the option of the Person to whom such Indebtedness is owed, not
more than twelve months after such date, (b) any payments in respect
of any Indebtedness of any such Person (whether installment, serial
maturity or sinking fund payments or otherwise) required to be made
not more than twelve months after such date and (c) all reserves in
respect of liabilities or Indebtedness payable on demand or, at the
option of the Person to whom such Indebtedness is owed, not more than
twelve months after such date, the validity of which is contested at
such date.
"Consolidated EBITDA": for any period, with respect to any
Person, Consolidated Net Income of such Person for such period plus,
without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of
(i) total income tax expense, and (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 and (v) any extraordinary expenses or
losses (including, whether or not otherwise includable as a separate
item in the statement of such Consolidated Net Income for such period,
losses on sales of assets outside of the ordinary course of business)
and minus any extraordinary 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).
"Consolidated Interest Expense": for any fiscal period of the
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Parent, the consolidated amount of interest expense of the Parent and
its Subsidiaries determined in accordance with GAAP (but excluding for
purposes of calculating the amount of such interest expense for any
such fiscal period the effect of any interest income for such fiscal
period) including, without limitation, the interest component of
payments made under Financing Leases and net of costs of or
obligations arising under any Interest Rate Protection Agreements.
"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": consolidated
Indebtedness of the Parent or any of its Subsidiaries for borrowed
money maturing more than twelve months after the incurrence thereof,
including, without limitation, (i) obligations under Financing Leases,
(ii) current maturities of any such Indebtedness and (iii) the Loans.
"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 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 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.
"Coverage Ratio": as defined in subsection 7.1(c).
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"Cumulative Consolidated Net Income": the sum of Consolidated
Net Income for each fiscal quarter of the Parent in which such
Consolidated Net Income is greater than zero ending after March 30,
1997.
"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 such System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
equal to the rate notified to the Administrative Agent by the
Reference Lender as the rate at which the Reference Lender is offered
Dollar deposits at or about 10:00 A.M., New York City time, two
Business Days prior to the beginning of such Interest Period in the
interbank eurodollar market where the eurodollar and foreign currency
and exchange operations in respect of its Eurodollar Loans are then
being conducted for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable
to the amount of its Eurodollar Loan to be outstanding during such
Interest Period.
"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%):
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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 the recitals hereto.
"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.
"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, "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.
"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
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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.
"Hazardous Materials": any hazardous materials, hazardous
wastes, hazardous constituents, hazardous or toxic substances,
petroleum products (including crude oil or any fraction thereof),
defined or regulated as such in or under any Environmental Law.
"Implied Interest Rate": with respect to any lease, the
interest rate implicit in the lease as defined in Financial Accounting
Standard Board Statement of Standards Number 13.
"Indebtedness": of any Person (the "Debtor") at any date,
without duplication, (a) all indebtedness of such Person for borrowed
money or for the deferred purchase price of property or services
(other than current trade liabilities, accrued compensation and other
fees incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar
instrument, (c) all obligations of such Person under Financing Leases,
(d) all obligations of such Person in respect of acceptances issued or
created for the account of such Person and (e) all liabilities of any
other Person or Persons secured by any Lien on any property owned by
the Debtor even though the Debtor has not assumed or otherwise become
liable for the payment thereof.
"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": a wholly owned corporate Subsidiary
of the Borrower organized under the insurance laws of the Cayman
Islands for the purpose of engaging in the business of providing
insurance to the Borrower, its Subsidiaries and/or independent
contractors doing business with the Borrower and/or any of its
Subsidiaries.
"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,
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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) 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 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.
"Issuing Lender": Chase, in its capacity as issuer of any
Letter of Credit.
"L/C Commitment": $50,000,000.
"L/C Fee Payment Date": the last day of each March, June,
September and December.
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"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.
"L/C Participants": the collective reference to all the
Lenders other than the Issuing 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, 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, any of the Notes
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 $5,000,000.
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"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic 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.
"Net Cash Proceeds": in connection with any sale or other
disposition of any asset or any settlement by, or receipt of payment
in respect of, any insurance claim, the cash proceeds (including any
cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of
such sale, settlement or payment, net of reasonable attorneys' fees,
accountants' fees, investment banking fees, amounts required to be
applied to the repayment of Indebtedness secured by a Lien expressly
permitted hereunder on any asset which is the subject of such sale or
insurance claim (other than any Lien in favor of the Administrative
Agent for the benefit of the Lenders) and other customary fees
actually incurred in connection therewith and net of taxes paid or
reasonably estimated to be payable as a result thereof (after taking
into account any available tax credits or deductions and any tax
sharing arrangements).
"New Lenders": as defined in the recitals hereto.
"Non-Cash Working Capital": at a particular date, the excess,
if any, of (a) Consolidated Current Assets (other than cash and Cash
Equivalents) over (b) Consolidated Current Liabilities (other than
installments of Consolidated Long-Term Indebtedness maturing not more
than twelve months after such date and the Revolving Credit Loans) at
such date.
"Non-Excluded Taxes": as defined in subsection 2.15.
"Notes": the collective reference to the Revolving Credit
Notes and the Swing Line Note.
"Offshore Joint Venture": a corporation, partnership or other
joint venture company (which is a Subsidiary Guarantor) formed under
the laws of a jurisdiction other than the United States or any
political subdivision thereof by the Insurance Subsidiary and either
the Parent or the Borrower (which shall be the owners of all the
Capital Stock thereof) for the sole purpose of making, and which shall
be permitted to make, Permitted Insurance Company Investments.
"Operator Financing Program": a program pursuant to which
financing shall be provided to independent contractors doing business
with the Borrower and its Subsidiaries to enable them to purchase
tractors, trailers and related transportation equipment expected to be
used in connection with the business of the Borrower and its
subsidiaries; pursuant to such program (i) the Borrower will make
12
investments, loans and/or advances to the Operator Financing
Subsidiary or another entity formed for the purpose of such program
(the "Financing Vehicle"), (ii) the Financing Vehicle will make loans
to such independent contractors to finance such equipment secured by
Liens on such equipment, (iii) the Financing Vehicle will from time to
time sell such loans (and assign such Liens), without recourse to the
Financing Vehicle, to one or more other Person or Persons (other than
the Parent or any of its Subsidiaries) and (iv) the Borrower and/or
Parent will enter into Guarantee Obligations with respect to all or
some portion of such loans so sold.
"Operator Financing Subsidiary": a direct or indirect wholly
owned Subsidiary formed for the sole purpose of constituting a
Financing Vehicle (as such term is defined in the definition of
Operator Financing Program) and which shall engage in no business or
activities other than those related to the Operator Financing Program
"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 Tranche A 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 Tranche A Revolving Credit Loans
made by such Lender then outstanding, and (b) such Lender's Revolving
Credit Percentage of the L/C Obligations then outstanding, provided
that with respect to Chase for any purpose other than the calculation
of the commitment fee pursuant to subsection 2.4, Outstanding Tranche
A Revolving Extensions of Credit at any time shall also include the
aggregate principal amount of Swing Line Loans then outstanding.
"Outstanding Tranche B Revolving Extensions of Credit": as to
any Lender at any time, an amount equal to the aggregate principal
amount of all Tranche B Revolving Credit Loans made by such Lender
then outstanding.
"Parent": as defined in the preamble hereto.
"Parent Guarantee": the Second 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.
"Participant": as defined in subsection 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Percentage": as to any Lender at any time, the percentage
which the sum of such Lender's Tranche A Revolving Credit Percentage
and Tranche B Revolving Credit Percentage then constitutes of the
aggregate Tranche A Revolving Credit Percentages and Tranche B
Revolving Credit Percentages.
"Percentage-Based Leases": those tractor, trailer and related
13
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
corporations which, at the time the investment in question is made,
are rated one, two or three by the Securities Valuation Office of the
National Association of Insurance Commissioners in an aggregate amount
not to exceed at any time 10% of the Insurance Subsidiary's total
assets, (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 in an aggregate amount not to
exceed at any time 25% of the Insurance Subsidiary's total assets, (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 one, two or three by the Securities
Valuation Office of the National Association of Insurance
Commissioners.
"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) (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 otherwise) prior to October 31, 2002 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.
"Xxxxx": Landstar Xxxxx, Inc.
"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": Chase.
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"Refunded Swing Line Loans": as defined in subsection
2.6(c).
"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, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or 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 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": the collective reference to the
Tranche A Revolving Credit Loans and the Tranche B Revolving Credit
Loans.
"Revolving Credit Notes": the collective reference to the
Tranche A Revolving Credit Notes and the Tranche B Revolving Credit
Notes.
"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.
15
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Subsidiaries Guarantee": the Second 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.
"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 2.6(a).
"Swing Line Note": as defined in subsection 2.6(b).
"Termination Date": the date that is the fifth anniversary of
the Closing Date.
"Total Capitalization": the sum of Consolidated Long-Term
Indebtedness of the Parent and its Subsidiaries and shareholders'
equity of the Parent.
"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".
"Tranche A Revolving Credit Commitment": as to any Lender,
the obligation of such Lender to make Tranche A Revolving Credit Loans
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
"Tranche A 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.
"Tranche A Revolving Credit Loans": as defined in subsection
2.1(a).
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"Tranche A Revolving Credit Note": as defined in subsection
2.2.
"Tranche A Revolving Credit Percentage": as to any Lender at
any time, the percentage which such Lender's Tranche A Revolving
Credit Commitment then constitutes of the aggregate Tranche A
Revolving Credit Commitments (or, at any time after the Tranche A
Revolving Credit Commitments shall have expired or terminated, the
percentage which the aggregate principal amount of such Lender's
Tranche A Revolving Credit Loans then outstanding constitutes of the
aggregate principal amount of the Tranche A Revolving Credit Loans and
L/C Obligations then outstanding).
"Tranche B Revolving Credit Commitment": as to any Lender,
the obligation of such Lender to make Tranche B Revolving Credit Loans
to the Borrower hereunder in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth under the heading
"Tranche B 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.
"Tranche B Revolving Credit Loans": as defined in subsection
2.1(b).
"Tranche B Revolving Credit Note": as defined in subsection
2.2.
"Tranche B Revolving Credit Percentage": as to any Lender at
any time, the percentage which such Lender's Tranche B Revolving
Credit Commitment then constitutes of the aggregate Tranche B
Revolving Credit Commitments (or, at any time after the Tranche B
Revolving Credit Commitments shall have expired or terminated, the
percentage which the aggregate principal amount of such Lender's
Tranche B Revolving Credit Loans then outstanding constitutes of the
aggregate principal amount of the Tranche B Revolving Credit Loans).
"Transferee": as defined in subsection 10.6(f).
"Type": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.
"Uniform Customs": 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.
I.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the Notes or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in the Notes, 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.
17
(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 not to any particular provision of this Agreement,
and Section, subsection, Schedule and Exhibit references are to this Agreement
unless otherwise specified.
(d) 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
II.1 Revolving Credit Commitments. (a) Subject to the terms
and conditions hereof, each Lender severally agrees to make revolving credit
loans ("Tranche A 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, (ii) the aggregate
unpaid principal amount at such time of all Swing Line Loans made by such
Lender, (iii) except in the case of Chase, the aggregate unpaid principal
amount at such time of all Swing Line Loans outstanding multiplied by such
Lender's Tranche A Revolving Credit Percentage (net of the portion, if any,
of the proceeds of such Tranche A Revolving Credit Loans that are applied at
the time they are made to repay such Swing Line Loans) and (iv) the then
Outstanding Permitted Line of Credit Indebtedness multiplied by such Lender's
Tranche A Revolving Credit Percentage, not to exceed the amount of such
Lender's Tranche A Revolving Credit Commitment. During the Revolving Credit
Commitment Period the Borrower may use the Tranche A Revolving Credit
Commitments by borrowing, prepaying the Tranche A Revolving Credit Loans in
whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof.
(b) Subject to the terms and conditions hereof, each
Lender severally agrees to make revolving credit loans ("Tranche B 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
not to exceed the amount of such Lender's Tranche B Revolving Credit
Commitment. During the Revolving Credit Commitment Period the Borrower may
use the Tranche B Revolving Credit Commitments by borrowing, prepaying the
Tranche B Revolving Credit Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof.
(c) 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 2.3 and 2.7, 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.
II.2 Revolving Credit Notes. The Revolving Credit Loans made
by each Lender shall be evidenced by a promissory note of the Borrower,
substantially in the form of Exhibit A-1, in the case of Tranche A Revolving
Credit Loans, and Exhibit A-2, in the case of Tranche B Revolving Credit
Loans, with appropriate insertions as to payee, date and principal amount (a
"Tranche A Revolving Credit Note" and a "Tranche B Revolving Credit Note",
respectively; collectively, "Revolving Credit Notes"), payable to the order of
18
such Lender and in a principal amount equal to the lesser of (a) the amount of
the initial Tranche A Revolving Credit Commitment or Tranche B Revolving
Credit Commitment, as applicable, of such Lender and (b) the aggregate unpaid
principal amount of all Tranche A Revolving Credit Loans or Tranche B
Revolving Credit Loans, as applicable, made by such Lender. Each Lender is
hereby authorized to record the date, Type and amount of each Revolving Credit
Loan made by such Lender, 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, in the case of Eurodollar Loans, the
length of each Interest Period with respect thereto, on the schedule annexed
to and constituting a part of its applicable Revolving Credit Notes, and any
such recordation shall constitute prima facie evidence of the accuracy of the
information so recorded. Each Revolving Credit Note shall (x) be dated the
Closing Date, (y) be stated to mature on the Termination Date and (z) provide
for the payment of interest in accordance with subsection 2.9.
II.3 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 12:00 Noon, 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, $2,000,000 or a whole multiple of $500,000 in
excess thereof (or, if the then Available Tranche A Revolving Credit
Commitments or the then Available Tranche B Revolving Credit Commitments, as
applicable, are less than $2,000,000, such lesser amount) and (y) in the case
of Eurodollar Loans, $2,500,000 or a whole multiple of $500,000 in excess
thereof. Upon 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 2.3(a) above with respect to the aggregate principal amount of
Tranche A Revolving Credit Loans that it wishes to have outstanding on the
Closing Date. If any Lender's Tranche A Revolving Credit Percentage of the
Tranche A Revolving Credit Loans to be so outstanding on the Closing Date
exceeds the aggregate amount of Tranche A Revolving Credit Loans, if any, made
by such Lender outstanding under the Existing Credit Agreement on the Closing
19
Date before giving effect to this Agreement, such Lender shall make the amount
of such excess available, as a Tranche 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 Tranche A
Revolving Credit Percentage of the Tranche A Revolving Credit Loans to be so
outstanding on the Closing Date is less than the aggregate amount of Tranche A
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 Bank shall have Tranche A 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
such Exiting Bank, 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 2.17 of the Existing Credit Agreement). If the
aggregate amount of Tranche A Revolving Credit Loans to be outstanding on the
Closing Date exceeds the amount of all Tranche A 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 Tranche A 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.
(c) In the case of borrowings on the Closing Date, the
Borrower shall give to the Administrative Agent notice as provided in
subsection 2.3(a) above with respect to the aggregate principal amount of
Tranche B Revolving Credit Loans that it wishes to have outstanding on the
Closing Date. If any Lender's Tranche B Revolving Credit Percentage of the
Tranche B Revolving Credit Loans to be so outstanding on the Closing Date
exceeds the aggregate amount of Tranche B 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 Tranche B 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 Tranche B
Revolving Credit Percentage of the Tranche B Revolving Credit Loans to be so
outstanding on the Closing Date is less than the aggregate amount of Tranche B
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 Bank shall have Tranche B 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
such Exiting Bank, 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
20
Agreement and repaid on the Closing Date (including, without limitation,
amounts due under subsection 2.17 of the Existing Credit Agreement). If the
aggregate amount of Tranche B Revolving Credit Loans to be outstanding on the
Closing Date exceeds the amount of all Tranche B 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 Tranche B 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.
II.4 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.
II.5 Optional Termination or Reduction of Commitments. The
Borrower shall have the right, upon not less than five Business Days' notice
to the Administrative Agent, to terminate the Tranche A Revolving Credit
Commitments or the Tranche B Revolving Credit Commitments or, from time to
time, to reduce the amount of the Tranche A Revolving Credit Commitments or
the Tranche B Revolving Credit Commitments, provided that (a) no such
termination or reduction of the Tranche A Revolving Credit Commitments shall
be permitted if, after giving effect thereto and to any prepayments of the
Tranche A Revolving Credit Loans and the Swing Line Loans made on the
effective date thereof, the Available Tranche A Revolving Credit Commitment
would be less than zero and (b) no such termination or reduction of the
Tranche B Revolving Credit Commitments shall be permitted if, after giving
effect thereto and to any prepayments of the Tranche B Revolving Credit Loans
made on the effective date thereof, the Available Tranche B Revolving Credit
Commitments would be less than zero. The amount of any such optional
reduction shall be applied pro rata to the reduction of the Tranche A
Revolving Credit Commitments and the Tranche B Revolving Credit Commitments.
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.
II.6 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, Chase 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 at no time shall the aggregate
principal amount of Swing Line Loans outstanding, when added to Chase's then
Outstanding Tranche A Revolving Extensions of Credit and Chase's Tranche A
Revolving Credit Commitment Percentage of the then Outstanding Permitted Line
of Credit Indebtedness, exceed Chase's Tranche A Revolving Credit Commitment.
Amounts borrowed by the Borrower under this subsection 2.6 may be repaid and,
21
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 Chase irrevocable notice (which notice must be received by
Chase 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 Chase to the Borrower at the office
of Chase specified in subsection 10.2 by crediting the account of the Borrower
at such office with such proceeds.
(b) The Swing Line Loans shall be evidenced by a
promissory note of the Borrower substantially in the form of Exhibit B, with
appropriate insertions (the "Swing Line Note"), payable to the order of Chase
and representing the obligation of the Borrower to pay the unpaid principal
amount of the Swing Line Loans, with interest thereon as prescribed in
subsection 2.9. Chase is hereby authorized to record the Borrowing Date, the
amount of each Swing Line Loan and the date and amount of each payment or
prepayment of principal thereof, on the schedule annexed to and constituting a
part of the Swing Line Note and any such recordation shall constitute prima
facie evidence of the accuracy of the information so recorded. The Swing Line
Note shall (a) be dated the Closing Date, (b) be stated to mature on the
Termination Date and (c) bear interest for the period from the date thereof to
the Termination Date on the unpaid principal amount thereof from time to time
outstanding at the applicable interest rate per annum determined as provided
in, and payable as specified in, subsection 2.9.
(c) Chase 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 Chase to act on its behalf) request prior to 12:00 Noon (New York City
time) each Lender, including Chase, to make a Tranche A Revolving Credit Loan
in an amount equal to such Lender's Tranche A Revolving Credit 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 (d) of this subsection 2.6 shall apply) each
Lender shall make the proceeds of its Tranche A Revolving Credit Loan
available to Chase for the account of Chase at the office of Chase 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
Tranche A Revolving Credit Loans shall be immediately applied to repay the
Refunded Swing Line Loans. Each Tranche A Revolving Credit Loan made pursuant
to this subsection 2.6(c) shall be an ABR Loan.
(d) If prior to the making of a Tranche A Revolving
Credit Loan pursuant to paragraph (c) of this subsection 2.6 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 Tranche A Revolving Credit Percentage of such Refunded Swing Line
Loan. Each Lender will immediately transfer to Chase, in immediately
available funds, the amount of its participation and upon receipt thereof
Chase will deliver to such Lender a Swing Line Loan participation certificate
dated the date of receipt of such funds and in such amount.
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(e) Whenever, at any time after Chase has received from
any Lender such Lender's participating interest in a Refunded Swing Line Loan,
Chase receives any payment on account thereof, Chase 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 Chase is required to
be returned, such Lender will return to Chase any portion thereof previously
distributed by Chase to it.
(f) Each Lender's obligation to purchase participating
interests pursuant to this subsection 2.6 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 Chase, 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.
II.7 Conversion and Continuation Options. (a) The Borrower
may elect from time to time to convert Eurodollar Loans to ABR Loans by giving
the 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.
23
II.8 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 $2,500,000 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.
II.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, 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.
II.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
24
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.
II.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 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.
II.12 Pro Rata Treatment and Payments. (a) Each borrowing
of Tranche A 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 Tranche A Revolving Credit Commitments
hereunder shall be made pro rata according to the respective Tranche A
Revolving Credit Percentages of the Lenders. Each borrowing of Tranche B
Revolving Credit Loans by the Borrower from the Lenders hereunder, each
payment by the Borrower on account of any commitment fee in respect of the
Tranche B Revolving Credit Commitments hereunder shall be made pro rata
according to the respective Tranche B Revolving Credit Percentages of the
Lenders. Each payment (including each prepayment) by the Borrower on account
of principal of the Tranche A 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 Tranche A Revolving Credit Loans. Subject to the
immediately foregoing sentence, each payment (including each prepayment) by
25
the Borrower on account of the principal of and interest on the Tranche A
Revolving Credit Loans shall be made pro rata according to the respective
outstanding principal amounts of the Tranche A Revolving Credit Loans then
held by the Lenders. Each payment (including each prepayment) by the Borrower
on account of the principal of and interest on the Tranche B Revolving Credit
Loans shall be made pro rata according to the respective outstanding principal
amounts of the Tranche B Revolving Credit Loans then held by the Lenders. All
payments (including prepayments) to be made by the Borrower hereunder and
under the Notes, whether on account of principal, interest, fees or otherwise,
shall be made without set off or counterclaim and shall be made prior to 12:00
Noon, 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 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 Tranche A Revolving Credit Commitment Percentage or Tranche B
Revolving Credit Commitment Percentage, as applicable, 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 Tranche A Revolving Credit Commitment Percentage or
Tranche B Revolving Credit Commitment Percentage, as applicable, of any
borrowing hereunder from its obligation to do so in accordance with the terms
hereof.
II.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
26
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 canceled 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.
II.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 made subsequent to the date hereof:
(i) shall subject such Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note, 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 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, or net worth taxes or
similar taxes imposed in lieu of such 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
the Notes));
(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
27
in Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, 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. 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, 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 Notes 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 made subsequent to the date hereof 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, (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.
II.15 Taxes. (a) All payments made by the Borrower under
this Agreement and the Notes (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
28
Authority, excluding 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 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 the Notes) ("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 the Notes, 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 and the Notes, 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 any Lender if 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. The agreements in this subsection
shall survive the termination of this Agreement and the payment of the Notes
and all other amounts payable hereunder.
(b) (i) Each Lender that is incorporated under the
laws of the United States of America or a state thereof hereby confirms that
it is so incorporated;
(ii) Each Lender that is not incorporated
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 (x) two duly completed
copies of United States Internal Revenue Service Form 1001 or
4224, or successor applicable form, as the case may be, and (y)
an Internal Revenue Service Form W-8 or W-9, 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
29
(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 any change in treaty, law or regulation, or the application or
interpretation thereof, has occurred after the date on which such Lender
became a Lender 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 (A) in the case of
a Form 1001 or 4224, or successor applicable form, that it is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes and (B) in the case of a Form W-8 or W-9,
or successor applicable form, that 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 subsection, 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, each Lender to which the Borrower is required to pay any additional
amount pursuant to this subsection 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 Non-Excluded Tax giving rise
to such payment. Each Lender to which the Borrower is required to pay any
additional amount pursuant to this subsection 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 provides an incorrect form, certificate or statement (or fails to
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, 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 provided, as the case may be.
30
II.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. This covenant shall survive the termination of
this Agreement and the payment of the Notes and all other amounts payable
hereunder.
II.17 Certain Exclusions. (a) For purposes of subsections
2.14 and 2.15, the entry into force and implementation of the treaty between
the United States and the Netherlands, signed at Washington on December 18,
1992, shall not be treated as a change in treaty, law, regulation, or
application or interpretation thereof.
(b) 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.
(c) 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.
II.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.
31
SECTION III. LETTERS OF CREDIT
III.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 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 Tranche A 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 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.
(b) Each Letter of Credit shall be subject to the
Uniform Customs 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.
III.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 satisfaction of the Issuing Lender, and such other certificates, documents
and other papers and information as the Issuing Lender may 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 or to the respective Subsidiary
Guarantor promptly following the issuance thereof, and shall notify the
Lenders of the issuance thereof.
III.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
32
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 Tranche A
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 1/8% 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.
(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.
III.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 Tranche A 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
33
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.
(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.
III.5 Reimbursement Obligation. The Borrower or the
respective 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
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 or the respective Subsidiary Guarantor 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.
III.6 Obligations Absolute. The Borrower's or 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 or the
respective Subsidiary Guarantor may have or have had against the Issuing
Lender or any beneficiary of a Letter of Credit. The Borrower or the
respective Subsidiary Guarantor also agrees with the Issuing Lender that the
Issuing Lender shall not be responsible for, and the Borrower's or 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
34
Subsidiary Guarantor against any beneficiary of such Letter of Credit or any
such transferee. The Issuing Lender 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 or the respective Subsidiary
Guarantor agrees 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 Uniform Commercial Code
of the State of New York, shall be binding on the Borrower or on the
respective Subsidiary Guarantor and shall not result in any liability of the
Issuing Lender to the Borrower or the respective Subsidiary Guarantor.
III.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.
III.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:
IV.1 Financial Condition. The consolidated balance sheet of
the Parent and its consolidated Subsidiaries as at December 28, 1996 and the
related consolidated statements of income and of cash flows for the fiscal
year ended on such date, reported on by KPMG Peat Marwick, 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). Neither
the Parent nor any of its consolidated Subsidiaries had, at the date of the
balance sheet referred to above, 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 December
28, 1996 to and including the date hereof there has been no sale, transfer or
35
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 December 28, 1996.
IV.2 No Change. Since December 28, 1996 (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, 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.
IV.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, (b) has
the corporate power and authority, and the legal right, 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.
IV.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the corporate power and authority, and the legal right, 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 Notes. 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 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 on the performance, validity or enforceability of this
Agreement or any other Loan Document. 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).
36
IV.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.
IV.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.
IV.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.
IV.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.
IV.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 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. 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.
IV.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.
IV.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
37
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.
IV.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.
IV.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 have previously occurred) 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.
IV.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.
IV.15 Subsidiaries. The Subsidiaries listed on Schedule 4.15
hereto constitute all the Subsidiaries of the Borrower and the Parent at the
date hereof.
IV.16 Purpose of Loans. The proceeds of the Tranche A
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 but excluding Permitted Acquisitions. The proceeds
of the Tranche B Revolving Credit Loans shall be used by the Borrower solely
38
to finance all or a portion of the purchase price of Permitted Acquisitions
and to pay fees and expenses related to the consummation of Permitted
Acquisitions.
IV.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 (x) in either case insofar as such violation or
liability, or any aggregation thereof, other than as described in clause (y)
of this paragraph, is not reasonably likely to result in the payment of a
Material Environmental Amount or (y) in either case with respect to the
upgrading of underground fuel storage tanks described under the heading
"Business--Regulation" in the Registration Statement insofar as all such
violations and liabilities are not reasonably likely to result in payments in
the aggregate in excess of $2,000,000.
(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 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
39
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
V.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:
(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, (ii) for the account of each Lender, a Tranche A
Revolving Credit Note and a Tranche B Revolving Credit Note, in each
case conforming to the requirements hereof and executed by a duly
authorized officer of the Borrower, (iii) a Swing Line Note for Chase
conforming to the requirements hereof and executed by a duly
authorized officer of the Borrower and (iv) each of the 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) Related Agreements. The Administrative Agent shall have
received, with a copy for each Lender, true and correct copies,
certified as to authenticity by the Borrower, of such documents or
instruments as may be reasonably requested by the Administrative
Agent, including, without limitation, a copy of any debt instrument,
security agreement or other material contract to which the Parent, the
Borrower or any of their Subsidiaries may be a party.
(c) Borrowing Certificate. The Administrative Agent shall
have received, with a counterpart for each Lender, 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.
40
(d) Corporate Proceedings of the Borrower. The
Administrative Agent shall have received, with a counterpart for each
Lender, 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, the Notes 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.
(e) Borrower Incumbency Certificate. The Administrative
Agent shall have received, with a counterpart for each Lender, 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.
(f) Corporate Proceedings of the Parent. The Administrative
Agent shall have received, with a copy for each Lender, 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.
(g) Parent Incumbency Certificate. The Administrative Agent
shall have received, with a counterpart for each Lender, 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.
(h) Corporate Proceedings of Subsidiaries. The
Administrative Agent shall have received, with a copy for each Lender,
a copy of the resolutions, in form and substance reasonably
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.
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(i) Subsidiary Incumbency Certificates. The Administrative
Agent shall have received, with a counterpart for each Lender, 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.
(j) Corporate Documents. The Administrative Agent shall
have received, with a counterpart for each Lender, 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.
(k) Fees. The Administrative Agent shall have received the
fees to be received on the Closing Date as separately agreed between
the Administrative Agent and the Borrower.
(l) Legal Opinions. The Administrative Agent shall have
received, with a counterpart for each Lender, the following executed
legal opinions:
(i) the executed legal opinion of
Debevoise & Xxxxxxxx, counsel to the Borrower and the other
Loan Parties, substantially in the form of Exhibit E-1; and
(ii) the executed legal opinion of
Xxxxxxx Xxxxxx, general counsel of the Borrower, substantially
in the form of Exhibit E-2.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative
Agent may reasonably require.
(m) 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.
(n) Labor Matters. The Administrative Agent shall have
received evidence reasonably satisfactory to it that (i) no strikes or
other labor disputes are pending or, to the knowledge of the Parent or
the Borrower, threatened against the Parent, the Borrower or any of
its Subsidiaries, (ii) 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.
(o) 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 2.3(b) and (c), and all interest,
42
fees and other amounts payable under the Existing Credit Agreement
(including, without limitation, amounts due under subsection 2.17 of
the Existing Credit Agreement) shall have been paid.
V.2 Conditions to Each Tranche B Loan. The agreement of each
Lender to make any Tranche B Revolving Credit Loan requested to be made by it
on any date is subject to the satisfaction of the following conditions
precedent:
(a) Acquisition Loan Documents. The Administrative Agent
shall have received, with a copy thereof for each Lender substantially
concurrently therewith, one or more supplements to the Subsidiaries
Guarantee, in substantially the form attached to the Subsidiaries
Guarantee as Exhibit A thereto, executed and delivered by a duly
authorized officer of each Subsidiary of the Borrower that may be
created or acquired in connection with the Permitted Acquisition to be
financed by such Tranche B Revolving Credit Loan (each such
Subsidiary, a "New Acquisition Subsidiary").
(b) Acquisition. The Administrative Agent shall have
received, upon or prior to the proposed Borrowing Date for such
Tranche B Revolving Credit Loan (and copies shall have been provided
to the Lenders substantially concurrently therewith), true and correct
copies, certified as to authenticity by the Borrower, of each material
acquisition document relating to the Permitted Acquisition to be
financed with such Tranche B Credit Loan, and such other documents or
instruments as may be reasonably requested by the Administrative Agent
(or the Required Lenders), including, without limitation, a copy of
any debt instrument or other material contract to which the Borrower
or its Subsidiaries may be a party upon the consummation of such
Permitted Acquisition (all such documents, collectively, the
"Acquisition Documents"). Such Permitted Acquisition shall have been
(or shall contemporaneously be) consummated in accordance with the
Acquisition Documents therefor.
(c) Financial Certificate. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of a
Responsible Officer, in form satisfactory to the Administrative Agent,
certifying the calculations required to determine satisfaction of the
conditions set forth in subsection 7.10(g) and evidencing pro forma
compliance, as described in subsection 7.10(g), with the covenants set
forth in subsection 7.1.
(d) Corporate Proceedings of the Borrower. The
Administrative Agent shall have received, and each Lender shall have
received substantially concurrently therewith, 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 the Loan
Documents to which it is a party to be delivered in connection with
the relevant Permitted Acquisition, certified by the Secretary or an
Assistant Secretary of the Borrower as of such Borrowing 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.
43
(e) Borrower Incumbency Certificate. The Administrative
Agent shall have received, and each Lender shall have received
substantially concurrently therewith, a copy of the Certificate of the
Borrower, dated such Borrowing Date, as to the incumbency and
signature of the officers of the Borrower executing any Loan Document
to be executed and delivered in connection with the relevant Permitted
Acquisition, reasonably satisfactory in form and substance to the
Administrative Agent, and executed by a Responsible Officer and the
Secretary or an Assistant Secretary of the Borrower.
(f) Corporate Proceedings of Subsidiaries. The
Administrative Agent shall have received, and each Lender shall have
received substantially concurrently therewith, a copy of the
resolutions, in form and substance reasonably satisfactory to the
Administrative Agent, of the Board of Directors of each Subsidiary of
the Borrower which is a party to a Loan Document to be delivered on
such Borrowing Date authorizing the execution, delivery and
performance of the Loan Documents to which it is a party to be
delivered on such Borrowing Date, certified by the Secretary or an
Assistant Secretary of each such Subsidiary as of such Borrowing 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.
(g) Subsidiary Incumbency Certificates. The Administrative
Agent shall have received, and each Lender shall have received a copy
thereof substantially concurrently therewith, a certificate of each
Subsidiary of the Borrower that is a Loan Party, dated such Borrowing
Date, as to the incumbency and signature of the officers of each such
Subsidiary executing any Loan Document to be delivered on such
Borrowing Date, reasonably satisfactory in form and substance to the
Administrative Agent, and executed by the President or any Vice
President and the Secretary or an Assistant Secretary of each such
Subsidiary.
(h) Corporate Documents. The Administrative Agent shall
have received, and each Lender shall have received substantially
concurrently therewith, true and complete copies of the certificate of
incorporation and by-laws of each New Acquisition Subsidiary executing
any Loan Document to be delivered on such Borrowing Date, certified as
of such Borrowing Date as complete and correct copies thereof by the
Secretary or an Assistant Secretary of such New Acquisition
Subsidiary.
(i) Lien Searches. The Administrative Agent shall have
received the results of a recent search by a Person reasonably
satisfactory to the Administrative Agent, of the Uniform Commercial
Code, judgement and tax lien filings that may have been filed with
respect to property and Persons to be acquired in connection with the
relevant Permitted Acquisition.
V.3 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:
44
(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.
(c) Additional Matters. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection
with the transactions contemplated by this Agreement and the other
Loan Documents shall be reasonably satisfactory in form and substance
to the Administrative Agent, and the Administrative Agent shall have
received such other documents and legal opinions in respect of any
aspect or consequence of the transactions contemplated hereby or
thereby as it shall reasonably request.
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 Note or Letter
of Credit remains outstanding and unpaid 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:
VI.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days (or
in the case of consolidating statements, 100 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 Peat Marwick or other independent certified public accountants of
nationally recognized standing; and
(b) as soon as available, but in any event not later than 45
days (or in the case of consolidating statements, 50 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
45
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).
VI.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 in the
Notes 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) not later than the last day of January of each fiscal
year of the Borrower, a copy of the projections by the Borrower of the
operating budget and cash flow budget of the Borrower and its
Subsidiaries for such fiscal year, such projections to be accompanied
by a certificate of a Responsible Officer to the effect that such
projections have been prepared in good faith on the basis of
assumptions which the Borrower believes to be reasonable;
(c) 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
(d) promptly, such additional financial and other information
as the Administrative Agent may from time to time reasonably request.
46
VI.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.
VI.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
business of providing insurance to the Borrower, its Subsidiaries and/or
independent contractors doing business with the Borrower and/or any of its
Subsidiaries) 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.
VI.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 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 $2,500,000 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.
VI.6 Inspection of Property; Books and Records;. 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 with officers and employees of the Parent and its Subsidiaries
and with its independent certified public accountants.
VI.7 Notices. Promptly give notice to the Administrative
Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
47
(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 either case, 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 $2,500,000 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.
VI.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.
(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.
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VI.9 Additional Subsidiaries. Cause each Subsidiary (other
than any Subsidiary permitted pursuant to the first proviso to subsection
7.17) 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 Note or Letter of Credit
remains outstanding and unpaid or any 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 to, directly or indirectly:
VII.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
the sum of (i) $80,000,000, plus (ii) the gross cash proceeds of any
issuance of any equity securities received by the Parent or any of its
Subsidiaries subsequent to the Closing Date less all legal expenses,
commissions and other fees and expenses incurred or to be incurred and
all federal, state, local and foreign taxes incurred or to be incurred
in connection therewith to the extent such proceeds are included in
Consolidated Net Worth, plus (iii) 50% of Cumulative Consolidated Net
Income.
(b) Consolidated Long-Term Indebtedness and Lease Expense to
EBITDA and Lease Expense. Permit the ratio (the "Leverage Ratio") of
(i) the sum of (A) Consolidated Long-Term Indebtedness, (B) the
present value of the minimum aggregate rental payments of the Parent
and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP, payable under leases (other than Financing Leases, Short
Term Leases and Percentage-Based Leases) for tractors, trailers and
related equipment entered into or assumed after the Closing Date,
discounted at the Implied Interest Rate and (C) then existing
Guarantee Obligations permitted by subsection 7.4(f), to (ii) the sum
of (A) Consolidated EBITDA for the then most recently ended period of
four consecutive quarters and (B) the aggregate rental payments of the
Parent and its Subsidiaries during such period, payable under leases
(other than Financing Leases, Short Term Leases and Percentage-Based
Leases) for tractors, trailers and related equipment entered into or
assumed after the Closing Date, at any time to be greater than 3.0 to
1.0.
(c) Interest Coverage. Permit, for any period ending after
the Closing Date of four consecutive fiscal quarters of the Parent,
the ratio (the "Coverage Ratio") of (i) the sum of Consolidated Net
Income for such period plus income taxes deducted in determining such
Consolidated Net Income plus Consolidated Interest Expense for such
period to (ii) Consolidated Interest Expense for such period to be
less than 4.0 to 1.0.
49
(d) Fixed Charge Coverage. Permit, for any period ending
after the Closing Date of four consecutive fiscal quarters of the
Parent, the ratio of (i) the sum of Consolidated EBITDA for such
period, 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 1.50 to 1.0.
VII.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;
(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
50
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);
(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;
51
(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 exceeding $25,000,000 in aggregate principal amount at any
one time outstanding, provided that no Indebtedness may be created or
incurred pursuant to this paragraph unless, after giving effect
thereto, the aggregate Available Tranche A Revolving Credit Commitment
would be greater than zero;
(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 $100,000,000 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;
(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 September 1, 1995 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 to the
Borrower in an aggregate principal amount not to exceed $10,000,000 at
any one time outstanding; and
(t) Additional Indebtedness of the Parent or any of its
Subsidiaries not exceeding $5,000,000 in aggregate principal amount at
any one time outstanding.
VII.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
52
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 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;
53
(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 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; and
(k) Liens on the property or assets of the Insurance
Subsidiary securing the payment of claims in the aggregate amount of
not more than $40,000,000.
VII.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), $2,500,000
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 described in clause (iii)
of the definition of such term, provided 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
54
(i) other Guarantee Obligations incurred after the date
hereof in an aggregate amount not to exceed $2,000,000 at any one time
outstanding.
VII.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).
VII.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;
(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);
55
(f) any conveyance, sale, lease, assignment, transfer or
other disposition of the Capital Stock or assets, of Xxxxx, in either
case the net proceeds of which are, within 120 days of receipt
thereof, reinvested in a business of a type permitted by subsection
7.16 or otherwise utilized in the business of the Borrower and its
Subsidiaries; and
(g) the sale (without recourse to the Operator Financing
Subsidiary) of loans made pursuant to the Operator Financing Program
by the Operator Financing Subsidiary to Persons other than the Parent
and its Subsidiaries.
VII.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 $20,000,000 or (b) Consolidated
Lease Expense with respect to Short Term Leases in any fiscal year of the
Borrower to exceed $30,000,000.
VII.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:
(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;
56
(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(i); 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.
VII.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 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 to the extent
it is acquired with the net proceeds of any assets conveyed, sold, leased,
assigned, transferred or disposed of pursuant to subsection 7.6(f), (iii) any
such asset acquired in connection with a Permitted Acquisition and (iv) 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) except for expenditures in
the ordinary course of business not exceeding, when added to the value of all
assets (determined as set forth in the leases with respect thereto) 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.
57
VII.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 (other than Xxxxx) not to exceed, when added to
Guarantee Obligations at any time outstanding pursuant to subsection
7.4(d), $5,000,000 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(l)) to any independent contractor
performing services for it or for any of its agents not to exceed
$10,000,000 in the aggregate for the Parent and its Subsidiaries at
any time outstanding maturing not later than three years after the
incurrence thereof;
(f) short term loans (excluding those permitted by subsection
7.10 (l)) 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 each 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
$75,000,000, 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
58
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 four 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 $3,000,000 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).
(k) investments, loans and advances by the Borrower in an
amount not to exceed $7,500,000 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 Financing Vehicle (as such term is defined in the definition of
Operator Financing Program) in an aggregate amount not to exceed
$10,000,000 at any one time outstanding, the proceeds of which shall
be used to make loans to independent contractors pursuant to the
Operator Financing Program, and, if the Financing Vehicle is the
Operator Financing Subsidiary, loans by such Subsidiary to independent
contractors pursuant to such Program; and
(m) other investments not to exceed $1,000,000 at any one
time outstanding.
VII.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) and (iii) Financing Leases that are
refinanced with Indebtedness incurred pursuant to subsection 7.2(c)) 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,
59
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).
VII.12 Limitation on Transactions with Affiliates. Enter
into any transaction, including, without limitation, any purchase, sale, lease
or exchange of 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.
VII.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 an arrangement in respect of its
headquarters in Jacksonville, Florida for aggregate consideration of up to
$20,000,000.
VII.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.
VII.15 Limitation on Negative Pledge Clauses. Enter into
with any Person any agreement (i) other than (a) this Agreement, (b) any
industrial revenue bonds, purchase money mortgages or Financing Leases
permitted by this Agreement (in which cases, any prohibition or limitation
shall only be effective against the assets financed thereby) and (c) in
respect of Permitted Specified Additional Debt, 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, or (ii) in respect of Permitted Specified
Additional Debt 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 any Note (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
party.
VII.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,
60
operating the Operator Financing Program, warehousing, logistics, brokerage,
freight forwarding, 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 business of providing insurance to the Borrower,
its Subsidiaries and/or independent contractors doing business with the
Borrower and/or any of its Subsidiaries 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).
VII.17 Limitation on Formation of 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.
VII.18 Limitation on Non-Guarantor Subsidiaries. Permit at
any time Subsidiaries (other than the Operator Financing Subsidiary) that are
not parties to the Subsidiaries Guarantee to have assets equal to more than
$10,000,000 in the aggregate.
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 Note
or the Borrower or any Subsidiary Guarantor 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 Note,
or the Borrower or the relevant Subsidiary Guarantor 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
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or Section 7 of this Agreement, Section 11 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
Subsidiary Guarantee (to the extent such Section incorporates by
reference the covenants contained in subsection 6.9 or Section 7
hereof) or Section 11 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 Notes) 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 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 a 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
62
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 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"
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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 Notes (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 Notes (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.
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 Notes. 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 Notes 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
IX.1 Appointment. Each Lender hereby irrevocably designates
and appoints The Chase Manhattan Bank as the Administrative Agent of such
Lender under this Agreement and the other Loan Documents, and each such
Lender
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irrevocably authorizes The Chase Manhattan 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.
IX.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.
IX.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 or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the Notes 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.
IX.4 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any Note, 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
65
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 Notes 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 Notes.
IX.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.
IX.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 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.
IX.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
66
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 (including, without limitation, at any time
following the payment of the Notes) 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 Notes and all other amounts payable hereunder.
IX.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,
any Note issued to it and any Letter of Credit issued or participated in by
it, the Administrative Agent shall have the same rights and 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.
IX.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 Notes. 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
X.1 Amendments and Waivers. Neither this Agreement, any Note
or 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
67
Administrative Agent to the Borrower), the Administrative Agent may, from time
to time, (a) enter into with the Borrower written amendments, supplements or
modifications hereto and to the Notes and the other Loan Documents for the
purpose of adding any provisions to this Agreement, the Notes or the other
Loan Documents or changing in any manner the rights 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, the
Notes 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 Note 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 all or substantially all of the Collateral, 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 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 Notes. 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 under the
outstanding Notes 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.
X.2 Notices. 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, 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 Notes:
The Borrower: Landstar System Holdings, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Vice President and
Chief Financial Officer
Telecopy: (000) 000-0000
The Parent: Landstar System, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
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Attention: Vice President and
Chief Financial Officer
Telecopy: (000) 000-0000
The Administrative Agent: The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
With a copy to: The Chase Manhattan Bank
Administrative Agent Services Corporation
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopy: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative
Agent or the Lenders pursuant to subsection 2.3, 2.5, 2.7, 2.12 or 3.2 shall
not be effective until received.
X.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.
X.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 Notes and the making of the Loans hereunder.
X.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, the Notes 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 Agent for all its costs and expenses incurred in connection
with the enforcement or preservation of any rights under this Agreement, the
Notes, 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
69
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 Notes, 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 Notes, 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 such Lender or (ii)
legal proceedings commenced against the Administrative Agent or any such
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 Notes and all other amounts payable
hereunder.
X.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Administrative Agent, all future holders of the
Notes and their respective successors and assigns, except that the Borrower
may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of 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 Note held by 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 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 Note 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
70
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 Notes 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 Notes 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 and any Note to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement or any Note, 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, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time and from
time to time assign to any Lender or any affiliate thereof or, with the
consent of the Borrower and the Administrative Agent (which shall not be
unreasonably withheld), to an additional bank or financial institutions (an
"Assignee") all or any part of its rights and obligations under this Agreement
and the Notes pursuant to an Assignment and Acceptance, substantially in the
form of Exhibit F, executed by such Assignee, such assigning Lender (and, in
the case of an Assignee that is not then a Lender or an affiliate thereof, by
the Borrower and Administrative Agent) and delivered to the Administrative
Agent for its acceptance and recording in the Register, provided, that (i) the
amount of the Tranche A 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 and (ii) the Tranche A Revolving Credit Percentage assigned
pursuant to such assignment shall equal the Tranche B Revolving Credit
Percentage assigned pursuant to such assignment. 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
71
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, 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 execute and deliver to the Administrative Agent (in exchange
for the Revolving Credit Note of the assigning Lender) a new Revolving Credit
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, a new Revolving Credit Note to the
order of the assigning Lender in an amount equal to the Commitment retained by
it hereunder. Such new Notes shall be dated the Closing Date and shall
otherwise be in the form of the Note replaced thereby.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
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.
X.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
72
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 the Notes and the expiration of any applicable
period of grace provided for herein or in the Notes (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.
X.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including 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.
X.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.
X.10 Integration. This Agreement and the other Loan
Documents represent the agreement of the Borrower, 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 Administrative Agent or any Lender relative to subject matter hereof
not expressly set forth or referred to herein or in the other Loan Documents.
X.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.
X.12 Submission To Jurisdiction; Waivers. Each of the Parent
and the Borrower hereby irrevocably and unconditionally:
73
(a) 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
judgement 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;
(b) 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 proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) 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 the Parent or the Borrower, as applicable, at its address
set forth in subsection 10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) 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 xxx in any other jurisdiction; and
(e) 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.
X.13 Acknowledgements. Each of the Borrower and the Parent
hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the Notes and the other
Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Parent or the Borrower
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 the Borrower, the
Parent and the Lenders.
X.14 WAIVERS OF JURY TRIAL. THE PARENT, THE BORROWER, 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.
74
X.15 Confidentiality. Each Lender 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 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 10.15.
X.16 Matters Relating to Insurance Subsidiary.
Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the Insurance Subsidiary shall be deemed not to be a Loan Party
hereunder (and shall not have the right to request that Letters of Credit be
issued for its account) until such date as the Administrative Agent receives a
certificate from the Insurance Subsidiary stating that all of the
representations and warranties applicable to the Insurance Subsidiary under
Section 4 hereof are true and current in all material respects and at such
date the Insurance Subsidiary will be deemed a Loan Party hereunder.
75
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.
By: __________
Title:
LANDSTAR SYSTEM, INC.
By: __________
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent and as a Lender
By: __________
Title:
ABN AMRO BANK N.V.
By: __________
Title:
By: __________
Title:
AMSOUTH BANK
By: __________
Title:
BANKBOSTON
By: __________
Title:
BANK OF NEW YORK
By: __________
Title:
76
XXXXXXX BANK
By: __________
Title:
FIRST UNION NATIONAL BANK
By: __________
Title:
FLEET NATIONAL BANK
By: __________
Title:
THE LONG TERM CREDIT BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By: __________
Title:
NATIONSBANK, N.A.
By:____________
Title:
PNC BANK, N.A.
By:____________
Title:
SUNTRUST BANK, NORTH FLORIDA, N.A.
By:________________________________________________________
Title:
77
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 GEMINI ACQUISITION CORP.
LANDSTAR INWAY, INC.
(f.k.a. Independent Freightway, Inc.)
LANDSTAR XXXXX, INC.
(f.k.a. Xxxxx Nationwide, Inc.)
LANDSTAR LOGISTICS, INC.
(f.k.a. Landstar Transportation Service, Inc.)
LANDSTAR XXXXX, INC.
(f.k.a. Xxxxx Truck Line, Inc.)
LANDSTAR RANGER, INC.
(f.k.a. Ranger Transportation, Inc.)
LANDSTAR T.L.C., INC.
RISK MANAGEMENT CLAIM SERVICES, INC.
SIGNATURE INSURANCE COMPANY
by:________________________________________________________
Title:
78
SCHEDULE 1.1(a) TO
CREDIT AGREEMENT
------------------
COMMITTMENTS
Trance A Revolving Trance B Revolving
Name and Address of Lender Credit Commitment Credit Commitment
--------------------------- ------------------ ------------------
The Chase Manhattan Bank $15,750,000 $5,250,000
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
ABN Amro Bank N.V. $ 9,750,000 $3,250,000
Xxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxx
Facsimile: (000) 000-0000
Amsouth Bank $14,250,000 $4,750,000
0000 Xxxxx Xxxxxx, Xxxxx
0xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Facsimile: (000) 000-0000
The Bank of New York $ 9,750,000 $3,250,000
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Facsimile: (000) 000-0000
BankBoston, N.A. $14,250,000 $4,750,000
000 Xxxxxxx Xxxxxx
Mailstop 01-08-01
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxx
Facsimile: (000) 000-0000
Xxxxxxx Bank, N.A. $ 9,750,000 $3,250,000
00 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxx
Facsimile: (000) 000-0000
79
Trance A Revolving Trance B Revolving
Name and Address of Lender Credit Commitment Credit Commitment
--------------------------- ------------------ ------------------
First Union National Bank $14,250,000 $4,750,000
000 Xxxxx Xxxxxx
XX FL/0074
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
Fleet National Bank $14,250,000 $4,750,000
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Facsimile: (000) 000-0000
The Long Term Credit Bank of Japan, $ 9,750,000 $3,250,000
Limited, New York Branch
000 Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx
Facsimile: (000) 000-0000
NationsBank, N.A. $14,250,000 $4,750,000
000 Xxxxxxxxx Xxxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
PNC Bank, N.A. $ 9,750,000 $3,250,000
000 Xxxx Xxxxxxxxx
0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Facsimile: (000) 000-0000
SunTrust Bank, North Florida, N.A. $14,250,000 $4,750,000
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Facsimile: (000) 000-0000
80
SCHEDULE 1.1(b) TO
CREDIT AGREEMENT
------------------
SUBSIDIARY GUARANTORS
Landstar Capacity Services, Inc.
Landstar Carrier Services, Inc. (f.k.a. Landstar Expedited, Inc.)
Landstar Corporate Services, Inc.
Landstar Express America, Inc.
Landstar Gemini Acquisition Corp.
Landstar Gemini, Inc. (f.k.a. Gemini Transportation Services, Inc.)
Landstar Inway, Inc. (f.k.a. Independent Freightway, Inc.)
Landstar Xxxxx, Inc. (f.k.a. Xxxxx Nationwide, Inc.)
Landstar Logistics, Inc. (f.k.a. Landstar Transportation Services, Inc.
Landstar Xxxxx, Inc. (f.k.a. Xxxxx Truck Line, Inc.)
Landstar Ranger, Inc. (f.k.a. Ranger Transportation Services, Inc.)
Landstar T.L.C., Inc.
Risk Management Claim Services, Inc.
81
SCHEDULE 1.1(c) TO
CREDIT AGREEMENT
------------------
PRICING GRID (in bps)
LEVERAGE RATIO ABR MARGIN LIBOR MARGIN COMMITMENT FEE
-------------- ---------- ------------ --------------
Greater than 2.25 to 1 0 50.0 15.0
Less than or equal to 2.25 to 1 0 37.5 12.5
but greater than 1.0 to 1
Less than or equal to 1.0 to 1 0 32.0 10.0
82
SCHEDULE 4.15 TO
CREDIT AGREEMENT
------------------
SUBSIDIARIES
-------------
JURISDICTION OF
DIRECT SUBSIDIARIES OF PARENT INCORPORATION
------------------------------ ---------------
Landstar System Holdings, Inc. Delaware
JURISDICTION OF
DIRECT SUBSIDIARIES OF BORROWER INCORPORATION
------------------------------ ---------------
Landstar Capacity Services, Inc. Delaware
Landstar Carrier Services, Inc. (fka Landstar Expedited, Inc.) Delaware
Landstar Contractor Financing, Inc. Delaware
Landstar Express America, Inc. North Carolina
Landstar Inway, Inc. (fka Independent Freightway, Inc.) Delaware
Landstar Xxxxx, Inc. (fka Xxxxx Nationwide, Inc.) Delaware
Landstar Logistics, Inc. (fka Landstar Transportation Services, Inc.) Delaware
Landstar Xxxxx, Inc. (fka Xxxxx Truck Line, Inc.) Alabama
Landstar Ranger, Inc. (fka Ranger Transportation, Inc.) Delaware
Risk Management Claim Services, Inc. Kentucky
Signature Insurance Company Cayman Islands
83
SCHEDULE 4.15 (cont'd)
INDIRECT JURISDICTION OF
SUBSIDIARIES OF BORROWER INCORPORATION
------------------------ ---------------
Landstar Corporate Services, Inc. Delaware
Landstar Gemini Acquisition Corp. Delaware
Landstar Gemini, Inc. (fka Gemini Transportation Services, Inc.) Delaware
Landstar T.L.C., Inc. Delaware
84
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 System Holdings, Inc.
----------------------------------------------
Indebtedness under the Existing Credit Agreement
$18,500,000 under Tranche B Revolving Credit Loans
85
SCHEDULE 7.3
EXISTING LIENS
None.
86
SCHEDULE 7.4
EXISTING GUARANTEE OBLIGATIONS
None.
87
EXHIBIT A-1 TO
CREDIT AGREEMENT
FORM OF TRANCHE A REVOLVING CREDIT NOTE
$______________ New York, New York
October 10, 1997
FOR VALUE RECEIVED, LANDSTAR SYSTEM HOLDINGS, INC., a Delaware
corporation (the "Borrower"), promises to pay to the order of
_________________________(the "Lender") on the Termination Date, at the office
of The Chase Manhattan Bank, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, in
lawful money of the United States of America and in immediately available
funds, the principal amount of the lesser of (a) ______________ DOLLARS
($____________) and (b) the aggregate unpaid principal amount of all Tranche A
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 Second Amended and Restated Credit
Agreement, dated as of October 10, 1997, 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 The Chase Manhattan 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 Tranche A 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 Tranche A 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.
88
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.
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____________________________
Title:
89
SCHEDULE A
To Note
LOANS, CONVERSIONS AND PAYMENTS
WITH RESPECT TO ABR LOANS
Amount of ABR Amount of ABR Unpaid
Loans Made or Loans Paid Principal
Converted from or Converted into Balance of Notation
Date Eurodollar Loans Eurodollar Loans ABR Loans Made by
----- ---------------- ------------------ ----------- --------
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
90
SCHEDULE B
To Note
LOANS, CONVERSIONS AND PAYMENTS
WITH RESPECT TO EURODOLLAR LOANS
Interest
Amount of Period and Amount of Unpaid
Eurodollar Eurodollar Eurodollar Principal
Loans Made or Rate with Loans Paid Balance of
Converted from Respect or Converted into Eurodollar Notation
Date ABR Loans Thereto ABR Loans Loans Made By
----- -------------- ---------- ----------------- ---------- --------
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
91
EXHIBIT A-2 TO
CREDIT AGREEMENT
FORM OF TRANCHE B REVOLVING CREDIT NOTE
$______________ New York, New York
October 10, 1997
FOR VALUE RECEIVED, LANDSTAR SYSTEM HOLDINGS, INC., a Delaware
corporation (the "Borrower"), promises to pay to the order of
________________________ (the "Lender") on the Termination Date, at the office
of The Chase Manhattan Bank, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, in
lawful money of the United States of America and in immediately available
funds, the principal amount of the lesser of (a) _______________ DOLLARS
($____________) and (b) the aggregate unpaid principal amount of all Tranche B
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 Second Amended and Restated Credit
Agreement, dated as of October 10, 1997, 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 The Chase Manhattan 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 Tranche B 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 Tranche B Revolving Credit Loan made by the Lender to
the Borrower pursuant to subsection 2.1(b) 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.
92
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.
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________________________________________
Title:
93
SCHEDULE A
To Note
LOANS, CONVERSIONS AND PAYMENTS
WITH RESPECT TO ABR LOANS
Amount of ABR Amount of ABR Unpaid
Loans Made or Loans Paid Principal
Converted from or Converted into Balance of Notation
Date Eurodollar Loans Eurodollar Loans ABR Loans Made by
----- ---------------- ------------------ ----------- --------
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
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______ _______________ __________________ ___________ ________
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______ _______________ __________________ ___________ ________
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______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
______ _______________ __________________ ___________ ________
94
SCHEDULE B
To Note
LOANS, CONVERSIONS AND PAYMENTS
WITH RESPECT TO EURODOLLAR LOANS
Interest
Amount of Period and Amount of Unpaid
Eurodollar Eurodollar Eurodollar Principal
Loans Made or Rate with Loans Paid Balance of
Converted from Respect or Converted into Eurodollar Notation
Date ABR Loans Thereto ABR Loans Loans Made By
----- -------------- ---------- ----------------- ---------- --------
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
______ _____________ ___________ ___________ __________ ________
95
EXHIBIT B TO
CREDIT AGREEMENT
FORM OF SWING LINE NOTE
$5,000,000 New York, New York
October 10, 1997
FOR VALUE RECEIVED, LANDSTAR SYSTEM HOLDINGS, INC., a Delaware
corporation (the "Borrower"), promises to pay to the order of THE CHASE
MANHATTAN BANK (the "Lender") on the Termination Date, at its offices at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, 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 Second Amended and Restated
Credit Agreement, dated as of October 10, 1997, 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 The Chase Manhattan 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 2.6 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.
96
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_______________________________________
Title:
97
SCHEDULE A
To Note
LOANS AND PAYMENTS
Unpaid
Principal
Balance
Amount of Amount of Swing of Swing Notation
Date Swing Line Loans Line Loans Paid Line Loans Made By
----- ---------------- --------------- ---------- --------
_____ ________________ _______________ __________ ________
_____ ________________ _______________ __________ ________
_____ ________________ _______________ __________ ________
_____ ________________ _______________ __________ ________
_____ ________________ _______________ __________ ________
_____ ________________ _______________ __________ ________
_____ ________________ _______________ __________ ________
_____ ________________ _______________ __________ ________
_____ ________________ _______________ __________ ________
_____ ________________ _______________ __________ ________
_____ ________________ _______________ __________ ________
_____ ________________ _______________ __________ ________
_____ ________________ _______________ __________ ________
_____ ________________ _______________ __________ ________
_____ ________________ _______________ __________ ________
_____ ________________ _______________ __________ ________
98
EXHIBIT C-1 TO
CREDIT AGREEMENT
FORM OF SECOND AMENDED AND RESTATED PARENT GUARANTEE
SECOND AMENDED AND RESTATED PARENT GUARANTEE, dated as of October 10, 1997, by
LANDSTAR SYSTEM, INC., a Delaware corporation (the "Guarantor"), in favor of
THE CHASE MANHATTAN BANK, as administrative agent (in such capacity, the
"Administrative Agent") for the Lenders (the "Lenders") that are parties to
the Credit Agreement described below.
W I T N E S S E T H :
WHEREAS, Landstar System Holdings, Inc., a Delaware
corporation (the "Borrower"), is party to the Amended and Restated Credit
Agreement, dated as of October 7, 1994, 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 Second Amended and Restated Credit Agreement, dated
as of October 10, 1997, 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
Amended and Restated Parent Guarantee, dated as of October 7, 1994 (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:
I. 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:
99
"Guarantee" shall mean this Second 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 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 Notes 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 Notes, 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.
(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 Commitment is 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
100
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 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 Notes, 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
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 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 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
101
Administrative Agent or any Lender and the Credit Agreement, the Notes, 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, the Notes, 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 relieve the Guarantor of any liability
102
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 Commitment 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 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, X.X.X.
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.
10. 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).
11. Covenants. The Guarantor hereby agrees that, from
and after the Closing Date and so long as the Commitments remain in effect,
any Note 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 no
Default or Event of Default, is caused by any act or failure to act of the
Guarantor or any of its Subsidiaries.
103
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 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.
16. 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 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
104
case of the Guarantor, to the following address:
Landstar System, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
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, 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:____________________________________
Title:
105
EXHIBIT C-2 TO
CREDIT AGREEMENT
FORM OF SECOND AMENDED AND RESTATED SUBSIDIARIES GUARANTEE
SECOND AMENDED AND RESTATED SUBSIDIARIES GUARANTEE, dated as
of October 10, 1997, by each of the corporations that are signatories hereto
(the "Subsidiary Guarantors") in favor of THE CHASE MANHATTAN BANK, as
administrative agent (in such capacity, the "Administrative Agent") for the
Lenders (the "Lenders") that are parties to the Credit Agreement described
below.
W I T N E S S E T H :
WHEREAS, Landstar System Holdings, Inc., a Delaware
corporation (the "Borrower"), is party to the Amended and Restated Credit
Agreement, dated as of October 7, 1994, 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 Second Amended and Restated Credit Agreement, dated
as of October 10, 1997, 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 Amended and Restated Subsidiaries Guarantee, dated as
of October 7, 1994 (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:
106
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 Second 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 Notes 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 Notes, 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) Subject to the provisions of paragraph 0,
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.
(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 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
107
Subsidiary 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 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 Notes, 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 such Subsidiary Guarantor promptly of
108
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
Subsidiary 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 Subsidiary Guarantor in respect of payments made by such Subsidiary
Guarantor hereunder, until all amounts owing to the Administrative Agent and
the Lenders by the Borrower on account of the Obligations are paid in full and
the Commitment is 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 Notes, 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 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
109
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, the Notes, 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 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 Commitment shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
the Borrower may be free from any Obligations.
110
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 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, X.X.X.
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 Commitments remain in
effect, any Note 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.
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.
111
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 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 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 CAPACITY SERVICES, INC.
LANDSTAR CARRIER SERVICES, INC.
(fka Landstar Expedited, Inc.)
112
LANDSTAR CORPORATE SERVICES
LANDSTAR EXPRESS AMERICA
LANDSTAR GEMINI, INC.
(fka Gemini Transportation Services, Inc.)
LANDSTAR GEMINI ACQUISITION CORP.
LANDSTAR INWAY, INC.
(fka Independent Freightway, Inc.
LANDSTAR XXXXX, INC.
(fka Xxxxx Nationwide, Inc.)
LANDSTAR LOGISTICS, INC.
(fka Landstar Transportation Service, Inc.)
LANDSTAR XXXXX
(fka Xxxxx Truck Line, Inc.)
LANDSTAR RANGER, INC.
(fka Ranger Transportation, Inc.)
LANDSTAR T.L.C., INC.
RISK MANAGEMENT CLAIM SERVICES, INC.
SIGNATURE INSURANCE COMPANY
By: ______________________________________
Title
113
EXHIBIT A TO
SUBSIDIARY GUARANTEE
SUBSIDIARIES GUARANTEE SUPPLEMENT
Reference is made to the Second Amended and Restated Subsidiaries Guarantee,
dated as of October 10, 1997 (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 The
Chase Manhattan Bank, as administrative agent (in such capacity, the
"Administrative Agent") for the lenders (the "Lenders") parties to the Second
Amended and Restated Credit Agreement, dated as of October 10, 1997, 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.
114
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
Date: ____________________, _______
ACCEPTED AND AGREED:
LANDSTAR CAPACITY SERVICES, INC.
LANDSTAR CARRIER SERVICES, INC.
(fka Landstar Expedited, Inc.)
LANDSTAR CORPORATE SERVICES, INC.
LANDSTAR EXPRESS AMERICA, INC.
LANDSTAR GEMINI, INC.
(fka Gemini Transportation Services, Inc.)
LANDSTAR GEMINI ACQUISITION CORP.
LANDSTAR INWAY, INC.
(fka Independent Freightway, Inc.
LANDSTAR XXXXX, INC.
(fka Xxxxx Nationwide, Inc.)
LANDSTAR LOGISTICS, INC.
(fka Landstar Transportation Service, Inc.)
LANDSTAR XXXXX, INC.
(fka Xxxxx Truck Line, Inc.)
LANDSTAR RANGER, INC.
(fka Ranger Transportation, Inc.)
LANDSTAR T.L.C., INC.
RISK MANAGEMENT CLAIM SERVICES, INC.
SIGNATURE INSURANCE COMPANY
By:_________________________________________
Title:
115
EXHIBIT C-3 TO
CREDIT AGREEMENT
FORM OF L/C GUARANTEE
L/C GUARANTEE, dated as of October 10, 1997, by LANDSTAR SYSTEM, INC., a
Delaware corporation (the "Guarantor"), in favor of THE CHASE MANHATTAN BANK,
as administrative agent (in such capacity, the "Administrative Agent") for the
Lenders (the "Lenders") that are parties to the Credit Agreement described
below.
W I T N E S S E T H :
WHEREAS, the Subsidiary Guarantors (as listed on Schedule I
hereto) are parties to the Amended and Restated Credit Agreement, dated as of
October 7, 1994, 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 Second Amended and Restated Credit Agreement, dated
as of October 10, 1997, 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, relating to the respective
Subsidiary Guarantor, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Notes and
all other obligations and liabilities of the respective Subsidiary
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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 Notes, the Letters of
Credit, the 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.
(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 Commitment is 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
117
Participant to or for the credit or the account 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 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 Agreement, the other Loan Documents or other
guarantee or document in connection therewith may be amended, modified,
118
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 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
119
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 Commitment
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 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, X.X.X.
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.
10. 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).
11. 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 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.
120
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, the Issuing Lender nor any L/C Participant 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, 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.
15. 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 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 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
121
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.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
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, 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:__________________________________________
Title:
122
EXHIBIT D TO
CREDIT AGREEMENT
FORM OF BORROWING CERTIFICATE
This Borrowing Certificate is delivered to you by the
undersigned pursuant to subsection 5.1(c) of the Second Amended and Restated
Credit Agreement, dated as of October 10, 1997 (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 The Chase Manhattan 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 October, 1997.
____________________________________________
Name:
Title:
____________________________________________
Name:
Title:
123
EXHIBIT E-1 TO
CREDIT AGREEMENT
FORM OF OPINION OF DEBEVOISE & XXXXXXXX
October 10, 1997
The Chase Manhattan Bank,
as Administrative Agent
under the Credit Agreement referred to below
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Each of the lenders named in Annex A
attached hereto that are parties
to the Credit Agreement referred to below
We have acted as special counsel for Landstar System Holdings,
Inc., a Delaware corporation (the "Borrower"), Landstar System, Inc., a
Delaware corporation (the "Parent"), and the subsidiaries of the Borrower
listed on Schedule I hereto (the "Borrower's Subsidiaries") in connection with
the preparation, execution and delivery of (a) the Second Amended and Restated
Credit Agreement, dated as of October 10, 1997 (the "Credit Agreement"), among
the Borrower, the Parent, the lenders parties thereto (the "Lenders") and The
Chase Manhattan Bank, as Administrative Agent (in such capacity, the
"Administrative Agent"), (b) the Notes referred to in the Credit Agreement and
(c) the other Loan Documents (as defined below).
The opinions expressed below are furnished to you pursuant to
subsection 5.1(1)(i) of the Credit Agreement. Unless otherwise defined
herein, terms defined in the Credit Agreement are used herein as therein
defined. As used herein, the following terms shall have the following
meanings: The term "Loan Documents" means the Credit Agreement, the Notes and
the Guarantees. The term "Delaware Subsidiaries" means Landstar Capacity
Services, Inc., Landstar Carrier Services, Inc., Landstar Corporate Services,
Inc., Landstar Gemini, Inc., Landstar Gemini Acquisition Corp., Landstar
Inway, Inc., Landstar Xxxxx, Inc., Landstar Logistics, Inc., Landstar Ranger,
Inc. and Landstar T.L.C., Inc., each a Delaware corporation. The term "DGCL"
means the General Corporation Law of the State of Delaware as in the effect on
the date hereof.
In arriving at the opinions expressed below,
1) we have examined and relied on the following (including, but
not limited to, the representations and warranties contained therein):
(a) originals, or copies certified or otherwise
identified to our satisfaction, of the Credit Agreement, the
Notes issued today pursuant thereto and the Guarantees, and
124
The Chase Manhattan Bank,
as Administrative Agent
under the Credit Agreement referred to below
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Each of the lenders named in Annex A
attached hereto that are parties
to the Credit Agreement referred to below
October 10, 1997
(b) such corporate documents and records of the
Borrower, the Parent, the Borrower's Subsidiaries and such
other instruments and certificates of public officials,
officers and representatives of the Borrower, the Parent, the
Borrower's Subsidiaries and other Persons as we have deemed
necessary or appropriate for the purposes of this opinion; and
(2) we have made such investigations of law as we
have deemed appropriate as a basis for this opinion.
In rendering the opinions expressed below, we have
assumed, with your permission, without independent investigation or inquiry,
(a) the authenticity of all documents submitted to us as originals, (b) the
genuineness of all signatures on all documents that we examined, (c) the
conformity to authentic originals of documents submitted to us as certified,
conformed or photostatic copies and (d) the due authorization, execution and
delivery of the Loan Documents by each party thereto.
Based upon and subject to the foregoing and the
qualifications hereinafter set forth, we are of the opinion that:
1. Each of the Parent, the Borrower and the Delaware
Subsidiaries is duly incorporated, validly existing and in good standing under
the laws of the State of Delaware.
2. Each of the Parent, the Borrower and the Delaware
Subsidiaries has the corporate power and authority to execute, deliver and
perform its obligations under each of the Loan Documents to which it is a
party and, in the case of the Borrower, to borrow thereunder, and has taken
all necessary corporate action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party.
3. No consent or authorization of, approval by,
notice to, or filing with, any Federal, New York or Delaware (insofar as the
DGCL is concerned) court or governmental authority is required to be obtained
or made on or prior to the date hereof by the Parent, the Borrower or any of
the Borrower's Subsidiaries, as the case may be, in connection with its
respective execution, delivery or performance of the Loan Documents to which
it is today a party or, in the case of the Borrower, with the borrowings today
under the Credit Agreement, or in connection with the validity or
enforceability against it of the Loan Documents to which it is today a party,
except for (a) any consents, authorizations, approvals, notices and filings
125
The Chase Manhattan Bank,
as Administrative Agent
under the Credit Agreement referred to below
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Each of the lenders named in Annex A
attached hereto that are parties
to the Credit Agreement referred to below
October 10, 1997
that have been obtained or made and (b) those consents, authorizations,
approvals, notices and filings that if not made, obtained or done, would not,
to our knowledge, have a Material Adverse Effect.
4. The execution, delivery and performance by the
Parent, the Borrower or any of the Borrower's Subsidiaries of the Loan
Documents to which it is today a party, and, in the case of the Borrower, the
borrowings today and other extensions of credit under the Credit Agreement,
will not conflict with, or result in a violation of, or result in, or require,
the creation or imposition of any Lien (other than Liens permitted by the
Credit Agreement) on any of its or their respective properties or revenues
under, any existing law, rule or regulation known to us to be applicable to
the Parent, the Borrower or any of the Borrower's Subsidiaries or any of their
material properties, except in each case, for such violations that to our
knowledge would not have a Material Adverse Effect.
5. Each of the Credit Agreement and the other Loan
Documents to which the Parent, the Borrower and the Borrower's Subsidiaries is
today a party constitutes the legal, valid and binding obligation of such
party, enforceable against it in accordance with its respective terms.
6. No Loan Party is an "investment company", or a
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
Our opinions set forth in paragraphs 2, 3, 4 and 5
above are subject to the effects of (a) bankruptcy, insolvency, fraudulent
conveyance, fraudulent transfer, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights or remedies generally, and (b)
general equitable principles (whether considered in a proceeding in equity or
at law). Our opinions set forth in paragraphs 2, 3, 4 and 5 above are also
subject to the effects of (i) an implied covenant of good faith,
reasonableness and fair dealing, (ii) applicable laws and interpretations
which may affect the validity or enforceability of certain remedies provided
for in the Loan Documents, which limitations, however, do not, in our opinion,
make the remedies provided for therein inadequate for the practical
realization of the rights and benefits intended to be provided hereby (subject
to the other qualifications expressed herein), and (iii) limitations on
enforceability of rights to indemnification under securities laws or
regulations or to the extent any indemnification would violate public policy.
We express no opinion as to (1) Section 10.12(a) of the Credit Agreement and
any similar provision in any other Loan Document, insofar as such provisions
relate to the subject matter jurisdiction of the United States District Court
126
The Chase Manhattan Bank,
as Administrative Agent
under the Credit Agreement referred to below
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Each of the lenders named in Annex A
attached hereto that are parties
to the Credit Agreement referred to below
October 10, 1997
for the Southern District of New York to adjudicate any controversy, (2) the
waiver of inconvenient forum set forth in Section 10.12(b) of the Credit
Agreement and any similar provision in any other Loan Document and (3) as to
acceptance by a Federal or other court located in the State of New York of
jurisdiction in a dispute arising under any Loan Document.
We express no opinion as to any matter relating to
the execution, delivery or performance of the Credit Agreement by the
Insurance Subsidiary or as to whether the Credit Agreement constitutes a
legal, valid or binding obligation of the Insurance Subsidiary or is
enforceable against the Insurance Subsidiary in accordance with its terms.
We express no opinion as to the effect of, or
compliance with, any provisions of Delaware or New York law restricting
dividends, loans or other distributions by a corporation or for the benefit of
its stockholders, or any Federal or State securities laws, rules or
regulations, including without limitation, as to the effect thereof on the
validity, binding effect or enforceability of any of the Loan Documents.
We express no opinion as to the laws of any
jurisdiction other than the laws of the State of New York, the DGCL and the
Federal laws of the United States of America.
The opinions expressed herein are solely for your
benefit and, without our prior consent, neither our opinion nor this opinion
letter may be disclosed publicly to or relied upon by any other person.
Very truly yours,
127
ANNEX A
LENDERS
1. The Chase Manhattan Bank, as Administrative Agent and as a Lender
2. ABN Amro Bank N.V.
3. Amsouth Bank
4. BankBoston, N.A.
5. The Bank of New York
6. Xxxxxxx Bank, N.A.
7. First Union National Bank
8. Fleet National Bank
9. The Long-Term Credit Bank of Japan, Limited,
New York Branch
10. NationsBank, N.A.
11. PNC Bank, N.A.
12. SunTrust Bank, North Florida, N.A.
128
Schedule I
BORROWER'S SUBSIDIARIES
Landstar Capacity Services, Inc.
Landstar Carrier Services, Inc.
Landstar Corporate Services, Inc.
Landstar Express America, Inc.
Landstar Gemini Acquisition Corp.
Landstar Gemini, Inc.
Landstar Inway, Inc.
Landstar Xxxxx, Inc.
Landstar Logistics, Inc.
Landstar Xxxxx, Inc.
Landstar Ranger, Inc.
Landstar T.L.C., Inc.
Risk Management Claim Services, Inc.
Signature Insurance Company
129
EXHIBIT E-2 TO
CREDIT AGREEMENT
FORM OF OPINION OF BORROWER COUNSEL
October 10, 1997
To the Parties named on
Annex A hereto
Ladies and Gentlemen:
I am Vice President, General Counsel and Secretary of
Landstar System Holdings, Inc., a Delaware corporation (the "Borrower") and of
Landstar System, Inc., a Delaware corporation (the "Parent"), and the
subsidiaries of the Borrower listed on Schedule I hereto (the "Borrower's
Subsidiaries") and as such I am delivering this opinion in connection with
the transactions contemplated by the Second Amended and Restated Credit
Agreement, dated as of October 10, 1997 (the "Credit Agreement"), among the
Borrower, the Parent, the lenders parties thereto (the "Lenders") and The
Chase Manhattan Bank, as Administrative Agent (in such capacity, the
"Administrative Agent").
This opinion is delivered to you pursuant to subsection
5.1(l)(ii) of the Credit Agreement. Unless otherwise defined herein, terms
defined in the Credit Agreement are used herein as therein defined. As used
herein, "Loan Documents" shall mean the Credit Agreement, the Notes and the
Guarantees.
In connection with this opinion, I have examined and relied
upon the representations and warranties as to factual matters contained in or
made pursuant to the Credit Agreement and the other Loan Documents and upon
the originals, or copies certified or otherwise identified to my satisfaction,
of such records, documents, certificates and other instruments as I have
deemed necessary or appropriate to enable me to render the opinion expressed
below. I have assumed the genuineness of all signatures of, and the authority
of, persons signing the Loan Documents on behalf of the parties thereto other
than the Loan Parties and the authenticity of all documents submitted to me
as certified, conformed or Photostat copies.
Based on the foregoing, and subject to the qualifications
expressed below, I am of the following opinion:
1 each of the Parent, the Borrower and the Borrower's
Subsidiaries (a) is duly incorporated, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, (b) has the corporate
power and authority, and the legal right, 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 and (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 so to qualify, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.
130
To the Parties named on
Schedule I hereto
October 10,1997
2 Each of the Parent, the Borrower, Landstar Express
America, Inc., Landstar Xxxxx, Inc. and Risk Management Claim Services, Inc.
has the corporate power and authority to execute, deliver and perform its
obligations under each of the Loan Documents to which it is a party and, in
the case of the Borrower, to borrow thereunder, and has taken all necessary
corporate action 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 its borrowings today and other extensions of credit on the terms and
conditions of the Credit Agreement and the Notes.
3 To my knowledge, no consent or authorization of,
approval by, notice to, or filing with, any Governmental Authority of the
United States or any State thereof or any other Person is required to be
obtained or made on or prior to the date hereof by the Parent, the Borrower or
any of its Subsidiaries, as the case may be, in connection with its
respective execution, delivery or performance of the Loan Documents to which
it is today a party or, in the case of the Borrower, with the borrowings today
or other extensions of credit under the Credit Agreement, or in connection
with the validity or enforceability against it of the Loan Documents to which
it is today a party except for (a) any consents, authorizations, approvals,
notices and filings that have been obtained or made and (b) those consents,
authorizations, approvals, notices and filings that if not made, obtained or
done, would not, to my knowledge, have a Material Adverse Effect.
4 Each of the Loan Documents to which the Parent, the
Borrower and the Subsidiaries is today a party has been duly executed and
delivered on behalf of such party.
5 The execution, delivery and performance by the
Parent, the Borrower, Landstar Express America, Inc., Landstar Xxxxx Inc. or
Risk Management Claim Services, Inc. of the Loan Documents to which it is
today a party, and the borrowings and other extensions of credit under the
Credit Agreement will not conflict with, or result in a violation of, or
result in, or require, the creation or imposition of any Lien (other than
Liens permitted by the Credit Agreement) on any of its or their respective
properties or revenues under (a) the certificate of incorporation or by-laws
of the Parent, the Borrower or any Subsidiary, (b) any material Requirement of
Law that to my knowledge is applicable to or binding upon the Parent, the
Borrower or any of its Subsidiaries, or (c) any material Contractual
Obligation of which I have knowledge applicable to or binding upon the Parent,
the Borrower or any of its Subsidiaries.
6 To my knowledge, after due inquiry, except as
disclosed in the most recent Report on Form 10-K of the Parent for the year
ended December 31, 1996, as filed with the Securities and Exchange Commission
and all of the Reports on Form 10-Q filed by the Parent with the Securities
and Exchange Commission since the filing of such Report on Form 10-K, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or threatened by or against the Parent, the
Borrower or any of its Subsidiaries or against any of its or their respective
131
To the Parties named on
Schedule I hereto
October 10,1997
properties or revenues (a) with respect to any of the Loan Documents or any of
the transactions contemplated thereby, or (b) that could reasonably be
expected to have a Material Adverse Effect.
I express no opinion as to any matter relating to the
execution, delivery or performance of the Credit Agreement by the Insurance
Subsidiary or as to whether the Credit Agreement constitutes a legal, valid or
binding obligation of the Insurance Subsidiary or is enforceable against the
Insurance Subsidiary in accordance with its terms.
I express no opinion as to the laws of any jurisdiction
other than the laws of the State of Indiana, the General Corporation Law of
the State of Delaware and the Federal laws of the United States of America.
The opinions expressed herein are solely for your benefit
and, without my prior consent, neither my opinion nor this opinion letter may
be circulated, furnished or disclosed to or relied upon by any other person.
Very truly yours,
Xxxxxxx X. Xxxxxx
132
ANNEX A
LENDERS
1. The Chase Manhattan Bank, as Administrative Agent and as a Lender
2. ABN Amro Bank N.V.
3. Amsouth Bank
4. BankBoston, N.A.
5. The Bank of New York
6. Xxxxxxx Bank, N.A.
7. First Union National Bank
8. Fleet National Bank
9. The Long-Term Credit Bank of Japan, Limited,
New York Branch
10. NationsBank, N.A.
11. PNC Bank, N.A.
12. SunTrust Bank, North Florida, N.A.
133
Schedule I
BORROWER'S SUBSIDIARIES
Landstar Capacity Services, Inc.
Landstar Carrier Services, Inc.
Landstar Corporate Services, Inc.
Landstar Express America, Inc.
Landstar Gemini Acquisition Corp.
Landstar Gemini, Inc.
Landstar Inway, Inc.
Landstar Xxxxx, Inc.
Landstar Logistics, Inc.
Landstar Xxxxx, Inc.
Landstar Ranger, Inc.
Landstar T.L.C., Inc.
Risk Management Claim Services, Inc.
Signature Insurance Company
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EXHIBIT F TO
CREDIT AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Second Amended and Restated Credit
Agreement, dated as of October 10, 1997 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Landstar System
Holdings, Inc., a Delaware corporation (the "Borrower"), Landstar System,
Inc., the Subsidiaries of the Borrower signatories thereto, the lenders from
time to time parties thereto (the "Lenders") and The Chase Manhattan Bank, as
agent (in such capacity, the "Administrative Agent"). Unless otherwise
defined herein, terms which are defined in the Credit Agreement and used
herein are so used as so defined and the meanings assigned to terms defined
herein or in the Credit Agreement shall be equally applicable to both the
singular and plural forms of such terms. This Assignment and Acceptance,
between the Assignor (as set forth on Schedule 1 hereto and made a part
hereof) and the Assignee (as set forth on Schedule 1 hereto and made a part
hereof) and for the benefit of the Borrower and the Administrative Agent, is
dated as of the Transfer Effective Date (as set forth on Schedule 1 hereto and
made a part hereof, the "Transfer Effective Date").
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as
of the Transfer Effective Date, a ___% interest (the "Assigned Interest") in
and to the Assignor's rights and obligations under the Credit Agreement with
respect to each credit facility contained in the Credit Agreement as are set
forth on Schedule 1 (individually, an "Assigned Facility"; collectively, the
"Assigned Facilities"), in a principal amount for each Assigned Facility as
set forth on Schedule 1; provided, however, it is expressly understood and
agreed that the Assignor is not assigning to the Assignee and the Assignor
shall retain (A) all of the Assignor's rights and obligations under
subsections 2.14, 2.15 and 2.16 of the Credit Agreement with respect to any
cost, reduction or payment incurred or made prior to the Transfer Effective
Date, including, without limitation the rights to indemnification and to
reimbursement for taxes, costs and expenses and (B) any and all amounts paid
to the Assignor prior to the Transfer Effective Date and (iii) both Assignor
and Assignee shall be entitled to the benefits of subsection 10.5 of the
Credit Agreement.
2. The Assignor (i) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement, any other Loan Document or any other instrument
or document furnished pursuant thereto, other than that it has not created any
adverse claim upon the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Parent, any of its Subsidiaries or any other obligor or the
performance or observance by the Parent, any of its Subsidiaries or any other
obligor of any of their respective obligations under the Credit Agreement or
any other Loan Document or any other instrument or document furnished pursuant
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hereto or thereto; and (iii) attaches the Notes held by it evidencing the
Assigned Facilities and requests that the Administrative Agent exchange such
Notes for new Notes payable to the Assignor (if the Assignor has retained any
interest in the Assigned Facility) and new Notes payable to the Assignee in
the respective amounts which reflect the assignment being made hereby (and
after giving effect to any other assignments which have become effective on
the Transfer Effective Date).
3. The Assignee, for the benefit of the Assignor, the
Administrative Agent and the Borrower, (i) represents and warrants that it is
legally authorized to enter into this Assignment and Acceptance; (ii) confirms
that it has received a copy of the Credit Agreement, together with copies of
the financial statements delivered pursuant to subsection 4.1 and 6.1 of the
Credit Agreement 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; (iii) agrees that it will, independently and
without reliance upon the Assignor, the Administrative Agent or any other
person which has become a 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 Credit Agreement; (iv)
appoints and authorizes the Administrative Agent to take such action as agent
on its behalf and to exercise such powers under the Credit Agreement and the
other Loan Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are incidental thereto; and (v) agrees
that it will be bound by the provisions of the Credit Agreement and will
perform in accordance with its terms all the obligations which by the terms of
the Credit Agreement are required to be performed by it as a Lender including,
(A) if it is organized under the laws of a jurisdiction outside the United
States, its obligation pursuant to subsection 2.15 of the Credit Agreement to
deliver the forms prescribed by the Internal Revenue Service of the United
States certifying as to the Assignee's exemption from United States
withholding taxes with respect to all payments to be made to the Assignee
under the Credit Agreement and (B) if it is organized under the laws of the
United States or a state thereof, its obligation pursuant to subsection 2.15
of the Credit Agreement to deliver a written statement to that effect.
4. Following the execution of this Assignment and Acceptance,
it will be delivered to the Borrower and the Administrative Agent, together
with payment to the Administrative Agent of a registration and processing fee
of $3,500, for acceptance by the Borrower and the Administrative Agent, which
acceptance shall not be unreasonably withheld, and recording by the
Administrative Agent pursuant to subsections 10.6(d) and 10.6(e) of the Credit
Agreement, effective as of the Transfer Effective Date (which shall not,
unless otherwise agreed to by the Administrative Agent, be earlier than five
Business Days after the date of acceptance and recording by the Borrower and
the Administrative Agent of the executed Assignment and Acceptance).
5. Upon such acceptance and recording, from and after the
Transfer 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 the Transfer Effective Date or accrue subsequent to the Transfer
Effective Date. The Assignor and the Assignee shall make all appropriate
adjustments in payments by the Administrative Agent for periods prior to the
Transfer Effective Date or with respect to the making of this assignment
directly between themselves.
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6. From and after the Transfer Effective Date, (i) the
Assignee shall be a party to the Credit Agreement and, to the extent provided
in this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the other Loan Documents and shall be bound by the
provisions thereof and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations, and release the Borrower from its obligations to the Assignor
(other than with respect to indemnities which by their terms survive repayment
of the Notes under the Credit Agreement).
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective duly authorized
officers on Schedule 1 hereto.
Schedule 1 to Assignment and Acceptance relating to the Second Amended and
Restated Credit Agreement, dated as of October 10, 1997, among Landstar System
Holdings, Inc., a Delaware corporation, Landstar System, Inc., the Subsidiaries
of the Borrower signatories thereto, the lenders from time to time parties
thereto and The Chase Manhattan Bank, as administrative agent (the "Credit
Agreement")
Name of Assignor:
Name of Assignee:
Transfer Effective Date of Assignment:
Percentage (as defined
in the Credit Agreement)
Assigned Commitment Assigned (to at least)
Facility Amount Assigned fifteen decimals)
-------- --------------- ----------------------
Tranche A Revolving Credit
Commitments
Tranche B Revolving Credit
Commitments
Accepted:
---------
LANDSTAR SYSTEM HOLDINGS, INC.
By:____________________________________
Name:
Title:
000
XXX XXXXX XXXXXXXXX BANK, [ASSIGNEE]
as Administrative Agent
By:_______________________________ By:____________________________________
Name: Name:
Title: Title:
[ASSIGNOR]
By:_____________________________________
Name:
Title:
