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$130,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
Among
COVENANT TRANSPORT, INC.,
a Tennessee corporation
and
COVENANT LEASING, INC.,
a Nevada corporation
as Borrowers,
the Banks signatories hereto,
the banks from time to time acting
as Letter of Credit Banks hereunder,
and
ABN AMRO BANK N.V.,
as Agent.
Dated as of June 18, 1999.
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TABLE OF CONTENTS
PAGE
ARTICLE I......................................................................2
COMMITMENT.....................................................................2
Section 1.1 Commitments................................................2
Section 1.2 Borrowing Options; Method of Borrowing.....................3
Section 1.3 Evidence of Indebtedness...................................5
Section 1.4 Interest...................................................5
Section 1.5 Commitment and Management Fees.............................6
Section 1.6 Repayment of Loans.........................................6
Section 1.7 Reductions of Commitments..................................7
Section 1.8 Computation of Interest and Fees...........................8
Section 1.9 Maximum Interest Rate......................................8
Section 1.10 Manner of Payment; Application of Payments................8
Section 1.11 Return of Payments........................................8
ARTICLE II.................................................... ................9
LETTERS OF CREDIT..............................................................9
Section 2.1 Letters of Credit..........................................9
Section 2.2 Manner of Issuance........................................10
Section 2.3 Drawings Under Letters of Credit..........................10
Section 2.4 Letter of Credit Fees; Administrative Fees; Interest......12
Section 2.5 Limitation of Liability With Respect To Letters of Credit.13
ARTICLE III...................................................................14
CONDITIONS TO EXTENSIONS OF CREDIT............................................14
Section 3.1 Conditions to the Effectiveness of this Agreement.........14
Section 3.2 Conditions to Issuance of Letters of Credit...............15
Section 3.3 Conditions to Each Extension of Credit....................15
ARTICLE IV..................................................... ..............17
CERTAIN REPRESENTATIONS AND WARRANTIES OF BORROWERS...........................17
Section 4.1 Organization; Power; Qualification; Subsidiaries..........17
Section 4.2 Authorization and Compliance of Agreement, Notes and
Extensions of Credit......................................17
Section 4.3 Litigation................................................18
Section 4.4 Burdensome Provisions.....................................18
Section 4.5 No Adverse Change or Event................................18
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Section 4.6 No Adverse Fact...........................................18
Section 4.7 Title to Properties.......................................19
Section 4.8 Environmental Matters.....................................19
Section 4.9 Debt.19...................................................19
Section 4.10 Patents, Trademarks, Etc.................................19
Section 4.11 Solvency.................................................19
Section 4.12 The Questionnaires.......................................19
ARTICLE V.....................................................................20
COVENANTS.....................................................................20
Section 5.1 Preservation of Existence and Properties, Scope of Business,
Compliance with Law, Payment of Taxes and Claims..........20
Section 5.2 Insurance.................................................20
Section 5.3 Use of Proceeds...........................................20
Section 5.4 Guaranties................................................21
Section 5.5 Liens.....................................................21
Section 5.6 Merger, Consolidation, Acquisitions and Disposition
of Assets.................................................21
Section 5.7 Transactions with Affiliates..............................22
Section 5.8 Taxes of Other Persons....................................22
Section 5.9 Limitation on Restrictive Covenants.......................22
Section 5.10 Issuance or Disposition of Capital Securities............22
Section 5.11 Permitted Debt...........................................22
Section 5.12 Minimum Consolidated Tangible Net Worth..................23
Section 5.13 Consolidated Adjusted Debt to Consolidated EBITDAR.......23
Section 5.14 Fixed Charge Coverage Ratio..............................23
Section 5.15 Restricted Payments......................................23
Section 5.16 Environmental Matters....................................23
Section 5.17 Limitations on Investments, Loans and Advances...........24
Section 5.18 Additional Subsidiaries..................................25
Section 5.19 Trade Payables...........................................25
Section 5.20 Interest Rate Agreements.................................25
Section 5.21 Security for Obligations.................................25
ARTICLE VI....................................................................26
INFORMATION...................................................................26
Section 6.1 Financial Statements and Information to be Furnished......26
Section 6.2 Accuracy of Financial Statements and Information..........29
Section 6.3 Additional Covenants Relating to Disclosure...............30
ARTICLE VII...................................................................31
DEFAULT.......................................................................31
Section 7.1 Events of Default.........................................31
Section 7.2 Remedies upon Event of Default............................33
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ARTICLE VIII..................................................................34
CHANGES IN CIRCUMSTANCES......................................................34
Section 8.1 Mandatory Suspension and Conversion of Eurodollar Loans...34
Section 8.2 Regulatory Changes........................................35
Section 8.3 Change of Lending Office..................................36
Section 8.4 Funding Losses............................................36
Section 8.5 Determinations............................................37
ARTICLE IX....................................................................37
THE AGENT AND THE LETTER OF CREDIT BANKS......................................37
Section 9.1 Appointment and Authorization.............................37
Section 9.2 Agent and Affiliates; Letter of Credit Bank and
Affiliates................................................37
Section 9.3 Action by the Agent and the Letter of Credit Banks........38
Section 9.4 Consultation with Experts.................................38
Section 9.5 Liability of the Agent and the Letter of Credit Banks.....38
Section 9.6 Indemnification...........................................38
Section 9.7 Credit Decision...........................................39
Section 9.8 Successor Agent...........................................39
Section 9.9 Security Documents, Etc...................................39
ARTICLE X.....................................................................40
INTERPRETATION................................................................40
Section 10.1 Interpretation...........................................40
Section 10.2 Accounting Matters.......................................63
Section 10.3 Classes of Extensions of Credit and Types of Loans.......63
Section 10.4 Captions.................................................64
ARTICLE XI....................................................................64
MISCELLANEOUS.................................................................64
Section 11.1 Notices..................................................64
Section 11.2 Expenses; Indemnification................................66
Section 11.3 Rights Cumulative........................................67
Section 11.4 Disclosure...............................................67
Section 11.5 Waivers; Amendments......................................67
Section 11.6 Set-Off..................................................69
Section 11.7 Assignment and Participations............................69
Section 11.8 Governing Law............................................71
Section 11.9 Judicial Proceedings; Waiver of Jury Trial...............71
Section 11.10 Severability of Provisions..............................72
Section 11.11 Counterparts............................................72
Section 11.12 Entire Agreement........................................72
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Section 11.13 Survival of Obligations.................................72
Section 11.14 Successors and Assigns..................................73
Section 11.15 Limitation of Liability.................................73
Section 11.16 Joint and Several Liability; Additional Waivers.........73
Section 11.17 Maximum Liability; Contribution Rights..................75
Section 11.18 Subordination...........................................76
Exhibit A-1 Form of Eurodollar Revolving Note
Exhibit A-2 Form of Base Rate Revolving Note
Exhibit A-3 Form of Eurodollar Term Note
Exhibit A-4 Form of Base Rate Term Note
Exhibit A-5 Form of Alternate Base Rate Revolving Note
Exhibit A-6 Form of Alternate Base Rate Term Note
Schedule 1.2(b) Form of Notice of Borrowing
Schedule 3.1(f) Form of Certificate of Negotiating Officer
Schedule 3.1(j) Form of Solvency Certificate
Schedule 4.1 Schedule of Subsidiaries and Jurisdictions Where Authorized
to Do Business
Schedule 4.2 Schedule of Consents and Approvals
Schedule 4.3 Schedule of Litigation
Schedule 4.4 Burdensome Provisions
Schedule 4.7 Schedule of Permitted Liens
Schedule 4.9 Agreements Relating to Debt of Borrowers
Schedule 4.12-1 Parent's Informational Questionnaire
Schedule 4.12-2 Borrowers' Informational Questionnaire
Schedule 5.9 Schedule of Contracts with Permitted Restrictive Covenants
Schedule 6.1(a) Form of Certificate of the Parent as to Quarterly Financial
Statements
Schedule 6.1(b) Form of Certificate of the Parent as to Annual Financial
Statements
Schedule 6.1(c)(v) Form of Certificate of the Borrowers as to Monthly Borrowing
Base
Schedule 6.2 Schedule of Historical Financial Information
Schedule 11.7 Assignment and Assumption Agreement
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AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of June 18, 1999
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") is made
as of June 18, 1999 by and among COVENANT TRANSPORT, INC., a Tennessee
corporation ("CTI"), COVENANT LEASING, INC., a Nevada corporation ("CLI" and,
together with CTI, the "Borrowers" and each a "Borrower"), the banks signatories
hereto (the "Banks"), and any assignees that may become "Banks" as provided
herein, ABN AMRO BANK N.V., as Agent (the "Agent"), and any bank that may from
time to time hereafter be designated by the Agent and the Borrowers to serve as
a letter of credit bank hereunder (each a "Letter of Credit Bank" and,
collectively, the "Letter of Credit Banks"), agree as follows (with certain
terms used herein being defined in Article X):
Background
CTI, the Agent and the Banks entered into a certain Credit Agreement,
dated as of January 17, 1995 (the "Credit Agreement"), as amended by that
certain First Amendment to Credit Agreement and Waiver, dated as of October 15,
1995 (the "First Amendment"), among CTI, the Agent and the Banks, as further
amended by that certain Second Amendment to Credit Agreement and Waiver, dated
as of April 12, 1996 (the "Second Amendment"), among CTI, the Agent and the
Banks, as further amended by that certain Third Amendment to Credit Agreement
and Consent, dated as of March 31, 1997 (the "Third Amendment"), among the
Borrowers, the Agent and the Banks as further amended by that certain Fourth
Amendment to Credit Agreement, dated as of December 31, 1997 (the "Fourth
Amendment"), among the Borrowers, the Agent and the Banks, (the Credit
Agreement, as amended by the First Amendment, the Second Amendment, the Third
Amendment and the Fourth Amendment is the "Existing Credit Agreement"). Pursuant
to the Existing Credit Agreement, the Banks and the Letter of Credit Banks
agreed to make certain loans and grant other financial accommodations to or for
the benefit of the Borrowers, subject to the terms, covenants and conditions
contained in the Existing Credit Agreement and the documents executed and
delivered in connection therewith or pursuant thereto.
The Borrowers have requested that the Agent and the Banks further amend
the Existing Credit Agreement to add an additional lender and increase the
Revolving Credit Commitments (as defined in the Existing Credit Agreement) of
the Banks to $130,000,000, and to modify certain other terms of the Existing
Credit Agreement as set forth herein and the Agent, the Banks and the Letter of
Credit Banks are willing to agree to such modifications subject to the terms and
conditions hereof. For the convenience of the parties to the Existing Credit
Agreement, the parties have elected to consolidate the existing amendments into
the Credit Agreement and to restate the Existing Credit Agreement in connection
with making the additional modifications contemplated by this Agreement.
The Existing Credit Agreement shall continue to remain in full force
and effect until the Effective Date (defined hereafter), at which time this
Agreement shall replace the Existing Credit Agreement with respect to all
obligations of the parties to the Existing Credit Agreement or this Agreement
arising from and after the Effective Date. The obligations of the Borrowers
evidenced by the Existing Credit Agreement have not been extinguished or
satisfied, but have merely been amended and restated by the obligations set
forth in this Agreement and the documents contemplated hereby, or executed and
delivered in connection herewith or pursuant hereto.
NOW, THEREFORE, in consideration of the covenants contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
ARTICLE I
COMMITMENT
Section 1.1 Commitments.
(a) Banks' Commitments. Upon the terms and subject to the conditions
set forth herein, each of the Banks severally, and jointly, agrees:
(i) from the Effective Date to but excluding the Revolving
Credit Commitment Termination Date, to make Revolving Loans as provided
in Section 1.2 and to purchase participations in the Letters of Credit
issued from time to time by a Letter of Credit Bank, in an aggregate
principal amount at any time outstanding not to exceed the lesser of
(A) such Bank's Revolving Credit Commitment and (B) such Bank's
Proportionate Share of the Borrowing Base, provided that the
outstanding amount of Letter of Credit Obligations arising under
Letters of Credit shall not exceed at any time $10,000,000 (the "Letter
of Credit Commitment"), and provided further that the aggregate
outstanding amount of Revolving Loans plus the aggregate outstanding
amount of Letter of Credit Obligations, shall not exceed at any time
$130,000,000; and
(ii) on the Term Loan Conversion Date, to make Term Loans to
the Borrowers as provided in Section 1.2, in an amount not to exceed
such Bank's Term Loan Commitment; provided that, from and after the
Term Loan Conversion Date, no further Term Loans shall be made except
as a part of a Rollover Borrowing.
All Loans and Letters of Credit made hereunder shall be made jointly to the
Borrowers, who shall be jointly and severally liable for the repayment thereof
and for the full and prompt performance of all other obligations of the
Borrowers hereunder.
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(b) Letter of Credit Banks' Commitment. Upon the terms and subject
to the conditions set forth herein and in any agreement pursuant to which it may
agree to serve as a Letter of Credit Bank, each Letter of Credit Bank agrees to
issue, and to sell participations in, its Letters of Credit as provided in
Section 2.1.
(c) Proportional Participation. Each Bank shall make a Loan with
respect to each Borrowing and shall purchase a participation in each Letter of
Credit in the amount of its Proportionate Share of such Borrowing or Letter of
Credit.
(d) Extension of Revolving Credit Commitment Termination Date.
Upon written request of the Borrowers delivered to the Agent not less than 60
days prior to the Revolving Credit Commitment Termination Date (as the same may
be extended from time to time), the Banks shall review the revolving credit
facility provided hereunder and may, in their sole discretion, extend the
Revolving Credit Commitment Termination Date for an additional one year period,
in which event the Revolving Credit Commitment Termination Date shall be
extended to such later date (subject to earlier termination as provided in
Section 7.2). The Revolving Credit Commitment Termination Date as so extended
may be further extended by the Banks, in their sole discretion, for successive
one year periods by following the same procedure as for the initial extension of
the Revolving Credit Commitment Termination Date as set forth in the immediately
preceding sentence. This Section is for the convenience of the parties and shall
not prevent the parties from agreeing to extend the Revolving Credit Commitment
Termination Date in any other manner or for any other term.
Section 1.2 Borrowing Options; Method of Borrowing.
(a) Borrowing Options. Loans of any Class, at the option of the
Borrowers, may be made or continued as, or may from time to time be converted
into, one or more Alternate Base Rate Borrowings, Base Rate Borrowings, or
Eurodollar Borrowings, or any combination thereof; provided, that Eurodollar
Loans may be converted only on the last day of any applicable Interest Period;
and provided, further, that only Alternate Base Rate Borrowings and Base Rate
Borrowings shall be made or continued, and all Eurodollar Borrowings shall be
converted into Base Rate Borrowings on the last day of their applicable Interest
Periods, so long as a Default shall have occurred and be continuing. Each
Borrowing shall be in a minimum amount of $1,000,000 and in greater whole
multiples of $500,000. There shall at no time be in effect more than twelve
Eurodollar Borrowings.
(b) Method of Borrowing. Whenever the Borrowers desire to incur a
Borrowing they shall give the Agent notice of such requested Borrowing(s) in the
form of Schedule 1.2(b) ("a Notice of Borrowing") (which shall be irrevocable),
in the case of the incurrence of an Alternate Base Rate Borrowing or a Base Rate
Borrowing, prior to 10:00 a.m. on the same Business Day as, and in the case of
the incurrence of a Eurodollar Borrowing, three Business Days before, the
requested date of such Borrowing, specifying (i) the requested date of the
Borrowing(s), which shall be a Business Day, (ii) the aggregate principal amount
of the Borrowing(s) to be incurred, (iii) the Class and Type of the Loans
comprising such requested Borrowing(s), and (iv) in the case of the incurrence
of a Eurodollar Borrowing, the duration of the Interest Period, subject to
3
the provisions of the definition of Interest Period. In the absence of an
acceleration of the Obligations pursuant to Section 7.2, if a request for a
Eurodollar Borrowing is not made, or is not made in accordance with this
Section, upon the maturity of a Eurodollar Borrowing, and the Agent shall not
have received notice from the Borrowers of their intention to repay such Loan
other than with the proceeds of a Rollover Borrowing by 10:00 a.m. on the date
of such maturity, then the Borrowers shall be deemed to have requested an
Alternate Base Rate Borrowing in an amount necessary to repay such maturing
Borrowing. Any Notice of Borrowing shall be deemed received on the following
Business Day if (i) in the case of Alternate Base Rate Borrowings, received
after 10:00 a.m. (Chicago time) or (ii) in the case of Eurodollar Borrowings,
received after noon (Chicago time).
(c) Funding Of Loans. (i) After receiving a Notice of Borrowing,
the Agent shall notify each Bank of the contents of such Notice of Borrowing, of
such Bank's Proportionate Share of the requested Borrowing and, in the case of a
Eurodollar Borrowing, the applicable interest rate. Except as provided in
subsection (f) below and subject, in the case of Eurodollar Borrowings, to the
provisions of Article VIII, each Bank shall make available to the Agent at the
Agent's Office its Proportionate Share of any requested Borrowing, in lawful
money of the United States of America in immediately available funds, prior to
11:00 a.m. (Chicago time) on the Business Day requested for such Borrowing. The
Agent shall, subject to (i) confirming that Borrowing Base availability exists
under the Revolving Credit Commitments, and (ii) the satisfaction of the
conditions set forth in Article III, by 12:00 Noon (Chicago time) on such day,
credit the amounts received by it in like funds to an account of the Borrowers
maintained with the Agent or in such other manner as the Borrowers and the Agent
shall agree.
(d) Rollover Borrowings. If any Bank makes a new Loan hereunder on
a day on which the Borrowers are to repay all or any part of an outstanding Loan
from such Bank, such Bank shall apply the proceeds of its new Loan to make such
repayment (the Loan made in the amount necessary to repay a maturing loan of the
same Class, a "Rollover Borrowing") and only an amount equal to the difference
(if any) between the amount being borrowed and the amount being repaid shall be
made available by such Bank as provided in subsection (e) of this Section or
remitted by the Borrowers to the Agent as provided in Section 1.6.
(e) Agent May Assume Funding. Unless the Agent shall have received
notice from a Bank prior to 11:00 a.m. on the date of any Borrowing that such
Bank will not make available to the Agent such Bank's Proportionate Share of
such Borrowing, the Agent may assume that such Bank has made such amount
available to it on the date of such Borrowing in accordance with subsection (c)
of this Section 1.2, and may, in reliance upon such assumption, make available
for the account of the Borrowers on such date a corresponding amount. If and to
the extent that such Bank shall not have so made such Proportionate Share
available to the Agent such Bank shall pay to the Agent forthwith on demand,
such corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrowers until the date such amount
is paid to the Agent at the Federal Funds Rate. If such Bank shall pay to the
Agent such corresponding amount, such amount so paid shall constitute such
Bank's Loan as part of such Borrowing for purposes of this Agreement. If such
Bank shall fail to pay such corresponding amount upon such demand, then the
Borrowers shall, forthwith on demand, repay
4
to the Agent such corresponding amount, together with interest thereon for each
day from the date such amount is made available to the Borrowers until the date
such amount is paid, at the interest rate applicable at such time to Loans
comprising such Borrowing.
(f) Banks' Obligations Independent. The failure of any Bank to
make a Loan to be made by it as part of any Borrowing or to purchase any
participation hereunder shall not relieve any other Bank of its obligation, if
any, hereunder to make its Loan on the date of such Borrowing or to purchase any
such participation. Neither the Agent nor any Bank shall be responsible for the
failure of any other person to make any Loan or to purchase any participation
hereunder on the date required therefor.
Section 1.3 Evidence of Indebtedness.
(a) Notes. Revolving Loans by each Bank to the Borrowers and the
Borrowers' obligation to repay such Revolving Loans with interest in accordance
with the terms of this Agreement, shall be evidenced by (i) in the case of the
Base Rate Revolving Loans, a single Base Rate Revolving Note, (ii) in the case
of Eurodollar Revolving Loans, a single Eurodollar Revolving Note, and (iii) in
the case of Alternate Base Rate Revolving Loans, a single Alternate Base Rate
Revolving Note. Term Loans by each Bank to the Borrowers and the Borrowers'
obligation to repay such Term Loans with interest in accordance with the terms
of this Agreement, shall be evidenced by (i) in the case of Base Rate Term
Loans, a single Base Rate Term Note, (ii) in the case of Eurodollar Term Loans,
a single Eurodollar Term Note, and (iii) in the case of Alternate Base Rate Term
Loans, a single Alternate Base Rate Term Note, all of which Term Notes shall be
executed by the Borrowers and delivered to the Agent prior to the Term Loan
Conversion Date.
(b) Authorization to Make Notations. Each Bank shall record, and
prior to any transfer of any Note shall endorse on the schedules forming a part
thereof appropriate notations to evidence the date, amount and maturity of each
Loan made by it and the date and amount of each payment of principal made by the
Borrowers with respect thereto; provided that the failure of any Bank to make
any such recordation or endorsement shall not affect the obligations of the
Borrowers hereunder or under the Notes. Each Bank is hereby irrevocably
authorized by the Borrowers to so endorse its Note or Notes and to attach to and
make a part of its Note or Notes a continuation of any such schedule as and when
required.
Section 1.4 Interest.
(a) Rates. Each Loan shall bear interest on the outstanding
principal amount thereof until due at a rate per annum equal to, (i) so long as
it is a Base Rate Loan, the Base Rate as in effect from time to time, (ii) so
long as it is a Eurodollar Loan, the applicable Adjusted Eurodollar Rate plus
the Applicable Margin, and (iii) so long as it is an Alternate Base Rate Loan,
the Alternate Base Rate as in effect from time to time plus the Applicable
Margin.
(b) Post Maturity Interest. If all or any part of a Loan or other
Obligation is not paid when due (whether at maturity, by reason of notice of
prepayment or acceleration or otherwise),
5
such unpaid amount shall bear interest for each day during the period from the
date such amount became so due until it shall be paid in full (whether before or
after judgment) at a rate per annum equal to the Post-Maturity Rate.
(c) Payments. Interest due pursuant to this Agreement shall be
payable, (i) in the case of Alternate Base Rate Loans and Base Rate Loans, on
each Interest Payment Date, (ii) in the case of any Eurodollar Loan, on the last
day of each Interest Period applicable thereto, and (iii) in the case of any
Loan or other Obligation, when any portion of such Loan, or other Obligation
shall be due (whether at maturity, by reason of prepayment or acceleration or
otherwise), but only to the extent then accrued on the amount then so due.
Interest at the Post-Maturity Rate shall be payable on demand.
Section 1.5 Commitment and Management Fees.
(a) Management Fee. The Borrowers agree to pay to the Agent a
periodic management fee (the "Management Fee") in the amounts and upon the terms
and conditions previously agreed between the Agent and the Borrowers.
(b) Commitment Fee. The Borrowers agree to pay to the Agent for
the account of each Bank, for each day from and including the Effective Date to
but excluding the Revolving Credit Commitment Termination Date, an amount equal
to the Applicable Commitment Fee Percentage on the daily unused Revolving Credit
Commitment of such Bank (the "Commitment Fee").
(c) Fees Payable in Arrears. All fees due pursuant to Section
1.5(b), and the fees due pursuant to Section 2.4(a), shall be payable quarterly
in arrears on the first Business Day in each January, April, July and October
(commencing with the first of such dates occurring on or after the Effective
Date), on the applicable Termination Date and, in the case of any Commitment Fee
or Letter of Credit Fee, upon each reduction of the Commitment or Letter of
Credit in respect of which such fee is accruing, to the extent accrued on the
amount of such reduction.
Section 1.6 Repayment of Loans.
(a) Mandatory Payment. (i) All Revolving Loans outstanding on the
Revolving Credit Commitment Termination Date shall mature and become immediately
due and payable; provided that, subject to the conditions of Section 3.3,
Section 1.1(a)(ii) and otherwise set forth in this Agreement, the Borrowers may
repay such maturing Loans with the proceeds of a Term Loan. On any date that the
aggregate outstanding principal amount of Revolving Loans and Letter of Credit
Obligations shall exceed the lesser of (x) the Borrowing Base and (y) the
Revolving Credit Commitments, the Borrowers shall repay Revolving Loans and/or
Letter of Credit Obligations in an amount equal to such excess.
(ii) All Term Loans outstanding on the Term Loan Commitment
Termination Date shall mature and become immediately due and payable.
On any date that the aggregate outstanding principal amount of Term
Loans shall exceed the Term Loan
6
Commitment, the Borrowers shall repay Term Loans in an amount equal
to such excess, including, specifically, any excess that occurs as a
result of mandatory reductions in the Term Loan Commitment pursuant
to Section 1.7(b).
(iii) All Eurodollar Loans shall mature and become due and
payable on the last day of the Interest Period applicable thereto.
(b) Optional Payment. The Borrowers may at any time and from time
to time upon one Business Day's notice prepay Loans in whole or in part. Any
prepayment of Loans shall be in an aggregate principal amount of at least
$1,000,000 and in greater whole multiples of $500,000, subject, however, to the
Borrowers' right to repay all outstanding Loans in full.
(c) All prepayments. A prepayment of Eurodollar Loans which causes
the amount of any Eurodollar Borrowing to fall below $1,000,000 shall be deemed
a repayment of the entire amount of such Borrowing. Alternate Base Rate Loans
and Base Rate Loans may be prepaid without premium or penalty. Any prepayment of
Eurodollar Loans prior to the end of an Interest Period shall be subject to the
provisions of Article VIII, including particularly Section 8.4. Amounts to be
prepaid shall irrevocably be due and payable on the date specified in the
applicable notice of prepayment, together with interest thereon as provided in
Section 1.4(c).
(d) Revolving Credit. Prior to the Revolving Credit Commitment
Termination Date and subject to the terms and conditions hereof, Revolving Loans
may be repaid and reborrowed. Prior to the Term Loan Commitment Termination Date
and subject to the terms and conditions hereof, Term Loans may be repaid and
reborrowed solely for the purpose of making Rollover Borrowings.
Section 1.7 Reductions of Commitments.
(a) Optional Reductions of Commitments. Subject to the following
sentence, the Borrowers may elect to reduce any Commitment, in whole or in part,
by (i) giving the Agent not less than five Business Days' prior written notice
thereof, and (ii) paying to the Agent for the ratable account of the Banks the
amount by which the sum of all outstanding Loans thereunder exceeds such
Commitment as so reduced, together with any accrued and unpaid interest and fees
thereon. (A) No optional reduction of any Commitment pursuant to this Section
1.7 shall be effective prior to the 90th day after the Effective Date, (B) there
shall be no more than one optional reduction of any Commitment pursuant to this
Section 1.7 during any calendar quarter, (C) partial reductions of Commitments
of any Class pursuant to this Section 1.7 shall be in incremental amounts of
$5,000,000, and (D) no optional reduction of a Commitment which causes the
prepayment of a Eurodollar Loan will be permitted.
(b) Mandatory Reduction of Commitments. (i) The Revolving
Credit Commitments shall reduce automatically to zero on the Revolving Credit
Commitment Termination Date.
(ii) The Term Loan Commitments shall reduce automatically by
an amount equal to one-twelfth of the Term Loan Commitments as
determined on the Term Loan
7
Conversion Date, at the end of each calendar quarter commencing
with the quarter in which the Term Loan Conversion Date shall occur,
and to zero on the Term Loan Commitment Termination Date.
(c) Ratable Reduction of Commitments. Each reduction in Commitments
pursuant to this Section 1.7 shall permanently reduce the appropriate Commitment
of each Bank by an amount equal to its Proportionate Share of such reduction.
Section 1.8 Computation of Interest and Fees. Interest and fees due
pursuant to this Agreement that are calculated at a per annum rate, unless
expressly stated to the contrary with respect to a particular item of interest
or a particular fee, shall be computed on the basis of a year of 360 days and
paid, in arrears, for the actual number of days elapsed (including the first but
excluding the last day, which, in the case of any Interest Period, means from
and including the first day of such Interest Period to but excluding the last
day thereof). If the date for any payment of principal is extended (whether by
operation of this Agreement, any provision of law or otherwise), fees payable
pursuant to this Agreement as well as interest, shall be payable for such
extended time on a pro rata basis.
Section 1.9 Maximum Interest Rate. Nothing contained in this Agreement
or any Note shall require the Borrowers to pay interest at a rate exceeding the
Maximum Permissible Rate. If amounts payable to any Bank, any Letter of Credit
Bank or the Agent on any date would be treated as interest in excess of the
Maximum Permissible Rate, such amounts automatically shall be reduced to the
Maximum Permissible Rate, and payments for any subsequent period, to the extent
less than the Maximum Permissible Rate, shall, to that extent, be increased by
the amount of such reduction.
Section 1.10 Manner of Payment; Application of Payments. Unless
otherwise provided herein, all payments and deposits due from the Borrowers to
any Bank, any Letter of Credit Bank or the Agent hereunder or under the Notes,
or under the Reimbursement Agreements, shall be made not later than 12:00 noon
(Chicago time), on the due date thereof, in Dollars in funds immediately
available (i) in the case of Loans and other payments hereunder, other than
Reimbursement Obligations, to the Agent at the Agent's Office, for the account
of, (A) in the case of payments on account of Eurodollar Loans, the Banks'
Eurodollar Lending Offices, (B) in the case of all other payments hereunder for
the account of the Banks, the Banks' Base Rate Lending Offices and (C) in the
case of all payments for the account of the Agent, the Agent's Office, and (ii)
in the case of any Reimbursement Obligation or any amounts due to any Letter of
Credit Bank, at such Letter of Credit Bank's Office, in each case ((i) and
(ii)), without any deduction whatsoever, including, but not limited to, any
deduction for any setoff, recoupment, counterclaim or Tax. Payments received by
the Agent or any Letter of Credit Bank for the account of any Bank before 12:00
noon (Chicago time) on any day shall be made available to the Banks not later
than 3:00 p.m. (Chicago time) on such day.
Section 1.11 Return of Payments. If the Agent or any Letter of Credit
Bank shall be required by any court, trustee or debtor-in-possession or other
person to return any amount previously received by it in respect of the
Obligations under this Agreement or the
8
Reimbursement Agreements (or if the Agent or any Letter of Credit Bank shall
make any payment in good faith settlement of a pending or threatened avoidance
claim), upon receipt of notice from the Agent or the Letter of Credit Bank, as
appropriate, each Bank shall immediately pay over to the Agent or the Letter of
Credit Bank, as appropriate, such Bank's Proportionate Share of the amount
required to be returned or paid in settlement.
ARTICLE II
LETTERS OF CREDIT
Section 2.1 Letters of Credit.
(a) Purchase of Participations by Banks.
Simultaneously with the issuance by any Letter of Credit Bank of any
Letter of Credit, each Bank shall be deemed to have irrevocably and
unconditionally purchased and received without recourse or warranty, an
undivided interest and participation in such Letter of Credit (including,
without limitation, all Obligations of the Borrowers with respect thereto except
those expressly stated to be payable to the Letter of Credit Bank or the Agent
hereunder or under the other Loan Documents) and any documents or security
therefor or Guaranty pertaining thereto, equal to such Bank's Proportionate
Share of such Letter of Credit (based on the Banks' respective Revolving Credit
Commitments). The Agent shall promptly notify the Banks upon the issuance of any
Letter of Credit issued after the Closing Date of the amount and expiration date
thereof.
(b) Terms of Letters of Credit.
(i) Each Letter of Credit shall (A) have an expiration date
not later than the Revolving Credit Commitment Termination Date, (B) be
used only to secure (1) bid, performance and/or payment bonds or
obligations in respect thereof or obligations in respect of workers
compensation insurance, that are required by any Borrower in the
ordinary course of its business and (2) with the consent of the Agent,
for other general corporate purposes (excluding, however, use as
security for all or any portion of any Debt), and (C) be in such form
and contain such terms and conditions as the Agent and the Letter of
Credit Bank issuing such Letter of Credit shall agree. The aggregate
stated amount of Letters of Credit outstanding at any time shall not
exceed $10,000,000.
(ii) In addition to any obligation of the Borrowers hereunder
with respect to the Letters of Credit and drawings thereunder, the
Borrowers' Reimbursement Obligations and any additional obligations in
respect of the Letters of Credit shall be set forth in, and shall be
evidenced by, the Reimbursement Agreements.
Section 2.2 Manner of Issuance. The Borrowers shall deliver to the
Agent and any Letter of Credit Bank prior to noon (Chicago time) at least three
days before the requested date of issuance of a Letter of Credit, a written
request (a "Letter of Credit Request") for the issuance of
9
such Letter of Credit together with all of the documents, materials and
evidences required to be delivered to the Agent pursuant to Article III prior to
the issuance of such Letter of Credit. Such request shall set forth: (i) the
beneficiary of the Letter of Credit, (ii) the stated amount thereof, (iii) the
requested issue date, (iv) the requested expiration date, and (v) the drawing
conditions applicable thereto. On the requested date of issuance of such Letter
of Credit, the Borrowers shall deliver to the Agent a duly executed
Reimbursement Agreement in the form agreed to by the Agent and the Letter of
Credit Bank issuing such Letter of Credit (each a "Reimbursement Agreement"),
together with such documents, evidences and opinions as shall be required
pursuant to Article III.
Section 2.3 Drawings Under Letters of Credit.
(a) Notice to Borrowers, Agent and Banks. Promptly upon receipt by
any Letter of Credit Bank of any draft upon, or other notice of drawing under, a
Letter of Credit, such Letter of Credit Bank shall give the Borrowers, the Agent
and each Bank written or telephonic notice of the amount of such draft or notice
of drawing, of the Letter of Credit against which it is drawn and of the date
upon which such Letter of Credit Bank proposes to honor such draft.
(b) Payments by Banks. Each Bank hereby agrees that it shall pay
to any Letter of Credit Bank prior to 2:00 p.m. (Chicago time) on the date each
Letter of Credit Bank honors each drawing under such Letter of Credit Bank's
Letter of Credit such Bank's Proportionate Share of such Letter of Credit
drawing; provided, that, if the Borrowers should pay in full or in part any
Letter of Credit drawing on the date thereof, the obligation of each Bank to pay
to such Letter of Credit Bank pursuant to this Section its Proportionate Share
of such drawing shall be reduced by an amount equal to such Bank's Proportionate
Share of such payment. Amounts paid in excess of the net amount so owed shall
promptly be refunded by such Letter of Credit Bank to such Bank.
(c) Failure to Pay by Banks. If any Bank shall fail to pay the
amount of its participation in a Letter of Credit drawing on the date such
amount is due in accordance with subsection (b) above, the Letter of Credit Bank
to which such payment is due shall be deemed to have advanced funds on behalf of
such Bank. Each such advance shall be secured by such Bank's participation
interest, and such Letter of Credit Bank shall be subrogated to such Bank's
rights hereunder in respect thereof. Such advance may be repaid by application
to such advance of any payment that such Bank is otherwise entitled to receive
under this Agreement. Any amount not paid by such Bank to such Letter of Credit
Bank hereunder shall bear interest for each day from the day such payment was
due until such payment shall be paid in full at a rate per annum equal to the
Federal Funds Rate.
(d) Repayment by Borrowers. The Borrowers shall repay to each
Letter of Credit Bank for the ratable account of the Banks the amount of each
Letter of Credit Obligation under any Letter of Credit issued by such Letter of
Credit Bank on the date provided in the applicable Reimbursement Agreement;
provided, that, notwithstanding anything in this Agreement or any Reimbursement
Agreement to the contrary, all Letter of Credit Obligations (fixed or
contingent, drawn or undrawn) not previously due and payable shall become due
and payable by the
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Borrowers on the Revolving Credit Commitment Termination Date. The amount of any
Letter of Credit Obligation that is not paid when due shall bear interest,
payable on demand, from the due date thereof until paid, at the Post-Maturity
Rate. The Borrowers agree that they shall be jointly and severally indebted to
each Bank in an amount equal to such Bank's Proportionate Share of each Letter
of Credit Obligation, including each drawing paid by any Letter of Credit Bank
under a Letter of Credit.
(e) Borrowers' Obligations Absolute. The obligation of the
Borrowers to pay a Letter of Credit Bank for the account of the Banks, for each
Letter of Credit Obligation arising under the Letter of Credit issued by such
Letter of Credit Bank shall be irrevocable, shall not be subject to any
qualification or exception whatsoever and shall be binding in accordance with
the terms and conditions of this Agreement under all circumstances, including,
without limitation, the following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or right
which any Borrower may have at any time against a beneficiary of any
Letter of Credit or any transferee of any Letter of Credit (or any
person for whom any such transferee may be acting), the Agent, such
Letter of Credit Bank, the Banks or any other Person, whether in
connection with this Agreement, any Reimbursement Agreement or any
Letter of Credit, the transactions contemplated herein or any unrelated
transactions;
(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient (except for insufficiencies that are manifest) in any
respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of this Agreement or the
other Loan Documents;
(v) any failure of the Agent or any Letter of Credit Bank to
provide notice to the Borrowers of any drawing under any Letter of
Credit;
(vi) the occurrence or continuance of any Default; or
(vii) any other reason that is not the result of the gross
negligence or willful misconduct on the part of such Letter of Credit
Bank.
(f) Banks' Obligations Absolute. The obligation of each Bank to
pay to any Letter of Credit Bank its Proportionate Share of each drawing under a
Letter of Credit issued by such Letter of Credit Bank, (less the amount thereof
repaid by the Borrowers as described above), shall be irrevocable,
unconditional, shall not be subject to any qualification or exception
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whatsoever and shall be binding in accordance with the terms and conditions of
this Agreement under all circumstances, including, without limitation, the
following circumstances:
(i) any lack of validity or enforceability of this Agreement;
(ii) the existence of any claim, set-off, defense or other
right which any Borrower or any Bank may have at any time against the
other, the Agent, any Letter of Credit Bank, any Bank or any other
Person, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transactions;
(iii) any draft or any other document presented under this
Agreement proving to be forged, fraudulent, invalid or insufficient
(except for insufficiencies that are manifest) in any respect or any
statement therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of this Agreement;
(v) the occurrence or continuance of any Default; or
(vi) any other reason not constituting gross negligence or
willful misconduct on the part of the Letter of Credit Bank issuing
such Letter of Credit.
Section 2.4 Letter of Credit Fees; Administrative Fees; Interest.
(a) Letter of Credit Fees. With respect to each Letter of Credit,
the Borrowers shall pay in advance (i) to the Agent for the account of each
Bank, a per annum fee equal to the Applicable Margin on Eurodollar Loans
multiplied by such Bank's Proportionate Share of the undrawn face amount of such
Letter of Credit, and (ii) to each Letter of Credit Bank for its own account, a
per annum fronting fee equal to 0.15% of the undrawn face amount of such Letter
of Credit.
(b) Administrative Fees. In addition to the foregoing fees payable
to the Banks, the Agent and the Letter of Credit Banks, the Borrowers shall pay
to each Letter of Credit Bank the fees specified in the applicable Reimbursement
Agreement and such other administrative fees as such Letter of Credit Bank
customarily charges in respect of letter of credit transactions, together with
all telecommunication fees and other expenses incurred by such Letter of Credit
Bank in connection with the issuance of, or any drawing under, any Letter of
Credit issued by such Letter of Credit Bank for the Borrowers' account.
(c) Interest on Reimbursement Obligations. All Reimbursement
Obligations shall bear interest from and including the date of the creation
thereof until due at the Alternate Base Rate, and thereafter, at the
Post-Maturity Rate.
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Section 2.5 Limitation of Liability With Respect To Letters of Credit.
(a) As among the Borrowers, the Banks, the Letter of Credit Banks, and the
Agent, the Borrowers assume all risks of the acts and omissions of, or misuse of
any Letter of Credit by the beneficiaries of such Letter of Credit. Without
limiting the foregoing, the Banks, the Letter of Credit Banks and the Agent
shall not be responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any draft, demand, application or other documents
submitted by any party in connection with any Letter of Credit even if
such document should in fact prove to be in any and all respects
invalid, insufficient, inaccurate, fraudulent or forged (unless
manifestly so);
(ii) the validity, genuineness or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason;
(iii) failure of the beneficiary of a Letter of Credit to
comply fully with the conditions required in order to draw upon such
Letter of Credit to the extent that the documents presented in
connection with a drawing manifestly comply with the terms of such
Letter of Credit;
(iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher;
(v) errors in interpretations of technical terms;
(vi) any loss or delay in the transmission or otherwise of any
document required to make a drawing under any Letter of Credit or with
respect to the proceeds thereof;
(vii) the misapplication by the beneficiary of a Letter of
Credit or of the proceeds of any drawing under such Letter of Credit;
or
(viii) any consequences arising from causes beyond the control
of the Banks, the Letter of Credit Banks or the Agent, including,
without limitation, any act or omission, rightfully or wrongfully, of
any present or future governmental authority.
None of the above circumstances shall affect, impair or prevent the vesting of
any of the Banks', the Letter of Credit Banks' or the Agent's rights or powers
under this Agreement.
(b) In furtherance and extension of and not in limitation of, the
specified provisions set forth above, any action taken or omitted by the Agent
or any Letter of Credit Bank under or in connection with any Letter of Credit or
any Related Documents, if taken or omitted in good faith,
13
shall not expose any Bank, any Letter of Credit Bank or the Agent to any
liability to the Borrowers or relieve any Borrower from any of its obligations
hereunder.
ARTICLE III
CONDITIONS TO EXTENSIONS OF CREDIT
Section 3.1 Conditions to the Effectiveness of this Agreement. This
Agreement shall not be effective until the occurrence of the "Effective Date,"
which shall be when the Agent has received (or, with the consent of the Letter
of Credit Banks, and the approval of the Required Banks, the Agent has waived
receipt of) each of the following, in form and substance satisfactory to the
Agent, the Banks and the Letter of Credit Banks:
(a) a certificate of the Secretary or an Assistant Secretary of
each Borrower, each Guarantor and Parent in form and substance acceptable to
Agent (i) with respect to the officers of such Persons authorized to execute and
deliver this Agreement, the Notes and the other Loan Documents to which it is a
party, to which shall be attached copies of the resolutions referred to in such
certificate and (ii) certifying that there is attached thereto an accurate and
complete copy of the certificate of incorporation (together with all amendments
thereto) and bylaws (as currently in effect) of such Person;
(b) with respect to each Borrower, each Guarantor and Parent, a
certificate of good standing issued as of a recent date by the jurisdiction of
organization of such entity;
(c) an opinion of Xxxxxxx Law Firm, P.C., counselfor the Borrowers,
the Guarantors and the Parent, dated the Closing Date, in form and substance
acceptable to Agent;
(d) the Revolving Notes, duly executed by the Borrowers and payable
to the order of each Bank;
(e) Intentionally Omitted.
(f) a certificate from the negotiating officer of each Borrower and
the Parent in the form of Schedule 3.1(f);
(g) a copy of each Governmental Approval and other consent or
approval listed on Schedule 4.2;
(h) a duly executed counterpart of this Agreement;
(i) a Consent and Ratification Agreement in form and substance
acceptable to Agent duly executed by Parent and each other Guarantor pursuant to
which such Persons shall acknowledge and consent to the making of this Agreement
and shall confirm the continued existence of, and ratify, the Existing
Guaranties and the Existing Security Documents to which
14
they respectively are parties (and any other documents previously executed and
delivered by such Persons in connection therewith);
(j) a certificate of the president or chief financial officer of
each Borrower and the Parent regarding the solvency of each Borrower and the
Parent, respectively, in the form of Schedule 3.1(j);
(k) full payment of all amounts payable by the Borrowers to the
Agent, the Banks or the Letter of Credit Banks on or before the Closing Date,
including, without limitation, all fees and expenses of Xxxxxxxxxx Xxxxxxxx LLP,
counsel for the Agent (provided, however, that if the Agent elects to submit
invoices for any such amounts after the Closing Date, the Borrowers shall remain
obligated to promptly pay same);
(l) a duly executed and completed initial Borrowing Base
Certificate;
(m) a duly executed and completed Notice of Borrowing;
(n) a duly executed Second Amendment to Master Collateral and
Intercreditor Agreement in form and substance acceptable to the Agent; and
(o) such other documents, instruments and opinions as the Agent
shall reasonably request.
It shall be a further condition to the occurrence of the Effective Date that
there shall not then exist any default or event of default under the Existing
Credit Agreement. Until the occurrence of the Effective Date, the obligations of
the Borrowers, the Agent, the Letter of Credit Banks and the Banks shall
continue to be governed by the terms of the Existing Credit Agreement.
Section 3.2 Conditions to Issuance of Letters of Credit. The obligation
of a Letter of Credit Bank to issue Letters of Credit, and the Banks' obligation
to purchase participations therein, is subject to the satisfaction of the
following conditions:
(a) The Agent shall have received prior to the issuance of any
Letter of Credit, a duly executed and completed Letter of Credit Request and
Reimbursement Agreement together with evidence satisfactory to the Agent that
the Borrowing Base, after giving effect to the issuance of such Letter of
Credit, is greater than or equal to the sum of the aggregate principal amount of
all Revolving Loans and Letter of Credit Obligations; and
(b) The Agent and the Letter of Credit Bank shall be satisfied in
all respects with all terms, actions and proceedings relating to the Letter of
Credit and Reimbursement Agreement and all transactions contemplated thereunder.
Section 3.3 Conditions to Each Extension of Credit. The obligation of
each Bank, each Letter of Credit Bank and the Agent to make each Extension of
Credit, including the initial Extension of Credit, is subject to the fulfillment
of each of the following conditions to the
15
satisfaction of the Required Banks, provided that the conditions specified in
Sections 3.3(a) and 3.3(b) shall not apply in the case of a Rollover Borrowing
made prior to an acceleration of the Obligations:
(a) each of the Representations and Warranties shall be true and
correct at and as of the time of such Extension of Credit, with and without
giving effect to such Extension of Credit and to the application of the proceeds
thereof, except those expressly stated to be made as of a particular date which
shall be true and correct as of such date;
(b) no Default shall have occurred and be continuing at the time
of such Extension of Credit, with or without giving effect to such Extension of
Credit and to the application of the proceeds thereof;
(c) receipt by the Agent of such materials as may have been
requested pursuant to Section 6.1(c);
(d) such Extension of Credit will not contravene any Applicable
Law applicable to any Bank, any Letter of Credit Bank or the Agent; and
(e) all legal matters incident to such Extension of Credit and
the other transactions contemplated by this Agreement shall be reasonably
satisfactory to counsel for the Agent.
Each Notice of Borrowing under Section 1.2 and each request for the
issuance of a Letter of Credit under Section 2.2 shall constitute a
representation and warranty by the Borrowers, made as of the time of the making
of such Extension of Credit, that the conditions specified in clauses (a) and
(b) have been fulfilled as of such time, unless a notice to the contrary
specifically captioned "Disclosure Statement" is received by the Agent from the
Borrowers prior to 2:00 p.m. (Chicago time) on the Business Day preceding the
date of the requested Extension of Credit. To the extent that the Required Banks
agree to make any Extension of Credit after receipt of a Disclosure Statement in
accordance with the preceding sentence, the representations and warranties
pursuant to the preceding sentence will be deemed made as modified by the
contents of such statement and repeated at the time of the making of such
Extension of Credit as so modified. Any such modification shall be effective
only for the occasion on which the Required Banks elect to make such Extension
of Credit, and unless expressly agreed by the Required Banks in writing to the
contrary as provided in Section 11.5, shall not be deemed a waiver or
modification of any condition to any future Extension of Credit.
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ARTICLE IV
CERTAIN REPRESENTATIONS AND WARRANTIES OF BORROWERS
In order to induce the Banks, the Letter of Credit Banks and the Agent
to enter into this Agreement and to make each Extension of Credit, the Borrowers
jointly and severally represent and warrant as follows:
Section 4.1 Organization; Power; Qualification; Subsidiaries. The
Parent and each Borrower are corporations duly organized, validly existing and
in good standing under the laws of their respective jurisdictions of
incorporation, have the corporate power and authority to own their respective
properties and to carry on their respective businesses as now being and proposed
to be conducted hereafter and are duly qualified and are in good standing, and
are authorized to do business, in all jurisdictions in which the character of
their properties or the nature of their businesses requires such qualification
or authorization, except for qualifications and authorizations the lack of
which, singly or in the aggregate, has not had and is not reasonably likely to
have a Materially Adverse Effect upon the Parent and the Borrowers, taken as a
whole. The Parent has no Subsidiaries except the Borrowers and such other
subsidiaries as may be listed from time to time on Schedule 4.1. The Parent owns
100% of the outstanding Capital Securities of the Borrowers and has the
unrestricted right to vote, and (subject to limitations imposed by Applicable
Law and Permitted Restrictive Covenants) to receive dividends and distributions
on, all of the issued and outstanding shares of the Capital Securities of the
Borrowers, and all such shares of Capital Securities have been duly authorized
and issued and are fully paid and nonassessable. The Borrowers have no
Subsidiaries. Schedule 4.1 lists all jurisdictions for each Borrower and the
Parent, wherein such Person is qualified as a foreign corporation transacting
business within such jurisdiction.
Section 4.2 Authorization and Compliance of Agreement, Notes and
Extensions of Credit. The Parent and each of the Borrowers have the corporate
power, and have taken all necessary corporate (including stockholder, if
necessary) action to authorize it, to execute, deliver and perform this
Agreement and each of the other Loan Documents to which it is a party in
accordance with the terms thereof, to borrow hereunder, to request the issuance
of Letters of Credit hereunder and to incur its other obligations under this
Agreement and each of the other Loan Documents to which it is a party. Each of
this Agreement and the other Loan Documents has been duly executed and delivered
by the Parent and each Borrower to the extent that it is party thereto, and
constitutes the legal, valid and binding obligation of such Person, enforceable
against such Person in accordance with its terms. The execution, delivery and
performance of this Agreement and the other Loan Documents by the Parent and
each Borrower in accordance with their terms, and the incurrence of Obligations
thereunder, do not and will not (a) require (i) any Governmental Approval, (ii)
any consent or approval of the stockholders of the Parent or any Borrower or
(iii) any consent or approval of any other Person, that has not been obtained
and is not listed on, and a copy (certified in the case of Governmental
Approvals) of which is not attached to Schedule 4.2, (b) violate or conflict
with, result in a breach of, or constitute a default under, (i) any Contract to
which the Parent or any Borrower is a party or by which either of them
17
or any of their properties may be bound, except as described on Schedule 4.2 or
(ii) any Applicable Law, or (c) result in, or require the creation of, any Lien
upon any assets of the Parent or any Borrower other than Liens created under
this Agreement and the other Loan Documents in favor of the Collateral Agent or
the Agent for the benefit of the Banks, the Letter of Credit Banks and the
Agent.
Section 4.3 Litigation. Except as set forth on Schedule 4.3, there are
not, in any court or before any arbitrator of any kind or before or by any
governmental or nongovernmental body, any actions, suits or proceedings, pending
or threatened (nor, to the knowledge of the Parent or either Borrower, is there
any basis therefor) against or in any other way relating to or affecting (a) the
Parent or either Borrower or the business or any property of the Parent or
either Borrower, except actions, suits or proceedings that, if adversely
determined, would not, singly or in the aggregate, have a Materially Adverse
Effect on the Parent and the Borrowers, taken as a whole, or (b) this Agreement
or any other Loan Document.
Section 4.4 Burdensome Provisions. Except as described on Schedule 4.4,
neither the Parent nor any Borrower is a party to or bound by any Contract or
Applicable Law that could have a Materially Adverse Effect on (i) the Parent and
the Borrowers, taken as a whole, or (ii) this Agreement or any of the other Loan
Documents.
Section 4.5 No Adverse Change or Event. Since December 31, 1998, no
change in the business, assets, liabilities, financial condition, results of
operations or business prospects of the Parent or any Borrower has occurred, and
no event has occurred or failed to occur, that has had or reasonably could be
expected to have, either alone or in conjunction with all other such changes,
events and failures, a Materially Adverse Effect on (i) the Parent and the
Borrowers, taken as a whole, or (ii) this Agreement or any other Loan Document.
In determining whether an adverse change has occurred, it is understood that
such an adverse change may have occurred, and such an event may have occurred or
failed to occur, at any particular time notwithstanding the fact that at such
time no Default shall have occurred and be continuing. If a fact or circumstance
disclosed in the financial statements referred to in Section 6.2(a) or a
Disclosure Statement, or if an action, suit or proceeding disclosed in Schedule
4.3, should in the future have, or appear reasonably likely to have, a
Materially Adverse Effect upon the Parent and the Borrowers, taken as a whole,
or upon this Agreement, or any other Loan Document, such Materially Adverse
Effect shall be a change or event subject to Section 4.5 notwithstanding such
disclosure.
Section 4.6 No Adverse Fact. No fact or circumstance is known to the
Parent or any Borrower, as of the Effective Date, that, either alone or in
conjunction with all other such facts and circumstances, has had or reasonably
could be expected in the future to have a Materially Adverse Effect upon the
Parent and the Borrowers, taken as a whole, or on this Agreement or any other
Loan Document, that has not been set forth or referred to in the financial
statements referred to in Section 6.2(a) or in a writing specifically captioned
"Disclosure Statement" and delivered to the Agent prior to the date of execution
of this Agreement by the Agent.
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Section 4.7 Title to Properties. The Parent and each Borrower has title
to its respective properties reflected on the financial statements delivered
from time to time under Section 6.1(a) and (b), subject to no Liens or adverse
claims except as disclosed thereon and except for Permitted Liens.
Section 4.8 Environmental Matters. All of the operations of the Parent
and each Borrower are (a) in material compliance with the requirements of all
Environmental Laws and (b) not the subject of any federal, state or local
investigation evaluating whether any remedial action is needed to respond to a
release of any Hazardous Material into the environment or the work place or the
use of any such substance in any of its operations, which noncompliance or
remedial action could have a Materially Adverse Effect on the Parent and the
Borrowers, taken as a whole, or on the Loan Documents.
Section 4.9 Debt. All agreements at the Agreement Date, relating to
Debt of the Parent or any Borrower or commitments or agreements to permit the
Parent or any Borrower to incur Debt (other than under any Loan Document as
amended from time to time) are described on Schedule 4.9.
Section 4.10 Patents, Trademarks, Etc. The Parent and each Borrower
owns, or is licensed or otherwise has the lawful right to use, all Patents used
in or necessary for the conduct of its business as currently conducted. To the
best of each Borrower's knowledge, the use of such Patents by the Parent or any
Borrower using or requiring the same, does not infringe on the rights of any
Person, subject to such claims and infringements as do not, in the aggregate,
give rise to any liability that is material to the Parent and the Borrowers,
taken as a whole.
Section 4.11 Solvency. (i) The Parent and each Borrower have each
received fair consideration and reasonably equivalent value for the incurrence
of its obligations hereunder and under the Loan Documents, (ii) after giving
effect to the incurrence of such obligations, (A) the present fair salable value
of the Parent's and each Borrower's assets exceeds its liabilities, and (B) the
Parent and each Borrower each retain sufficient capital to meet the reasonably
anticipated needs and risks of its ongoing business, and (iii) after giving
effect to the incurrence of such obligations and the acquisition of such rights,
(A) neither the Parent nor any Borrower has incurred, nor is it obligated for,
debts beyond its ability to pay such debts as they mature, and (B) the present
fair salable value of its assets is greater than that needed to pay its probable
existing debts as they become due.
Section 4.12 The Questionnaires. The informational questionnaires
completed by the Parent and the Borrowers and attached hereto as Schedule 4.12-1
and Schedule 4.12-2, respectively, are true, correct and complete in all
respects.
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ARTICLE V
COVENANTS
So long as (i) any Letter of Credit Obligation is outstanding or (ii)
any Loan, indebtedness or other obligation is outstanding under this Agreement
or any Loan Document or (iii) any Commitment shall remain in effect or the
Banks, any Letter of Credit Bank or the Agent shall have any obligation to make
any Extension of Credit:
A. The Parent and the Borrowers and each other Subsidiary shall:
Section 5.1 Preservation of Existence and Properties, Scope of
Business, Compliance with Law, Payment of Taxes and Claims. (i) Preserve and
maintain its corporate existence and all of its other franchises, licenses,
rights and privileges, (ii) preserve, protect and obtain all Patents, and
preserve and maintain in good repair, working order and condition all other
property, required for the conduct of its business, (iii) engage only in the
business of transporting freight, (iv) comply with all Applicable Laws, (v) pay
or discharge when due all Taxes owing by it or imposed upon its property (for
the purposes of this clause, such Taxes shall be deemed to be due on the date
after which they become delinquent), and all Liabilities that might become a
Lien on any of its properties (other than any Tax or Liability to the extent
secured by a Permitted Lien or, in the case of any Tax not secured by a Lien, to
the extent such Tax is being contested in good faith by appropriate proceedings
and the Parent and/or the Borrowers have set aside adequate reserves on its
books in accordance with Generally Accepted Accounting Principles), and (vi)
take all action and obtain all consents and Governmental Approvals required so
that its obligations hereunder will at all times be valid, binding and
enforceable in accordance with their respective terms, except that this Section
(other than clause (i), insofar as it requires the Parent, each Borrower and the
other Subsidiaries to preserve their corporate existence, and clauses (iii) and
(v)) shall not apply in any circumstance where noncompliance, together with all
other noncompliances, will not have a Materially Adverse Effect on (A) the
Parent, the Borrowers and the other Subsidiaries, taken as a whole, or (B) this
Agreement or the other Loan Documents.
Section 5.2 Insurance. Maintain, with Acceptable Insurers, insurance
with respect to its properties and business against such casualties and
contingencies, of such types and in such amounts as is customary in the case of
corporations of established reputations engaged in the same or a similar
business and similarly situated.
Section 5.3 Use of Proceeds. Use (i) the proceeds of any Revolving Loan
only to refinance the Debt listed on part A of Schedule 4.9, for working capital
purposes, the issuance of standby letters of credit permitted hereunder, to pay
costs associated with this Agreement and the other Loan Documents, for financing
or refinancing Revenue Equipment, for non-hostile acquisitions and for general
corporate purposes. No Extension of Credit and none of the proceeds thereof
shall be used to purchase or carry, or to reduce or retire or refinance any
credit
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incurred to purchase or carry, any margin stock (within the meaning of
Regulations U and X) or to extend credit to others for the purpose of purchasing
or carrying any margin stock. If requested by the Agent, the Borrowers will
furnish to the Agent statements in conformity with the requirements of Federal
Reserve Form U1 referred to in Regulation U and will take all other action
necessary or desirable to ensure that the Banks and the Extensions of Credit are
at all times in compliance with Regulations U and X.
B. The Parent shall not, nor shall any Borrower or any other
Subsidiary, at any time directly or indirectly:
Section 5.4 Guaranties. Become or remain liable with respect to
any Guaranty except that this Section 5.4 shall not apply to Permitted
Guaranties.
Section 5.5 Liens. Create, assume or incur, or permit or suffer to
exist or to be created, assumed or incurred, any Lien upon any of its properties
or assets of any character, whether now owned or hereafter acquired, or upon any
income or profits therefrom, except that this Section 5.5 shall not apply to
Permitted Liens; provided, however, that if, notwithstanding this Section 5.5,
any Lien to which this Section 5.5 is applicable shall be created or arise, all
Obligations shall automatically be secured by such Lien equally and ratably with
the other Debt secured thereby, and the holder of such other Debt, by accepting
such Lien, shall be deemed to have agreed thereto and to share with the Banks,
the Letter of Credit Banks and the Agent on that basis, the proceeds of such
Lien, whether or not the Banks' Lien shall be perfected, provided further,
however, that notwithstanding such equal and ratable securing and sharing, the
existence of such Lien shall constitute a default in the performance or
observance of this Section 5.5.
Section 5.6 Merger, Consolidation, Acquisitions and Disposition of
Assets. (i) Merge or consolidate with any Person, (ii) purchase, lease or
otherwise acquire for cash, stock or other consideration all or any substantial
portion of the assets of any other Person, if the consideration paid (whether in
the form of cash payment, stock or securities issued, liability assumed or
otherwise) in connection with all such purchases, leases or acquisitions, or any
series of related purchases, leases or acquisitions, shall exceed in any fiscal
year of the Parent, 20% of the total assets of the Parent and its Consolidated
Subsidiaries as such assets appear on the audited year-end financial statements
for the Parent and its Consolidated Subsidiaries for the then most recently
completed fiscal year of the Parent (and no such acquisition shall be allowed
unless the Parent, taking into consideration such acquisition, demonstrates pro
forma compliance with the financial covenants herein), or (iii) sell, lease,
transfer or otherwise dispose of any assets, except that this Section 5.6 shall
not apply to (A) the creation of a Permitted Lien, (B) any purchase or
disposition of assets in the ordinary course of business, (C) any disposition of
Revenue Equipment, so long as the proceeds of such disposition are used for the
purchase of replacements of such equipment or for the repayment of the
Obligations, or (D) the disposition of any obsolete or retired property (other
than dispositions of Revenue Equipment permitted under (C) above) not used or
useful in its business, the book value of which obsolete or retired property,
singly or when aggregated with all other such assets sold over the immediately
preceding twelve month period, does not exceed $10,000,000.
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Section 5.7 Transactions with Affiliates. Effect any transaction with
any Affiliate on a basis less favorable to the Parent, any Borrower or any other
Subsidiary, as the case may be, than would at the time be available to an
unrelated third party for a comparable transaction in armslength dealing.
Section 5.8 Taxes of Other Persons. (i) File a consolidated tax return
with any other Person other than the Parent and its Consolidated Subsidiaries,
or (ii) except as required by Applicable Law, pay any Taxes owing by any Person
other than the Parent and its Consolidated Subsidiaries.
Section 5.9 Limitation on Restrictive Covenants. Enter into any
Contract, other than this Agreement and the other Loan Documents, or otherwise
create or cause or permit to exist or become effective any consensual
restriction, (i) purporting to restrict (whether by covenant, event of default
or otherwise) any Borrower or any other Subsidiary from (A) paying dividends or
making any other distributions on shares of its capital stock held by the Parent
or any Subsidiary, (B) paying any obligation owed to any Borrower or any other
Subsidiary, (C) making any loan or advance to or investment in the Parent, any
Borrower or any other Subsidiary, or (D) transferring any of its property or
assets to the Parent or any Borrower or any other Subsidiary, or (ii) purporting
to restrict the Parent, any Borrower or any other Subsidiary from creating any
Lien upon its property or assets whether now owned or hereafter acquired or upon
any income or profits therefrom, except in each case ((i) and (ii)) for
Permitted Restricted Covenants.
Section 5.10 Issuance or Disposition of Capital Securities. Issue any
of its Capital Securities or sell, transfer or otherwise dispose of any Capital
Securities of any Borrower or any other Subsidiary, except that this Section
5.10 shall not apply to the issuance of common stock of the Parent in connection
with any public offering or private sale or the issuance of Capital Securities
of the Parent to employees, officers or directors under incentive stock
arrangements, provided that the Parent and the Borrowers shall, prior to a
public offering or private sale, renegotiate the financial covenants contained
herein to reflect the effects of such issuance in a manner satisfactory to the
Agent and the Banks.
Section 5.11 Permitted Debt. Create, incur, assume or suffer to
exist any Debt, other than:
(a) Debt arising under this Agreement or the other Loan Documents
(including up to $10,000,000 of Letters of Credit issued under this Agreement);
(b) Intercompany Debt so long as it is subordinated to the
Obligations;
(c) Debt in respect of Interest Rate Contracts and Fuel Contracts
in notional amounts not to exceed at any time 75% of the Commitments in the
aggregate;
(d) Any Debt listed on Schedule 4.9 hereto.
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(e) Purchase Money Debt incurred in connection with the financing
of equipment in an amount not to exceed at any time outstanding $25,000,000;
(f) Up to $5,000,000 in the aggregate of other unsecured Debt
(including any standby letters of credit that are not issued under this
Agreement); and
(g) Other Debt consented to in writing in advance by the Agent and
the Required Banks.
Section 5.12 Minimum Consolidated Tangible Net Worth. Permit
Consolidated Tangible Net Worth at any date to be less than $120,000,000 plus
the aggregate of 75% of positive Consolidated Net Income for each fiscal quarter
commencing after December 31, 1998 (provided that, for any fiscal quarter in
which Consolidated Net Income is a deficit figure, Consolidated Net Income for
such fiscal quarter shall be deemed to be zero), plus the net proceeds of any
issuance of Capital Securities of the Parent.
Section 5.13 Consolidated Adjusted Debt to Consolidated EBITDAR. Permit
the ratio of Consolidated Adjusted Debt to Consolidated EBITDAR, as determined
at the end of each fiscal quarter or year and based on the consecutive
four-quarter period ending therewith, to exceed 3.0 to 1.0.
Section 5.14 Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio to be less than 1.25:1.
Section 5.15 Restricted Payments.
(a) Generally. Declare or make any Restricted Payment, except that
this Section 5.15 shall not prohibit any Restricted Payment if: (i) at the time
of the declaration or making thereof, and immediately after giving effect
thereto, no Default would exist, and (ii) such Restricted Payment, singly or
when aggregated with all other Restricted Payments made over the term of this
Agreement, does not exceed the sum of $1,000,000 plus 25% of the aggregate of
Consolidated Net Income for each fiscal quarter commencing after December 31,
1998 (provided that such aggregate Consolidated Net Income shall be reduced by
100% of any deficit for any period in which Consolidated Net Income is a deficit
figure).
Section 5.16 Environmental Matters. Fail to (i) use and operate all of
its facilities and properties in material compliance with all Environmental
Laws, (ii) keep all necessary permits, approvals, certificates, licenses and
authorizations relating to environmental matters in effect and remain in
material compliance therewith, and (iii) handle all Hazardous Materials in
material compliance with all applicable Environmental Laws. In addition, the
Borrowers shall:
(a) immediately notify the Agent and provide copies upon receipt
of all written claims, complaints or notices (excluding routine fee or schedule
notices) relating to compliance with, and liabilities or obligations under,
Environmental Laws or related common law theories with respect to its facilities
or properties and shall promptly cure and have dismissed with
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prejudice to the satisfaction of the Required Banks any actions or proceedings
relating to compliance with Environmental Laws; and
(b) provide such information and certifications that the Agent
may reasonably request from time to time to evidence compliance with this
Section 5.16.
Section 5.17 Limitations on Investments, Loans and Advances. Make any
advance, loan or other extension of credit to, or equity or other investment in,
any Person, except that, so long as at the time of such transaction, and
immediately after giving effect thereto, no Default would exist:
(a) (i) the Parent and/or any other Subsidiary make payments to or
equity investments in any Borrower, and (ii) the Parent and/or any other
Subsidiary may make loans, advances, or other extensions of credit to any
Borrower, provided that any loan to any Borrower shall be subordinated to the
payment of the Obligations on terms satisfactory to the Required Banks;
(b) the Parent, any Borrower or any other Subsidiary may create
and hold receivables owing to it, if such receivables are created in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms (provided that nothing in this clause (b) shall prevent
the Parent, any Borrower or any other Subsidiary from offering such
concessionary trade terms in accordance with past practice, as management deems
reasonable in the circumstances);
(c) the Parent, any Borrower and any other Subsidiary may acquire
and hold any of the following to the extent specified below:
(i) commercial paper rated "P-1" or higher by Xxxxx'x
Investors Service ("Moody's") or "A-1" or higher by Standard and Poor's
Corporation ("S&P's") or has been given an equivalent rating by another
nationally recognized statistical rating agency;
(ii) certificates of deposit of, or demand or time deposits
in, any Bank;
(iii) deposit, disbursement or payroll accounts of the Parent
with banks acceptable to the Agent and the Required Banks, subject to
such limits as the Agent and the Required Banks shall require;
(iv) demand deposits constituting collection accounts or
concentration accounts of the Borrowers in any Bank or in other
domestic banks that are insured by the Federal Deposit Insurance
Corporation, have combined capital and surplus in excess of
$1,000,000,000 and whose (or whose parent company's) publicly held debt
securities, if any, meet the standards set forth in item (i) above; and
(v) demand, disbursement or time deposits of any Borrower in
LaSalle National Bank.
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Section 5.18 Additional Subsidiaries. Create or acquire any Subsidiary;
provided that, if notwithstanding this Section the Parent or any Borrower shall
acquire or create any Subsidiary, it shall immediately cause such Subsidiary to
guarantee the Obligations hereunder and, if required pursuant to Section 5.21,
to become a party to the Security Agreement and to pledge its assets, in each
case, to secure the Obligations. If required pursuant to Section 5.21, the
Parent or any Borrower, as the case may be, shall immediately pledge, or cause
to be pledged, 100% of the capital stock of such Subsidiary to the Agent for the
equal and ratable benefit of the Banks, the Letter of Credit Banks and the
Agent, to secure the Obligations.
C. Each Borrower shall:
Section 5.19 Trade Payables. Pay its trade payables in the ordinary
course of its business consistent with past practice and industry practice,
subject however, to the Parent's, any Borrower's or any other Subsidiary's right
to dispute items in good faith.
Section 5.20 Interest Rate Agreements. Each Borrower shall from time to
time enter into such Interest Rate Agreements as shall be reasonably required by
the Agent.
Section 5.21 Security for Obligations. Following an Event of Default
specified in Section 7.1(f), or at the request of the Required Banks following
the occurrence of any Event of Default (other than one specified in Section
7.1(f)), the Parent, each Borrower and each other Subsidiary will take such
steps as the Agent or the Required Banks shall require to grant to the
Collateral Agent, for the ratable benefit of the Banks, the Letter of Credit
Banks and the Agent, a first lien on and security interest in all Accounts
(including intercompany accounts), equipment leases, trademarks, trade names and
other intellectual property, Revenue Equipment and any general intangibles
relating to any of the foregoing, owned by the Parent, any Borrower or any other
Subsidiary except such Revenue Equipment as shall exist on the Agreement Date
and be encumbered by liens permitted hereunder and such Revenue Equipment as
shall be acquired hereafter and shall be encumbered by liens securing Purchase
Money Debt that is permitted hereunder, and the Parent shall pledge all equity
interests in each Borrower and each other Subsidiary, in each case, to secure
the Obligations. In furtherance thereof, each Borrower and the Parent have
executed and delivered to the Collateral Agent the Security Documents, which
Security Documents shall be held in escrow by the Collateral Agent until such
time as the Agent or the Collateral Agent shall notify the Parent and the
Borrowers that they are required to pledge to the Collateral Agent the
collateral described therein (the "Collateral") to secure the Obligations,
whereupon such Security Documents shall immediately and forever thereafter
(notwithstanding any subsequent curing of any Event of Default) be deemed
effective. Upon such Event of Default the Collateral Agent, on behalf of the
Banks and the Letter of Credit Banks, shall be entitled to make any and all
necessary or desirable filings to perfect its rights under such documents and to
exercise any and all rights and remedies provided therein, and each Borrower
shall immediately deliver or cause to be delivered to the Collateral Agent
certificates of title for any and all Revenue Equipment required to be pledged
by the Parent, any Borrower or any other Subsidiary hereunder and shall take
such other steps as the Collateral Agent shall reasonably require to perfect its
interest in the Collateral. Each Borrower and the Parent hereby
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acknowledge that, in the event of any default by any Borrower or the Parent in
respect of their respective covenants and obligations in this Section 5.21, the
Agent, the Collateral Agent, the Banks and the Letter of Credit Banks shall be
permitted to pursue any and all rights and remedies available under this
Agreement and the other Loan Documents, or otherwise available at law or in
equity, including without limitation the right to xxx for specific performance
of the obligations of the Borrowers and the Parent under this Section 5.21. In
the event that the Collateral Agent desires to resign from its position under
the Intercreditor Agreement, or if the Intercreditor Agreement is terminated or
the obligations represented by the Senior Notes are extinguished, the Collateral
Agent shall be entitled to assign all of its duties and responsibilities to the
Agent with respect to the Loan Documents (including the Security Documents) and
the Collateral. Should the Agent succeed to the Collateral Agent's
responsibilities with respect to the Loan Documents (including the Security
Documents) and the Collateral, the Agent shall be entitled to all benefits and
rights afforded to the Collateral Agent under the Loan Documents.
ARTICLE VI
INFORMATION
Section 6.1 Financial Statements and Information to be Furnished. So
long as (i) any Loan or Letter of Credit Obligation is outstanding or (ii) any
other indebtedness or obligation is outstanding under this Agreement or any of
the other Loan Documents or (iii) the Banks, the Letter of Credit Banks or the
Agent shall have any Commitment or any obligation to make an Extension of
Credit, the Borrowers shall furnish to each Bank, at its Base Rate Lending
Office, to the Agent, at the Agent's Office, and to each Letter of Credit Bank
(if it is not also a Bank), at the address specified pursuant to Section 11.1:
(a) As soon as available and in any event within 50 days after the
close of each quarterly accounting period in each fiscal year of the Parent:
(i) consolidated and consolidating balance sheets of the
Parent and its Consolidated Subsidiaries as at the end of such
quarterly period and the related consolidated and consolidating
statements of income, shareholders' equity and cash flows of the Parent
and its Consolidated Subsidiaries for such quarterly period and the
elapsed portion of the fiscal year ended with the last day of such
quarterly period, setting forth in each case in comparative form the
figures for the corresponding periods of the previous fiscal year; and
(ii) a certificate with respect thereto of the president or
chief financial officer of the Parent in the form of Schedule 6.1(a).
(b) As soon as available and in any event within 100 days after
the end of each fiscal year of the Parent:
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(i) consolidated and consolidating balance sheets of the
Parent and its Consolidated Subsidiaries as at the end of such fiscal
year and the related consolidated and consolidating statements of
earnings, shareholders' equity and cash flows of the Parent and its
Consolidated Subsidiaries for such fiscal year, setting forth in
comparative form the figures as at the end of and for the previous
fiscal year;
(ii) a report on the financial statements of the Parent by
Price Waterhouse Coopers, or other independent certified public
accountants of recognized standing satisfactory to the Required Banks,
which report shall be unqualified as to scope of audit and shall state
that, based upon an audit conducted in accordance with generally
accepted auditing standards, such consolidated financial statements
present fairly, in all material respects, the consolidated financial
condition of the Parent and its Consolidated Subsidiaries as at the end
of such fiscal year, and the consolidated earnings, shareholders'
equity and cash flows of the Parent and its Consolidated Subsidiaries,
as the case may be, for such fiscal year in accordance with Generally
Accepted Accounting Principles consistently applied since the date of
the financial statements referred to in Section 6.2(a);
(iii) a certificate of such accountants, addressed to and in
form and substance satisfactory to, the Agent and the Banks (A)
confirming that (1) the Parent and the Borrowers are authorized to
deliver the report referred to in clause (ii) to the Banks pursuant to
this Agreement and (2) it is their understanding that the Banks are
relying on such report and such certificate, and (B) stating that they
have caused this Agreement and the other Loan Documents to be reviewed
and that, in making the examination necessary for their report on such
consolidated financial statements, nothing came to their attention that
caused them to believe that, as of the date of such financial
statements, any Default exists or, if such is not the case, specifying
such Default and its nature, when it occurred and whether it is
continuing; and
(iv) a certificate of the president or chief financial officer
of the Parent, in the form of Schedule 6.1(b).
(c) (i) Promptly upon receipt thereof, copies of any management letters
submitted to the Parent or any Borrower, or the Board of Directors of
the Parent or any Borrower, by its independent certified public
accountants;
(ii) Promptly upon the sending thereof, copies of all notices,
reports and other communications from the Parent or any Borrower to any
of its shareholders, lenders or securities holders (other than the
Parent) or to the United States Securities and Exchange Commission;
(iii) On the date not later than 100 days after the close of
each fiscal year, projections of the Parent's performance for each of
the next three fiscal years, with such projections prepared on an
annual basis, and otherwise prepared in such detail as is consistent
with the Borrowers' practices as in effect on the Agreement Date. Such
projections shall be accompanied by a certificate of the president or
chief financial officer
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of the Parent to the effect that the projections were prepared based on
the best assumptions currently availabl to management and that such
assumptions are reasonable based on the Parent's historical
performance. Such projections shall also be accompanied by a
management commentary thereon including a discussion of any changes
therein from the previous projections;
(iv) Promptly upon its becoming aware thereof, notice of each
federal statutory Lien, tax or other state or local government Lien or
other Lien filed against any property of the Parent or any of its
Subsidiaries;
(v) On the fifteenth day of each calendar month, a duly
completed Monthly Borrowing Base Certificate as at the close of the
last Business Day of the preceding month in the form of Schedule
6.1(c)(v), duly executed by the chief financial officer of the
Borrowers;
(vi) On the date specified therefore, such other reports,
certificates, opinions and documents as are required under the other
Loan Documents; and
(vii) From time to time and upon request, such data,
certificates, reports, statements, opinions of counsel, documents or
further information as any Bank, any Letter of Credit Bank or the Agent
may reasonably request.
(d) Notice of Defaults, Litigation and Other Matters. Prompt
notice of: (i) any Default; (ii) any change or event referred to in Section 4.5;
(iii) any event or condition referred to in clauses (i) through and including
(vii) of Section 7.1(h), whether or not such event or condition shall constitute
an Event of Default; (iv) the commencement of any action, suit or proceeding or
investigation in any court or before any arbitrator of any kind or by or before
any governmental or nongovernmental body against or in any other way relating
adversely to or affecting (A) the Parent, the Borrowers or any other Subsidiary
or any of their businesses or properties, that, if adversely determined, might,
singly or in the aggregate, have a Materially Adverse Effect on the Parent and
its Consolidated Subsidiaries, taken as a whole, or (B) this Agreement, the
other Loan Documents, or any transaction contemplated hereby or thereby; and (v)
any amendment of the certificate of incorporation or bylaws of the Parent, the
Borrowers or any other Subsidiary.
(e) Pro Forma Financials for Acquisitions. Prior to consummating
any acquisition, financial statements for the Parent and its Consolidated
Subsidiaries adjusted to reflect such acquisition and demonstrating pro forma
compliance with all financial covenants herein.
Section 6.2 Accuracy of Financial Statements and Information.
(a) Historical Financial Statements. The Borrowers hereby
represent and warrant to the Banks, the Letter of Credit Banks and the Agent:
(i) that the financial statements listed on Schedule 6.2 are complete and
correct and present fairly, in accordance with Generally Accepted Accounting
Principles consistently applied throughout the periods involved, the
consolidated
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financial position of the Parent and its Consolidated Subsidiaries as at their
respective dates and the consolidated earnings, shareholders' equity and cash
flows of the Parent and its Consolidated Subsidiaries for the respective periods
to which such statements relate (except in the case of unaudited interim
financial statements for the absence of footnotes and normally recurring
year-end adjustments), and (ii) that, except as disclosed or reflected in such
financial statements or in Schedule 4.3, as at December 31, 1998, neither the
Parent nor any of its Consolidated Subsidiaries has any liabilities, contingent
or otherwise, nor any unrealized or anticipated losses, that, singly or in the
aggregate, have had or might have a Materially Adverse Effect on the Parent and
its Consolidated Subsidiaries, taken as a whole.
(b) Future Financial Statements. All financial statements
delivered pursuant to Section 6.1(a) or (b) shall be complete and correct and
present fairly, in accordance with Generally Accepted Accounting Principles
consistently applied, the consolidated financial position of the Parent and its
Consolidated Subsidiaries, as at their respective dates and the consolidated
earnings, shareholders' equity, and consolidated cash flows of the Parent and
its Consolidated Subsidiaries for the respective periods to which such
statements relate (subject, in the case of the financial statements delivered
pursuant to Section 6.1(a), to the absence of footnotes and normally recurring
year-end adjustments), and the furnishing of the same to the Banks shall
constitute a representation and warranty by the Borrowers made on the date the
same are furnished to the Banks to that effect and to the further effect that,
except as disclosed or reflected in such financial statements, as at the
respective dates thereof, neither the Parent nor any of its Consolidated
Subsidiaries had any liability, contingent or otherwise, nor any unrealized or
anticipated loss, that, singly or in the aggregate, has had or might have a
Materially Adverse Effect on the Parent and its Consolidated Subsidiaries, taken
as a whole.
(c) Historical Information. Each Borrower hereby represents and
warrants to the Banks, the Letter of Credit Banks and the Agent that all
Information furnished to the Banks, the Letter of Credit Banks or the Agent by
or on behalf of the Parent or any Borrower prior to the Effective Date in
connection with or pursuant to this Agreement and the relationship established
hereunder, at the time the same was so furnished, but in the case of Information
dated as of a prior date, as of such date, (i) in the case of any such
Information prepared in the ordinary course of business, was complete and
correct in the light of the purpose prepared, and, in the case of any such
Information the preparation of which was requested by the Agent or the Banks,
was complete and correct in all material respects to the extent necessary to
give true and accurate knowledge of the subject matter thereof, and (ii) did not
contain any untrue statement of a material fact; except to the extent that the
Parent or any Borrower has notified the Agent in writing prior to the Agreement
Date in a notice captioned "Disclosure Statement".
(d) Future Information. All Information furnished to the Banks,
the Letter of Credit Banks or the Agent by or on behalf of the Parent, any
Borrower or any other Subsidiary on and after the Agreement Date in connection
with or pursuant to this Agreement or any other Loan Document or in connection
with or pursuant to any amendment or modification of, or waiver under, this
Agreement or any other Loan Document, shall, at the time the same is so
furnished, but in the case of Information dated as of a prior date, as of such
date, (i) in the case of any such prepared in the ordinary course of business,
be complete and correct in the light of the purpose
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prepared, and, in the case of any such Information required by the terms of this
Agreement or the preparation of which was requested by the Banks, the Letter of
Credit Banks or the Agent, be complete and correct in all material respects to
the extent necessary to give true and accurate knowledge of the subject matter
thereof, and (ii) not contain any untrue statement of a material fact, and the
furnishing of the same to the Banks, the Letter of Credit Banks or the Agent
shall constitute a representation and warranty by the Borrowers made on the date
the same are so furnished to the effect specified in clauses (i) and (ii).
(e) Change in Fiscal Year. Neither the Parent nor any Borrower or
any other Subsidiary shall change its fiscal year.
Section 6.3 Additional Covenants Relating to Disclosure. From the
Effective Date and until the Termination Date, the Parent and each Borrower
shall and shall cause each other Subsidiary to:
(a) Accounting Methods and Financial Records. Maintain a system of
accounting, and keep such books, records and accounts (which shall be true and
complete), as may be required or necessary to permit (i) the preparation of
financial statements required to be delivered pursuant to Section 6.1(a) and
(b), and (ii) the determination of the Parent's, each Borrower's and each other
Subsidiary's compliance with the terms of this Agreement and the other Loan
Documents.
(b) Visits and Inspections. Permit representatives (whether or not
officers or employees) of the Agent, the Banks or the Letter of Credit Banks,
from time to time, as often as may be reasonably requested, but only during
normal business hours, to (i) visit and inspect any of the properties of the
Parent, any Borrower or any other Subsidiary, (ii) inspect and make extracts
from their books and records, including but not limited to management letters
prepared by the Parent's independent accountants, (iii) discuss with their
principal officers, and their independent accountants, their respective
businesses, assets, liabilities, financial condition, results of operations and
business prospects and (iv) audit and inspect any Collateral and the premises
upon which any Collateral is located, verify the amount, quality, quantity,
value and condition of, or any other matter relating to, any Collateral. In the
event that any Collateral is under the exclusive control of any third party, the
Borrowers shall cause such parties to make such inspection rights available to
the Agent.
ARTICLE VII
DEFAULT
Section 7.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary, or within or without the control of the Parent, any
Borrower or any other Subsidiary, or be effected by operation of law or pursuant
to any judgment or order of any court or any order, rule or regulation of any
governmental or quasi-governmental body:
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(a) Any amount payable pursuant to this Agreement, the Notes or
any other Loan Document shall not be paid when and as due (whether at maturity,
by reason of notice of prepayment, acceleration or otherwise) in accordance with
the terms of this Agreement, such Note or such other Loan Document;
(b) Any Representation and Warranty shall at any time prove to have
been incorrect or misleading in any material respect when made;
(c) Any Borrower shall default in the performance or observance of:
(i) any term, covenant, condition or agreement contained in
Section 5.1(i) (insofar as such section requires the preservation of
the corporate existence of such Borrower), Section 5.4 through Section
5.22, or Section 6.1(c)(vii), Section 6.1(d), or Section 6.2(e) or
Section 6.3(b); or
(ii) any term, covenant, condition or agreement contained in
this Agreement or any other Loan Document (other than a term, covenant,
condition or agreement a default in the performance or observance of
which is elsewhere in this section specifically dealt with) and such
default shall continue unremedied for a period of 30 days after any
officer of the Parent or any Borrower has knowledge thereof;
(d) The Parent, any Borrower or any other Subsidiary shall fail to
pay, in accordance with its terms and when due and payable, the principal of, or
interest or premium on, any Debt having an aggregate outstanding balance in
excess of $2,000,000 (other than the Obligations), or the maturity of any such
Debt, in whole or in part, shall have been accelerated, or any such Debt, in
whole or in part, shall have been required to be prepaid prior to the stated
maturity thereof, in accordance with the provisions of any Contract evidencing,
providing for the creation of or concerning such Debt or, if any event shall
have occurred and be continuing that, with the passage of time or the giving of
notice or both, would permit any holder or holders of such Debt, any trustee or
agent acting on behalf of such holder or holders or any other Person so to
accelerate such maturity or require any such prepayment;
(e) A default shall occur and be continuing under any Contract
(other than a Contract relating to Debt to which clause (d) of this Section 7.1
is applicable) binding upon the Parent, any Borrower or any other Subsidiary,
except such a default that, together with all other such defaults, has not had
and will not have a Materially Adverse Effect on (i) the Parent and its
Consolidated Subsidiaries, taken as a whole, or (ii) the Loan Documents;
(f) (i) The Parent, any Borrower or any other Subsidiary shall (A)
commence a voluntary case under the Federal bankruptcy laws (as now or hereafter
in effect), (B) file a petition seeking to take advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or composition or adjustment of debts, (C) consent to, or fail to contest in
a timely and appropriate manner, any petition filed against it in an involuntary
case under such bankruptcy laws or other laws, (D) apply for, or consent to, or
fail to contest in a
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timely and appropriate manner, the appointment of, or the taking of possession
by, a receiver, custodian, trustee or liquidator of itself or of a substantial
part of its assets, domestic or foreign, (E) admit in writing its inability to
pay, or generally not be paying, its debts (other than those that are the
subject of bona fide disputes) as they become due, (F) make a general assignment
for the benefit of creditors, or (G) take any corporate action for the purpose
of effecting any of the foregoing; or
(ii) A case or other proceeding shall be commenced against the
Parent, any Borrower or any other Subsidiary in any court of competent
jurisdiction seeking (A) relief under the Federal bankruptcy laws (as now or
hereafter in effect) or under any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or adjustment of debts, or
(B) the appointment of a trustee, receiver, custodian, liquidator or the like of
the Parent, any Borrower or any other Subsidiary, or of all or any substantial
part of the assets, domestic or foreign, of the Parent, any Borrower or any
other Subsidiary, and, in each case, such case or proceeding shall continue
undismissed for a period of 60 days, or an order granting the relief requested
in such case or proceeding against the Parent, any Borrower or any other
Subsidiary (including, but not limited to, an order for relief under such
Federal bankruptcy laws) shall be entered;
(g) (i) A judgment or order for the payment of money in an amount
that individually, or when aggregated with all other unpaid judgments
outstanding against the Parent, any Borrower and the other Subsidiaries, exceeds
$500,000 shall be entered against the Parent, any Borrower or other Subsidiary
by any court, and (ii) either (A) such judgment or order shall continue
undischarged and/or unbonded or unstayed for a period of 30 days or (B)
enforcement proceedings shall have been commenced upon such judgment or order;
(h) (i) Any Termination Event shall occur, (ii) any Person shall
engage in any Prohibited Transaction involving any Plan, (iii) any Accumulated
Funding Deficiency, whether or not waived, shall exist with respect to any Plan,
(iv) the Parent or any ERISA Affiliate of the Parent shall be in "default" (as
defined in ERISA Section 4219(c)(5)) with respect to payments owing to a
multiemployer plan (as defined in ERISA Section 4001(a)(3)) as a result of the
Parent's or such ERISA Affiliate's complete or partial withdrawal (as described
in ERISA Section 4203 or 4205) from such Plan, (v) the Parent or any ERISA
Affiliate shall fail to pay when due any amount that is payable by it to the
PBGC or to a Plan under Title IV of ERISA, (vi) a proceeding shall be instituted
by a fiduciary of any Plan against the Parent or any ERISA Affiliate to enforce
ERISA Section 515 and such proceeding shall not have been dismissed within 30
days thereafter, or (vii) any other event or condition shall occur with respect
to a Plan, except that no event or condition referred to in any of the clauses
(i) through (vii) shall constitute an Event of Default if it, together with all
other events or conditions at the time existing, has not subjected, or in the
reasonable determination of the Required Banks would not subject, the Parent,
any Borrower or any other Subsidiary to any Liability that, alone or in the
aggregate with all such Liabilities, would have a Materially Adverse Effect on
the Parent and its Consolidated Subsidiaries taken as a whole;
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(i) Any material provision of any Loan Document, or any portion of
any obligation for the payment of money under any Loan Document shall cease to
be in full force and effect, or the Parent or any Borrower or any Affiliate of
any of the foregoing shall bring any action challenging the enforceability or
binding effect of any of the foregoing;
(j) A default or "Event of Default" as defined in any Loan
Document shall have occurred and be continuing (including any default or event
of default under the Existing Credit Agreement with respect to obligations
arising thereunder prior to the Effective Date);
(k) An event, condition or circumstance shall occur or exist
having a Materially Adverse Effect with respect to the Parent and its
Consolidated Subsidiaries, taken as a whole, or any Borrower, or on this
Agreement, the other Loan Documents or the Obligations; or
(l) There shall occur any Change of Control.
Section 7.2 Remedies upon Event of Default. (a) Upon the occurrence and
during the continuance of any Event of Default (other than one specified in
Section 7.1(f)) and in every such event, the Agent, if requested by the Required
Banks, upon notice to the Borrowers, may do any or all of the following: (i)
declare, in whole or, from time to time, in part, the Obligations to be, and the
Obligations shall thereupon become, due and payable to the Banks, the Letter of
Credit Banks and the Agent, (ii) demand in writing that the Borrowers deliver to
the Agent, at once and in full, an amount sufficient to reimburse the Letter of
Credit Banks, the Banks and the Agents for all outstanding Letter of Credit
Obligations, which amount shall become immediately due and payable by the
Borrowers, and to the extent paid by any Borrower shall constitute a prepayment
under this Agreement, (iii) deliver, or cause the applicable Letter of Credit
Bank to deliver, notice to any Letter of Credit beneficiary of such Event of
Default and require the Letter of Credit beneficiary to draw upon the applicable
Letter of Credit and to take other action under the applicable Indenture, (iv)
terminate, in whole or, from time to time, in part each Bank's Commitments, and
the Agent's and the Letter of Credit Banks' obligations hereunder, (v) require
the Parent, each Borrower and each other Subsidiary to pledge the Collateral to
secure the Obligations, as provided in Section 5.21, and (vi) exercise, or
direct any Letter of Credit Bank to exercise, any rights or remedies provided
herein, in any other Loan Document or otherwise.
(a) Upon the occurrence of an Event of Default specified in
Section 7.1(f), automatically and without any notice to the Borrowers, (i) the
Obligations shall be due and payable, including, without limitation, all
outstanding Letter of Credit Obligations, (ii) each Bank's Commitments shall
terminate, (iii) the Agent's, and the Letter of Credit Banks' obligations to the
Borrowers hereunder shall terminate, (iv) the Parent, each Borrower and each
other Subsidiary shall be immediately deemed to have pledged the Collateral to
secure the Obligations as provided in Section 5.21, and the Security Documents
shall be immediately deemed delivered and effective pursuant to Section 5.21,
and (v) the Agent, if requested by the Required Banks, or any Letter of Credit
Bank, if directed by the Agent, may take such other actions as permitted to it
hereunder, under any other Loan Document or otherwise.
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(b) Presentment, demand, protest or notice of any kind (other than
the notice provided for in the first sentence of this Section 7.2) are hereby
expressly waived. The remedies specified in this Section shall be in addition to
and not in limitation of the remedies set forth elsewhere herein and in the
other Loan Documents, existing at law or in equity.
ARTICLE VIII
CHANGES IN CIRCUMSTANCES
Section 8.1 Mandatory Suspension and Conversion of Eurodollar Loans.
Any Bank's obligations to make or continue Loans as, or to convert Loans into,
Eurodollar Loans shall be suspended, all outstanding Eurodollar Loans shall be
converted on the last day of their applicable Interest Periods (or, if earlier,
in the case of clause (b) below, on the last day such Bank may lawfully continue
to maintain Loans of that Type or, in the case of clause (c) below, the day
determined by such Bank to be the last Business Day before the effective date of
the applicable restriction) into, and all pending requests for the making or
continuation of or conversion, into Loans of that Type shall be deemed requests
for, Alternate Base Rate Loans, if:
(a) on or prior to the determination of an interest rate for a
Eurodollar Loan for any Interest Period, the Agent determines that for any
reason appropriate quotations are not available to it in the London interbank
market for purposes of determining the Eurodollar Rate, or any Bank shall
determine that such Rate would not accurately reflect the cost to such Bank of
making or continuing a Loan as, or converting a Loan into, a Eurodollar Loan for
such Interest Period;
(b) at any time such Bank determines that any Regulatory Change
makes it unlawful or impracticable for such Bank to make or maintain any
Eurodollar Loan, or to comply with its obligations hereunder in respect thereof;
or
(c) such Bank determines that by reason of any Regulatory Change
it is restricted, directly or indirectly, in the amount that it may hold of (A)
a category of liabilities that includes deposits by reference to which, or on
the basis of which, the interest rate applicable to Eurodollar Loans is directly
or indirectly determined, or (B) the category of assets which includes
Eurodollar Loans.
The Agent or any such Bank, as the case may be, shall promptly notify the
Borrowers and the other parties to this Agreement of any circumstances that
would make the provisions of this Section 8.1 applicable, but the failure to
give any such notice shall not affect such Bank's rights hereunder.
Section 8.2 Regulatory Changes.
(a) If any Regulatory Change:
(i) shall subject the Agent, any Letter of Credit Bank or any
Bank to any Tax, duty or other charge determined by the Agent, such
Letter of Credit Bank or such Bank, as the case may be, to be
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applicable to any Extension of Credit, to its obligation to make or
maintain any such Extension of Credit, or to this Agreement, any Note
or any other Loan Document, or shall, in the determination of the
Agent, or any Bank, as the case may be, change the basis of taxation of
payments to such Bank or the Agent on the principal of or interest on
any Eurodollar Loan or of any other amounts payable under this
Agreement in respect of any Eurodollar Loan or its obligation to make
or maintain any Eurodollar Loan; or
(ii) shall impose, increase, modify or deem applicable any
reserve, special deposit, assessment, or other requirement or condition
against assets of, deposits with or to the account of, Extensions of
Credit by, or the Commitment or obligations of, any Bank, any Letter of
Credit Bank or the Agent, or shall impose on the Agent or such Bank or
on any relevant interbank market for Dollars, any condition;
and the result of the foregoing, in the determination of the Agent, such Letter
of Credit Bank or such Bank, as the case may be, is (x) to reduce the amount of
any sum received or receivable by such Bank with respect to any Eurodollar Loan
or the return to be earned by the Agent, such Letter of Credit Bank, or such
Bank on any Extension of Credit, (y) to impose a cost or increase any existing
cost on the Agent, such Letter of Credit Bank, or such Bank, as the case may be,
or any parent company of the Agent, such Letter of Credit Bank, or such Bank,
that is attributable to the making or maintaining of any Extension of Credit or
its Commitment or its obligation to make any Extension of Credit, or (z) to
require the Agent, such Letter of Credit Bank, or such Bank, or any parent
company of the Agent, such Letter of Credit Bank, or such Bank, to make any
payment on or calculated by reference to the gross amount of any amount received
by it hereunder, under any Loan Document or under any Note, then, within 15 days
after request by the Agent, such Letter of Credit Bank, or such Bank, the
Borrowers shall pay to the Agent, such Letter of Credit Bank, or such Bank such
additional amount or amounts as the Agent, such Letter of Credit Bank, or such
Bank determines will compensate it, or its parent company, for such reduction,
increased cost or payment. The Agent, such Letter of Credit Bank, or any such
Bank, as the case may be, will promptly notify the Borrowers of any Regulatory
Change of which it has knowledge and that will entitle the Agent, such Letter of
Credit Bank, or such Bank to compensation pursuant to this Section 8.2, but the
failure to give such notice shall not affect the Agent, such Letter of Credit
Bank, or such Bank's right to such compensation.
(b) If after the Agreement Date the Agent, any Letter of Credit
Bank, or any Bank shall have determined that the adoption or implementation of
any applicable law, rule or regulation regarding capital adequacy, or any change
therein or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by it (or its Applicable
Lending Office) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Person (or its parent) as a consequence of such Person's
obligations hereunder or obligations held by it, including, without limitation
its Commitments, Loans and participation interests in Letters of Credit to a
level below that which such Person (or its parent) could have achieved but for
such adoption, change or compliance (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by
35
such Bank to be material, then from time to time, within 15 days after demand by
such Person (with a copy to the Agent), the Borrowers shall pay to such Person
such additional amount or amounts as will compensate such Person (or its parent)
for such reduction.
Section 8.3 Change of Lending Office. Any Bank will, if an event occurs
with respect to a Lending Office that makes Section 8.1 or 8.2 applicable, and
if requested by the Borrowers, use reasonable efforts to designate another
Lending Office or Offices, provided that such designation would not, in the sole
and absolute discretion of such Bank, be disadvantageous to such Bank in any
manner or contrary to such Bank's policy. Any Bank may at any time and from time
to time change any Lending Office and shall give notice of any such change to
the Borrowers. Except in the case of a change in Lending Offices made at the
request of the Borrowers, the designation of a new Lending Office by a Bank
shall not make operable the provisions of clause (ii) or (iii) of Section 8.1 or
entitle such Bank to make a claim under Section 8.2 if the operability of such
clause or such claim results solely from such designation and not from a
subsequent Regulatory Change.
Section 8.4 Funding Losses. The Borrowers shall pay to the Agent and
each Bank, upon request, such amount or amounts as such Person determines are
necessary to compensate it for any loss, cost or expense incurred by it as a
result of (i) any payment or prepayment, of a Eurodollar Loan on a date other
than the last day of an Interest Period for such Eurodollar Loan or (ii) a
Eurodollar Loan for any reason not being made or converted after the Borrowers
shall have given a Notice of Borrowing, or any payment of principal of or
interest thereon not being made on the date therefor determined in accordance
with the applicable provisions of this Agreement, in each case whatever the
reason for such event, including, without limitation, the operation of Sections
1.6, 1.7, 7.2 or otherwise. In the case of a Eurodollar Loan, at the election of
such Bank, and without limiting the generality of the foregoing, but without
duplication, such compensation on account of losses referred to in (i) and (ii)
above may include an amount equal to the excess of (x) the interest that would
have been received from the Borrowers under this Agreement on any amounts to be
reemployed during an Interest Period or its remaining portion over (y) the
interest component of the return that such Bank determines it could have
obtained had it placed such amount on deposit in the London interbank market for
a period equal to such Interest Period or its remaining portion.
Section 8.5 Determinations. In making the determinations contemplated
by Sections 8.1, 8.2 and 8.4, the Agent, the Letter of Credit Banks and the
Banks may make such reasonable estimates, assumptions, allocations and the like
that they, in good faith, reasonably determine to be appropriate, but a Bank's,
a Letter of Credit Bank's or the Agent's selection thereof in accordance with
this Section 8.5, and the determinations made by a Bank, a Letter of Credit
Bank, or the Agent on the basis thereof, shall be presumed to be correct,
except, in the case of such determinations, for manifest errors in computation
or transmission. Any such Bank, Letter of Credit Bank, or the Agent, as the case
may be, shall furnish to the Borrowers a certificate outlining in reasonable
detail the computation of any amounts claimed by it under this Article VIII and
the assumptions underlying such computations.
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ARTICLE IX
THE AGENT AND THE LETTER OF CREDIT BANKS
Section 9.1 Appointment and Authorization.
(a) Each Bank irrevocably appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement, the Notes, the Security Documents and the Letters of Credit as are
delegated to the Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto.
(b) Each Bank irrevocabl authorizes each Letter of Credit Bank to
issue the Letters of Credit as provided in this Agreement, and to take all other
actions specifically delegated to it under this Agreement and the Reimbursement
Agreements to which it is a party and as are reasonably incidental thereto.
Section 9.2 Agent and Affiliates; Letter of Credit Bank and Affiliates.
(a) ABN shall have the same rights and powers under this Agreement and the Loan
Documents as any other Bank and may exercise or refrain from exercising the same
as though it were not the Agent, and ABN and its affiliates may accept deposits
from, lend money to, and generally engage in any kind of business with the
Parent or any Borrower, or any Subsidiary or Affiliate of the Parent or any
Borrower, as if it were not the Agent hereunder.
(a) Each Letter of Credit Bank, acting in its individual capacity,
shall have the same rights and powers under this Agreement and the other Loan
Documents, and may exercise, or refrain from exercising such rights as though it
were not a Letter of Credit Bank hereunder, and its affiliates may accept
deposits from, lend money to, and generally engage in any kind of business with
the Parent or any Borrower, or any Subsidiary or Affiliate of the Parent or any
Borrower, as if it were not a Letter of Credit Bank hereunder.
Section 9.3 Action by the Agent and the Letter of Credit Banks. The
respective obligations hereunder of the Agent and of the Letter of Credit Banks
are only those expressly set forth herein. Without limiting the generality of
the foregoing, the Agent shall not be required to take any action with respect
to any Default, except as requested by the Required Banks. The Agent and the
Letter of Credit Banks shall in all cases be fully protected in acting or in
refraining from acting hereunder and under the other Loan Documents in
accordance with the written instructions signed by the Required Banks and each
such instruction and any action taken or any failure to act pursuant thereto
shall be binding on all of the parties thereto, their successors and assigns.
Neither the Agent nor any Letter of Credit Bank shall have any duty to exercise
any right, power or remedy hereunder or under any of the other Loan Documents or
to take any affirmative action hereunder or under any of the other Loan
Documents unless directed to do so by the Required Banks and unless first
indemnified by the Banks to its satisfaction against the costs and expenses of
taking such action.
37
Section 9.4 Consultation with Experts. Each of the Agent and the Letter
of Credit Banks may consult with legal counsel (who may be counsel for the
Borrowers), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it hereunder
or under the other Loan Documents in good faith in accordance with the advice of
such counsel, accountants or experts.
Section 9.5 Liability of the Agent and the Letter of Credit Banks. None
of the Agent, any Letter of Credit Bank, or any of their respective directors,
officers, agents or employees, shall be liable for any action taken or not taken
by it in connection herewith (i) with the consent or at the request of the
Required Banks or (ii) in the absence of its own gross negligence or willful
misconduct. None of the Agent, any Letter of Credit Bank, or any of their
respective directors, officers, agents or employees, shall be responsible for or
have any duty to ascertain, inquire into or verify (i) any statement, warranty
or representation made by or on behalf of any Borrower in connection with this
Agreement, any of the other Loan Documents or any Extension of Credit hereunder;
(ii) the performance or observance of any of the covenants or agreements of any
Borrower or the Parent; (iii) the satisfaction of any condition specified in
Article III, except receipt of items required to be delivered to the Agent; or
(iv) the validity, effectiveness or genuineness of this Agreement, the Notes,
any Letter of Credit, any Reimbursement Agreement, any Security Document, or any
other instrument or writing furnished in connection herewith or therewith, or
any filing in connection therewith. Neither the Agent nor any Letter of Credit
Bank shall incur any liability by acting in reliance upon any notice, consent,
certificate, statement, or other writing (which may be a bank wire, telex or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties.
Section 9.6 Indemnification. Each Bank shall, ratably based upon its
Proportionate Share of the Commitments, indemnify the Agent and each Letter of
Credit Bank, to the extent not reimbursed by the Borrowers, against any cost,
expense (including counsel fees and disbursements), claim, demand, action, loss
or liability (except such as results from the Agent's or such Letter of Credit
Bank's, as the case may be, gross negligence or willful misconduct) that the
Agent or such Letter of Credit Bank, as the case may be, may suffer or incur in
connection with this Agreement or any of the other Loan Documents or any action
taken or omitted hereunder or under any of the other Loan Documents by the Agent
or such Letter of Credit Bank.
Section 9.7 Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent, any Letter of Credit Bank or
any other Bank, and based on such documents and information as it has deemed
appropriate (but without reliance upon the Agent's information memorandum
circulated by the Agent to the Banks), made its own credit analysis and decision
to enter into this Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent, any Letter of Credit Bank or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement or the other Loan Documents.
Section 9.8 Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Letter of Credit Banks and the Banks, and may be
removed at any time with
38
or without cause at the direction of all of the Banks other than the Agent. Upon
any such resignation or removal, the Required Banks shall have the right to
appoint a successor Agent, which successor, or its parent company, shall have
its long term debt securities rated "A" or better (or the equivalent) by S&P's
or Xxxxx'x, or another nationally recognized securities rating firm. If no such
successor shall have been so appointed by the Required Banks and shall have
accepted such appointment within 30 days after the retiring Agent's giving of
notice of resignation, or the Required Banks' removal, then the retiring Agent
may, on behalf of the Banks, appoint a successor agent meeting the requirements
set forth in the immediately preceding sentence. Upon the acceptance of its
appointment hereunder, such successor agent shall thereupon succeed to and
become vested with all the rights and duties of the retiring Agent and the
retiring Agent shall be discharged from its duties and obligations hereunder and
under the other Loan Documents. After any retiring Agent's resignation
hereunder, the provisions of this Article shall continue to inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent.
Section 9.9 Security Documents, Etc.
(a) The Letter of Credit Banks and the Banks hereby ratify the
Intercreditor Agreement and authorize the Agent to enter into the Second
Amendment to Master Collateral and Intercreditor Agreement described in Section
3.1(n) hereof, and any and all other agreements that Agent believes in good
faith are necessary or advisable to confirm and preserve the continued validity
of the Intercreditor Agreement and the Security Documents and to take all action
contemplated by such documents. All rights and remedies under all Security
Documents may be exercised by the Collateral Agent for the benefit of the Banks,
the Letter of Credit Banks and the Agent, as provided in the Intercreditor
Agreement. The Collateral Agent may assign any rights and obligations under any
of the Security Documents to any co-collateral agent as permitted under the
Intercreditor Agreement.
(b) Except as provided in Section 11.5 with respect to releasing
Collateral, in each circumstance where, under any provision of the Intercreditor
Agreement or any Security Document, the Agent or the Collateral Agent shall have
the right to grant or withhold any consent, exercise any remedy, make any
determination or direct any action by the Borrowers under any Security Document,
the Agent shall act, and shall direct the Collateral Agent to act, in respect of
such consent, exercise of remedies, determination or action, as the case may be,
with consent of and at the direction of the Required Banks, including with
respect to any actions taken under Section 5.21 or Section 7.2; provided,
however, that no such consent of the Required Banks shall be required with
respect to any consent, determination or other matter that is, in the Agent's
judgment, non-material, ministerial or administrative in nature. In each
circumstance where any consent of or direction from the Required Banks is
required, the Agent shall notify the Banks in reasonable detail of the matter as
to which consent or direction is required and the Agent's proposed course of
action with respect thereto. In the event the Agent shall not have received a
response from any Bank within five Business Days after receipt of such written
notice and the Agent shall have confirmed by telephone or in writing such Bank's
receipt of such notice, such Bank shall be deemed to have agreed to the course
of action proposed by the Agent. The Agent shall act in accordance with the
instructions of the Required Banks, subject to its right to
39
require indemnification from the Banks satisfactory to the Agent for any actions
taken by the Agent at the direction of the Required Banks.
ARTICLE X
INTERPRETATION
Section 10.1 Interpretation.
(a) Defined Terms. For the purposes of this Agreement:
"ABN" means ABN AMRO Bank N.V. in its individual capacity.
"Acceptable Insurer" means an insurance company (i) having
an A.M. Best rating of "A" or better and being in a financial size category of X
or larger (as such category is defined as of the Agreement Date) or (ii)
otherwise reasonably acceptable to the Required Banks.
"Account" means any right of any Borrower or any other
Subsidiary to payment for goods sold or leased, or for services rendered, by
such Borrower or such other Subsidiary that is not evidenced by an instrument or
chattel paper.
"Accumulated Funding Deficiency" has the meaning ascribed to
that term in Section 302 of ERISA.
"Adjusted Eurodollar Rate" means for any Interest Period a
rate per annum (rounded upward, if necessary to the next higher 1/16 of 1%)
equal to the rate obtained by dividing (a) the Eurodollar Rate (similarly
rounded) for such Interest Period by (b) a percentage equal to 1 minus the
Reserve Requirement in effect from time to time during such Interest Period.
"Agent" means ABN, in its capacity as agent under this
Agreement, and any successor agent appointed pursuant to Section 9.8 hereof.
"Affiliate" means any Person (other than the Parent) (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Parent, (ii) which
beneficially owns or holds 5% or more of any class of the Voting Stock of the
Parent, (iii) of which the Parent or any Borrower or Shareholders of the Parent
beneficially own or hold 5% or more of the Voting Stock (or in the case of a
Person which is not a corporation, 5% or more of the equity interest), or (iv)
who is a member of the Board of Directors of the Parent or a member of the
immediate family of any such Person. The term "immediate family" of any Person
shall include the spouse, brothers, sisters and descendants of such Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of Voting Stock, by contract or otherwise.
40
"Agent's Office" means the address of the Agent specified in
or determined in accordance with the provisions of Section 11.1.
"Agreement" means this Agreement.
"Agreement Date" means the date of this Agreement as first set
forth above.
"Alternate Base Rate" means the Federal Funds Rate plus .50%
"Alternate Base Rate Loan" means a Loan, the interest on
which is, or is to be, as the context may require, computed, as provided in
Section 1.4(a) on the basis of the Alternate Base Rate.
"Alternate Base Rate Revolving Note" means a promissory note
of the Borrowers in the form attached hereto as Exhibit A-5 payable to the order
of a Bank and evidencing such Bank's Revolving Loans that are Alternate Base
Rate Loans.
"Alternate Base Rate Term Note" means a promissory note of the
Borrowers in the form attached hereto as Exhibit A-6 payable to the order of a
Bank and evidencing such Bank's Term Loans that are Alternate Base Rate Loans.
"Applicable Commitment Fee Percentage" means the per annum
percentage determined from the grid set forth below for the ratio of
Consolidated Adjusted Debt to Consolidated EBITDAR as of the most recently ended
fiscal quarter of the Parent as determined from the financial statements most
recently delivered pursuant to Section 6.1(a) or (b) together with a Compliance
Certificate. The ratio shall be calculated at the end of such quarter and for
the four fiscal quarters ended on the last day of such fiscal quarter (with
proforma adjustments to reflect any acquisition):
--------------------------------------------------------- -------------------
Commitment Fee
Adjusted Debt/EBITDAR
--------------------------------------------------------- -------------------
--------------------------------------------------------- -------------------
=> 2.5:1.0 0.275%
--------------------------------------------------------- -------------------
--------------------------------------------------------- -------------------
=> 2.0:1.0 but [less than] 2.5:1.0 0.175%
--------------------------------------------------------- -------------------
--------------------------------------------------------- -------------------
=> 1.5:1.0 but [less than] 2.0:1.0 0.150%
--------------------------------------------------------- -------------------
--------------------------------------------------------- -------------------
[less than] 1.5:1.0 0.125%
--------------------------------------------------------- -------------------
Until the first set of financial statements and Compliance Certificate required
to be delivered after the Effective Date are received by the Agent, the
Applicable Commitment Fee Percentage shall be set at 0.150%. Notwithstanding
anything to the contrary in this definition of Applicable Commitment Fee
Percentage, from and after the date on which any financial statements and
Compliance Certificate are due under this Agreement but are not delivered to the
Agent, and until such financial statements and Compliance Certificate are
actually delivered to the Agent, the Applicable Commitment Fee Percentage shall
be set at the highest rate appearing in the table above.
41
Each adjustment in the Applicable Commitment Fee Percentage shall take effect
immediately upon receipt by the Agent of the financial statements and Compliance
Certificate referred to above, and shall be effective prospectively.
"Applicable Law" means, anything in Section 11.8 to the
contrary notwithstanding, (i) all applicable common law and principles of equity
and (ii) all applicable provisions of all (A) constitutions, statutes, rules,
regulations and orders of governmental bodies, (B) Governmental Approvals and
(C) orders, decisions, judgments and decrees of all courts and arbitrators.
"Applicable Margin" means for any Eurodollar Loan or any
Alternate Base Rate Loan (as the case may be) the percentage determined from the
grid set forth below for the ratio of Consolidated Adjusted Debt to Consolidated
EBITDAR as of the most recently ended fiscal quarter of the Parent, as
determined from the financial statements most recently delivered pursuant to
Section 6.1(a) or (b) and the Compliance Certificate. The ratio shall be
calculated at the end of such quarter and for the four fiscal quarters ended on
the last day of such fiscal quarter (with proforma adjustments to reflect any
acquisition):
------------------------------------------ -------------------------------
Eurodollar and Alternate Base
Rate
Adjusted Debt/EBITDAR Applicable Margin
----------------------------------------- -------------------------------
------------------------------------------ -------------------------------
=>2.5:1 0.925%
------------------------------------------ -------------------------------
------------------------------------------ -------------------------------
=>2.0:1 but [less than] 2.5:1 0.700%
------------------------------------------ -------------------------------
------------------------------------------ -------------------------------
=>1.5:1 but [less than] 2.0:1 0.600%
------------------------------------------ -------------------------------
------------------------------------------ -------------------------------
[less than] 1.5:1 0.550%
------------------------------------------ -------------------------------
Until the first set of financial statements and Compliance Certificate required
to be delivered after the Effective Date are received by the Agent, the
Applicable Margin shall be set at 0.600%. Notwithstanding anything to the
contrary in this definition of "Applicable Margin", from and after the date on
which any financial statements and Compliance Certificate are due under this
Agreement but are not delivered to the Agent, and until such financial
statements and Compliance Certificate are actually delivered to the Agent, the
Applicable Margin shall be set at the highest rate appearing in the table above.
Each adjustment in the Applicable Margin shall take effect immediately upon
receipt by the Agent of the financial statements referred to above and shall be
effective prospectively.
"Banks" means the financial institutions, funds or banks
signatories hereto, as the same may be amended from time to time, any assignees
thereof as provided in Section 11.7.
"Base Rate" means the fluctuating rate per annum equal to
the greater of: (i) the rate of interest publicly announced by the Agent from
time to time as its prime lending rate for loans to borrowers located in the
United States of America that are denominated in dollars, and (ii) the Federal
Funds Rate plus 1.0%. The Base Rate is a reference rate only and is not
necessarily the lowest rate offered by the Agent to its customers.
42
"Base Rate Lending Office" of a Bank means the branch or
office designated by such Bank from time to time as the branch or office of such
Bank at which Alternate Base Rate Loans and Base Rate Loans are to be made and
maintained. Each Bank's initial Base Rate Lending Office is set forth on the
signature pages hereof.
"Base Rate Loan" means a Loan, the interest on which is, or
is to be, as the context may require, computed, as provided in Section 1.4(a),
on the basis of the Base Rate.
"Base Rate Revolving Note" means a promissory note of the
Borrowers in the form attached hereto as Exhibit A-2 payable to the order of a
Bank and evidencing such Bank's Revolving Loans that are Base Rate Loans.
"Base Rate Term Note" means a promissory note of the Borrowers
in the form attached hereto as Exhibit A-4 payable to the order of a Bank and
evidencing such Bank's Term Loans that are Base Rate Loans.
"Borrowers" means Covenant Transport, Inc., a Tennessee
corporation, and Covenant Leasing, Inc., a Nevada corporation, or either of them
individually, as the context may require.
"Borrowing" means the aggregation of the Loans of a particular
Class and Type made by more than one Bank pursuant to a single Notice of
Borrowing on a single date, and, if such Loans are Eurodollar Loans, for a
single Interest Period. A Borrowing is a "Base Rate Borrowing" if such Loans are
Base Rate Loans, a "Eurodollar Borrowing" if such Loans are Eurodollar Loans or
an "Alternate Base Rate Borrowing" if such Loans are Alternate Base Rate Loans.
"Borrowing Base" means, at any date, an amount equal to the
sum of (i) 85% of the aggregate amount of Eligible Accounts on such date, plus
(ii) 90% of the net book value (as determined in accordance with Generally
Acceptable Accounting Principles consistently applied) of Eligible Revenue
Equipment, in each case as shown on the most recent Borrowing Base Certificate
delivered by the Borrower to the Agent pursuant to Section 6.1(c)(v).
"Business Day" means any day other than a Saturday, Sunday or
other day on which banks in Atlanta, Georgia or Chicago, Illinois are required
or authorized to close and, if the applicable Business Day relates to any
Eurodollar Loan, on which commercial banks are open for international business
(including dealings in Dollar deposits) in London.
"Capital Lease" means a lease giving rise to a Capitalized
Lease Obligation.
"Capital Securities" means, with respect to any Person, any
shares of capital stock of such Person or any security convertible into, or any
option, warrant or other right to acquire, any shares of capital stock of such
Person.
43
"Capitalized Lease Obligation" means indebtedness represented
by obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with Generally Accepted Accounting Principles.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time and in
effect.
"Change of Control" means the occurrence, after the
Agreement Date, of any of the following: (i) any person or group (within the
meaning of Rule 13d-3, as in effect on the Agreement Date, promulgated by the
SEC under the Securities and Exchange Act of 1934), shall acquire, directly or
indirectly, beneficially or of record, shares representing more than 50% of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Parent; or (ii) a majority of the seats (other than vacant
seats) on the board of directors of the Parent become occupied by persons not
members of said board on the Agreement Date that were neither (a) nominated by
the board of directors of the Parent, nor (b) appointed by directors so
nominated; or (iii) any person or group shall otherwise directly or indirectly
Control the Borrower. or (iv) the Parent shall cease to own free and clear of
any Lien (except the lien created under the Security Documents) 100% of the
legal and beneficial ownership of each Borrower. Notwithstanding the foregoing,
it shall not be a "Change of Control" for any one or more of Xxxxx X. Xxxxxx,
Xxxxxxxxxx X. Xxxxxx, Xxxxx X. Xxxxxx or their respective heirs or entities
controlled by them or such heirs to increase their level of Control of the
Parent or any of its Subsidiaries (regardless of their ownership percentage at
the time of such increase).
"Class" has the meaning ascribed to such term in Section 10.3.
"Closing Date" means the date on which the initial Extension of
Credit is made.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning ascribed to such term in Section
5.21.
"Collateral Agent" means First Union National Bank, as
collateral agent for the Banks and the holders of the Senior Notes pursuant to
the Intercreditor Agreement.
"Collateral Debtor" means any Person liable on or with respect
to an account or any security therefor.
"Commitment" means, (i) with respect to each Bank, a Letter of
Credit Commitment and/or a Revolving Credit Commitment and/or a Term Loan
Commitment and (ii) with respect to any Letter of Credit Bank, its commitment to
issue a Letter of Credit; and "Commitments" means any two or more of the
foregoing, or, with respect to a commitment to make Loans of any Type or Class
or to purchase participations in Letters of Credit, the Commitments of all Banks
to make such Loans or to purchase such participations.
"Commitment Fee" has the meaning ascribed to such term in
Section 1.5(b).
44
"Commitment Percentage" means, with respect to any Bank's
Commitment of any Class, the percentage of all of the Banks' Commitments of such
Class set forth opposite such Bank's name on the signature pages hereof.
"Consolidated Adjusted Debt" means, at any time, the sum of (i)
Consolidated Debt at such time and (ii) the Asset Termination Value under (and
as defined in) the Synthetic Lease.
"Consolidated Amortization" means, for any period, the
aggregate amount of all amortization expense of the Parent and its Consolidated
Subsidiaries as shown on the consolidated financial statements of the Parent.
"Consolidated Debt" means the sum of all Debt of the Parent and
its Consolidated Subsidiaries, plus the sum of the present values of all future
payments on operating leases, discounted to present value at the rate of 9% per
annum, in each case after elimination of all intercompany items.
"Consolidated Debt Amortization" means, for any period, the
aggregate amount of all required principal payments in respect of Consolidated
Funded Debt of the Parent and its Consolidated Subsidiaries for such period.
"Consolidated Depreciation" means, for any period, the
aggregate amount of all depreciation expense of the Parent and its Consolidated
Subsidiaries as shown on the consolidated financial statements of the Parent.
"Consolidated EBITDAR" means, for any period, Consolidated Net
Income of the Parent and its Consolidated Subsidiaries for such period, plus all
amounts deducted therefrom for such period in respect of (i) Consolidated
Interest Charges (ii) Consolidated Depreciation, (iii) Consolidated
Amortization, (iv) Consolidated Lease Payments and (v) Consolidated Taxes. In
addition, Consolidated EBITDAR for the applicable period shall include the net
income plus interest charges, depreciation, amortization, lease payments (other
than Capital Leases) and tax payments of any entity the capital stock, assets,
business or other ownership interests of which were acquired by the Parent or
any Consolidated Subsidiary during such period (with pro forma adjustments from
the date of such acquisition).
"Consolidated Funded Debt" means, at any time, that portion
of Consolidated Debt that is, or at the time of its incurrence was, repayable
over a term in excess of one year or renewable at the option of the Parent or
any Borrower for such term.
"Consolidated Interest Charges" means, for any period, the
aggregate amount of all interest on Debt (including payments in the nature of
interest under Capital Leases) that would, in accordance with Generally Accepted
Accounting Principles, be deducted in determining Consolidated Net Income for
such period.
45
"Consolidated Lease Payments" means, for any period, the
aggregate amount of all payments by the Parent and its Consolidated Subsidiaries
in respect of Operating Leases.
"Consolidated Net Income" means, for any period, the amount of
net income or net loss of the Parent and its Consolidated Subsidiaries for such
period (taken as a cumulative whole) determined on a consolidated basis in
accordance with Generally Accepted Accounting Principles after elimination of
intercompany items and portions of income attributable to minority interests in
Subsidiaries (until such earnings are received by the Parent), provided, that
there shall be excluded:
(i) the proceeds of any life insurance policy;
(ii) net earnings and losses of any Subsidiary accrued prior
to the date it became a Subsidiary;
(iii) net earnings and losses of any entity, substantially all
the assets of which have been acquired in any manner, that were
realized by such entity prior to the date of such acquisition;
(iv) net earnings and losses of any entity with which the
Parent or a Subsidiary shall have consolidated or that shall have
merged into or with the Parent or a Subsidiary, that were realized by
such entity prior to the date of such consolidation or merger;
(v) net earnings of any business entity in which the Parent or
any Subsidiary has an ownership interest unless such net earnings shall
have actually been received by the Parent or such Subsidiary in the
form of cash distributions;
(vi) any portion of the net earnings of any Subsidiary of any
other business entity in which the Parent or any Subsidiary has an
ownership interest, that for any reason (other than the provisions of
this Agreement, the other Loan Documents, or any other instrument or
agreement evidencing other Permitted Debt) is unable to be dividended
to the Parent or any other Subsidiary;
(vii) earnings resulting from any reappraisal, reevaluation or
write-up of assets;
(viii) any deferred or other credit representing any excess of
the equity in any Subsidiary at the date of acquisition thereof over
the amount invested in such Subsidiary; and
(ix) any gain arising from the acquisition of any Capital
Securities of the Parent or any Subsidiary.
"Consolidated Subsidiary" of any Person means, at any time,
any Subsidiary or other entity the accounts of which would be consolidated with
those of such Person in its consolidated financial statements as of such time.
46
"Consolidated Tangible Net Worth" means, at any time, the
consolidated stockholders' equity of the Parent and its Consolidated
Subsidiaries less intangible assets (to the extent included in determining such
consolidated stockholders' equity) and less consolidated Mandatorily Redeemable
Stock (except to the extent deducted in determining such consolidated
stockholders' equity), in each case, as of such time.
"Consolidated Taxes" means, for any period, the aggregate
amount of all Taxes paid by the Parent and its Consolidated Subsidiaries, as
determined in accordance with Generally Accepted Accounting Principles.
"Contract" means an indenture, agreement (other than this
Agreement and any other Loan Document), other contractual restriction, lease,
instrument (other than the Notes), certificate of incorporation or charter, or
bylaw.
"Control" means the power to direct or cause the direction
of the management or policies of a person, whether through rights of ownership
under voting securities, under contract or otherwise.
"CLI" means Covenant Leasing, Inc., a Nevada corporation which
is a Wholly-Owned Subsidiary of the Parent.
"CTI" means Covenant Transport, Inc., a Tennessee corporation
which is a Wholly-Owned Subsidiary of the Parent.
"Debt" of any Person means at any time, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable that arise in the ordinary
course of business but only if and so long as the same are payable on customary
trade terms, (iv) Capitalized Lease Obligations of such Person, (v) all
Mandatorily Redeemable Stock of such Person owned by any Person other than such
Person, a Wholly-Owned Subsidiary of such Person that has no Debt other than the
Obligations (the amount of any such Stock to be determined for this purpose as
the higher of the liquidation preference of and the amount payable upon
redemption of such Stock), (vi) all obligations of such Person to purchase
securities or other property that arise out of or in connection with the sale of
the same or substantially similar securities or property, (vii) all obligations
of such Person, whether fixed or contingent, to reimburse any other Person in
respect of amounts paid under a letter of credit or similar instrument, (viii)
all obligations with respect to interest rate and currency swaps and similar
obligations obligating such Person to make payments, whether periodically or
upon the happening of a contingency, except that if any agreement relating to
such obligations provides for the netting of amounts payable by and to such
Person thereunder or if any such agreement provides for the simultaneous payment
of amounts by and to such Person, then in each such case, the amount of such
obligations shall be the net amount thereof, (ix) all of the foregoing of others
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) a Lien on any asset of such Person,
47
whether or not such Debt is assumed by such Person, and (x) all of the foregoing
of others Guaranteed by such Person.
"Default" means any condition or event that constitutes an
Event of Default or that with the giving of notice or lapse of time or both,
would, unless cured or waived, become an Event of Default.
"Dollars" and the sign "$" mean lawful money of the United
States of America.
"Effective Date" shall have the meaning ascribed to that term
in Section 3.1 hereof.
"Eligible Account" means, at the time of any determination
thereof, any Account of either Borrower and their Subsidiaries (herein, the
"account holder")as to which each of the following requirements has been
fulfilled to the satisfaction of the Agent:
(i) Such Account is free and clear of all Liens other than a
Lien in favor of the Agent or Collateral Agent granted pursuant to any
Loan Document, and, if after the Security Date, such Account is subject
to a lien in favor of the Agent that constitutes a first perfected
security interest in such Account; provided, however, that no Account
as to which any United States federal or state governmental agency or
instrumentality is the Collateral Debtor may be an Eligible Account
after the Security Date, except to the extent that the account holder
has complied with the Assignment of Claims Act of 1940, as amended (31
U.S.C. ss. 3727; 41 U.S.C. ss. 15), by delivering to the Agent a notice
of assignment under such Act in favor of the Collateral Agent, for the
benefit of the Banks, the Letter of Credit Banks and the Agent, and in
compliance with applicable provisions of 31 C.F.R. ss. 7-103.8 and 41
C.F.R. ss. 1-30.7, or with similar state law;
(ii) Such Account is a legal, valid, binding and enforceable
obligation of the Collateral Debtor;
(iii) Such Account is not subject to any dispute, setoff,
counterclaim or other claim or defense on the part of the Collateral
Debtor or any other Person denying liability under such Account;
(iv) the account holder has the full and unqualified right to
assign and xxxxx x Xxxx in such Account to the Collateral Agent as
security for the Obligations;
(v) Such Account is evidenced by an invoice rendered to the
Collateral Debtor and is not evidenced by any instrument or chattel
paper (as the terms "instrument" and "chattel paper" are defined in
Section 9-105 of the UCC);
(vi) Such Account arose from the sale of goods or services on
an absolute basis (and not on a consignment, approval or
sale-and-return basis) by the account holder in the ordinary course of
the account holder's business, and such services have been performed or
48
such goods have been shipped and delivered to, and accepted by, the
Collateral Debtor for such Account;
(vii) With respect to such Account, the Collateral Debtor
thereof is not (A) an Affiliate of the Parent, any Borrower, or any
Subsidiary thereof, or (B) the subject of any reorganization,
bankruptcy, receivership, custodianship, insolvency, dissolution,
winding up, liquidation or similar proceeding;
(viii) Such Account is not outstanding (A) more than 90 days
past the original billing date (which date shall not be later than the
date upon which the services giving rise to such Account are completed
or the shipment date of the goods giving rise to such Account), or (B)
more than 60 days past the due date thereof;
(ix) Such Account is not an Account owing by a Collateral
Debtor having, at the time of any determination of Eligible Accounts,
in excess of 25% of the aggregate outstanding amount of all of such
Collateral Debtor's Accounts more than 90 days past the original
invoice date with respect thereto or more than 60 days past the due
date thereof;
(x) With respect to the Collateral Debtor under such Account,
the account holder is not indebted to such Collateral Debtor, unless
the account holder and such Collateral Debtor have entered into an
agreement whereby the Collateral Debtor is prohibited from exercising
any right of setoff with respect to such Accounts of the account
holder;
(xi) Such Account has arisen from the sale of goods or
services in the United States to a Collateral Debtor located in the
United States or is 100% secured by a letter of credit issued or
confirmed by a domestic bank or a domestic agency of a foreign bank,
acceptable to the Agent and the Required Banks;
(xii) Such Account is denominated and payable only in Dollars;
(xiii) Such Account does not arise out of a contract or order
which fails in any material respect to comply with the requirements of
applicable law;
(xiv) Such Account is not an Account with respect to which the
Collateral Debtor is located in a state that requires the account
holder, as a precondition to commencing or maintaining an action in the
courts of that state, either to (A) receive a certificate of authority
to do business and be in good standing in such state, or (B) file a
notice of business activities report or similar report with such
state's taxing authority, unless (x) the account holder has taken one
of the actions described in clauses (A) or (B), (y) the failure to take
one of the actions described in either clause (A) or (B) may be cured
retroactively by the account holder at its election and has been so
cured, or (z) the account holder has proven, to Agent's satisfaction,
that it is exempt from any such requirements under any such state's
laws;
49
(xv) Such Account is not an Account (A) with respect to which
any representation or warranty contained in this Agreement or any other
Loan Document is untrue or (B) which violates any of the covenants of
any Borrower or any of its Subsidiaries contained in this Agreement or
any other Loan Document;
(xvi) Such Account is not an Account which, when added to a
particular Collateral Debtor's other indebtedness to any Borrower or
any of its Subsidiaries, exceeds a credit limit determined by Agent in
its sole discretion for that Collateral Debtor (except that Accounts
excluded from Eligible Accounts solely by reason of this clause shall
be Eligible Accounts to the extent of such credit limit); and
(xvii) Such Account is not an Account with respect to which
the prospect of payment or performance by the Collateral Debtor is or
will be impaired, as determined by the Agent is its sole discretion.
"Eligible Revenue Equipment" means, at any date of
determination thereof, any Revenue Equipment which is (i) owned by any Borrower
free and clear of all Liens other than a Lien in favor of the Collateral Agent
or the Agent pursuant to any Loan Document or (ii) refinanced using the proceeds
of Revolving Loans, and, if after the Security Date, in each case is subject to
a lien in favor of the Agent that constitutes a first perfected security
interest in such Revenue Equipment.
"Environmental Laws" means all applicable federal, state or
local statutes, laws, ordinances, codes, rules and regulations (including
consent decrees and administrative orders) relating to public health and safety
and the protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as in effect from time to time.
"ERISA Affiliate" means a trade or business including, a
Subsidiary or other Affiliate, that is a member of any group of organizations
within the meaning of Code Sections 414(b),(c),(m) or (o) of which the Parent,
any Borrower or any Guarantor is a member.
"Eurodollar Lending Office" of a Bank means the branch or
office designated by such Bank from time to time, as the branch or office of
such Bank at which Eurodollar Loans are to be made and maintained. Each Bank's
initial Eurodollar Lending Office is set forth on the signature pages hereof.
"Eurodollar Rate" as applicable to any Interest Period means
the (rounded upward, if necessary, to the next higher 1/16%) rate per annum at
which deposits in Dollars are offered by the Agent to first class banks in the
London interbank market at approximately 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period in an amount approximately
equal to the principal amount of the Eurodollar Loan to which such Interest
Period is to apply and for a period of time comparable to such Interest Period.
50
"Eurodollar Loan" means a Loan the interest on which is, or
is to be, as the context may require, computed, as provided in Section 1.4(a),
on the basis of the Adjusted Eurodollar Rate.
"Eurodollar Revolving Note" means a promissory note of th
Borrowers in the form attached hereto as Exhibit A-1 payable to the order of a
Bank and evidencing such Bank's Revolving Loans that are Eurodollar Loans.
"Eurodollar Term Note" means the promissory note of the
Borrowers in the form attached hereto as Exhibit A-3 payable to the order of a
Bank and evidencing such Bank's Term Loans that are Eurodollar Loans.
"Event of Default" means any of the events specified in Section
7.1.
"Existing Guaranty Agreements" means, collectively, the
following documents:
(i) Guaranty Agreement dated as of January 17, 1995 by the
Parent in favor of the Banks and the Agent;
(ii) Guaranty Agreement dated as of March 31, 1997 by C&F
Acquisition Co., a Nevada corporation, and Intellectual Property Co., a
Nevada corporation, in favor of the Banks and the Agent;
(iii) Joinder Agreement dated as of December 31, 1997 by
Xxx Xxxxx Truck Lines, Inc., a Minnesota corporation, in favor of the
Banks and the Agent;
(vi) Joinder Agreement dated as of November 13, 1998 by
Southern Refrigerated Transport, Inc., an Arkansas corporation, and
Xxxx Xxxxx Trucking, Inc., an Arkansas corporation, in favor of the
Banks and the Agent.
"Existing Security Documents" means, collectively, the
following documents:
(i) Security Agreement dated as of January 17, 1995 by CTI in
favor the Agent;
(ii) Security Agreement dated as of October 15, 1995 by CTI in
favor of the Collateral Agent, as amended by the First Amendment to
Security Agreement dated as of March 31, 1997;
(iii) Trademark Security Agreement dated as of March 31, 1997
by Intellectual Property Co., a Nevada corporation, in favor of the
Collateral Agent;
(iv) Separate Security Agreements each dated as of March 31,
1997 by Intellectual Property Co., a Nevada corporation, and CLI in
favor of the Collateral Agent;
51
(v) Stock Pledge and Security Agreement dated as of January
17, 1995 by the Parent in favor of the Agent together with the required
stock certificate(s) and duly executed stock power(s);
(vi) Stock Pledge and Security Agreement dated as of October
15, 1995 by the Parent in favor of the Collateral Agent together with
the required stock certificate(s) and duly executed stock power(s);
(vii) Stock Pledge and Security Agreement dated as of March
31, 1997 by the Parent in favor of the Collateral Agent together with
the required stock certificate(s) and duly executed stock power(s) as
amended by the First Amendment to Stock Pledge and Security Agreement
dated as of December 31, 1997 as further amended by the Second
Amendment to Stock Pledge and Security Agreement dated as November 13,
1998, each together with the required stock certificate(s) and duly
executed stock power(s);
(viii) Security Agreement dated as of December 31, 1997 by
Xxx Xxxxx Truck Lines, Inc., a Minnesota corporation in favor of the
Collateral Agent;
(ix) Security Agreement dated as of November 13, 1998 by
Southern Refrigerated Transport, Inc., an Arkansas corporation and Xxxx
Xxxxx Trucking, Inc., an Arkansas corporation in favor of the
collateral Agent.
"Extension of Credit" means any of the following: (i) a Loan,
(ii) the conversion of a Loan of one Type into a Loan of another Type, (iii) a
Letter of Credit and (iv) a participation interest in a Letter of Credit.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fixed Charge Coverage Ratio" means the ratio of (i)
Consolidated EBITDAR to (ii) the sum of (A) Consolidated Interest Charges, plus
(B) Consolidated Lease Payments, plus (C) Consolidated Debt Amortization, plus
(D) prior to the Term Loan Conversion Date, 25% of then outstanding Revolving
Loans and Letter of Credit Obligations, plus (E) the amount of then outstanding
Guaranty obligations (to the extent not included in (C) or (D) above), in each
case ((i) and (ii)) calculated for the four fiscal quarters ending on the last
day of any fiscal quarter; provided, that, for purposes of calculating the Fixed
Charge Coverage Ratio, there shall be included in Consolidated Interest Charges,
Consolidated Lease Payments and Consolidated Debt Amortization for the
applicable period the interest charges (as calculated on a pro forma basis using
the effective rate of interest paid by the Borrowers on the Obligations), lease
payments (other than Capital Leases) and debt amortization, respectively, of any
entity the capital stock, assets, business or other
52
ownership interests of which were acquired by the Parent or any Consolidated
Subsidiary during such period (with pro forma adjustments from the date of such
acquisition).
"Fuel Contracts" means any agreements or arrangements designed
to protect against fluctuations in fuel prices.
"Generally Accepted Accounting Principles" means the generally
accepted accounting principles as in effect in the United States of America from
time to time.
"Governmental Approval" means an authorization, consent,
approval, license or exemption of, registration or filing with, or report or
notice to, any governmental body, including, without limitation, any such
approval required under ERISA or by the PBGC.
"Guarantor" means any Person who guarantees the payment,
performance or collectability of any of the Obligations.
"Guarantor Pledge Agreement" means any pledge agreement
executed by any Guarantor in favor of the Collateral Agent as security for the
Obligations.
"Guaranty" by any Person means any obligation, contingent or
otherwise, of such Person, directly or indirectly, guaranteeing any Liability of
any other Person, or in any manner providing for the payment of any Liability of
any other Person or otherwise protecting the holder of such Liability against
loss (whether by agreement to keep well, to purchase assets, goods, securities
or services, to take or pay, to reimburse for payments made under performance
letters of credit or otherwise). The term "Guarantee", used as a verb, has a
correlative meaning.
"Guaranty Agreement" means the Existing Guaranty Agreements
and any other guaranty agreement now existing or hereafter executed by a
Subsidiary or any other Guarantor in favor of the Banks, the Letter of Credit
Banks and the Agent, guaranteeing payment of the Obligations.
"Hazardous Material" means (a) any "hazardous substance" as
defined by CERCLA; (b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act; (c) any petroleum products; or (d) any pollutant,
contaminant or hazardous, dangerous or toxic chemical, material or substance
within the meaning of any other applicable federal, state or local Environmental
Law.
"Information" means written data, services, reports,
statements (including, but not limited to, financial statements delivered
pursuant to or referred to in Sections 6.1 and 6.2), opinions of counsel,
documents and other information, whether, in the case of any such in writing,
the same was prepared by any Borrower or any other Person on behalf of any
Borrower.
"Intercreditor Agreement" means the Master Collateral and
Intercreditor Agreement among the Agent, the holders of the Senior Notes and the
Collateral Agent, dated as of October 15, 1995, as amended by the First
Amendment to Master Collateral and Intercreditor
53
Agreement dated as of March 31, 1997, and as further amended by the Second
Amendment to Master Collateral and Intercreditor Agreement of even date herewith
(and as the same may be further amended, supplemented, restated or replaced,
from time to time).
"Interest Payment Date" means the first Business Day of each
calendar quarter.
"Interest Period" means a period commencing on the date of the
making of such Loan and ending, at the election of the Borrowers, on the same
day in the first, second, or third calendar month thereafter, except that (i)
any Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day
falls in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day, (ii) any Interest Period 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 in which such Interest
Period ends) shall end on the last Business Day of a calendar month, and (iii)
no Interest Period in respect of Eurodollar Revolving Loans shall extend past
the Revolving Credit Commitment Termination Date.
"Interest Rate Contracts" means interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements and other
agreements or arrangements designed to protect against fluctuations in interest
rates.
"Lending Office" with respect to any Bank means such Bank's
Base Rate Lending Office or the Eurodollar Lending Office, or both, as the
context may require. For purposes of Section 8.1 and 8.2, references to any
"Bank" shall be deemed to include reference to such Bank's applicable Lending
Office.
"Letter of Credit" means any letter of credit issued pursuant
to this Agreement.
"Letter of Credit Bank" means ABN AMRO Bank, N.V., and any
other Bank that may be designated by the Agent, in its sole discretion, to issue
any Letter of Credit pursuant to Section 2.1.
"Letter of Credit Bank's Office" means the office of a Letter
of Credit Bank specified pursuant to Section 11.1.
"Letter of Credit Obligation" means, in respect of each
Letter of Credit, the undrawn face amount of such Letter of Credit, plus the
aggregate amount of all Reimbursement Obligations in respect thereof.
"Letter of Credit Obligations" means the sum of all Letter of
Credit Obligations.
"Letter of Credit Request" has the meaning ascribed to it in
Section 2.2.
54
"Liability" as applied to a Person, means and include all
obligations of such Person that in accordance with Generally Accepted Accounting
Principles, shall be classified upon the balance sheet of such Person as
liabilities.
"Lien" as applied to the property or assets (or the income or
profits therefrom) of any Person, means (in each case, whether the same is
consensual or nonconsensual or arises by Contract, operation of law, legal
process or otherwise): any mortgage, lien, pledge, attachment, financing
statement, levy, charge, or other security interest or encumbrance of any kind
in respect of any property or assets of such Person, or upon the income or
profits therefrom. For this purpose, the Parent, any Borrower or any other
Subsidiary shall be deemed to own subject to a Lien any asset that it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, Capitalized Lease or other title retention agreement
relating to such asset.
"Loan" means a Revolving Loan or a Term Loan.
"Loan Documents" means this Agreement, the Notes, the Security
Documents, the Reimbursement Agreements, the Guaranty Agreements, each Schedule
to this Agreement, the Intercreditor Agreement and each document, instrument,
certificate, and opinion executed and delivered in connection with any of the
foregoing.
"Management Fee" has the meaning ascribed to that term in
Section 1.5(a).
"Mandatorily Redeemable Stock" means, as applied to a Person,
any share of such Person's capital stock to the extent that it is redeemable,
payable or required to be purchased or otherwise retired or extinguished (i) at
a fixed or determinable date, whether by operation of a sinking fund or
otherwise, (ii) at the option of any Person other than such Person or (iii) upon
the occurrence of a condition not solely within the control of such Person, such
as a redemption required to be made out of future earnings.
"Materially Adverse Effect" means, (i) with respect to any
Person, a materially adverse effect on such Person's business, assets,
liabilities, financial condition, results of operations or business prospects,
(ii) with respect to a group of Persons "taken as a whole," a materially adverse
effect on such Persons' business, assets, liabilities, financial conditions,
results of operations or business prospects taken as a whole, if a consolidated
entity, on a consolidated basis in accordance with Generally Accepted Accounting
Principles, (iii) with respect to any Contract or any other obligation (other
than the Loan Documents), a materially adverse effect, as to any Borrower, upon
the binding nature, validity or enforceability thereof, (iv) with respect to
this Agreement and the other Loan Documents, an adverse effect, WHETHER OR NOT
MATERIAL, upon the binding nature, validity or enforceability of any material
provision thereof or on the obligations of any Borrower for the payment of money
thereunder and (v) with respect to the Security Interest, an adverse effect,
WHETHER OR NOT MATERIAL, upon the priority, perfection, validity or
enforceability thereof against any Borrower, or any other Person.
"Maximum Permissible Rate" means, with respect to interest
payable on any amount, the rate of interest on such amount that, if exceeded,
could, under Applicable Law, result in
55
(i) civil or criminal penalties being imposed on any Bank or (ii) any Bank being
unable to enforce payment of (or if collected, to retain) all or part of such
amount or the interest payable thereon.
"Monthly Borrowing Base Certificate" means a certificate of the
Borrower in the form of Schedule 6.1(c)(v).
"Xxxxx'x" has the meaning ascribed to it in Section 5.17(c)(i).
"Note" means an Alternate Base Rate Revolving Note, Base Rate
Revolving Note, Eurodollar Revolving Note, Alternate Base Rate Term Note, Base
Rate Term Note or Eurodollar Term Note, as the context may require.
"Notice of Borrowing" has the meaning ascribed to it in Section
1.2.
"Obligations" mean all loans, fees, indebtedness, liabilities,
obligations, Letter of Credit Obligations, covenants and duties of any Borrower
to the Banks, the Letter of Credit Banks and the Agent, of every kind, nature
and description, direct or indirect, absolute or contingent, due or not due, in
contract or tort, liquidated or unliquidated, arising under this Agreement, or
under the other Loan Documents, by operation of law or otherwise in connection
with the transactions contemplated hereby, now existing or hereafter arising,
and whether or not for the payment of money or the performance or
non-performance of any act, including, but not limited to, all damages that the
Parent, any Borrower or any other Subsidiary may owe to the Agent, any Letter of
Credit Bank and/or any Bank by reason of any breach by the Parent, any Borrower
or any other Subsidiary of any representation, warranty, covenant, agreement or
other provision of this Agreement or any of the other Loan Documents.
"Operating Lease" means any lease (other than a Capital Lease)
of real or personal property having a lease term of more than one year or that
is extendible or renewable, at the option of any the Borrower or the Lessor, and
if so renewed or extended would have a total period of more than one year.
"Parent" means Covenant Transport, Inc., a Nevada corporation.
"Patents" means patents, patent rights or licenses, trademarks,
trademark rights, trade names, trade name rights, copyrights, and any other
rights with respect to the foregoing.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Debt" means Debt permitted under Section 5.11.
"Permitted Guaranty" means a Guaranty that is (i) an
endorsement of a negotiable instrument for collection in the ordinary course of
business and (ii) a Guaranty by the Parent or any Subsidiary of any Borrower's
obligations hereunder.
56
"Permitted Lien" means, when used with respect to the Parent,
any Borrower or another Subsidiary, (i) a Lien securing a tax, assessment or
other governmental charge or levy (excluding any Lien arising under any of the
provisions of ERISA), the claim of a materialman, mechanic, carrier,
warehouseman or landlord for labor, materials, supplies or rentals incurred in
the ordinary course of business, or a money judgment rendered by a court or
administrative tribunal, but in each case only if (A) such amount is not overdue
and payable or, in the case of a tax assessment or other governmental charge or
levy, if payment thereof shall not at the time be required to be made in
accordance with Section 5.1(v), (B) foreclosure, distraint, sale or other
similar proceedings shall not have been commenced or, if commenced, such
proceeding is being contested in good faith by appropriate action and any
execution in respect thereof has been bonded or stayed, and (C) such Lien,
together with all other such Liens, secures obligations that do not exceed
$500,000 in the aggregate; (ii) a Lien on the properties and assets of a
Subsidiary (other than any Borrower) securing Debt owing to any Borrower or the
Parent; (iii) a Lien consisting of a deposit or pledge made, in the ordinary
course of business, in connection with, or to secure payment of, obligations
under worker's compensation, unemployment insurance or similar legislation; (iv)
a Lien constituting an encumbrance in the nature of zoning restrictions,
easements and rights or restrictions of record on the use of real property that
does not materially detract from the value of such property or impair the use
thereof in the business of the Parent, any Borrower or any other Subsidiary; (v)
a Lien existing on (A) property of any Person at the time such Person becomes a
Subsidiary or (B) any asset prior to the acquisition thereof by the Parent, any
Borrower or another Subsidiary, but only, in the case of either (A) or (B), if
such Lien was not created in contemplation thereof and so long as the obligation
secured by such Lien constitutes Permitted Debt and is not in default and such
Lien is and will remain confined to the property subject to it at the time such
Person becomes a Subsidiary or such property is acquired and to fixed
improvements thereafter erected on such property; (vi) a Lien in existence on
the Agreement Date to the extent set forth on Schedule 4.7 hereto, but only, in
the case of each such Lien, to the extent it secures an obligation existing on
the Agreement Date, which obligation has not been amended or modified; (vii) a
Lien securing Purchase Money Debt but only if, in the case of each such Lien:
(A) such Lien shall at all times be confined solely to the asset the purchase
price of which was financed through the incurrence of the Purchase Money Debt
secured by such Lien and to fixed improvements then or thereafter erected on
such asset; (B) such Lien attached to such asset within 30 days of the
acquisition of such property; and (C) the aggregate principal amount of Purchase
Money Debt secured by such Lien at no time exceeds an amount equal to 90% of the
lesser of (1) the cost (including the principal amount of such Debt, whether or
not assumed) to the Parent, any Borrower or another Subsidiary of the asset
subject to such Lien and (2) the fair value of such asset at the time of such
acquisition; (viii) a Lien on the headquarters building and the real estate upon
which such building is situated which Lien is confined solely to such assets and
secures Debt permitted pursuant to Section 5.11(e); (ix) a Lien constituting a
renewal, extension or replacement of a Lien constituting a Permitted Lien by
virtue of clause (vi), (vii), (viii) or (ix) of this definition, but only, in
the case of each such renewal, extension or replacement Lien, to the extent that
the principal amount of indebtedness secured by such Lien does not exceed the
principal amount of such indebtedness so secured at the time of the extension,
renewal or replacement, and that such renewal, extension or replacement Lien is
limited to all or a part of the property that secured the Lien extended, renewed
or replaced and to fixed improvements then or thereafter erected on such
property; (x) a Lien arising pursuant to an order of attachment, distraint or
similar legal process
57
arising in the execution or other enforcement thereof is not unstayed for more
than 20 days; (xi) a Lien securing obligations to the Agent or any Bank arising
under any Interest Rate Contract; and (xii) a Lien created, granted or imposed
pursuant to the Security Documents.
"Permitted Restrictive Covenants" means (i) any covenant or
restriction contained in this Agreement or any other Loan Document, (ii) any
covenant or restriction binding upon any Person at the time such Person becomes
a Subsidiary if the same is not created in contemplation thereof, (iii) any
covenant or restriction of the type contained in Section 5.6 that is contained
in any Contract evidencing or providing for the creation of or concerning
Purchase Money Debt, and only to the extent that such covenant extends only to
the asset subject to the Permitted Lien securing such Debt, (iv) any covenant or
restriction contained in any Contract listed on Schedule 5.9, but only to the
extent such covenant or restriction is there identified by specific reference to
the relevant section or paragraph of such Contract and/or (v) any covenant or
restriction that (A) is not more burdensome than an existing Permitted
Restrictive Covenant that is such by virtue of clause (ii), (iii) or (iv), (B)
is contained in a Contract constituting a renewal, extension or replacement of
the Contract in which such existing Permitted Restrictive Covenant is contained
and (C) is binding only on the Person or Persons bound by such existing
Permitted Restrictive Covenant.
"Person" means an individual, corporation, partnership, trust,
limited liability company, or unincorporated organization, a government or any
agency or political subdivision thereof.
"Plan" means, at any time, any employee benefit plan
(including a multiemployer plan), the funding requirements of which (under
Section 302 of ERISA or Section 412 of the Code) are, or at any time within six
years immediately preceding the time in question were, in whole or in part, the
responsibility of any Borrower, any Guarantor or an ERISA Affiliate.
"Post-Maturity Rate" means a rate per annum equal to the Base
Rate in effect from time to time, plus 2%; provided that, if the amount in
default is a Eurodollar Loan and the due date is a day prior to the last day of
an Interest Period therefor, the "Post-Maturity Rate" for such Loan shall be (x)
from such day through the last day of such Interest Period, the rate applicable
to such Loan for such Interest Period as provided in Section 1.4(a), plus 2%,
and (y) thereafter the Base Rate as in effect from time to time, plus 2%.
"Prohibited Transaction" means a transaction that is
prohibited under Section 4975 of the Code or Section 406 of ERISA and not exempt
under Section 4975 of the Code or Section 408 of ERISA.
"Proportionate Share" of a Bank in respect of any amount,
means the product obtained by multiplying such amount by such Bank's Commitment
Percentage set forth by its name on the signature pages hereof.
"Purchase Money Debt" means (i) Debt of the Parent, any
Borrower or any other Subsidiary that, within 30 days of such purchase, is
incurred to finance at least 90% of (but not more than) the purchase price of
new tangible assets in which neither the Parent, any Borrower nor
58
any other Subsidiary had at any time prior to such purchase any interest other
than a security interest and/or (ii) Debt that (A) constitutes a renewal,
extension or refunding of, but not an increase in the principal amount of,
Purchase Money Debt that is such by virtue of clause (i), (B) is binding only on
the obligor or obligors under the Purchase Money Debt being renewed, extended or
refunded and (C) bears interest at a rate per annum that is commercially
reasonable at the time.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time, and any regulation
successor thereto.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time, and any regulation
successor thereto.
"Regulation X" means Regulation X of the Board of Governors of
the Federal Reserve System, as in effect from time to time, and any regulation
successor thereto.
"Regulatory Change" means (i) any new, or any change in any
existing, Applicable Law, interpretation, directive or request (whether or not
having the force of law) or (ii) any change in the administration or enforcement
of any such Applicable Law, interpretation, directive or request, in each case,
that becomes effective after the Agreement Date, whether as a result of an
enactment by a government or any agency or political subdivision thereof, a
determination of a court or a regulatory authority, or otherwise.
"Reimbursement Agreement" has the meaning ascribed to it in
Section 2.2.
"Reimbursement Obligation" means, with respect to any Letter
of Credit, the Borrowers' obligation to reimburse the Banks and the Letter of
Credit Bank for drawings thereunder as provided herein and in the Reimbursement
Agreements.
"Reportable Event" means, to the extent the same relates to or
affects a Plan, (i) any of the events set forth in ERISA Sections 4043(b) (other
than a Reportable Event as to which the provision of 30 days' notice to the PBGC
is waived under applicable regulations), 4068(f) or 4063(a) or the regulations
thereunder, (ii) any event requiring the Parent, any Borrower, any Guarantor or
any ERISA Affiliate to provide security to a Plan under Code Section 401(a)(29)
and (iii) any failure to make a payment required by Code Section 412(m).
"Representation and Warranty" means each representation and
warranty made pursuant to or under (i) Section 3.3, Article IV, Section 6.2 or
any other provision of this Agreement or any other Loan Document, (ii) any
amendment of or waiver or consent under this Agreement or any other Loan
Document, (iii) any Schedule to this Agreement, any other Loan Document or any
such amendment, waiver or consent, or (iv) any statement contained in any
certificate, financial statement, legal opinion or other instrument or document
delivered by or on behalf of any Borrower or any Subsidiary pursuant to any Loan
Document, WHETHER OR NOT (except as expressly provided to the contrary herein),
IN THE CASE OF ANY REPRESENTATION OR WARRANTY REFERRED TO IN CLAUSE (i), (ii),
(iii) OR (iv) OF
59
THIS DEFINITION, THE INFORMATION THAT IS THE SUBJECT MATTER THEREOF IS WITHIN
THE KNOWLEDGE OF SUCH BORROWER OR SUCH SUBSIDIARY.
"Required Banks" means, at any time, the Banks holding at least
51% of the then aggregate unpaid principal amount of the Loans and the
participations in Letter of Credit Obligations, or if no such obligations are
outstanding, the Banks having at least 51% of the Commitments to make Loans or
to purchase participations in Letters of Credit.
"Reserve Requirement" means at any time the then current
maximum rate for which reserves (including any marginal, supplemental or
emergency reserve) are required to be maintained under Regulation D by member
banks of the Federal Reserve System in New York City with deposits comparable in
amount to those of the Agent against "Eurocurrency liabilities", as that term is
used in Regulation D. The Adjusted Eurodollar Rates shall be adjusted
automatically on and as of the effective date of any change in the Reserve
Requirement.
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended and
in effect from time to time.
"Restricted Payment" means as to any Person (i) any dividend
or other distribution on any shares of such Person's capital stock (other than
dividends payable solely in shares of its capital stock), (ii) any payment
(other than regularly scheduled payments of principal and interest) on account
of the principal of or premium, if any, on any Debt convertible into shares of
such Person's capital stock, (iii) any acquisition of any of such Person's
Capital Securities (except an acquisition of shares of such Person's capital
stock upon the conversion thereof into or the exchange thereof for other shares
of its capital stock), or (iv) any advance, loan, financial accommodation or
extension of credit (other than accounts arising in arms-length transactions in
the ordinary course of business on customary trade terms) by such Person to any
of its Affiliates.
"Revenue Equipment" means all tractors, trailers and other
similar equipment used in the operation of the trucking business of any Borrower
or any of their Subsidiaries.
"Revolving Credit Commitment" means the commitment of each
Bank to make Revolving Loans pursuant to Section 1.1(a)(i) in the amount set
forth opposite such Bank's name on the signature pages hereof, as such amount
may be reduced from time to time pursuant to Section 1.7 or 7.2. Revolving
Credit Commitments means the sum of the Revolving Credit Commitments of all the
Banks.
"Revolving Credit Commitment Termination Date" means the
earlier of (i) the date upon which the Revolving Credit Commitments reduce to
zero pursuant to Section 1.7 or Section 7.2 and (ii) December 31, 2000, or such
later date as shall be designated by the Banks pursuant to Section 1.1(d).
"Revolving Loan" means an amount advanced pursuant to Section
1.1(a)(i).
"Rollover Borrowing" has the meaning ascribed to such term in
Section 1.2(d).
60
"S&P's" has the meaning ascribed to it in Section 5.17(c)(i).
"Security Agreement" means the Security Agreement between
the Borrowers and the Collateral Agent, dated as of October 15, 1995, and any
other security agreement executed by a Subsidiary in favor of the Collateral
Agent as security for the Obligations.
"Security Date" means the date upon which the Agent shall be
required to be granted a first perfected security interest in the Collateral
pursuant to Section 5.21.
"Security Documents" means, collectively, the Existing
Security Documents, all Guarantor Pledge Agreements, all Security Agreements,
and each other mortgage, deed of trust, security agreement, pledge agreement, or
other security or collateral document securing the Obligations.
"Senior Notes" means the 7.39% Guaranteed Senior Notes in the
aggregate principal amount of $25,000,000, due October 1, 2005, issued by the
Borrower to Connecticut General Life Insurance Company, on behalf of one or more
separate accounts, Connecticut General Life Insurance Company and Life Insurance
Company of North America.
"Subsidiary," when used to determine the relationship of a
Person to another Person, means any Person of which (a) securities having
ordinary voting power to elect a majority of the board of directors (or other
persons having similar functions), or (b) other ownership interests ordinarily
constituting a majority voting interest, in each case, are at the time, directly
or indirectly, owned or controlled by such other Person, or by one or more other
Subsidiaries of such other Person, or by such other Person and one or more of
its Subsidiaries. Unless otherwise specified "Subsidiary" means a Subsidiary of
the Parent.
"Synthetic Lease" means the Participation Agreement, dated
March 29, 1996, among CTI, the Parent, Lease Plan North America, Inc. and ABN
AMRO Bank N.V., Atlanta Agency, as Participant and Agent.
"Tax" means any Federal, State or foreign tax, assessment or
other governmental charge or levy (including any withholding tax) upon a Person
or upon its assets, revenues, income or profits other than income and franchise
taxes imposed upon a Bank by the jurisdictions (or any political subdivision
thereof) in which such Bank or its Lending Office is located.
"Termination Date" means (i) with respect to the Revolving
Credit Commitments, the Revolving Credit Commitment Termination Date and (ii)
with respect to the Term Loan Commitments, the Term Loan Commitment Termination
Date.
"Term Loan" means an amount advanced pursuant to Section 1.1(a)
(ii).
"Term Loan Commitment" means, for any Bank, its Proportionate
Share of the lesser of $130,000,000 and the aggregate amount of Revolving Loans
outstanding on the Term
61
Loan Conversion Date, as such amount may be reduced from time to time pursuant
to Section 1.7 or Section 7.2.
"Term Loan Commitment Termination Date" means the earlier of
(i) the date upon which the Term Loan Commitment is reduced to zero pursuant to
Section 1.7 or Section 7.2, and (ii) the third anniversary of the date upon
which Term Loans shall be made pursuant to Section 1.1(a)(ii), provided,
however, if such third anniversary is not the last day of a calendar quarter,
then the Term Loan Commitment Termination Date shall be the last day of the
calendar quarter immediately preceding such third anniversary.
"Term Loan Conversion Date" means the Revolving Credit
Commitment Termination Date, unless the Revolving Credit Commitments are
terminated pursuant to Section 7.2.
"Termination Event" means (i) a Reportable Event, (ii) the
termination of a Plan, or the filing of a notice of intent to terminate a Plan,
or the treatment of a Plan amendment as a termination under Section 4041(c) of
ERISA, (iii) the institution of proceedings to terminate a Plan under Section
4042(a) of ERISA, or (iv) the appointment of a trustee to administer any Plan
under Section 4042(b) of ERISA.
"UCC" means the Uniform Commercial Code as in effect in the
relevant jurisdiction.
"Unfunded Benefit Liabilities" means with respect to any
Plan at any time, the amount of unfunded benefit liabilities of such Plan at
such time as determined under Section 4001(18) of ERISA.
"Wholly-Owned Subsidiary" means a Consolidated Subsidiary of a
Person, all of the Capital Securities and all other ownership interests and
rights to acquire ownership interests of which are, directly or indirectly,
owned or controlled by such Person or one or more Wholly-Owned Subsidiaries of
such Person or by such Person and one or more of such Subsidiaries.
(b) Other Definitional Provisions.
(i) Except as otherwise specified herein, all references
herein (A) to any Person, other than any Borrower, shall be deemed to
include such Person's successors, transferees and assignees, but only,
in the case of transferees and assignees of the Banks, to the extent
the applicable transfer or assignment complies with the provisions of
this Agreement, (B) to any Borrower shall be deemed to include such
Person's successors, (C) to any Applicable Law specifically defined or
referred to herein shall be deemed references to such Applicable Law as
the same may be amended or supplemented from time to time, (D) to any
Contract defined or referred to herein shall be deemed references to
such Contract (and, in the case of any instrument, any other instrument
issued in substitution therefor) as the terms thereof may have been
amended, supplemented, waived or otherwise modified from time to time
and (E) to any Loan Document, as the terms thereof may have been
amended,
62
supplemented, waived or otherwise modified from time to time in
accordance with Section 11.5 or any corresponding provision of such
Loan Document.
(ii) When used in this Agreement, the words "herein", "hereof"
and "hereunder" and words of similar import shall refer to this
Agreement as a whole and not to any provision of this Agreement, and
"Section," "Subsection," "Schedule" and "Exhibit" shall refer to
Sections and Subsections of, and Schedules and Exhibits to, this
Agreement unless otherwise specified.
(iii) Whenever the context so requires, the neuter gender
includes the masculine or feminine, and the singular number includes
the plural, and vice versa.
(iv) All terms defined in this Agreement shall have the same
defined meanings when used in any Note or, except as otherwise
expressly stated therein, any certificate, opinion or other Loan
Document or other document delivered pursuant hereto.
Section 10.2 Accounting Matters. Unless otherwise specified herein, all
accounting determinations hereunder and all computations utilized by the Parent
and its Consolidated Subsidiaries in complying with the covenants contained
herein shall be made, all accounting terms used herein shall be interpreted, and
all financial statements requested to be delivered hereunder shall be prepared,
in accordance with Generally Accepted Accounting Principles, except, in the case
of such financial statements, for departures from Generally Accepted Accounting
Principles that may from time to time be approved in writing by the Required
Banks and the independent certified public accountants who are at the time, in
accordance with Section 6.1(b), reporting on the financial statements of the
Parent and its Consolidated Subsidiaries.
Section 10.3 Classes of Extensions of Credit and Types of Loans.
Extensions of Credit hereunder are distinguished by "Class" and by "Type". The
"Class" of an Extension of Credit (or of a Commitment to make such Extension of
Credit) refers to the determination of whether such Extension of Credit arises
under the Revolving Loan Commitment or the Term Loan Commitment or the Letter of
Credit Commitment, each group of which constitutes a Class. The "Type" of a Loan
refers to the determination of whether such Loan is a Eurodollar Loan, an
Alternate Base Rate Loan, or a Base Rate Loan. A Loan may be identified by both
Class and Type (e.g., a "Eurodollar Revolving Loan" indicates that such Loan is
both a Revolving Loan and a Eurodollar Loan).
Section 10.4 Captions. Article and Section captions in this Agreement
are included for convenience of reference only and shall not constitute a part
of this Agreement for any other purpose.
ARTICLE XI
MISCELLANEOUS
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Section 11.1 Notices.
(a) Manner of Delivery. All notices and other communications under
this Agreement, including but not limited to materials delivered pursuant to
Article VI, shall, except in those cases where a telephonic notice is expressly
permitted, be in writing (which shall include communications by telex and
telecopy). All written notices and communications shall be sent by registered or
certified mail, postage prepaid, return receipt requested, by prepaid telex or
telecopier, reputable overnight courier, freight prepaid, or delivered by hand.
(b) Addresses. All notices and other communications under this
Agreement shall be given at the following respective addresses and telex,
telecopier and telephone numbers and to the attention of the following Persons:
(i) If to the Borrowers:
Covenant Transport, Inc.
Covenant Leasing, Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxx
Chief Financial Officer
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Xxxxxxx Law Firm, P.C.
000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(ii) notice to the Agent shall be addressed as follows:
ABN AMRO Bank N.V.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Group Vice President
Telecopier No.: (000) 000-0000
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Telephone No.: (000) 000-0000
with a copy to:
ABN AMRO Bank N.V.
Syndications Department
1325 Avenue of the Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Telecopier No.: (000) 000-0000 or 1710
Telephone No.: (000) 000-0000
(iii) If to a Letter of Credit Bank at its respective address
and telex, telecopier and telephone numbers set forth in the
Reimbursement Agreement to which such Letter of Credit Bank is a party;
(iv) If to the Banks, at their respective address and telex,
telecopier and telephone numbers set forth on the signature pages
hereto (as the same may be amended from time to time);
or at such other address or telex, telecopier or telephone number or to the
attention of such other person as the party to whom such information pertains
may hereafter specify for the purpose in a notice to the other specifically
captioned "Notice of Change of Address". The failure to copy the Borrowers'
counsel on any notice shall not affect the validity of such notice.
(c) Effectiveness. Each notice and other communication under this
Agreement shall be effective or deemed delivered or furnished (i) if given by
mail, on the fifth Business Day after such communication is deposited in the
mail, addressed as above provided, (ii) if given by telex or telecopier, when
such communication is transmitted to the appropriate number determined as above
provided in this Section 11.1 and the appropriate answer-back is received or
receipt is otherwise acknowledged, (iii) if given by hand delivery or overnight
courier, when left at the address of the addressee addressed as above provided,
and (iv) if given by telephone, when communicated to the Person or to the holder
of the office specified as the Person or officeholder to whose attention
communications are to be given, or, in the case of notice by the Agent to the
Borrowers under Section 7.2, given by telephone as provided below, if such
Person or officeholder is unavailable at the time, to any other responsible
officer of any Borrower, except that notices of a change of address, telex,
telecopier or telephone number, and notices to the Agent shall not be effective,
and materials furnished to the Banks pursuant to Article VI shall not be deemed
furnished until received, and in the case of the Agent, such notices and
materials shall not be deemed received until physically received by a
responsible officer at the office of the Agent at its Chicago, Illinois address
set forth in Section 11.1(b)(ii) above, not later than noon (Chicago time) on
any day if such day is to count as a Business Day for the purpose of determining
the adequacy of any notice to the Agent hereunder. Notices under Sections 1.2,
2.2, 2.3, and 7.2 may be by telephone, promptly confirmed
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in writing (which shall include communications by telex and telecopy). The
failure by the Agent to give written confirmation of any such notice shall not
effect the validity thereof. In the event of a discrepancy between telephonic
notice and the written confirmation thereof, or in the event written
confirmation of such notice is not furnished, the telephonic notice as
understood by the Agent will be deemed the effective notice. Delivery of notice
to any Borrower shall be deemed notice to all Borrowers.
Section 11.2 Expenses; Indemnification. Whether or not any Extension of
Credit is made hereunder, the Borrowers shall, on demand, pay or reimburse the
Banks, the Letter of Credit Banks and the Agent for (a) all transfer,
documentary, stamp and similar taxes, and all search, recording and filing fees,
if any, payable in connection with, arising out of or in any way related to the
execution, delivery and performance of this Agreement, the other Loan Documents
or the Extensions of Credit, and (b) all costs and expenses (including fees and
disbursements of legal counsel and other experts) reasonably incurred, and all
payments reasonably made, and indemnify and hold the Banks, the Letter of Credit
Banks and the Agent harmless from and against all losses suffered, in connection
with, arising out of, or in any way related to (i) the negotiation, preparation,
execution and delivery of (A) this Agreement and the other Loan Documents
(provided, that, with respect to legal counsel fees, the Borrower shall only be
responsible for the fees of the Agent's legal counsel), (B) any Extension of
Credit and (C) (whether or not executed) any waiver, amendment or consent
hereunder or thereunder, or hereto or thereto, (ii) the administration of this
Agreement and the other Loan Documents, including without limitation the matters
set forth in Section 6.3(b)(iv), (iii) consulting with respect to any matter in
any way arising out of, relating to, or connected with, this Agreement or any of
the other Loan Documents, including, but not limited to, the enforcement by the
Banks, the Letter of Credit Banks or the Agent of any of their rights hereunder
or under any of the other Loan Documents, or the performance by the Banks, the
Letter of Credit Banks or the Agent of any of their obligations hereunder or
under any other Loan Document, if any, (iv) protecting, preserving, exercising
or enforcing any of the rights of the Banks, the Letter of Credit Banks or the
Agent hereunder or under any of the other Loan Documents, (v) any claim (whether
asserted by the Banks, the Letter of Credit Banks, the Agent, any Borrower, or
any other Person and whether asserted before or after the payment, performance
and observance in full of the Borrowers' obligations hereunder and under the
other Loan Documents) and the prosecution or defense thereof, in any way arising
under, related to, or connected with, this Agreement, or any of the other Loan
Documents or the relationship established hereunder or under the other Loan
Documents, and (vi) any governmental investigation arising out of, relating to,
or in any way connected with this Agreement or any of the other Loan Documents,
provided that the foregoing indemnity shall not be applicable to any loss
suffered by any Bank, any Letter of Credit Bank or the Agent to the extent such
loss is the result of acts or omissions of such Bank, such Letter of Credit Bank
or the Agent, constituting (x) gross negligence or willful misconduct, (y)
violations of law, or (z) its failure to observe any other standard expressly
applicable to it under any of the other provisions of this Agreement or any of
the other Loan Documents. If the Borrowers fail to pay any amount owed under
this Section within 15 days after written demand specifying in reasonable detail
the basis for the amounts claimed, the Agent shall have the right to charge any
account of any Borrower for amounts due under this Section, and may cause the
Borrowers to incur a Borrowing in such amounts as may be necessary to repay such
Obligations.
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Section 11.3 Rights Cumulative. The rights and remedies of the Banks,
the Letter of Credit Banks and the Agent under this Agreement and the other Loan
Documents shall be cumulative and not exclusive of, nor limiting upon, any
rights or remedies that they would otherwise have, and no failure or delay by
any Bank, any Letter of Credit Bank or the Agent in exercising any right shall
operate as a waiver of it, nor shall any single or partial exercise of any power
or right preclude its other or further exercise or any other power or right.
Section 11.4 Disclosure. The Agent, the Banks and the Letter of Credit
Banks may disclose to, and exchange and discuss with, any other Person any
information concerning the Parent, any Borrower and any other Subsidiary
(whether received by the Agent, the Letter of Credit Banks, the Banks or such
person in connection with or pursuant to this Agreement or otherwise) only (i)
as may be required by Applicable Law, (ii) for the purpose of protecting,
preserving, exercising or enforcing any rights hereunder or under any of the
other Loan Documents, or consulting with respect to any such rights or any
rights of any Borrower, or (iii) as reasonably required in connection with the
making of assignments and the sale of participations by the Banks as provided in
Section 11.7.
Section 11.5 Waivers; Amendments. (a) Any term, covenant, agreement or
condition of this Agreement or any Loan Document may be amended with the consent
of the Borrowers, the Agent and the Required Banks, or compliance therewith may
be waived in writing by the Agent and, in the case of a term, covenant,
agreement or condition contained in any Reimbursement Agreement, the Letter of
Credit Bank party thereto, when authorized by the Required Banks, and in any
such event, the failure to observe, perform or discharge any such covenant,
condition or obligation (whether such amendment is executed or such consent or
waiver is given before or after such failure) shall not be construed as a breach
of such covenant, condition or obligation or a Default hereunder, provided that
no such amendment, consent or waiver shall:
(i) affect the amount or extend the time (pursuant to Section
1.1(d) or otherwise) of the Commitment of any Bank, of the obligation
of any Letter of Credit Bank to issue Letters of Credit or extend the
expiration date of any Letter of Credit, or of the obligation of the
Agent, any Letter of Credit Bank or any Bank to pay amounts on account
of Loans or Letters of Credit, and thereby extend credit to the
Borrowers, without the prior written consent of such Bank, such Letter
of Credit Bank or the Agent, as the case may be;
(ii) alter the time or times of payment of the principal of or
interest on any Obligation or with respect to any participation in a
Letter of Credit or any fees payable hereunder or any Loan Document, or
the amount of the principal of any Note, Reimbursement Obligation or
Letter of Credit, or the rates of interest, commission or fees, or
permit any subordination of principal, interest, or fees hereunder or
any Loan Document, without the prior written consent of the Bank,
Letter of Credit Bank or Agent as to its interest in the corresponding
Obligation, participation interest, commission or fees;
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(iii) alter any provision of Article VIII or any provision
requiring the ratable application of amounts received by the Agent in
payment of, or for application on, indebtedness under this Agreement or
under any of the Notes or any other Loan Document or any Obligation or
Letter of Credit Obligation, amend this Section 11.5, amend the
definition of Required Banks, or otherwise change the parties or
percentages required to authorize or direct the taking of any action
under this Agreement or any Loan Document, without the prior written
consent of the Agent and all the Banks and, to the extent such change
adversely affects a Letter of Credit Bank, the prior written consent of
such Letter of Credit Bank;
(iv) release Collateral or any guaranty of the Obligations or
change the definition of "Borrowing Base" or any component thereof,
without the prior written consent of the Agent and all the Banks; or
(v) amend any term or provision of Article IX or Section 11.2
or any waiver, release or limitation of liability in favor of the Agent
or a Letter of Credit Bank contained herein or in any other Loan
Document without the prior written consent of the Agent and, to the
extent the rights or obligations of any Letter of Credit Bank are
adversely affected thereby, the prior written consent of such Letter of
Credit Bank.
Except as set forth in this Section, each Letter of Credit Bank agrees to act
upon the direction of the Required Banks in all respects under its respective
Reimbursement Agreement. In addition to the foregoing rights, for the purpose of
this Section, the Letter of Credit Bank shall be deemed to own and be entitled
to vote in an amount equal to the participation interest of any Bank that has
failed to pay any amount owing to the Letter of Credit Bank hereunder.
(d) Unless otherwise specified in such waiver or consent, a waiver
or consent given hereunder shall be effective only in the specific instance and
for the specific purpose for which given.
Section 11.6 Set-Off.
(a) Exercise of Set-Off Rights. Upon the occurrence and during the
continuance of any Event of Default, each of the Agent, the Letter of Credit
Banks and the Banks, and each of its branches and offices, is hereby authorized
by the Borrowers, at any time and from time to time, without notice to the
Borrowers, (i) to set-off against, and to appropriate and apply to the payment
of the Obligations (whether matured or unmatured, fixed or contingent or
liquidated or unliquidated), any and all amounts owing by the Agent, such Letter
of Credit Bank or such Bank, or any such office or branch, to any Borrower
(whether payable in Dollars or any other currency, whether matured or unmatured,
and, in the case of deposits, whether general or special, time or demand, and
however evidenced) and (ii) pending any such action, to the extent necessary, to
hold such amounts as collateral to secure such Obligations and to return as
unpaid for insufficient funds any and all checks and other items drawn against
any deposits so held as such Person in its sole discretion may elect. Each
Borrower agrees, to the fullest extent it may effectively do so
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under Applicable Law, that any holder of a participation in any Extension of
Credit may exercise rights of set-off and counterclaim and other rights with
respect to such participation as fully as if such holder of a participation were
a direct creditor of such Borrower in the amount of such participation. The
Agent, each Bank and each Letter of Credit Bank agrees to give the Borrowers
prompt notice following its exercise of any set-off pursuant to this Section,
but the failure to give such notice shall not affect the effectiveness of such
exercise.
(b) Sharing of Set-Offs. Each of the Agent, the Banks and the
Letter of Credit Banks agree that if it shall, by exercising any right of
set-off or counterclaim or otherwise, obtain any payment (whether voluntary or
involuntary), of a proportion of the Obligations held by it that is greater than
the proportion received by any other of them in respect of the Obligations held
by such other of them, the Agent, the Bank and/or the Letter of Credit Bank, as
the case may be, receiving such proportionately greater payment shall purchase
such participations in the Obligations held by the other of them, and such other
adjustments shall be made, as may be required so that all such payments in
respect of the Obligations shall be shared by all of them pro rata. Any party
receiving such proportionately greater payment shall immediately notify the
Agent thereof. Promptly upon its receipt of such notice, the Agent shall notify
each of the Banks and the Letter of Credit Banks of the amount or amounts
received by one or more of the Banks in excess of its Proportionate Share
thereof. On the immediately succeeding Business Day after the giving of such
notice by the Agent, the appropriate adjustments in the Obligations shall be
made as provided in this Section 11.6(b).
(c) No Impairment of Set-Off Rights. Nothing in subsection (b) of
this Section 11.6 shall impair the right of the Agent, any Bank or any Letter of
Credit Bank to exercise any right of set-off or counterclaim it may have, or to
otherwise obtain payment, and to apply such amount to the payment of
indebtedness other than the Obligations.
Section 11.7 Assignment and Participations.
(a) Assignments. No Borrower may assign or transfer any of its
rights or obligations under this Agreement without the prior written consent of
the Agent and all the Banks, and no such assignment or transfer of any such
obligations shall relieve any Borrower thereof unless the Banks shall have
consented to such release in a writing specifically referring to the obligation
from which such Borrower is to be released. Any Bank may assign its rights and
delegate its obligations under this Agreement and the other Loan Documents and
further may assign, all or any part of any Extensions of Credit made by it, or
its Commitment or any other interest herein or in any other Loan Documents to
another bank or entity, provided, that, any such assignment shall be in a
minimum amount of $5,000,000, and provided, further, that except in the case of
an assignment by a Bank to one of its branches or its affiliates, (i) the Agent
and the Borrowers (unless an Event of Default Exists) shall have consented in
writing to such assignment and the terms thereof, including the amount of such
assignment and the assignee thereof, but which consent shall not be unreasonably
withheld, (ii) the Agent shall have received a $2500 assignment fee from the
assignor Bank, and (iii) the Agent shall have received an Assignment and
Assumption Agreement in the form of Schedule 11.7 duly executed by the assignee,
the assignor Bank and the Agent. Upon any such assignment by a Bank pursuant to
the terms hereof, the assignee thereof shall have, to the extent of such
assignment (unless otherwise provided therein) the same rights and benefits as
it
69
would have if it were an original Bank hereunder and under the Loan Documents,
and such assignee shall assume all of the obligations of a Bank hereunder and
such assignor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required to effect such assignments, assumptions and corresponding releases.
(b) Participations. Any Bank may from time to time sell or
otherwise grant participations in the Extensions of Credit, and the holder of
any such participation, if the participation agreement so specifically provides,
shall be entitled to all of the rights of a Bank hereunder respecting the taking
of any action directly affecting the extension of the final maturity of the
principal amount of, or any payment date for any interest on, a Loan allocated
to such participation, the reduction in the principal amount of, or the rate of
interest payable on, the Loans, the release of Collateral, or the enforcement of
the Obligations. Except as provided in the preceding sentence and as provided in
Article VIII or Section 11.6, a holder of a participation shall not be deemed a
Bank.
(c) Requirements Upon Transfer. If, pursuant to this subsection,
any interest in this Agreement or any Loan Document is transferred to any
assignee that is organized under the laws of any jurisdiction other than the
United States or any state thereof, the transferor Bank shall cause such
assignee concurrently with the effectiveness of such transfer, (i) to represent
to the transferor Bank (for the benefit of the transferor Bank, the Agent, the
Letter of Credit Banks and the Borrowers) that it is either (x) entitled to the
benefits of an income tax treaty with the United States that provides for an
exemption from United States withholding tax on interest and other payments
which may be made by the Borrower to other Loan Document; or (y) is engaged in
the trade or business within the United States, (ii) to furnish to the
transferor Bank, the Agent, the Letter of Credit Banks and the Borrower either
U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue Service Form
1001 (wherein such assignee claims entitlement to complete exemption from U.S.
federal withholding tax on all payments hereunder) and (iii) to agree (for the
benefit of the transferor Bank, the Agent, the Letter of Credit Banks and the
Borrowers) to provide to the transferor Bank, the Agent, the Letter of Credit
Banks and the Borrowers a new Form 4224 or Form 1001 (or appropriate successor
forms, which may include Forms W8-BEN or W8-ECI) upon the obsolescence of any
previously delivered form and comparable statements in accordance with
applicable U.S. laws and regulations with regard to such withholding tax
exemption.
(d) Bank Covenants. Each Bank represents and warrants to the
Borrowers, the Letter of Credit Banks and the Agent that it is either (x) a
United States person (as defined in Section 7701(a)(30) of the Code); (y)
entitled to the benefits of an income tax treaty with the United States that
provides for an exemption from United States withholding tax on interest and
other payments which may be made by the Borrowers to such Bank pursuant to the
terms of this Agreement or any other Loan Document; or (z) engaged in trade or
business within the United States. Each Bank that is organized under the laws of
any jurisdiction other than the United States or any State thereof (including
the District of Columbia) agrees to furnish to the Agent, the Letter of Credit
Banks and the Borrowers, prior to the date of the first interest payment
hereunder, two copies of either U.S. Internal Revenue Service Form 4224 or U.S.
Internal Revenue Service Form 1001, or appropriate successor forms (wherein such
Bank claims entitlement to complete exemption from U.S. federal withholding tax
on all payments hereunder), and to provide to the Agent, the Letter of Credit
Banks
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and the Borrower a new Form 4224 or Form 1001 (or appropriate successor forms,
which may include Forms W8-BEN or W8-ECI) upon the obsolescence of any
previously delivered form and comparable statements in accordance with
applicable U.S. laws and regulations and amendments duly executed and completed
by such Bank, and to comply from time to time with all applicable U.S. laws and
regulations with regard to such withholding tax exemptions.
Section 11.8 Governing Law. THIS AGREEMENT SHALL BE EFFECTIVE UPON
ACCEPTANCE BY THE AGENT IN ATLANTA, GEORGIA, AND THE AGREEMENT AND THE OTHER
LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAW
OF THE STATE OF GEORGIA WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
Section 11.9 Judicial Proceedings; Waiver of Jury Trial. ANY JUDICIAL
PROCEEDING BROUGHT AGAINST ANY BORROWER WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENTS, MAY BE BROUGHT IN ANY COURT OF COMPETENT JURISDICTION IN
THE STATE OF GEORGIA, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
BORROWER (A) ACCEPTS, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF SUCH COURTS AND ANY RELATED APPELLATE COURT, AND IRREVOCABLY
AGREES (WITHOUT WAIVING ANY RIGHT TO APPEAL) TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
AND (B) IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. EACH BORROWER HEREBY WAIVES PERSONAL
SERVICE OF PROCESS AND CONSENTS THAT SERVICE OF PROCESS UPON IT MAY BE MADE BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, (WITH A COPY BY
OVERNIGHT COURIER), AT ITS ADDRESS SPECIFIED OR DETERMINED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 11.1, AND SERVICE SO MADE SHALL BE DEEMED COMPLETED ON
THE FIFTH DAY AFTER SUCH SERVICE IS DEPOSITED IN THE MAIL. NOTHING HEREIN SHALL
AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT OF THE AGENT, ANY LETTER OF CREDIT BANK OR ANY BANK TO BRING
PROCEEDINGS AGAINST ANY BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY ANY BORROWER AGAINST THE BANKS, THE LETTER OF CREDIT
BANKS OR THE AGENT, INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS SHALL BE BROUGHT ONLY IN A COURT LOCATED IN XXX XXXX XX XXXXXXX, XXXXX
XX XXXXXXX. EACH BORROWER, THE AGENT, EACH BANK AND EACH LETTER OF CREDIT BANK
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH ANY ARE PARTIES
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY
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WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER AND
WHETHER ARISING OR ASSERTED BEFORE OR AFTER THE EFFECTIVE DATE OR BEFORE OR
AFTER PAYMENT, OBSERVANCE AND PERFORMANCE IN FULL OF THE BORROWERS' OBLIGATIONS
HEREUNDER OR THEREUNDER.
Section 11.10 Severability of Provisions. 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 or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by Applicable Law, each Borrower hereby
waives any provision of law that renders any provision hereof prohibited or
unenforceable in any respect.
Section 11.11 Counterparts. This Agreement may be executed in any
number of counterparts, all of which shall be deemed to constitute but one
original and shall be binding upon all parties, their successors and permitted
assigns.
Section 11.12 Entire Agreement. This Agreement and the other Loan
Documents, and the Notes executed in connection herewith embody the entire
agreement between the parties hereto relating to the subject matter hereof and,
except to the extent expressly stated to the contrary herein, supersede all
prior agreements, representations and understandings, if any, relating to the
subject matter hereof.
Section 11.13 Survival of Obligations. Except as otherwise expressly
provided herein, the representations, warranties, rights and obligations of the
parties hereunder shall survive the execution of this Agreement, any
investigation of any matters by the Agent, any Letter of Credit Bank or any Bank
and the extension and repayment of the Loans and other Obligations. This
Agreement, other than the indemnities set forth in Sections 9.6 and 11.2, which
shall survive, shall terminate upon the termination, expiration or reduction to
zero of the Banks' Commitments and the payment in full of all outstanding Loans,
Letter of Credit Obligations and other Obligations.
Section 11.14 Successors and Assigns. Subject to the provisions of
Section 11.7, all of the provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
Section 11.15 Limitation of Liability. Neither the Banks, the Letter of
Credit Banks, the Agent, or any Affiliate thereof shall have any liability with
respect to, and, EACH BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO XXX
UPON, ANY CLAIM FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES (AS OPPOSED
TO DIRECT DAMAGES) SUFFERED BY ANY BORROWER IN CONNECTION WITH, ARISING OUT OF,
OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED AND
THE
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RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT
OCCURRING IN CONNECTION THEREWITH.
Section 11.16 Joint and Several Liability; Additional Waivers.
(a) This Agreement and the other Loan Documents shall in all
respects be the absolute, unconditional, joint, several and irrevocable
agreement of each Borrower to pay and perform the Obligations and each Borrower
jointly and severally agrees that the Obligations will be paid and performed
strictly in accordance with the terms of the Loan Documents under which they
arise, regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of the Agent, the
Banks or the Letter of Credit Banks with respect thereto. The liability of each
Borrower under this Agreement and the other Loan Documents shall remain in full
force and effect without regard to, and shall not (except to the extent of any
waivers or amendments to this Agreement or the other Loan Documents made in
accordance with Section 11.5 hereof) be released, suspended, discharged,
terminated, modified or otherwise affected by any circumstance or occurrence
whatsoever, including without limitation any of the following (whether or not
any Borrower consents thereto or has notice thereof): (i) any change in or
waiver of the time, place or manner of payment, or any other term, of any of the
Obligations or Loan Documents, any waiver of or any renewal, extension,
increase, amendment or modification of or addition, consent or supplement to or
deletion from, or any other action or inaction under or in respect of, any of
the Obligations or Loan Documents or any other document, instrument or agreement
referred to therein or any assignment or transfer of any of the Obligations or
Loan Documents; (ii) any lack of validity, legality or enforceability of any of
the Obligations or Loan Documents or any other document, instrument, or
agreement referred to therein or of any assignment or transfer of any of the
foregoing; (iii) any furnishing to the Agent, the Collateral Agent, the Banks or
the Letter of Credit Banks of any collateral for any of the Obligations or any
sale, exchange, release or surrender of, or realization on, any collateral for
any of the Obligations; (iv) any settlement, release or compromise of any of the
Obligations or Loan Documents, any collateral therefor, or any liability of any
other party (including without limitation any other Borrower or any guarantor)
with respect to any of the Obligations or Loan Documents, or any subordination
of payment of any of the Obligations to the payment of any other indebtedness,
liability or obligation of any Borrower; (v) any bankruptcy, insolvency,
reorganization, composition, adjustment, merger, consolidation, dissolution,
liquidation or other like proceeding or occurrence relating to any Borrower or
any other change in the ownership, composition or nature of any Borrower; (vi)
any non-perfection, subordination, release, avoidability or voidability of any
security interest, security title, pledge, collateral assignment or other lien
of the Agent, the Collateral Agent, any Bank or any Letter of Credit Bank on any
collateral for any of the Obligations or this Agreement or any other Loan
Document; (vii) any application of sums paid by any Borrower or any other person
with respect to any of the Obligations, except to the extent actually applied
against the Obligations, regardless of what other liabilities of such Borrower
remain unpaid; (viii) the failure of the Agent, the Collateral Agent, any Bank
or any Letter of Credit Bank to assert any claim or demand or to enforce any
right or remedy against any Borrower or any other person (including any Borrower
or any guarantor of any of the Obligations) under the provisions of any of the
Loan Documents or otherwise, or any failure of the Agent, the Collateral Agent,
any Bank or any Letter of Credit
73
Bank to exercise any right or remedy against any Borrower or any guarantor of or
any collateral for any of the Obligations; (ix) any other act or failure to act
by the Agent, the Collateral Agent, any Bank or any Letter of Credit Bank which
may adversely affect any Borrower; or (x) any other circumstance which might
otherwise constitute a defense against, or a legal or equitable discharge of,
any Borrower's liability under this Agreement or any other Loan Document.
(b) Except for notices and demands expressly required to be given
to the Borrower under this Agreement or the other Loan Documents, each Borrower
hereby waives: (i) notice of acceptance of this Agreement and the other Loan
Documents by the Agent, the Collateral Agent, the Banks and the Letter of Credit
Banks; (ii) notice of the creation, existence, acquisition, extension, or
renewal of any of the Obligations; (iii) notice of the amount of the Obligations
outstanding from time to time, subject, however, to each Borrower's right to
make inquiry of the Agent at reasonable intervals to ascertain the amount of
Obligations then outstanding; (iv) notice of any default or event of default
under any of the Loan Documents (other than any notice expressly required
thereunder) or with respect to any of the Obligations or notice of any other
adverse change in any Borrower's financial condition or means or ability to pay
any of the Obligations or perform its obligations under any of the Loan
Documents or notice of any other fact which might increase any Borrower's risk
hereunder; (v) notice of presentment, demand, protest, and notice of dishonor or
nonpayment as to any instrument; (vi) notice of any acceleration or other demand
for payment of any of the Obligations (except as otherwise expressly provided
herein); and (vii) all other notices and demands to which the Borrowers might
otherwise be entitled with respect to any of the Obligations or the Loan
Documents or with respect to the Agent's, the Collateral Agent's, the Banks' and
the Letter of Credit Banks' enforcement of their rights and remedies thereunder.
Each Borrower further waives any right such Borrower may have, by statute or
otherwise, to require the Agent, the Collateral Agent, the Banks or the Letter
of Credit Banks to seek recourse first against any other Borrower or any other
person, or to realize upon any collateral for any of the Obligations, as a
condition precedent to enforcing such Borrower's joint and several liability and
obligations under this Agreement and the other Loan Documents, and each Borrower
further waives any defense arising by reason of any incapacity or other
disability of any other Borrower or by reason of any other defense which any
Borrower may have on any of the Obligations or under any of the Loan Documents.
Each Borrower consents and agrees that, without notice to or consent by any
Borrower and without affecting or impairing the liability of any Borrower under
this Agreement and the other Loan Documents, the Agent, the Collateral Agent,
the Banks and the Letter of Credit Banks may compromise or settle, extend the
period of duration or the time for the payment, discharge or performance of any
of the Obligations or Loan Documents, or may refuse to enforce or may release
all or any parties to any or all of the Obligations (including without
limitation any other Borrower or any guarantor thereof) or any collateral
therefor, or may grant other indulgences to any other Borrower or such other
parties in respect thereof, or may waive, amend or supplement in any manner the
provisions of any of the Loan Documents or any other document, instrument or
agreement relating to or securing any of the Obligations, or may release,
surrender, exchange, modify, or compromise any and all collateral securing any
of the Obligations or in which the Agent, the Collateral Agent, any Bank or any
Letter of Credit Bank may at any time have a lien, or may refuse to enforce its
rights or may make any compromise or settlement or agreement therefor, in
respect of any and all of such collateral, or with any party to any of the
Obligations or
74
Loan Documents, or with any other person, or may release or substitute any one
or more of the other endorsers or guarantors of the Obligations, or may
exchange, enforce, waive or release any collateral for any guaranty of any of
the Obligations. Each Borrower further consents and agrees that the Agent, the
Collateral Agent, the Banks and the Letter of Credit Banks shall not be under
any obligation to marshal any assets in favor of any Borrower or against or in
payment of any of the Obligations.
(c) Each Borrower agrees that no payment, performance or
enforcement of such Borrower's liabilities and obligations under this Agreement
and the other Loan Documents shall cause such Borrower by subrogation or
otherwise, to acquire any rights of the Agent, the Collateral Agent, any Bank or
any Letter of Credit Bank against any Borrower or any property of any Borrower
(or any interest in such rights) unless and until the Agent, the Collateral
Agent, the Banks and the Letter of Credit Banks have received full and
indefeasible payment of all of the Obligations.
(d) Each reference to "the Borrower" in this Agreement shall
be deemed to be a reference to either Borrower or, collectively, both Borrowers,
as appropriate.
Section 11.17 Maximum Liability; Contribution Rights.
(a) It is the intention of the Borrowers and of the Banks, the
Letter of Credit Banks and the Agent that each Borrower's obligations hereunder
shall be in, but not in excess of, the maximum amount permitted by applicable
federal bankruptcy, state insolvency, fraudulent conveyance or transfer or
similar laws ("Applicable Bankruptcy Law"). To that end, but only to the extent
such obligations would otherwise be subject to avoidance under Applicable
Bankruptcy Law if any Borrower is not deemed to have received valuable
consideration, fair value or reasonably equivalent value for its obligations
hereunder, such Borrower's respective obligations hereunder shall be reduced to
that amount which, after giving effect thereto, would not render such Borrower
insolvent, or leave such Borrower with unreasonably small capital to conduct its
business, or cause such Borrower to have incurred debts (or intended to have
incurred debts) beyond its ability to pay such debts as they mature, at the time
such obligations are deemed to have been incurred under Applicable Bankruptcy
Law. As used herein, the terms "insolvent" and "unreasonably small capital"
shall likewise be determined in accordance with Applicable Bankruptcy Law. This
Section is intended solely to preserve the rights of the Banks, the Letter of
Credit Banks and the Agent hereunder to the maximum extent permitted by
Applicable Bankruptcy Law, and none of the Borrowers nor any other Persons shall
have any right or claim under this Section that would not otherwise be available
under Applicable Bankruptcy Law.
(b) If and to the extent that any Borrower shall, under this
Agreement or any other Loan Document make a payment (a "Borrower Payment") of
all or any portion of the Obligations, then such Borrower shall be entitled to
contribution and indemnification from each of the other Borrowers (collectively
the "Contributing Borrowers") in an amount, for each such Contributing Borrower,
equal to a fraction of such Borrower Payment, the numerator of which fraction is
such Contributing Borrower's Allocable Amount of such Borrower Payment and the
75
denominator of which is the sum of all of the Allocable Amounts of such Borrower
Payment of all of the Contributing Borrowers. As of any date of determination
thereof and with respect to any Borrower Payment, the "Allocable Amount" of each
Contributing Borrower shall be equal to the maximum amount of liability which
could be asserted against such Contributing Borrower under this Agreement or any
other Loan Document with respect to such Borrower Payment without (i) rendering
such Contributing Borrower insolvent, (ii) leaving such Contributing Borrower
with unreasonably small capital to conduct its business, or (iii) causing such
Contributing Borrower to have incurred debts beyond its ability to pay such
debts as they mature. As used in this Section 11.17, the terms "insolvent" and
"unreasonably small capital" shall be determined in accordance with Applicable
Bankruptcy Laws. This Section 11.17 is intended only to define the relative
rights and obligations of the Borrowers with respect to any and all Borrower
Payments, and nothing set forth in this Section 11.17 is intended to or shall
otherwise modify, affect or impair the obligations of the Borrowers, jointly and
severally, to pay any or all of the Obligations as and when the same shall
become due and payable in accordance with the terms of this Agreement and the
other Loan Documents. Each of the Borrowers hereby acknowledges that the rights
of contribution and indemnification hereunder shall constitute assets in favor
of each Borrower to which such contribution and indemnification is owing
hereunder. The agreements contained in this Section 11.17 shall continue in full
force and effect and may not be terminated or otherwise revoked by any Borrower
until all of the Obligations have been indefeasibly paid in full and this
Agreement and the other Loan Documents shall been terminated in accordance with
the terms thereof.
Section 11.18 Subordination. Until all of the Commitments and Letters
of Credit have been terminated and all Loans, Reimbursement Obligations and
other Obligations have been paid in full, all present and future indebtedness
and obligations of any Borrower to any other Borrower are hereby subordinated in
right of payment to the Obligations, provided, however, that any such Borrower
may receive payments of any such indebtedness so long as no Default shall have
occurred and be continuing hereunder. All monies received from any Borrower or
for its account by any other Borrower with respect to such indebtedness or
obligations after the occurrence and during the continuance of a Default
hereunder shall be received in trust for the Banks, the Letter of Credit Banks
and the Agent, and promptly upon receipt be paid over to the Agent upon its
request until the Obligations are fully paid, satisfied and performed, all
without prejudice to and without in any way affecting the obligations of any
Borrower hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers all as of the day and year first
written above.
COVENANT TRANSPORT, INC.,
a Tennessee corporation
as Borrower
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Treasurer/CFO
COVENANT LEASING, INC.,
a Nevada corporation
as Borrower
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Treasurer/CFO
ABN AMRO BANK N.V., as Agent
By: /s/ Xxxxxx X. X'Xxxxxx
Name: Xxxxxx X. X'Xxxxxx
Title: Senior Vice President
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Group Vice President
77
"Banks"
ABN AMRO BANK N.V.
By: /s/ Xxxxxx X. X'Xxxxxx
Name: Xxxxxx X. X'Xxxxxx
Title: Senior Vice President
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Group Vice President
Commitments: Amount: Percentage:
Revolving $30,000,000 23.0769231%
Term $30,000,000 23.0769231%
Base Rate Lending Office:
ABN AMRO BANK N.V.
000 Xxxxxxx Xxxxxx
00xx Xxxxx, Xxxxxxxxxxx Xxxxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
Eurodollar Lending Office:
ABN AMRO BANK N.V.
000 Xxxxxxx Xxxxxx
17th Floor, Syndication Department
New York, New York 10017
Attention: Xxxx Xxxxxxxx
Address for purposes of Section 11.1:
ABN AMRO Bank N.V.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Group Vice President
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
78
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Xxxxxxx X. Muft
Name: Xxxxxxx X. Muft
Title: Customer Service Officer
Commitments: Amount: Percentage:
Revolving $26,000,000 20.00000000%
Term $26,000,000 20.00000000%
Base Rate Lending Office:
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Eurodollar Lending Office:
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Address for purposes of Section 11.1:
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxx
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
79
NATIONSBANK, N.A. (successor
in interest by merger to
NationsBank of Georgia, N.A.)
By: /s/ Xxxxxxxx X. Xxxxxx
Name: Xxxxxxxx X.Xxxxxx
Title: Senior Vice President
Commitments: Amount: Percentage:
Revolving $26,000,000 20.00000000%
Term $26,000,000 20.00000000%
Base Rate Lending Office:
NationsBank, N.A.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Eurodollar Lending Office:
NationsBank, N.A.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Address for purposes of Section 11.1:
NationsBank, N.A.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx
Telecopier No.: 000-000-00000
Telephone No.: 000-000-0000
80
FIRST AMERICAN NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Commitments: Amount: Percentage:
Revolving $24,000,000 18.0000000000%
Term $24,000,000 18.0000000000%
Base Rate Lending Office:
First American National Bank
000 Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Eurodollar Lending Office:
First American National Bank
000 Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Address for purposes of Section 11.1:
First American National Bank
000 Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
81
SUNTRUST BANK, CHATTANOOGA, N.A.
By: /s/Von L. Long
Name: Von L. Long
Title: Vice President
Commitments: Amount: Percentage:
Revolving $24,000,000 18.0000000000%
Term $24,000,000 18.0000000000%
Base Rate Lending Office:
SunTrust Bank, Chattanooga, N.A.
Corporate Banking Department
Mail Code M0125
X.X. Xxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
(or for overnight deliveries: 000 Xxxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 37402)
Eurodollar Lending Office:
SunTrust Bank, Chattanooga, N.A.
Corporate Banking Department
Mail Code M0125
X.X. Xxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
(or for overnight deliveries: 000 Xxxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 37402)
Address for purposes of Section 11.1:
SunTrust Bank, Chattanooga, N.A.
Corporate Banking Department
Mail Code M0125
X.X. Xxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
(or for overnight deliveries: 000 Xxxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 37402)
Attention: Xxxxx Xxxxxxxx, Administrative Officer
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
82
