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EXHIBIT 99.1
LOAN AND SECURITY AGREEMENT
among
GREYHOUND LINES, INC.,
as Borrower,
THE FINANCIAL INSTITUTIONS NAMED HEREIN,
as Lenders,
and
FOOTHILL CAPITAL CORPORATION
as Agent
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TABLE OF CONTENTS
Page(s)
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1. DEFINITIONS AND CONSTRUCTION.............................................................................1
1.1 Definitions.................................................................................1
1.2 Accounting Terms...........................................................................27
1.3 Code.......................................................................................27
1.4 Construction...............................................................................27
1.5 Schedules and Exhibits.....................................................................27
2. LOAN AND TERMS OF PAYMENT...............................................................................28
2.1 Revolving Advances.........................................................................28
2.2 Letters of Credit..........................................................................34
2.3 [Intentionally Deleted]....................................................................36
2.4 [Intentionally Deleted]....................................................................36
2.5 Payments...................................................................................36
2.6 Overadvances...............................................................................37
2.7 Interest and Letter of Credit Fees: Rates, Payments, and Calculations.....................38
2.8 Collection of Accounts.....................................................................39
2.9 Crediting Payments; Application of Collections.............................................39
2.10 Designated Account.........................................................................40
2.11 Maintenance of Loan Account; Statements of Obligations.....................................40
2.12 Fees.......................................................................................40
2.13 Eurodollar Rate Loans......................................................................41
2.14 Illegality.................................................................................42
2.15 Requirements of Law........................................................................43
2.16 Taxes......................................................................................44
2.17 Indemnity..................................................................................46
2.18 Replacement of Lender......................................................................47
3. CONDITIONS; TERM OF AGREEMENT...........................................................................48
3.1 Conditions Precedent to the Initial Advance................................................48
3.2 Conditions Precedent to all Advances and all Letters of Credit.............................50
3.3 Condition Subsequent.......................................................................50
3.4 Term.......................................................................................50
3.5 Effect of Termination......................................................................51
3.6 Early Termination by Borrower..............................................................51
4. CREATION OF SECURITY INTEREST...........................................................................51
4.1 Grant of Security Interest.................................................................51
4.2 Negotiable Collateral......................................................................51
4.3 Collection of Accounts, General Intangibles, and Negotiable Collateral.....................51
4.4 Delivery of Additional Documentation Required..............................................52
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4.5 Power of Attorney..........................................................................52
4.6 Right to Inspect...........................................................................52
5. REPRESENTATIONS AND WARRANTIES..........................................................................53
5.1 No Encumbrances............................................................................53
5.2 [Intentionally Deleted]....................................................................53
5.3 Location of Vehicles.......................................................................53
5.4 [Intentionally Deleted]....................................................................53
5.5 Location of Inventory and Equipment........................................................53
5.6 Inventory Records..........................................................................53
5.7 Location of Chief Executive Office; FEIN...................................................54
5.8 Due Organization and Qualification; Subsidiaries...........................................54
5.9 Due Authorization; No Conflict.............................................................54
5.10 Litigation.................................................................................55
5.11 No Material Adverse Change.................................................................55
5.12 Solvency...................................................................................55
5.13 Employee Benefits..........................................................................55
5.14 Environmental Condition....................................................................56
5.15 Compliance With The ADA....................................................................56
6. AFFIRMATIVE COVENANTS...................................................................................56
6.1 Accounting System..........................................................................56
6.2 Collateral Reporting.......................................................................57
6.3 [Intentionally Deleted]....................................................................57
6.4 Financial Statements, Reports, Certificates................................................57
6.5 Registration, Use, Maintenance, Identification of Vehicles.................................58
6.6 Additional Vehicles........................................................................59
6.7 Title to Equipment.........................................................................59
6.8 Maintenance of Equipment...................................................................59
6.9 Taxes......................................................................................59
6.10 Insurance..................................................................................60
6.11 [Intentionally Deleted]....................................................................61
6.12 Location of Borrower's Books, Inventory, and Equipment.....................................61
6.13 Compliance with Laws.......................................................................61
6.14 Employee Benefits..........................................................................61
6.15 Leases.....................................................................................62
6.16 Environmental Condition....................................................................62
6.17 Compliance With The ADA....................................................................64
6.18 Updated Current Appraisals.................................................................64
7. NEGATIVE COVENANTS......................................................................................64
7.1 Indebtedness...............................................................................64
7.2 Liens......................................................................................65
7.3 Restrictions on Fundamental Changes........................................................65
7.4 Disposal of Assets.........................................................................66
7.5 Change Name................................................................................66
7.6 Guarantee..................................................................................66
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7.7 Restructure................................................................................67
7.8 Prepayments................................................................................67
7.9 Change of Control..........................................................................67
7.10 Restricted Payments........................................................................67
7.11 Accounting Methods.........................................................................69
7.12 Advances, Investments and Loans............................................................69
7.13 Transactions with Affiliates...............................................................71
7.14 Suspension.................................................................................72
7.15 Use of Proceeds............................................................................72
7.16 Change in Location of Chief Executive Office...............................................72
7.17 Restrictions Affecting Subsidiaries........................................................72
7.18 No Prohibited Transactions Under ERISA.....................................................73
7.19 Financial Covenants........................................................................74
7.20 Capital Expenditures.......................................................................74
7.21 Payment on Xxxxxxx Trade Payables..........................................................74
8. EVENTS OF DEFAULT.......................................................................................74
9. THE LENDER GROUP'S RIGHTS AND REMEDIES..................................................................76
9.1 Rights and Remedies........................................................................76
9.2 Remedies Cumulative........................................................................78
9.3 Foreclosure Not A Discharge................................................................78
9.4 Release of Trust Monies....................................................................79
10. TAXES AND EXPENSES......................................................................................79
11. WAIVERS; INDEMNIFICATION................................................................................79
11.1 Demand; Protest; etc.......................................................................79
11.2 The Lender Group's Liability for Collateral................................................79
11.3 Indemnification............................................................................80
12. NOTICES.................................................................................................80
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER..............................................................81
14. DESTRUCTION OF BORROWER'S DOCUMENTS.....................................................................82
15. ASSIGNMENTS AND PARTICIPATION; SUCCESSORS...............................................................82
15.1 Assignments and Participation..............................................................82
15.2 Successors.................................................................................84
15.3 Registry...................................................................................85
16. AMENDMENTS; WAIVERS.....................................................................................85
16.1 Amendments and Waivers.....................................................................85
16.2 No Waivers; Cumulative Remedies............................................................86
17. AGENT; THE LENDER GROUP.................................................................................86
17.1 Appointment and Authorization of Agent.....................................................86
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17.2 Delegation of Duties.......................................................................87
17.3 Liability of Agent-Related Persons.........................................................87
17.4 Reliance by Agent..........................................................................88
17.5 Notice of Default or Event of Default......................................................88
17.6 Credit Decision............................................................................89
17.7 Costs and Expenses; Indemnification........................................................89
17.8 Agent in Individual Capacity...............................................................90
17.9 Successor Agent............................................................................90
17.10 Withholding Tax............................................................................90
17.11 Collateral Matters.........................................................................91
17.12 Restrictions on Actions by Lenders; Sharing of Payments....................................92
17.13 Agency for Perfection......................................................................92
17.14 Payments by Agent to the Lenders...........................................................93
17.15 Concerning the Collateral and Related Loan Documents.......................................93
17.16 Field Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information....................................................................93
17.17 Several Obligations; No Liability..........................................................94
18. GENERAL PROVISIONS......................................................................................94
18.1 Effectiveness..............................................................................94
18.2 Section Headings...........................................................................94
18.3 Interpretation.............................................................................95
18.4 Severability of Provisions.................................................................95
18.5 Counterparts; Telefacsimile Execution......................................................95
18.6 Revival and Reinstatement of Obligations...................................................95
18.7 Integration................................................................................95
18.8 Confidentiality............................................................................95
18.9 Survival of Indemnification Obligations....................................................96
18.10 Conflicting Terms..........................................................................96
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SCHEDULES AND EXHIBITS
Schedule C-1 Commitment Amounts; Wire Transfer Payment Instructions
Schedule C-2 Form of Compliance Certificate
Schedule E-1 Existing Indebtedness
Schedule F-1 Form of Financial Covenant Compliance Certificate
Schedule P-1 Permitted Liens
Schedule R-1 Real Property Collateral/Current Appraisals/Etc.
Schedule 2.2(d) Letter of Credit Fees and Costs
Schedule 5.3 Vehicles/Core Vehicles
Schedule 5.8 Subsidiaries
Schedule 5.13 ERISA Benefit Plans
Schedule 5.14 Environmental
Schedule 6.4(e) Form of Borrowing Base Certificate
Schedule 6.10 Current Insurance
Schedule 6.10(a) SFHAs
Schedule 6.12 Location of Books and Records, Inventory and Equipment
Schedule 7.6(h) Existing Guarantees
Schedule 7.12(j) Existing Investments
Schedule 18.8 Form of Confidentiality Agreement
Exhibit A-1 Form of Assignment and Acceptance
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (THIS "AGREEMENT"), is entered into as
of October 24, 2000, among GREYHOUND LINES, INC., a Delaware corporation
("Borrower"), with its chief executive office located at 00000 X. Xxxxxx
Xxxxxxx, Xxxxxx, Xxxxx 00000, on the one hand, and the financial institutions
listed on the signature pages hereof (such financial institutions, together with
their respective successors and assigns, are referred to hereinafter each
individually as a "Lender" and collectively as the "Lenders"), and FOOTHILL
CAPITAL CORPORATION, as agent ("Agent"), on the other hand.
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. As used in this Agreement, the following
terms shall have the following definitions:
"Account Debtor" means any Person who is or who may
become obligated under, with respect to, or on account of, an Account.
"Accounts" means all currently existing and hereafter
arising accounts, contract rights, and all other forms of obligations owing to
Borrower arising out of the sale or lease of goods or the rendition of services
by Borrower, irrespective of whether earned by performance, and any and all
credit insurance, guaranties, or security therefor.
"Act" means all applicable present and future laws,
regulations, statutes, common law, rules, ordinances, codes, licenses, permits,
orders, approvals, authorizations, concessions, franchises, and legally binding
similar items of any federal, state, or local government, instrumentality, or
body having jurisdiction over the Real Property and related to Hazardous
Materials, as the same may be amended, modified, or supplemented from time to
time.
"ADA" means the Americans with Disabilities Act, 42
U.S.C. Sections 12101, et. seq., and all applicable rules and regulations
promulgated thereunder.
"Adjusted Eurodollar Rate" means, with respect to
each Interest Period for any Eurodollar Rate Loan, the rate per annum (rounded
upwards, if necessary, to the next 1/16%) determined by dividing (a) the
Eurodollar Rate for such Interest Period by (b) a percentage equal to (i) 100%
minus (ii) the Reserve Percentage. "Reserve Percentage" means the then stated
rate of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves required by applicable law)
applicable to any member bank of the Federal Reserve System in respect of
eurocurrency funding or liabilities as defined in Regulation D of the Board of
Governors of the Federal Reserve System (or any successor category of
liabilities under Regulation D). The Adjusted Eurodollar Rate shall be adjusted
on and as of the effective day of any change in the Reserve Percentage.
"Advances" has the meaning set forth in Section
2.1(a).
Schedule 1, Pg. 1
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"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as used with
respect to any Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise.
"Affiliate Transaction" has the meaning set forth in
Section 7.13.
"Agent" has the meaning set forth in the preamble
hereto.
"Agent Advance" has the meaning set forth in Section
2.1(h).
"Agent Loan" has the meaning set forth in Section
2.1(g).
"Agent Loan Availability" means, as of the date of
determination, the result (so long as such result is a positive number) of (a)
$10,000,000, less (b) the then outstanding balance of Agent Loans.
"Agent-Related Persons" means Agent, together with
its Affiliates, and the officers, directors, employees, counsel, agents, and
attorneys-in-fact of Agent and such Affiliates.
"Agent's Account" has the meaning set forth in
Section 2.8.
"Agent's Fee Letter" means that certain letter
addressed to Agent by Borrower, of even date herewith.
"Agreement" has the meaning set forth in the preamble
hereto.
"Asset Sale" means (a) the sale, lease, conveyance or
other disposition (a "disposition") by Borrower or its Restricted Subsidiaries
of any assets or rights (including, without limitation, by way of a sale and
leaseback), excluding sales of passenger tickets and inventory in the ordinary
course of business (provided that the disposition of all or substantially all of
the assets of Borrower and its Restricted Subsidiaries taken as a whole will be
governed by Section 7.3 and not by the provisions of Section 7.4) and (b) the
issue or sale by Borrower or any of its Restricted Subsidiaries of Equity
Interests of any of Borrower's Subsidiaries, in the case of either clause (a) or
(b), whether in a single transaction or a series of related transactions (i)
that have a fair market value in excess of $1,000,000 or (ii) for net proceeds
in excess of $1,000,000. Notwithstanding the foregoing, (i) Borrower shall not
dispose of more than 33 1/3% of its interest in any Wholly Owned Restricted
Subsidiary except to another Wholly Owned Restricted Subsidiary and (ii) the
following transactions will be deemed not to be Asset Sales, if conducted prior
to the occurrence and continuation of an Event of Default: (A) a sale for fair
market value of Real Property not constituting Core Real Property Collateral and
obsolete or excess buses and motor vehicles that are not Vehicles; (B) a
disposition of assets by Borrower to a Wholly Owned Restricted Subsidiary or by
a Wholly Owned Restricted Subsidiary to Borrower or to another Wholly Owned
Restricted Subsidiary; (C) a disposition of Equity Interests in a Wholly Owned
Schedule 1, Pg. 2
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Restricted Subsidiary to Borrower or to another Wholly Owned Restricted
Subsidiary, (D) a sale-leaseback transaction, where the sale is for fair market
value, involving buses and motor vehicles that are not Vehicles or Real Property
not constituting Core Real Property Collateral within 365 days of the
acquisition of such buses or Real Property by Borrower or any of its Restricted
Subsidiaries; (E) a disposition of assets for fair market value by Borrower or
any of its Restricted Subsidiaries to a Person that is an Affiliate of Borrower
or such Restricted Subsidiary and is engaged in the passenger transportation
business (or a business that is reasonably complementary or related thereto as
determined in good faith by the Board of Directors), which Person is an
Affiliate solely because Borrower or such Restricted Subsidiary has an
Investment in such Person, provided, that such transaction complies with Section
7.13; (F) any customary pooling, interline, intermodal or other similar
arrangement with another Person engaged in the passenger transportation business
(including, without limitation, related dispositions of buses, terminal space
and other assets); and (G) a disposition of the Equity Interests of Affiliates
or Unrestricted Subsidiaries in a cumulative amount not to exceed $30,679,000.
"Assignee" has the meaning set forth in Section 15.1.
"Assignment and Acceptance" has the meaning set forth
in Section 15.1(a) and shall be in the form of Exhibit A-1.
"Authorized Person" means any officer or other
employee of Borrower.
"Availability" means, as of the date of
determination, the result (so long as such result is a positive number) of (a)
the lesser of the Borrowing Base or the Maximum Revolving Amount, less (b) the
Revolving Facility Usage.
"Average Unused Portion of Maximum Revolving Amount"
means, as of any date of determination, (a) the Maximum Revolving Amount, less
(b) the sum of (i) the average Daily Balance of Advances that were outstanding
during the immediately preceding month, plus (ii) the average Daily Balance of
the undrawn Letters of Credit that were outstanding during the immediately
preceding month.
"Bank" means Xxxxx Fargo Bank, National Association,
or any successor thereto.
"Bankruptcy Code" means the United States Bankruptcy
Code (11 U.S.C. Section 101 et seq.), as amended, and any successor statute.
"Base Rate" means, the rate of interest announced by
Bank at its principal office in San Francisco as its "prime rate", with the
understanding that the "prime rate" serves as the basis upon which effective
rates of interest are calculated for those loans making reference thereto and
does not necessarily represent the lowest or best rate actually charged to a
customer by Bank.
"Base Rate Loans" means any loan or Advance (or any
portion thereof) made pursuant to Section 2.1 during any period when interest on
such loan or Advance (or portion thereof) is payable based on the Base Rate.
Schedule 1, Pg. 3
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"Base Rate Margin" means:
(a) 0.50% per annum from and including the Closing
Date until the first adjustment pursuant to clause (b) hereof; or
(b) on the first day of the first month following
delivery to Agent of the financial statements of Borrower required pursuant to
Section 6.4(a) for any March, June, September, or December, commencing with
December 2000, together with the corresponding certificate of Borrower's Chief
Financial Officer pursuant to Section 6.4(d) for the twelve month period ending
on the last day of such month, the percentage per annum set forth below
corresponding to the Total Indebtedness to Consolidated Cash Flow ratio for such
twelve month period:
Total Indebtedness to
Consolidated Cash Flow Ratio Base Rate Margin
---------------------------- ----------------
4.25:1.0 or greater 1.00%
less than 4.25: 1.0, but greater than 0.75%
or equal to 3.75:1.0
less than 3.75:1.0, but greater than 0.50%
or equal to 3.25:1.0
less than 3.25:1.0, but greater than 0.25%
or equal to 2.75:1.0
less than 2.75:1.0 0.00%
Notwithstanding anything in this definition to the contrary, in the event that,
with respect to any twelve month period of Borrower which shall end on a fiscal
year end, the audited financial statements of Borrower required under Section
6.4 for such fiscal year shall indicate a Total Indebtedness to Consolidated
Cash Flow ratio for such twelve month period (as determined by Agent and agreed
to by Borrower) greater than that reflected in the Compliance Certificate
delivered to Agent for such twelve month period (and the difference is not
attributable to a change in accounting methodology), the Base Rate Margin shall
be adjusted retroactively (to the effective date of the Base Rate Margin which
was determined based upon the delivery of such incorrect Compliance Certificate)
to reflect a Base Rate Margin based upon the Total Indebtedness to Consolidated
Cash Flow ratio determined from the audited financial statements and Borrower
shall make payments to Agent on behalf of the Lenders to reflect such
adjustment.
"Benefit Plan" means a "defined benefit plan" (as
defined in Section 3(35) of ERISA) for which Borrower, any Subsidiary of
Borrower, or any ERISA Affiliate has been an "employer" (as defined in Section
3(5) of ERISA) within the past six years and which is subject to Section 413 of
the IRC and Section 302 of ERISA.
"Board of Directors" means the Board of Directors of
Borrower or any authorized committee of such Board of Directors.
Schedule 1, Pg. 4
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"Borrower" has the meaning set forth in the preamble
to this Agreement.
"Borrower's Books" means all of Borrower's presently
existing and hereafter existing books and records including: ledgers; records
indicating, summarizing, or evidencing Borrower's properties or assets
(including the Collateral) or liabilities; all information relating to
Borrower's business operations or financial condition; and all computer
programs, disk or tape files, printouts, runs, or other computer prepared
information.
"Borrowing" means a borrowing hereunder consisting of
Advances made on the same day by the Lenders, or by Agent in the case of an
Agent Loan or an Agent Advance.
"Borrowing Base" has the meaning set forth in Section
2.1(a).
"Business Day" means any day that is not a Saturday,
Sunday, or other day on which national banks are authorized or required to
close, and, if the applicable Business Day relates to any Eurodollar Rate Loan,
means such a day on which dealings are carried on in the London interbank
market.
"Capital Expenditure" means, without duplication,
expenditures (including, without limitation, Capital Lease Obligations and
purchase money Indebtedness in the year in which created but excluding payments
made thereon) of Borrower and its Restricted Subsidiaries in respect of the
purchase or other acquisition of fixed or capital assets (excluding (i) capital
expenditures for buses and other motor vehicles and (ii) purchases of all or
substantially all of the assets of a Person by Borrower or a Restricted
Subsidiary).
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at such time be required to be capitalized on a balance
sheet in accordance with GAAP; provided, however capital leases of buses and
other motor vehicles shall be excluded from this definition.
"Capital Stock" means (a) in the case of a
corporation, corporate stock, (b) in the case of an association or business
entity, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock (c) in the case of a
partnership or limited liability company, partnership or membership interests
(whether general or limited) and (d) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) United States dollars,
(b) securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof having maturities of
not more than six months from the date of acquisition, (c) certificates of
deposit and eurodollar time deposits with maturities of six months or less from
the date of acquisition, bankers' acceptances with maturities not exceeding six
months and overnight bank deposits, in each case with any domestic commercial
bank having capital and surplus in excess of $500,000,000, (d) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (b) and (c) above entered into with any financial
institution meeting the qualifications specified in clause (c) above, (d)
commercial paper having the highest rating obtainable from Xxxxx'x Investors
Service, Inc. or Standard & Poor's Rating Service and in each case maturing
within six months
Schedule 1, Pg. 5
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after the date of acquisition and (e) money market mutual funds substantially
all of the assets of which are of the type described in the foregoing clauses
(a) through (d).
"Change of Control" shall be deemed to have occurred
at such time after the Closing Date as a "person" or "group" (within the meaning
of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) other
than Xxxxxxx or a wholly owned Subsidiary of Xxxxxxx becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934),
directly or indirectly, of more than 25% of the total voting power of all
classes of stock then outstanding of Borrower entitled to vote in the election
of directors; provided, however, that a change in the ownership of Xxxxxxx,
shall not constitute a Change of Control.
"Closing Date" means the date of the making of the
initial Advance hereunder.
"Code" means the California Uniform Commercial Code,
as in effect from time to time.
"Collateral" means each of the following:
(a) the Accounts,
(b) Borrower's Books,
(c) the Equipment,
(d) the General Intangibles,
(e) the Inventory,
(f) the Negotiable Collateral,
(g) the Real Property Collateral,
(h) the Vehicles and any parts therefor;
(i) any money, or other assets of Borrower that now
or hereafter come into the possession, custody, or control of the Lender Group,
and
(j) the proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance covering
any or all of the Collateral, and any and all Accounts, Borrower's Books,
Equipment, General Intangibles, Inventory, Negotiable Collateral, Real Property
Collateral, Vehicles, money, deposit accounts, or other tangible or intangible
property resulting from the sale, exchange, collection, or other disposition of
any of the foregoing, or any portion thereof or interest therein, and the
proceeds thereof. Collateral does not include buses or motor vehicles that are
not Vehicles or Real Property which is not Real Property Collateral.
Schedule 1, Pg. 6
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"Collateral Access Agreement" means a landlord
waiver, mortgagee waiver, bailee letter, or acknowledgement agreement of any
warehouseman, processor, lessor, consignee, or other Person in possession of,
having a Lien upon, or having rights or interests in the Collateral other than
any Person having possession of any Collateral which is in-transit or out for
repair, in each case, in form and substance satisfactory to Agent.
"Collateral Agency Agreement" means that certain
Collateral Agency Agreement, dated as of October 17, 2000, between Lexis
Document Services, Inc., and Agent and acknowledged by Borrower and the
Guarantors.
"Collections" means all cash, checks, notes,
instruments, and other items of payment (including, insurance proceeds, proceeds
of sales, rental proceeds, and tax refunds).
"Commitment" means, at any time with respect to a
Lender, the principal amount set forth beside such Lender's name under the
heading "Commitment" on Schedule C-1 or on the signature page of the Assignment
and Acceptance pursuant to which such Lender became a Lender hereunder in
accordance with the provisions of Section 15.1, as such Commitment may be
adjusted from time to time in accordance with the provisions of Section 15.1 and
"Commitments" means, collectively, the aggregate amount of the commitments of
all of the Lenders.
"Common Stock" means the common stock of Borrower,
par value $0.01 per share.
"Compliance Certificate" means a certificate
substantially in the form of Schedule C-2 and delivered by the Chief Financial
Officer of Borrower to Agent.
"Consolidated Cash Flow" means, with respect to any
Person for any period, the Consolidated Net Income of such Person for such
period plus, to the extent deducted or excluded in calculating Consolidated Net
Income for such period, (a) an amount equal to any extraordinary loss plus any
net loss realized in connection with an Asset Sale, (b) provision for taxes
based on income or profits of such Person and its Restricted Subsidiaries, (c)
Consolidated Interest Expense and (d) depreciation and amortization (including
amortization of goodwill and other intangibles but excluding amortization of
prepaid cash expenses that were paid in a prior period) of such Person and its
Restricted Subsidiaries, in each case, on a consolidated basis and determined in
accordance with GAAP.
"Consolidated Interest Coverage Ratio" means with
respect to any Person for any period, the ratio of the Consolidated Cash Flow of
such Person for such period to the Consolidated Interest Expense of such Person
for such period; provided, however, that the Consolidated Interest Coverage
Ratio shall be calculated giving pro forma effect to each of the following
transactions as if each such transaction had occurred at the beginning of the
applicable four-quarter reference period: (a) any incurrence, assumption,
guarantee, or redemption by Borrower or any of its Restricted Subsidiaries of
any Indebtedness (other than the Obligations) subsequent to the commencement of
the four quarter period for which the Consolidated Interest Coverage Ratio is
being calculated but prior to the date on which the event for which the
calculation of the Consolidated Interest Coverage Ratio is made (the
"Calculation Date"); (b) any
Schedule 1, Pg. 7
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Permitted Investment, or any Restricted Payment permitted to be made under
Section 7.10, that has been made by Borrower or any of its Restricted
Subsidiaries, or approved and expected to be consummated within 30 days of the
Calculation Date, including, in each case, through a merger or consolidation,
and including any related financing transactions, during the four-quarter
reference period or subsequent to such reference period and on or prior to the
Calculation Date (in which case, for purposes of this definition, Consolidated
Cash Flow for such reference period shall be calculated without giving effect to
clause (c) of the proviso set forth in the definition of Consolidated Net
Income); and (c) any other transaction that may be given pro forma effect in
accordance with Article 11 of Regulation S-X as in effect from time to time;
provided further, however, that (i) the Consolidated Cash Flow attributable to
operations or businesses disposed of prior to the Calculation Date shall be
excluded and (ii) the Consolidated Interest Expense attributable to operations
or businesses disposed of prior to the Calculation Date shall be excluded, but
only to the extent that the obligations giving rise to such Consolidated
Interest Expense will not be obligations of the referent Person or any of its
Restricted Subsidiaries following the Calculation Date.
"Consolidated Interest Expense" means, with respect
to any Person for any period, the sum, without duplication, of (a) the
consolidated interest expense of such Person and its Restricted Subsidiaries for
such period, whether paid or accrued (including, without limitation,
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financing, and net payments
(if any) pursuant to Hedging Obligations) and (b) the consolidated interest
expense of such Person and its Restricted Subsidiaries that was capitalized
during such period.
"Consolidated Net Income" means, with respect to any
Person for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided, however, that (a) the Net Income (but not loss)
of any Person that is not a Restricted Subsidiary or that is accounted for by
the equity method of accounting shall be included only to the extent of the
amount of dividends or distributions paid in cash to the referent Person or a
Wholly Owned Restricted Subsidiary thereof, (b) the Net Income of any Restricted
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary or its stockholders, (c) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded and (d) the cumulative effect of a change in
accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any
Person as of any date, the sum of (a) the consolidated equity of the common
stockholders of such Person and its consolidated Restricted Subsidiaries as of
such date; plus (b) the respective amounts reported on such Person's balance
sheet as of such date with respect to any series of preferred stock (other than
Disqualified Stock) that by its terms is not entitled to the payment of
dividends unless such
Schedule 1, Pg. 8
15
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred stock; plus (c) the
amount (but in no event more than $30,000,000) by which the consolidated equity
described in clause (a) above would be reduced in the event the unfunded
accumulated pension obligation of Borrower under the Plans is increased as a
result of a Requirement of Law; plus (d) in the case of Borrower, the amount of
Indebtedness evidenced by, and subordinated to the Obligations by, the
Intercompany Agreement.
"Convertible Debentures" shall mean the debentures
issued pursuant to that certain Indenture dated as of April 10, 1992 by and
between Borrower and State Street Bank and Trust Company (as
successor-in-interest to The Connecticut National Bank), as the same has been
amended or supplemented from time to time.
"Core Real Property Collateral" means each parcel of
the Real Property Collateral that is so designated on Schedule R-1, and for
which each of the following exists: (1) a Current Appraisal containing a Fair
Market Value, (2) a duly executed Mortgage, (3) a mortgagee title insurance
policy or endorsement (or marked commitment to issue the same) issued by Chicago
Title (each a "Mortgage Policy" and, collectively, the "Mortgage Policies") in
an amount satisfactory to Agent (but not to exceed the Fair Market Value of such
parcel) assuring Agent that the Mortgage on such Core Real Property Collateral
is a valid and enforceable first priority mortgage Lien, free and clear of all
defects and encumbrances except Permitted Liens, and the Mortgage Policy shall
otherwise be in form and substance satisfactory to Agent, and (4) a Phase-I
(and, where reasonably required by Agent, a Phase II) environmental report, with
the environmental consultants retained for such report, the scope of the report,
and the results thereof being reasonably acceptable to Agent; provided, however,
that the failure of Borrower to provide any of the foregoing items in clauses
(1) through (4) for any such parcel identified as Core Real Property Collateral
shall not prevent the funding of the Advances under Section 2.1 (a)(y), but
until such failure is corrected such parcel shall not be included in calculating
the Borrowing Base.
"Core Vehicles" means Vehicles for which each of the
following exists: (a) a Wholesale Value; and (b) a certificate of title (or the
relevant applications therefor, duly completed and executed by Borrower), in the
possession of Agent, properly reflecting Agent's first priority Lien on behalf
of the Lender Group, each of the foregoing of which shall be reasonably
satisfactory to Agent.
"Current Appraisal" means: (a) with respect to
Vehicles, an appraisal by Motor Coach Industries or another appraisal firm
reasonably acceptable to Agent and Borrower, which appraisal shall be in form
and substance reasonably satisfactory to Agent. As of the Closing Date the
Current Appraisal for Vehicles is the updated desk top appraisal dated August
25, 2000, by Motor Coach Industries. Upon completion of any new appraisal of
Vehicles pursuant to the terms of Section 6.18, such new appraisal shall be
deemed the Current Appraisal hereunder; and (b) with respect to any parcel of
Core Real Property Collateral, a FIRREA appraisal by an appraisal firm
reasonably acceptable to the Agent, in form and substance reasonably
satisfactory to the Agent. Upon completion of any new appraisal of any Core Real
Property Collateral pursuant to the terms of Section 6.18, such new appraisal
shall be deemed the Current Appraisal for the subject parcel of Core Real
Property Collateral.
Schedule 1, Pg. 9
16
"Daily Balance" means the amount of an Obligation
owed at the end of a given day.
"Default" means an event, condition, or default under
Section 8 that, with the giving of notice, the passage of time, or both, would
be an Event of Default.
"Defaulting Lender" has the meaning set forth in
Section 2.1 (f)(ii).
"Defaulting Lenders Rate" means the Base Rate for the
first three days from and after the date the relevant payment is due and
thereafter at the interest rate then applicable to Base Rate Loans.
"Designated Account" means account number *** of
Borrower maintained with the Designated Account Bank, or such other deposit
account of Borrower (located within the United States) which has been
designated, in writing and from time to time, by Borrower to Agent.
"Designated Account Bank" means ***, whose office is
located *** and whose ABA number is ***, or such other bank as Borrower shall
designate from time to time and which is reasonably acceptable to Agent.
"Designated Payables" has the meaning set forth in
Section 6.2.
"Disbursement Letter" means an instructional letter
executed and delivered by Borrower to Agent regarding the extensions of credit
to be made on the Closing Date, the form and substance of which shall be
reasonably satisfactory to Agent.
"Disqualified Stock" means any Capital Stock that, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures
(excluding any maturity as a result of an optional redemption by the issuer
thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the holder thereof, in whole or in
part, on or prior to the date that is 91 days after the date on which the Senior
Notes mature or are redeemed or retired in full; provided, however, that any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof (or of any security into which it is convertible or for which it
is exchangeable) have the right to require the issuer to repurchase such Capital
Stock (or such security into which it is convertible or for which it is
exchangeable) upon the occurrence of an Asset Sale or a Change of Control shall
not constitute Disqualified Stock if such Capital Stock (and all such securities
into which it is convertible or for which it is exchangeable) provides that the
issuer thereof will not repurchase or redeem any such Capital Stock (or any such
security into which it is convertible or for which it is exchangeable) pursuant
to such provisions prior to compliance by Borrower with the provisions of
Section 7.4.
"Dollars or $" means United States dollars.
"Eligible Transferee" means (a) a commercial bank
organized under the laws of the United States, or any state thereof, and having
total assets in excess of $5,000,000,000, or the asset based lending Affiliate
of such bank, (b) a commercial bank
*** Redact for security of confidential information
Schedule 1, Pg. 10
17
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development or a political subdivision
of any such country, and having total assets in excess of $5,000,000,000, or the
asset based lending Affiliate of such bank; provided that such bank is acting
through a branch or agency located in the United States, (c) a finance company,
insurance or other financial institution, or fund that is engaged in making,
purchasing, or otherwise investing in commercial loans in the ordinary course of
its business and having total assets in excess of $500,000,000, (d) any
Affiliate (other than individuals) of an existing Lender, and (e) any other
Person approved by Agent and Borrower.
"Equipment" means all of Borrower's present and
hereafter acquired machinery, machine tools, motors, equipment, furniture,
furnishings, fixtures, tools, parts, dies, jigs, goods (other than Vehicles,
buses, motor vehicles, consumer goods, farm products, or Inventory), wherever
located, and any interest of Borrower in any of the foregoing, and all
attachments, accessories, accessions, replacements, substitutions, additions,
and improvements to any of the foregoing, wherever located; provided, however,
"Equipment" shall not include any fixture located on any real estate other than
the Real Property Collateral, or any parts of buses, Vehicles or motor vehicles.
"Equity Interests" means Capital Stock and all
warrants, options or other rights to acquire Capital Stock (but excluding any
debt security that is convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security
Act of 1974, 29 U.S.C. Sections 1000 et seq., amendments thereto, successor
statutes, and regulations or guidance promulgated thereunder.
"ERISA Affiliate" means (a) any Subsidiary of
Borrower subject to ERISA whose employees are treated as employed by the same
employer as the employees of Borrower under IRC Section 414(b), (b) any trade or
business subject to ERISA whose employees are treated as employed by the same
employer as the employees of Borrower under IRC Section 414(c), (c) solely for
purposes of Section 302 of ERISA and Section 412 of the IRC, any organization
subject to ERISA that is a member of an affiliated service group of which
Borrower is a member under IRC Section 414(m), or (d) solely for purposes of
Section 302 of ERISA and Section 412 of the IRC, any party subject to ERISA that
is a party to an arrangement with Borrower and whose employees are aggregated
with the employees of Borrower under IRC Section 414(o).
"ERISA Event" means (a) for the six year period
immediately preceding the Closing Date, a Reportable Event with respect to any
Benefit Plan or Multiemployer Plan, (b) the withdrawal of Borrower, any of its
Subsidiaries or ERISA Affiliates from a Benefit Plan during a plan year in which
it was a "substantial employer" (as defined in Section 4001(a)(2) of ERISA), (c)
the providing of notice of intent to terminate a Benefit Plan in a distress
termination (as described in Section 4041(c) of ERISA), (d) the institution by
the PBGC of proceedings to terminate a Benefit Plan or Multiemployer Plan, (e)
any event or condition (i) that provides a basis under Section 4042(a)(1), (2),
or (3) of ERISA for the termination of, or the appointment of a trustee to
administer, any Benefit Plan or Multiemployer Plan, or (ii) that may result in
termination of a Multiemployer Plan pursuant to Section 4041A of ERISA, (f) the
partial or
Schedule 1, Pg. 11
18
complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of
Borrower, any of its Subsidiaries or ERISA Affiliates from a Multiemployer Plan,
or (g) providing any security to any Plan under Section 401(a)(29) of the IRC by
Borrower or its Subsidiaries or any of their ERISA Affiliates.
"Eurodollar Rate" means, with respect to the Interest
Period for a Eurodollar Rate Loan, the interest rate per annum (rounded upwards,
if necessary, to the next 1/16%) notified to Agent by Bank as the rate of
interest at which United States dollar deposits would be offered to Bank by
major banks in the London interbank market (or other Eurodollar Rate market
selected by Borrower and approved by Agent) on or about 11:00 a.m. (California
time) two Business Days prior to the commencement of such Interest Period in
amounts substantially equal to the principal amount of the Eurodollar Rate Loans
requested by and available to Borrower in accordance with this Agreement, with a
maturity of comparable duration to the Interest Period selected by Borrower.
"Eurodollar Rate Loans" means any loan or Advance (or
any portion thereof) made pursuant to Section 2.1 during any period when
interest on such loan or Advance (or portion thereof) is payable based on the
Adjusted Eurodollar Rate.
"Eurodollar Rate Margin" means:
(a) 2.0% per annum from and including the Closing
Date until the first adjustment pursuant to clause (b) hereof; or
(b) on the first day of the first month following
delivery to Agent of the financial statements of Borrower required pursuant to
Section 6.4(a) for any March, June, September, or December, commencing with
December 2000, together with the corresponding certificate of Borrower's Chief
Financial Officer pursuant to Section 6.4(d) for the twelve month period ending
on the last day of such month, the percentage per annum set forth below
corresponding to the Total Indebtedness to Consolidated Cash Flow ratio for such
twelve month period:
Total Indebtedness to
Consolidated Cash Flow Ratio Eurodollar Rate Margin
---------------------------- ----------------------
4.25:1.0 or greater 2.50%
less than 4.25:1.0, but greater than or 2.25%
equal to 3.75:1.0
less than 3.75:1.0, but greater than or 2.00%
equal to 3.25:1.0
less than 3.25:1.0, but greater than or 1.75%
equal to 2.75:1.0
less than 2.75:1.0 1.50%
Schedule 1, Pg. 12
19
Notwithstanding anything in this definition to the contrary, in the event that,
with respect to any twelve month period of Borrower which shall end on a fiscal
year end, the audited financial statements of Borrower required under Section
6.4 for such fiscal year shall indicate a Total Indebtedness to Consolidated
Cash Flow ratio for such twelve month period (as determined by Agent and agreed
to by Borrower) greater than that reflected in the Compliance Certificate
delivered to Agent for such twelve month period (and the difference is not
attributable to a change in accounting methodology), the Eurodollar Rate Margin
shall be adjusted retroactively (to the effective date of the Eurodollar Rate
Margin which was determined based upon the delivery of such incorrect Compliance
Certificate) to reflect a Eurodollar Rate Margin based upon the Total
Indebtedness to Consolidated Cash Flow ratio determined from the audited
financial statements and Borrower shall make payments to Agent on behalf of the
Lenders to reflect such adjustment. Any such changes in the Eurodollar Rate
Margin shall only affect Eurodollar Rate Loans with Interest Periods that
commenced on or after the effective date of such change.
"Event of Default" has the meaning set forth in
Section 8.
"Exchange Debentures" means the 8 1/2% Convertible
Subordinated Debentures due 2009 as provided for in the Indenture dated April
16, 1997 between Borrower and U.S. Trust of Texas, N.A.
"Existing Indebtedness" means Indebtedness of
Borrower and its Restricted Subsidiaries (other than Indebtedness hereunder) in
existence on the date hereof, as set forth on Schedule E-1, until such amounts
are repaid.
"Existing Unrestricted Subsidiaries" means Amarillo
Trailways Bus Center, Inc., American Bus Sales Associates, Inc., Americanos
U.S.A., L.L.C., Autobuses Amigos, L.L.C., Xxxxxxxx, Inc., and Wilmington Union
Bus Station Corporation.
"Fair Market Value" means, (i) with respect to a
parcel of Core Real Property Collateral, the fair market value thereof as set
forth in the Current Appraisal thereof, and (ii) with respect to each share of
Common Stock, the closing price of a share of Common Stock on the principal
securities exchange on which the Common Stock is traded on the first trading day
preceding the announcement of the transaction pursuant to which such shares of
Common Stock were issued, or, if the Common Stock is not then traded on a
securities exchange, the fair market value of each share of Common Stock.
"Financial Covenant Compliance Certificate" means a
certificate substantially in the form of Schedule F-1, and delivered by the
Chief Financial Officer of Borrower to Agent.
"FEIN" means Federal Employer Identification Number.
"Foothill" means Foothill Capital Corporation, a
California corporation.
"Funding Date" means the date on which a Borrowing
occurs.
Schedule 1, Pg. 13
20
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board and the rules and
regulations of the Securities and Exchange Commission or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect from time to time.
"General Intangibles" means all of Borrower's present
and future general intangibles (including contract rights, rights arising under
common law, statutes, or regulations, choses or things in action, goodwill,
patents, trade names, trademarks, servicemarks, copyrights, blueprints,
drawings, purchase orders, customer lists, monies due or recoverable from
pension funds, route lists, rights to payment and other rights under any royalty
or licensing agreements, infringement claims, computer programs, information
contained on computer disks or tapes, literature, reports, catalogs, deposit
accounts, insurance premium rebates, tax refunds, and tax refund claims), other
than goods, Accounts, and Negotiable Collateral; provided, however, that
"General Intangibles" shall not include any property (including any
self-insurance reserve or deposit of Borrower or any of its Affiliates) or
contract right the granting of a security interest in which would be prohibited
by law or contract or any leases of buses or motor vehicles which are not
Vehicles.
"Governing Documents" means the certificate or
articles of incorporation, by-laws, or other organizational or governing
documents of any Person.
"Governmental Authority" means any federal, state,
local or other governmental department, commission, board, bureau, agency,
central bank, court, tribunal or other instrumentality or authority or
subdivision thereof, domestic or foreign, exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantor" means any Person who now or in the future
enters into a Guaranty.
"Guaranty" means any continuing guaranty of the
Obligations entered into now or in the future in favor of the Lender Group.
"Hazardous Materials" means (a) substances that are
defined or listed in, or otherwise classified by any Governmental Authority
having jurisdiction over environmental protection and the Real Property as
"hazardous substances," "hazardous materials," "hazardous wastes," "toxic
substances," or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
Schedule 1, Pg. 14
21
"Hedging Obligations" means, with respect to any
Person, the obligations of such Person under (a) interest rate swap agreements,
interest rate cap agreements, and interest rate collar agreements, (b) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates and (c) any commodity futures contract, commodity option or
similar agreement or arrangement designed to protect such Person against
fluctuations in the price of commodities used in the ordinary course of business
of such Person.
"Indebtedness" means, with respect to any Person, any
indebtedness of such Person, whether or not contingent, in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof) or banker's
acceptances or representing Capital Lease Obligations or the balance deferred
and unpaid of the purchase price of any property or representing any Hedging
Obligations, except any such balance that constitutes an accrued expense or
trade payable, if and to the extent any of the foregoing indebtedness (other
than letters of credit and Hedging Obligations) would appear as a liability upon
a balance sheet of such Person prepared in accordance with GAAP. The amount of
any Indebtedness outstanding as of any date shall be (a) the accreted value
thereof, in the case of any Indebtedness that does not require current payments
of interest, and (b) the principal amount thereof, in the case of any other
Indebtedness. Whenever the term "Indebtedness" is used with respect to Borrower
and its Subsidiaries, it shall mean without duplication. For purposes of this
definition, the Xxxxxxx Trade Payables shall constitute Indebtedness of
Borrower, but obligations owing under the Intercompany Agreement shall not
constitute Indebtedness of Borrower.
"Indemnified Liabilities" has the meaning set forth
in Section 11.3.
"Indemnified Person" has the meaning set forth in
Section 11.3.
"Indenture" means that certain Indenture, dated as of
April 16, 1997, among Borrower and certain guarantors, on the one hand and Chase
Manhattan Trust Company, N.A., (successor-in-interest to PNC Bank, National
Association), as trustee, on the other hand, as amended or supplemented from
time to time.
"Insolvency Proceeding" means any proceeding
commenced by or against any Person under any provision of the Bankruptcy Code or
under any other bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
"Intangible Assets" means, with respect to any
Person, that portion of the book value of all of such Person's assets that would
be treated as intangibles under GAAP.
"Intellectual Property Security Agreement" means that
certain Intellectual Property Security Agreement of even date herewith between
Borrower and Agent.
"Intercompany Agreement" means that certain
Intercompany Agreement, dated as of even date herewith, among Greyhound and the
Xxxxxxx Companies, as amended, restated, replaced or refinanced from time to
time, and which provides that all obligations of Borrower thereunder shall be
subordinated to the Obligations on terms and conditions
Schedule 1, Pg. 15
22
satisfactory to Agent (including that no payments of interest or principal may
be made until the 91st day following repayment in full of the Obligations) and
that any general accounts payable or trade payables owing by Borrower to the
Xxxxxxx Companies on the Closing Date in excess of $43,000,000 shall be
evidenced thereunder.
"Interest Period" means, for any Eurodollar Rate
Loan, the period commencing on the Business Day such Eurodollar Rate Loan is
disbursed or continued, or on the Business Day on which a Base Rate Loan is
converted to such Eurodollar Rate Loan, and ending on the date one or three
months thereafter, as selected by Borrower and notified to the Agent pursuant to
Section 2.1(d), and as further provided in Section 2.13(a).
"Inventory" means all present and future inventory in
which Borrower has any interest, including goods held for sale or lease or to be
furnished under a contract of service and all of Borrower's present and future
raw materials, work in process, finished goods, and packing and shipping
materials, wherever located.
"Investments" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the forms
of direct or indirect loans (including guarantees by the referent Person of and
Liens on any assets of the referent Person securing, Indebtedness or other
obligations of other Persons), advances or capital contributions (excluding
commission, travel, and similar advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP. If Borrower or any Restricted Subsidiary of Borrower sells
or otherwise disposes of any Equity Interests of any direct or indirect
Restricted Subsidiary of Borrower such that, after giving effect to any such
sale or disposition, such Person is no longer a Restricted Subsidiary of
Borrower, Borrower shall be deemed to have made an Investment on the date of any
such sale or disposition equal to the Fair Market Value of the Equity Interests
of such Restricted Subsidiary sold or disposed of in an amount determined as
provided in Section 7.12.
"IRC" means the Internal Revenue Code of 1986, as
amended, and the regulations thereunder.
"Issuer" means Bank or such other financial
institution that is a member of the Lender Group as Agent shall designate, with
the consent of the Borrower, as issuer of letters of credit as contemplated
under Section 2.2; provided, however, that in the event that neither Bank nor a
Lender acceptable to the Borrower is willing to issue letters of credit to
Borrower as contemplated by Section 2.2, then Borrower shall have the right to
select as the Issuer such other Person as Borrower determines in its sole
discretion (which may or may not be a member of the Lender Group), with the
letters of credit issued by such replacement Issuer being entitled to the
benefit of the L/C Guaranties.
"Xxxxxxx" means Xxxxxxx Inc.
"Xxxxxxx Companies" means LTI, Xxxxxxx, or any of
their Affiliates.
Schedule 1, Pg. 16
23
"Xxxxxxx Trade Payables" means up to $43,000,000 of
general accounts payable or trade payables, owing by Borrower or its
Subsidiaries on the Closing Date to the Xxxxxxx Companies.
"L/C" has the meaning set forth in Section 2.2(a).
"L/C Guaranty" has the meaning set forth in Section
2.2(a).
"Lender" and "Lenders" have the respective meanings
set forth in the preamble to this Agreement, and shall include any other Person
made a party to this Agreement in accordance with the provisions of Section
15.1.
"Lender Group" means, individually and collectively,
each of the individual Lenders and the Agent.
"Lender Group Expenses" means all: reasonable costs
or expenses (including stamp and other similar taxes, and insurance premiums)
required to be paid by Borrower under any of the Loan Documents that are paid or
incurred by the Lender Group; reasonable fees or charges paid or incurred by the
Agent in connection with the Agent's transactions with Borrower, including, fees
or charges for public record searches (including tax lien, litigation, and UCC
searches and including searches with the patent and trademark office, the
copyright office, or the department of motor vehicles), fees and charges of the
vehicle collateral agent under the Collateral Agency Agreement (but excluding
any fees and costs incurred as a result of the Agent's replacement of Lexis
Document Services, Inc., as such vehicle collateral agent prior to an Event of
Default if such replacement is not reasonably related to the inability of Lexis
Document Services, Inc. to adequately perform its responsibilities under the
Collateral Agency Agreement), filing, recording, publication, appraisal
(including the Current Appraisals and any other periodic Personal Property
Collateral or Real Property Collateral appraisals permitted hereunder), real
estate surveys, real estate title policies and endorsements, and environmental
audits; costs and expenses incurred by Agent in the disbursement of funds to
Borrower (by wire transfer or otherwise); charges paid or incurred by Agent
resulting from the dishonor of checks; reasonable costs and expenses paid or
incurred by Agent to correct any default or enforce any provision of the Loan
Documents, or in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the
Personal Property Collateral or the Real Property Collateral, or any portion
thereof, irrespective of whether a sale is consummated; reasonable costs and
expenses paid or incurred by the Agent in examining Borrower's Books (subject to
any limitations set forth in Section 2.12(d)); costs and expenses of third party
claims or any other suit paid or incurred by the Agent in enforcing or defending
the Loan Documents or in connection with the transactions contemplated by the
Loan Documents; the Agent's reasonable attorneys fees and expenses incurred in
advising, structuring, drafting, reviewing, administering, amending,
terminating, enforcing, defending, or concerning (including attorneys fees and
expenses incurred in connection with a "workout," a "restructuring," or an
Insolvency Proceeding concerning Borrower or any Guarantor) the Loan Documents,
irrespective of whether suit is brought; provided, however, that such attorneys
fees and expenses shall be limited to reasonable attorneys fees and expenses of
one lead law firm for the Agent and one local counsel in each jurisdiction in
which any tangible Collateral may be located, or where Borrower may be
incorporated or have
Schedule 1, Pg. 17
24
its chief executive office located; and, where the rights of an individual
member of the Lender Group would be materially prejudiced by any representation
by counsel to the Agent due to a unique position or defense not available to the
other members of the Lender Group, such Lender's reasonable fees and expenses
(including attorneys fees) incurred in terminating, enforcing, or defending the
Loan Documents against the Borrower or any Guarantor (including attorneys fees
and expenses incurred in connection with a "workout," a "restructuring," or an
Insolvency Proceeding concerning Borrower or any Guarantor), irrespective of
whether suit is brought.
"Letter of Credit" means an L/C or an L/C Guaranty,
as the context requires.
"Lien" means with respect to any asset of Borrower or
its Restricted Subsidiaries, any mortgage, deed in trust, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law (including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to give a security interest in and any
filing of or agreement to give any financing statement to perfect a security
interest granted in any such asset under the Uniform Commercial Code (or
equivalent statute of any jurisdiction)).
"Limited Recourse Debt" means Indebtedness of a
Subsidiary (a) as to which neither the Borrower nor any of its Restricted
Subsidiaries (i) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness) or is otherwise
directly or indirectly liable (as a guarantor or otherwise) or (ii) constitutes
the lender, except, in the case of clauses (i) and (ii), to the extent permitted
by Sections 7.1 and 7.10, (b) no default with respect to which (including any
rights that the holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) the
holders of Indebtedness of the Borrower or any of its Restricted Subsidiaries
having an aggregate principal amount of $10,000,000 or more to declare a default
on such Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity and (c) as to which the lenders have been notified
in writing that they will not have any recourse to the stock or assets of the
Borrower or any of its Restricted Subsidiaries, except to the extent of any
Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in
accordance with clause (a)(i) above.
"Loan Account" has the meaning set forth in Section
2.11.
"Loan Documents" means this Agreement, the
Disbursement Letter, the Letters of Credit, the Lockbox Agreements, the
Mortgages, the Collateral Agency Agreement, the Stock Pledge, the Intellectual
Property Security Agreement, the Subsidiary Guaranties, the Subsidiary Security
Agreements, the Agent's Fee Letter, any note or notes executed by Borrower and
payable to the Lender Group, and any other agreement entered into, by Borrower
or any Guarantor, on the one hand, and Agent or the Lender Group, on the other
hand, now or in the future, in connection with this Agreement.
"Lockbox Account" shall mean a depositary account
established pursuant to one of the Lockbox Agreements.
Schedule 1, Pg. 18
25
"Lockbox Agreements" means those certain lockbox
operating procedural agreements and those certain depository account agreements,
in form and substance satisfactory to Agent, each of which is among Borrower,
Agent, and one of the Lockbox Banks.
"Lockbox Banks" means Bank, LaSalle National Bank, or
any other financial institution mutually acceptable to Borrower and Agent.
"Lockboxes" has the meaning set forth in Section 2.8.
"LTI" means Xxxxxxx Transportation, Inc.
"Losses" shall mean any and all losses, liabilities,
contingent liabilities, damages, obligations, claims, contingent claims,
actions, suits, proceedings, disbursements, penalties, costs, and expenses
(including, without limitation, Lender Group Expenses), whether or not an action
or proceeding is commenced or threatened.
"Material Adverse Change" means (a) a material
adverse change in, or an event having a material adverse effect on, the
business, prospects, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of Borrower, (b) the material impairment of
Borrower's ability to perform its obligations under the Loan Documents to which
it is a party or of the Lender Group to enforce the Obligations or realize upon
the Collateral or the Subsidiary Collateral, (c) a material adverse effect on
the value of the Collateral or the Subsidiary Collateral or the amount that the
Lender Group would be likely to receive (after giving consideration to delays in
payment and costs of enforcement) in the liquidation of such Collateral or
Subsidiary Collateral as determined by the Current Appraisals or by material
variations in the subsequent sales price of Vehicles (other than material
variations of the sales price resulting from a casualty) from the values
therefor set forth in the Current Appraisal, or (d) a material impairment of the
priority of the Lender Group's Liens with respect to the Collateral or the
Subsidiary Collateral. Notwithstanding the foregoing, no Material Adverse Change
shall be deemed to occur solely as a result of any event arising out of the
liability of Borrower to make increased Plan contributions (not to exceed
$30,000,000) as a result of a Requirement of Law.
"Maturity Date" has the meaning set forth in Section
3.4.
"Maximum Real Estate Amount" means $35,000,000.
"Maximum Revolving Amount" means $125,000,000.
"Mortgages" means one or more mortgages, deeds of
trust, or deeds to secure debt, or (at the Agent's option) amendments to
existing mortgages, deeds of trust, or deeds to secure debt, executed by
Borrower in favor of Agent for the benefit of the Lender Group, the form and
substance of which shall be reasonably satisfactory to Agent, that encumber the
Real Property Collateral and the related improvements thereto.
"Multiemployer Plan" means a "multiemployer plan" (as
defined in Section 4001(a)(3) of ERISA) to which Borrower, any of its
Subsidiaries, or any ERISA Affiliate has contributed, or was obligated to
contribute, within the past six years.
Schedule 1, Pg. 19
26
"Negotiable Collateral" means all of Borrower's
present and future letters of credit, notes, drafts, instruments, investment
property, security entitlements, securities (including the shares of stock of
Subsidiaries of Borrower), documents, personal property leases (wherein Borrower
is the lessor), and chattel paper.
"Net Income" means, with respect to any Person, the
net income (loss) of such Person, determined in accordance with GAAP and before
any reduction in respect of preferred stock dividends, excluding, however, (a)
any gain (but not loss), together with any related provision for taxes on such
gain (but not loss), realized in connection with (i) any Asset Sale (including,
without limitation, dispositions pursuant to sale and leaseback transactions) or
(ii) the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (b) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds
received by Borrower or any of its Restricted Subsidiaries in respect of any
Asset Sale (including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset Sale), net
of (without duplication) (a) the direct costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees,
sales commissions, recording fees, title transfer fees, title insurance
premiums, appraiser fees and costs incurred in connection with preparing such
asset for sale) and any relocation expenses incurred as a result thereof, (b)
taxes paid or estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements), (c) amounts required to be applied to the repayment of
Indebtedness (other than under this Agreement) secured by a Lien on the asset or
assets that were the subject of such Asset Sale and (d) any reserve established
in accordance with GAAP or any amount placed in escrow, in either case for
adjustment in respect of the sale price of such asset or assets, until such time
as such reserve is reversed or such escrow arrangement is terminated, in which
case Net Proceeds shall include only the amount of the reserve so reserved or
the amount returned to Borrower or its Restricted Subsidiaries from such escrow
arrangement, as the case may be.
"Nominee" has the meaning set forth in Section
17.11(c).
"Non-Consenting Lender" has the meaning set forth in
Section 2.18.
"Non-Excluded Taxes" has the meaning set forth in
Section 2.16.
"Obligations" means all loans, Advances, debts,
principal, interest (including any interest that, but for the provisions of the
Bankruptcy Code, would have accrued), contingent reimbursement obligations under
any outstanding Letters of Credit (including amounts reimbursed to Issuer as
referenced in Section 2.2(a)(iii)(y)), premiums, liabilities (including all
amounts charged to Borrower's Loan Account pursuant hereto), obligations, fees,
charges, costs, or Lender Group Expenses (including any fees or expenses that,
but for the provisions of the Bankruptcy Code, would have accrued), lease
payments, guaranties, covenants, and duties owing by Borrower to the Lender
Group of any kind and description pursuant to or evidenced by the Loan
Documents, due or to become due, absolute or contingent, and further
Schedule 1, Pg. 20
27
including all interest not paid when due and all Lender Group Expenses that
Borrower is required to pay or reimburse by the Loan Documents, by law, or
otherwise.
"Originating Lender" has the meaning set forth in
Section 15.1(e).
"Overadvance" has the meaning set forth in Section
2.6.
"Participant" has the meaning set forth in Section
15.1(e).
"PBGC" means the Pension Benefit Guaranty Corporation
as defined in Title IV of ERISA, or any successor thereto.
"Permitted Investment" means any Investment permitted
under Section 7.12.
"Permitted Liens" means: (a) Liens held by the Lender
Group; (b) Liens for taxes that are either (i) not yet due and payable or (ii)
subject to a Permitted Protest; (c) Liens set forth on Schedule P-1; (d) (i) the
interests of lessors under operating leases, or (ii) purchase money security
interests and Liens of lessors under capitalized leases unless the acquisition
or lease of the underlying asset would violate Section 7.20, and so long as the
Lien only attaches to the asset being purchased or acquired and only secures the
purchase price of such asset; (e) easements, rights of way, reservations,
covenants, conditions, restrictions, zoning variances, and other similar
encumbrances or title defects that do not materially interfere with the use or
value of the property subject thereto; (f) exceptions listed in the title
insurance or commitment therefor to be delivered by Borrower hereunder in
respect of the Real Property Collateral, as acceptable to Agent; (g) Liens
(other than any Lien imposed by ERISA) in respect of property or assets of
Borrower or its Restricted Subsidiaries imposed by law which were incurred in
the ordinary course of business and which do not secure Indebtedness, such as
carriers', warehousemen's, materialmen's and mechanics' Liens, statutory
landlord's Liens, and other similar Liens arising in the ordinary course of
business, and (x) which do not in the aggregate materially detract from the
value of such property or assets or materially impair the use thereof in the
operation of the business of Borrower or its Restricted Subsidiaries or (y)
which are subject to a Permitted Protest; (h) Liens (other than any Lien imposed
by ERISA) incurred or deposits made in the ordinary course of business of
Borrower or a Restricted Subsidiary in connection with (x) workers'
compensation, unemployment insurance and other types of social security, (y) to
secure the performance of tenders, insurance policies, statutory obligations,
customs bonds, bids, leases, government contracts, trade contracts, performance
and return-of-money bonds and other similar obligations incurred in the ordinary
course of business (exclusive of obligations in respect of borrowed money) or
(z) surety, stay, appeal or judgments bonds, provided that the aggregate amount
of cash and the fair market value of the property encumbered by Liens described
in this clause (z) shall not exceed $7,000,000 (exclusive of any Liens that are
secured by a Letter of Credit); (i) licenses, leases or subleases granted to
third Persons not materially interfering with the ordinary course of business of
Borrower or a Restricted Subsidiary; (j) Liens arising from precautionary UCC
(or other similar recording or notice statutes) financing statement filings
regarding operating leases or consignment arrangements permitted pursuant to
this Agreement; (k) deposits made in the ordinary course of business to secure
liability for premiums to insurance carriers; (l) any interest or title of a
lessor, sublessor, or licensor under any lease or license
Schedule 1, Pg. 21
28
agreement permitted by this Agreement; (m) Liens on the assets or property of
Borrower or a Restricted Subsidiary existing prior to the time such assets were
acquired by Borrower or a Restricted Subsidiary and not incurred as a result of
(or in connection with or in anticipation of) such acquisition; provided that
such Liens do not extend to or cover any property or assets of Borrower other
than the property or assets so acquired; (n) Liens of a banking institution
encumbering deposits (including the right of set-off) held by such banking
institutions incurred in the ordinary course of business and which are within
general parameters customary within the banking industry; (o) Liens in favor of
Borrower and its Restricted Subsidiaries; (p) Liens on property of a Person
existing at the time such Person is merged into or consolidated with Borrower or
any Restricted Subsidiary of Borrower; and (q) Liens not otherwise permitted
hereunder which secure obligations not exceeding $3,000,000 in the aggregate at
any one time outstanding.
"Permitted Protest" means the right of Borrower or a
Restricted Subsidiary to contest or protest any Lien (other than any such Lien
that secures the Obligations), tax, or rental payment, provided that (a) a
reserve with respect to such obligation is established on the books of Borrower
in accordance with GAAP, (b) any such contest or protest is instituted and
diligently prosecuted by Borrower in good faith, and (c) Agent is reasonably
satisfied that, while any such contest or protest is pending, there will not be
any material impairment of the enforceability, validity, or priority of any of
the Liens of the Agent for the benefit of the Lender Group in and to the
Collateral, or a material adverse change in the business, prospects, operations,
results of operations, assets, liabilities or condition (financial or otherwise)
of Borrower.
"Permitted Refinancing Indebtedness" means any
Indebtedness of Borrower or any of its Restricted Subsidiaries issued in
exchange for, or the net proceeds of which are used to extend, refinance, renew,
replace, defease or refund other Indebtedness permitted hereunder (other than
the Obligations) of Borrower and its Restricted Subsidiaries, provided that (a)
the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount of (or accreted
value, if applicable), plus premium, if any, and accrued interest on, the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded
(plus the amount of reasonable expenses incurred in connection therewith), (b)
such Permitted Refinancing Indebtedness has a final maturity date no earlier
than the final maturity date of, and has a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded, (c) such Permitted Refinancing Indebtedness is otherwise on terms and
conditions, taken as a whole, no less favorable to Borrower or such Restricted
Subsidiary, as the case may be, as reasonably determined by Agent, than the
terms and conditions of the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded (d) if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Obligations, such Permitted Refinancing Indebtedness is
subordinated in right of payment to the Obligations on terms at least as
favorable, taken as a whole, to the Lender Group as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded and (e) such Indebtedness is incurred either by
Borrower or by the Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; provided,
however, that a Restricted
Schedule 1, Pg. 22
29
Subsidiary may guarantee Permitted Refinancing Indebtedness incurred by
Borrower, whether or not such Restricted Subsidiary was an obligor or guarantor
of the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; provided further, however, that if such Permitted Refinancing
Indebtedness is subordinated in right of payment to the Obligations, such
guarantee shall be subordinated to such Restricted Subsidiary's Guaranty to at
least the same extent.
"Person" means and includes natural persons,
corporations, limited liability companies, limited partnerships, general
partnerships, limited liability partnerships, joint ventures, trusts, land
trusts, business trusts, or other organizations, irrespective of whether they
are legal entities, and governments and agencies and political subdivisions
thereof.
"Personal Property Collateral" means all Collateral
other than the Real Property Collateral.
"Plan" means any employee benefit plan, program, or
arrangement maintained or contributed to by Borrower or with respect to which it
may incur liability.
"Post Foreclosure Property" has the meaning set forth
in Section 17.11(c).
"Preferred Stock" means the Borrower's 8 1/2%
Convertible Exchangeable Preferred Stock and such other preferred stock as
Borrower shall issue and which is not classified as Indebtedness in accordance
with GAAP.
"Productive Assets" means assets (other than assets
that would be classified as current assets in accordance with GAAP) of the kind
used or usable by Borrower or its Restricted Subsidiaries in the passenger
transportation business (or any business that is reasonably complementary or
related thereto as determined in good faith by the Board of Directors).
"Program" has the meaning set forth in Section 6.10.
"Pro-Rata Share" means, with respect to a Lender, a
fraction (expressed as a percentage), the numerator of which is the amount of
such Lender's Commitment and the denominator of which is the aggregate amount of
the Commitments.
"Real Property" means any estates or interests in
real property now owned or hereafter acquired by Borrower.
"Real Property Collateral" means the parcel or
parcels of Real Property, and the related improvements thereto, now or in the
future identified on Schedule R-1.
"Recipient" has the meaning set forth in Section
18.8.
"Register" has the meaning set forth in Section 15.3.
"Remediate" and "Remediation" includes but is not
limited to the investigation of the environmental condition of the Real
Property, the preparation of any
Schedule 1, Pg. 23
30
feasibility studies, reports or remedial plans, and the performance of any
cleanup, abatement, removal, remediation, containment, operation and
maintenance, monitoring or restoration work, whether on or off of the Real
Property, which is required by applicable laws or regulations establishing
legally binding standards or obligations with respect to the environment.
"Reportable Event" means any of the events described
in Section 4043(c) of ERISA or the regulations thereunder other than a
Reportable Event as to which the provision of 30 days notice to the PBGC is
waived under applicable regulations.
"Reports" has the meaning set forth in Section 17.16
(a).
"Required Lenders" means, at any time, Lenders whose
Pro-Rata Shares aggregate 51% or more of the Commitments, or if the Commitments
have been terminated, Lenders who have at least 51% of the aggregate unpaid
principal amount of the Obligations outstanding.
"Requirement of Law" means, as to any Person: all (a)
(i) statutes and regulations and (ii) court orders and injunctions,
arbitrators's decisions, and/or similar rulings, in each instance by any
Governmental Authority, or other body which has jurisdiction over such Person,
or any property of such Person, or of any other Person whose conduct such Person
would be responsible; and (b) that Person's organizational documents, by-laws
and/or other instruments which deal with corporate or similar governance, as
applicable.
"Restricted Investment" means an Investment other
than a Permitted Investment.
"Restricted Payment" has the meaning set forth in
Section 7.10.
"Restricted Subsidiary" of a Person means any
Subsidiary of such Person that is not an Unrestricted Subsidiary. The Board of
Directors may, with the consent of Agent (which shall not be unreasonably
withheld), designate any Restricted Subsidiary to be an Unrestricted Subsidiary
if such designation would not cause a Default or an Event of Default. For
purposes of making such designation, all outstanding Investments by Borrower and
its Restricted Subsidiaries (except to the extent repaid in cash) in the
Subsidiary so designated shall be deemed to be Restricted Payments at the time
of such designation. All such outstanding Investments will be deemed to
constitute Investments in an amount equal to the greater of (a) the net book
value of such Investments at the time of such designation and (b) the fair
market value of such Investments at the time of such designation. Such
designation shall only be permitted if such Restricted Payment would be
permitted at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
"Retiree Health Plan" means an "employee welfare
benefit plan" within the meaning of Section 3(1) of ERISA that provides benefits
to individuals after termination of their employment, other than as required by
Section 601 of ERISA.
"Revolving Facility Usage" means, as of any date of
determination, the aggregate amount of Advances (including Agent Advances and
Agent Loans) and undrawn or unreimbursed (by Borrower) Letters of Credit
outstanding.
Schedule 1, Pg. 24
31
"Senior Notes" means any of the Series A and Series B
11-1/2% Senior Notes Due 2007 issued by Borrower pursuant to the Indenture.
"Settlement" has the meaning set forth in Section
2.1(i)(i).
"Settlement Date" has the meaning set forth in
Section 2.1(i)(i).
"SFHA" has the meaning set forth in Section 6.10.
"Solvent" means, with respect to any Person on a
particular date, that on such date (a) at fair valuations, all of the properties
and assets of such Person are greater than the sum of the debts, including
contingent liabilities, of such Person, (b) the present fair salable value of
the properties and assets of such Person is not less than the amount that will
be required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person is able to realize upon its
properties and assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course of
business, (d) such Person does not intend to, and does not believe that it will,
incur debts beyond such Person's ability to pay as such debts mature, and (e)
such Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person's properties and
assets would constitute unreasonably small capital after giving due
consideration to the prevailing practices in the industry in which such Person
is engaged. In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount that, in light of
all the facts and circumstances existing at such time, represents the amount
that reasonably can be expected to become an actual or matured liability.
"Stock Pledge" means the Security Agreement-Stock
Pledge, of even date herewith, between Borrower and Agent.
"Subsidiary" means, with respect to any Person, (a)
any corporation, association or other business entity of which more than 50% of
the total voting power of shares of Capital Stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof) and (b) any partnership (i) the sole general
partner or the managing general partner of which is such Person or a Subsidiary
of such Person or (ii) the only general partners of which are such Person or of
one or more Subsidiaries of such Person (or any combination thereof).
"Subsidiary Collateral" means the real or personal
property assets of a domestic Restricted Subsidiary subject to the Lien of Agent
on behalf of the Lender Group pursuant to a Subsidiary Security Agreement.
"Subsidiary Guaranty" means a Guaranty executed by a
domestic Restricted Subsidiary of Borrower.
"Subsidiary Security Agreement" means those certain
security agreements, stock pledges, intellectual property security agreements,
mortgages or deeds of trust
Schedule 1, Pg. 25
32
(or similar documents) pursuant to which Agent, on behalf of the Lender Group,
obtains a Lien on Subsidiary Collateral.
"Total Indebtedness" means, with respect to any
Person, the Indebtedness of such Person and its Restricted Subsidiaries.
"Unrestricted Subsidiary" means on the Closing Date
the Existing Unrestricted Subsidiaries, and thereafter shall also include any
Subsidiary that is designated by the Board of Directors as an Unrestricted
Subsidiary pursuant to a resolution of the Board of Directors, but only to the
extent that the Agent approves such designation (which shall not be unreasonably
withheld) and such Subsidiary (a) has no Indebtedness other than
Limited-Recourse Debt, (b) is not party to any agreement, contract, arrangement,
or understanding with Borrower or any Restricted Subsidiary of Borrower unless
the terms of any such agreement, contract, arrangement or understanding do not
violate Section 7.13, (c) is a Person with respect to which neither Borrower nor
any of its Restricted Subsidiaries has any direct or indirect obligation (i) to
subscribe for additional Equity Interests or (ii) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results, and (d) has at least one director on its board of
directors that is not a director or executive officer of Borrower or any of its
Restricted Subsidiaries and has at least one executive officer that is not a
director or executive officer of Borrower or any of its Restricted Subsidiaries.
Any such designation by the Board of Directors shall be evidenced to Agent by
filing with Agent a certified copy of the resolution giving effect to such
designation and an officers' certificate certifying that such designation
complied with the foregoing conditions. If, at any time, any Unrestricted
Subsidiary would fail to meet the foregoing requirements as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of this Agreement and any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of Borrower as of such date
(and, if such Indebtedness is not permitted to be incurred as of such date under
Section 7.1, Borrower shall be in default of such covenant). The Board of
Directors of Borrower may at any time designate any Unrestricted Subsidiary to
be a Restricted Subsidiary; provided that such designation shall be deemed to be
an incurrence of Indebtedness by a Restricted Subsidiary of Borrower of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if (A) such Indebtedness is permitted under Section 7.1,
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period, (B) no Default or Event of
Default would be in existence following such designation, and (C) such
Restricted Subsidiary, if domestic, executes a Guaranty and any Subsidiary
Security Agreements reasonably required by Agent, in substantially the same form
as those executed on the Closing Date.
"Vehicles" means all of the presently existing buses
and motor vehicles of Borrower or any of its domestic Restricted Subsidiaries
that is a Guarantor set forth on Schedule 5.3, and, solely to the extent that
Borrower agrees to add them to Schedule 5.3, any buses and motor vehicles that
are acquired after the Closing Date by Borrower (or any of its domestic
Restricted Subsidiaries that is a Guarantor), or that are leased as of the
Closing Date and subsequently purchased by Borrower (or any of its Restricted
Subsidiaries that is a Guarantor).
"Voidable Transfer" has the meaning set forth in
Section 18.6.
Schedule 1, Pg. 26
33
"Weighted Average Life to Maturity" means, when
applied to any Indebtedness at any date, the number of years obtained by
dividing (a) the sum of the products obtained by multiplying (i) the amount of
each then remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect thereof,
by (ii) the number of years (calculated to the nearest one-twelfth) that will
elapse between such date and the making of such payment, by (b) the then
outstanding principal amount of such Indebtedness.
"Wholesale Value" means, with respect to any Vehicle,
the wholesale value thereof as set forth in the Current Appraisal thereof or for
Vehicles acquired after the date of the most recent Current Appraisal, Wholesale
Value shall mean 90% of the invoice amount of such Vehicle.
"Wholly Owned Restricted Subsidiary" of any Person
means a Restricted Subsidiary of such Person all of the outstanding Capital
Stock or other ownership interests of which (other than directors' qualifying
shares) shall at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person.
1.2 ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. When used herein, the
term "financial statements" shall include the notes and schedules thereto.
Whenever the term "Borrower" is used in respect of a financial covenant or a
related definition, it shall be understood to mean Borrower on a consolidated
basis (but excluding any Unrestricted Subsidiaries) unless the context clearly
requires otherwise.
1.3 CODE. Any terms used in this Agreement that are defined in
the Code shall be construed and defined as set forth in the Code unless
otherwise defined herein.
1.4 CONSTRUCTION. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the term "including" is not limiting, and the
term "or" has, except where otherwise indicated, the inclusive meaning
represented by the phrase "and/or." The words "hereof," "herein," "hereby,"
"hereunder," and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. An Event of Default
shall "continue" or be "continuing" until such Event of Default has been waived
in writing by the requisite members of the Lender Group. Section, subsection,
clause, schedule, and exhibit references are to this Agreement unless otherwise
specified. Any reference in this Agreement or in the Loan Documents to this
Agreement or any of the Loan Documents shall include all alterations,
amendments, changes, extensions, modifications, renewals, replacements,
restatements, substitutions, and supplements, thereto and thereof, as
applicable.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits
attached to this Agreement shall be deemed incorporated herein by reference.
Schedule 1, Pg. 27
34
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVING ADVANCES.
(a) Subject to the terms and conditions of this
Agreement, each Lender agrees to make advances ("Advances") to Borrower in an
amount at any one time outstanding not to exceed such Lender's Pro-Rata Share of
an amount equal to the lesser of (i) the Maximum Revolving Amount less the
aggregate amount of all undrawn or unreimbursed Letters of Credit, or (ii) the
Borrowing Base less the aggregate amount of all undrawn or unreimbursed Letters
of Credit. For purposes of this Agreement, "Borrowing Base," as of any date of
determination, shall mean the result of:
(x) the lesser of (1) 85% of the Wholesale
Value of Core Vehicles (including any Core Vehicles appraised
on the Current Appraisal, irrespective of whether such
Vehicles have been sold or disposed of since completion of
such Current Appraisal), and (2) 88% of the Wholesale Value of
Core Vehicles appraised on the Current Appraisal, excluding
any such Vehicles sold or disposed of since completion of such
Current Appraisal; plus
(y) the least of (i) 50% of the Fair Market
Value of Core Real Property Collateral, (ii) 45% of the total
amount available under clause 2.1(a)(x) above, and (iii) the
Maximum Real Estate Amount; minus
(z) the aggregate amount of reserves, if
any, established by Agent under Sections 2.1(b) or 10.
(b) Anything to the contrary in Section 2.1(a) above
notwithstanding, Agent may create reserves against the Borrowing Base without
declaring an Event of Default: (i) if it determines that there has occurred a
material uninsured loss or condemnation respecting Core Real Property Collateral
(which loss or condemnation is not reflected in the Current Appraisal); (ii) if
it determines that there has occurred a breach of Borrower's obligations under
Section 6.18; or (iii) respecting tires and potential remediation or other
environmental issues concerning Core Real Property Collateral.
(c) Amounts borrowed pursuant to this Section 2.1 may
be repaid and, subject to the terms and conditions of this Agreement, reborrowed
at any time during the term of this Agreement.
(d) Procedure for Borrowing. Each Borrowing shall be
made upon Borrower's request (pursuant to the terms of Section 2.10), which
request shall be irrevocable except as set forth in Section 2.13, specifying (i)
the amount of the Borrowing; (ii) the requested Funding Date; (iii) whether the
Borrowing is to consist of Eurodollar Rate Loans or Base Rate Loans; and (iv) if
such Borrowing is to consist of Eurodollar Rate Loans, the requested Interest
Period. If the Borrowing is to consist of Eurodollar Rate Loans, such request
must be delivered to Agent no later than 11:00 a.m. (California time) two
Business Days prior to the requested Funding Date. If the Borrowing is to
consist of Base Rate Loans, such request must be delivered to Agent no later
than 11:00 a.m. (California time) one Business Day prior to the requested
Funding Date; provided, however, that if the amount of such requested Borrowing
consisting of
Schedule 1, Pg. 28
35
Base Rate Loans is not greater than the Agent Loan Availability at such time,
then such request may be made no later than 11:00 a.m. (California time) on the
requested Funding Date.
(e) Agent's Election. Promptly after receipt of a
request for a Borrowing that is to consist of Base Rate Loans in an aggregate
amount that is less than the Agent Loan Availability at such time, and if such
notice is received at least one Business Day before the requested Funding Date,
then the Agent shall elect, in its discretion, (i) to have the terms of Section
2.1(f) apply to such requested Borrowing, or (ii) to make an Agent Loan pursuant
to the terms of Section 2.1(g) in the amount of the requested Borrowing. Any
requested Borrowing consisting of Base Rate Loans where the notice is received
on the same day as the proposed Funding Date and the requested amount thereof is
not greater than the Agent Loan Availability shall be made as an Agent Loan
pursuant to the terms of Section 2.1(g). In any other case, upon the receipt of
a timely request for a Borrowing as set forth in Section 2.1(d), Agent shall
have the terms of Section 2.1(f) apply to such requested Borrowing.
(f) Making of Advances.
(i) In the event that the Agent shall elect
(or pursuant to Section 2.1(e) shall be compelled) to have the terms of this
Section 2.1(f) apply to a requested Borrowing as described in Section 2.1(e),
then promptly after receipt of a request for a Borrowing pursuant to Section
2.1(d), the Agent shall notify the Lenders, not later than 1:00 p.m. (California
time) on the Business Day immediately preceding the Funding Date applicable
thereto, by telephone and promptly followed by telecopy, or other similar form
of transmission, of the requested Borrowing. Each Lender shall make the amount
of such Lender's Pro-Rata Share of the requested Borrowing available to the
Agent in same day funds, to such account of the Agent as the Agent may
designate, not later than 10:00 a.m. (California time) on the Funding Date
applicable thereto. After the Agent's receipt of the proceeds of such Advances,
upon satisfaction of the applicable conditions precedent set forth in Sections
3.1 and 3.2, the Agent shall make the proceeds of such Advances available to
Borrower not later than 11:00 a.m. (California time) on the applicable Funding
Date by transferring same day funds equal to the proceeds of such Advances
received by the Agent to the Designated Account; provided, however, that,
subject to the provisions of Section 2.1(l), the Agent shall not request any
Lender to make, and no Lender shall have the obligation to make, any Advance if
the Agent shall have received written notice from any Lender, or otherwise has
actual knowledge, that (A) one or more of the applicable conditions precedent
set forth in Sections 3.1 or 3.2 will not be satisfied on the requested Funding
Date for the applicable Borrowing, or (B) the requested Borrowing would exceed
the Availability on such Funding Date.
(ii) Unless Agent receives notice from a
Lender on or prior to the Closing Date or, with respect to any Borrowing after
the Closing Date, at least one Business Day prior to the date of such Borrowing,
that such Lender will not make available as and when required hereunder to Agent
for the account of Borrower the amount of that Lender's Pro-Rata Share of the
Borrowing, Agent may assume that each Lender has made or will make such amount
available to Agent in immediately available funds on the Funding Date and Agent
may (but shall not be so required), in reliance upon such assumption, make
available to Borrower on such date a corresponding amount. If and to the extent
any Lender shall not have made its full amount available to Agent in immediately
available funds and Agent in such circumstances has
Schedule 1, Pg. 29
36
made available to Borrower such amount, that Lender shall on the Business Day
following such Funding Date make such amount available to Agent, together with
interest at the Defaulting Lenders Rate for each day during such period. A
notice from Agent submitted to any Lender with respect to amounts owing under
this subsection shall be conclusive, absent manifest error. If such amount is
paid to Agent such payment to Agent shall constitute such Lender's Advance on
the date of Borrowing for all purposes of this Agreement. If such amount is not
paid to Agent on the Business Day following the Funding Date, Agent will notify
Borrower of such failure to fund and, upon demand by Agent, Borrower shall pay
such amount to Agent for Agent's account, together with interest thereon for
each day elapsed since the date of such Borrowing, at a rate per annum equal to
the interest rate applicable at the time to the Advances composing such
Borrowing. Any Lender that fails to make any Advance that it is required to make
hereunder on any Funding Date and that has not cured such failure by making such
Advance within one Business Day after written demand upon it by Agent to do so,
shall constitute a "Defaulting Lender" for purposes of this Agreement and shall
continue to be a Defaulting Lender until such Advance is made.
(iii) Agent shall not be obligated to
transfer to a Defaulting Lender any payments made by Borrower to Agent for the
Defaulting Lender's benefit; nor shall a Defaulting Lender be entitled to the
sharing of any payments hereunder. Amounts payable to a Defaulting Lender shall
instead be paid to or retained by Agent to be applied first to any amounts owing
to Agent by such Defaulting Lender (including interest thereon as provided in
this Agreement) and thereafter as provided under Sections 2.1(i)(iii) or 2.5(b).
Solely for the purposes of voting or consenting to matters with respect to the
Loan Documents (other than matters described in Section 16.1, for which the
consent of all Lenders including such Defaulting Lender must still be obtained)
and determining Pro-Rata Shares, such Defaulting Lender shall be deemed not to
be a "Lender" and such Defaulting Lender's Commitment shall be deemed to be
zero. This section shall remain effective with respect to such Defaulting Lender
until (A) the Obligations under this Agreement shall have been declared or shall
have become immediately due and payable or (B) the requisite non-Defaulting
Lenders, Agent, and Borrower shall have waived such Defaulting Lender's default
in writing. The operation of this section shall not be construed to increase or
otherwise affect the Commitment of any non-Defaulting Lender, or relieve or
excuse the performance by Borrower of its duties and obligations hereunder.
(g) Making of Agent Loans.
(i) In the event that the Agent shall elect
(pursuant to the terms of Section 2.1(e)) or shall be compelled to have the
terms of this Section 2.1(g) apply to a requested Borrowing, Agent shall make an
Advance in the amount of such Borrowing (any such Advance made solely by Agent
pursuant to this Section 2.1(g) being referred to as an "Agent Loan" and such
Advances being referred to collectively as "Agent Loans") available to Borrower
not later than 11:00 a.m. (California time) on the Funding Date applicable
thereto by transferring same day funds to the Designated Account. Each Agent
Loan is an Advance hereunder, shall be a Base Rate Loan, and shall be subject to
all the terms and conditions applicable to other Advances, except that all
payments thereon shall be payable to Agent solely for its own account (and for
the account of the holder of any participation interest with respect to such
Advance). Subject to the provisions of Section 2.1(l), the Agent shall not make
any Agent Loan if the Agent shall have received written notice from any Lender,
or otherwise has actual knowledge, that
Schedule 1, Pg. 30
37
(i) one or more of the applicable conditions precedent set forth in Sections 3.1
or 3.2 will not be satisfied on the requested Funding Date for the applicable
Borrowing, or (ii) the requested Borrowing would exceed the Availability on such
Funding Date. Agent shall not otherwise be required to determine whether the
applicable conditions precedent set forth in Sections 3.1 or 3.2 have been
satisfied on the Funding Date applicable thereto prior to making, in its sole
discretion, any Agent Loan.
(ii) The Agent Loans shall be secured by the
Collateral and shall constitute Base Rate Loans and Obligations hereunder, and
shall bear interest at the rate applicable from time to time to Obligations
pursuant to Section 2.7(a).
(h) Agent Advances.
(i) Agent hereby is authorized by Borrower
and the Lenders, from time to time in Agent's sole discretion, (1) after the
occurrence of a Default or an Event of Default (but without constituting a
waiver of such Default or Event of Default), or (2) at any time that any of the
other applicable conditions precedent set forth in Section 3.1 or 3.2 have not
been satisfied, to make Advances (which shall be Base Rate Loans) to Borrower on
behalf of the Lenders which Agent, in its reasonable business judgment, deems
necessary or desirable (A) to preserve or protect the Collateral, or any portion
thereof, (B) to enhance the likelihood of, or maximize the amount of, repayment
of the Obligations, or (C) to pay any other amount chargeable to Borrower
pursuant to the terms of this Agreement, including Lender Group Expenses and the
costs, fees, and expenses described in Section 10 (any of the Advances described
in this Section 2.1(h) being hereinafter referred to as "Agent Advances");
provided, that Agent shall not make any Agent Advances to Borrower without the
consent of the Required Lenders if the amount thereof would exceed $5,000,000 in
the aggregate at any one time.
(ii) Agent Advances shall be repayable on
demand and secured by the Collateral, shall constitute Base Rate Loans and
Obligations hereunder, and shall bear interest at the rate applicable from time
to time to the Obligations pursuant to Section 2.7(a).
(i) Settlement. It is agreed that each Lender's
funded portion of the Advances is intended by the Lenders to be equal at all
times to such Lender's Pro-Rata Share of the outstanding Advances. Such
agreement notwithstanding, the Agent and the Lenders agree (which agreement
shall not be for the benefit of or enforceable by Borrower) that in order to
facilitate the administration of this Agreement and the other Loan Documents,
settlement among them as to the Advances, the Agent Loans, and the Agent
Advances shall take place on a periodic basis in accordance with the following
provisions:
(i) The Agent shall request settlement
("Settlement") with the Lenders on a weekly basis, or on a more frequent basis
if so determined by the Agent, (1) for itself, with respect to each Agent Loan
and Agent Advance, and (2) with respect to Collections received, as to each by
notifying the Lenders by telephone and promptly followed by telecopy, or other
similar form of transmission, of such requested Settlement, no later than 1:00
p.m. (California time) on the Business Day immediately preceding the date of
such requested Settlement (the "Settlement Date"). Such notice of a Settlement
Date shall include a summary statement of the amount of outstanding Advances,
Agent Loans, and Agent Advances for the
Schedule 1, Pg. 31
38
period since the prior Settlement Date, the amount of repayments received in
such period, and the amounts allocated to each Lender of the principal,
interest, fees, and other charges for such period. Subject to the terms and
conditions contained herein (including Section 2.1(i)(ii)): (y) if a Lender's
balance of the Advances, Agent Loans, and Agent Advances exceeds such Lender's
Pro-Rata Share of the Advances, Agent Loans, and Agent Advances as of a
Settlement Date, then Agent shall by no later than 1:00 p.m (California time) on
the Settlement Date transfer in same day funds to the account of such Lender as
such Lender may designate, an amount such that each such Lender shall, upon
receipt of such amount, have as of the Settlement Date, its Pro-Rata Share of
the Advances, Agent Loans, and Agent Advances; and (z) if a Lender's balance of
the Advances, Agent Loans, and Agent Advances is less than such Lender's
Pro-Rata Share of the Advances, Agent Loans, and Agent Advances as of a
Settlement Date, such Lender shall no later than 1:00 p.m. (California time) on
the Settlement Date transfer in same day funds to such account of the Agent as
the Agent may designate, an amount such that each such Lender shall, upon
transfer of such amount, have as of the Settlement Date, its Pro-Rata Share of
the Advances, Agent Loans, and Agent Advances. Such amounts made available to
the Agent under clause (z) of the immediately preceding sentence shall be
applied against the amounts of the applicable Agent Loan or Agent Advance and,
together with the portion of such Agent Loan or Agent Advance representing
Foothill's Pro-Rata Share thereof, shall constitute Advances of such Lenders
(which advances shall be Base Rate Loans). If any such amount is not made
available to the Agent by any Lender on the Settlement Date applicable thereto
to the extent required by the terms hereof, the Agent shall be entitled to
recover for its account such amount on demand from such Lender together with
interest thereon at the Defaulting Lenders Rate.
(ii) In determining whether a Lender's
balance of the Advances, Agent Loans, and Agent Advances is less than, equal to,
or greater than such Lender's Pro-Rata Share of the Advances, Agent Loans, and
Agent Advances as of a Settlement Date, Agent shall, as part of the relevant
Settlement, apply to such balance the portion of payments actually received by
Agent with respect to principal, interest, fees payable by Borrower and
allocable to the Lenders hereunder, and proceeds of Collateral. To the extent
that a net amount is owed to any such Lender after such application, such net
amount shall be distributed by Agent to that Lender as part of such Settlement.
(iii) Between Settlement Dates, the Agent,
to the extent no Agent Advances or Agent Loans are outstanding, may pay over to
Foothill any payments received by the Agent, which in accordance with the terms
of the Agreement would be applied to the reduction of the Advances, for
application to Foothill's Pro-Rata Share of the Advances, and, upon the
repayment in full of Foothill's Pro-Rata Share of the Advances, then to the
other Lenders as provided under Section 2.5(b). If, as of any Settlement Date,
Collections received since the then immediately preceding Settlement Date have
been applied to Foothill's Pro-Rata Share of the Advances other than to Agent
Loans or Agent Advances, as provided for in the previous sentence, Foothill
shall pay to the Agent for the accounts of the Lenders, and Agent shall pay to
the Lenders, to be applied to the outstanding Advances of such Lenders, an
amount such that each Lender shall, upon receipt of such amount, have, as of
such Settlement Date, its Pro-Rata Share of the Advances. During the period
between Settlement Dates, the Agent with respect to Agent Loans and Agent
Advances, and each Lender with respect to the Advances other than Agent Loans
and Agent Advances, shall be entitled to interest at the applicable rate or
Schedule 1, Pg. 32
39
rates payable under this Agreement on the daily amount of funds employed by the
Agent or the Lenders, as applicable.
(j) Notation. Each Lender is authorized, at such
Lender's option, to note the date and amount of each payment or prepayment of
principal of such Lender's Advances in its books and records, including computer
records, such books and records constituting rebuttably presumptive evidence,
absent manifest error, of the accuracy of the information contained therein.
(k) Lenders' Failure to Perform. All Advances (other
than Agent Loans and Agent Advances) shall be made by the Lenders simultaneously
and in accordance with their Pro-Rata Shares. It is understood that (i) no
Lender shall be responsible for any failure by any other Lender to perform its
obligation to make any Advances hereunder, nor shall any Commitment of any
Lender be increased or decreased as a result of any failure by any other Lender
to perform its obligation to make any Advances hereunder, and (ii) no failure by
any Lender to perform its obligation to make any Advances hereunder shall excuse
any other Lender from its obligation to make any Advances hereunder.
(l) Overadvances. Agent may make voluntary
Overadvances, which shall be Base Rate Loans, without the written consent of the
Required Lenders for amounts charged to the Loan Account for interest, fees, or
Lender Group Expenses pursuant to Section 2.1(h)(i)(2)(C). If the conditions for
borrowing under Section 3.2(d) cannot be fulfilled, the Agent may, with the
consent of the Required Lenders, knowingly and intentionally continue to make
Advances (including Agent Loans to the extent permitted under Section
2.1(g)(i)), which shall be Base Rate Loans, to Borrower such failure of
condition notwithstanding or modify the definition of "Borrowing Base," so long
as: (i) such Overadvance or modification would not exist for more than 120 days
and (ii) the amount by which Revolving Facility Usage exceeds the Borrowing Base
(as defined prior to any modification of such definition under this Section
2.1(l)) would not exceed the lesser of: (y) $12,500,000 or (z) 10% of the
Borrowing Base (as defined prior to any modification of such definition under
this Section 2.1(l)). The foregoing provisions are for the sole and exclusive
benefit of the Agent and the Lenders and are not intended to benefit Borrower in
any way. The Advances and Agent Loans, as applicable, that are made pursuant to
this Section 2.1(l) shall be subject to the same terms and conditions as any
other Agent Advance or Agent Loan, as applicable, except that the rate of
interest applicable thereto shall be the rates set forth in Section 2.7(c)(i)
without regard to the presence or absence of a Default or Event of Default;
provided, that the Required Lenders may, at any time, revoke Agent's
authorization contained in this Section 2.1(l) to make Overadvances (except for
and excluding amounts charged to the applicable Loan Account for interest, fees,
or Lender Group Expenses), any such revocation to be in writing and to become
effective upon Agent's receipt thereof; provided further, however, that the
making of such Overadvances shall not constitute a waiver of such Event of
Default arising therefrom. Each Lender shall be obligated to settle with Agent
as provided in Section 2.1(i) for the amount of such Lender's Pro-Rata Share of
any unintentional Overadvances by Agent reported to such Lender and any
intentional Overadvances made as permitted under this Section 2.1(l).
(m) Effect of Bankruptcy. If a case is commenced by
or against any Borrower under the Bankruptcy Code, or other statute providing
for debtor relief, then, without
Schedule 1, Pg. 33
40
the approval of Required Lenders the Lender Group shall not make additional
loans or provide additional financial accommodations under the Loan Documents to
such Borrower as debtor or debtor-in-possession, or to any trustee for such
Borrower, nor consent to the use of cash collateral (provided that the
applicable Loan Account shall continue to be charged, to the fullest extent
permitted by law, for accruing interest, fees, and Lender Group Expenses).
(n) [Intentionally Deleted]
(o) Voluntary Reductions of Commitments. Borrower may
permanently reduce the unfunded portion of the Commitments in amounts equal to
$5,000,000 and increments of $1,000,000 in excess thereof, at any time and from
time to time without penalty. Such voluntary reductions of the Commitments shall
be applied so as to maintain each Lender's Pro-Rata Share of the remaining
Commitments and shall be conditioned upon payment to the Agent for the ratable
benefit of the Lenders, of the accrued and unpaid unused line fee provided for
in Section 2.12(b), and upon at least two Business Days prior written notice to
the Agent and the Lenders.
2.2 LETTERS OF CREDIT.
(a) Agreement to Cause Issuance; Amounts; Outside
Expiration Date.
(i) Subject to the terms and conditions of
this Agreement, Agent agrees to issue letters of credit for the account of
Borrower (each, an "L/C") or to issue guarantees of payment (each such guaranty,
an "L/C Guaranty") with respect to letters of credit issued by Issuer for the
account of Borrower, in an aggregate undrawn and unreimbursed amount not to
exceed on any date the least of (x) the Borrowing Base less the aggregate amount
of all Advances outstanding on such date, (y) the Maximum Revolving Amount less
the aggregate amount of all Advances outstanding on such date, and (z)
$25,000,000.
(ii) Borrower expressly understands and
agrees that Agent shall have no obligation to arrange for the issuance by Issuer
of the letters of credit that are to be the subject of L/C Guarantees. Each
Letter of Credit shall have an expiry date no later than 5 days prior to the
Maturity Date and all such Letters of Credit shall be in form and substance
acceptable to Agent in its reasonable discretion.
(iii) If the Lender Group is obligated to
advance funds under a Letter of Credit, Borrower immediately shall reimburse
such amount to Agent and, in the absence of such reimbursement, the amount so
advanced shall, at Agent's discretion, either (x) immediately and automatically
be deemed to be an Advance hereunder and, thereafter, shall bear interest at the
rate then applicable to Advances under Section 2.7 or (y) be paid directly by
the Lender Group to the Issuer, not by way of an Advance, and, thereafter such
amounts paid shall bear interest at the rate then applicable to non-contingent
Obligations under Section 2.7.
(b) Indemnification. Borrower hereby agrees to
indemnify, save, defend, and hold the Lender Group harmless from any loss, cost,
expense, or liability, including payments made by the Lender Group, expenses,
and reasonable attorneys fees incurred by the Lender Group constituting Lender
Group Expenses arising out of or in connection with any Letter of Credit;
provided, however, that Borrower shall not be required to indemnify the Lender
Schedule 1, Pg. 34
41
Group if such loss, cost, expense, or liability was the result of the gross
negligence or wilful misconduct by (i) a member thereof (including a member
acting as Issuer), in which case such member shall indemnify each other member
of the Lender Group for any such loss, cost, or expense, or (ii) by Bank acting
as Issuer, in which case Foothill will indemnify each other member of the Lender
Group for any such loss, cost, or expense. Borrower agrees to be bound by the
Issuer's regulations and interpretations of any letters of credit guarantied by
the Lender Group and opened to or for Borrower's account as set forth in the
applications therefor entered into by Borrower in favor of Issuer, even though
this interpretation may be different from Borrower's own, and Borrower
understands and agrees that the Lender Group shall not be liable for any error,
negligence, or mistake, whether of omission or commission, in following
Borrower's instructions. Borrower understands that the L/C Guarantees may
require the Lender Group to indemnify the Issuer for certain costs or
liabilities arising out of claims by Borrower against such Issuer. Borrower
hereby agrees to indemnify, save, defend, and hold the Lender Group harmless
with respect to any loss, cost, expense (including reasonable attorneys fees),
or liability incurred by the Lender Group under any L/C Guaranty as a result of
the Lender Group's indemnification of Issuer; provided, however, that Foothill
shall be solely responsible for indemnifying the Lender Group for any such loss,
cost, expense or liability arising out of the gross negligence or wilful
misconduct of Bank as Issuer.
(c) Supporting Materials. Borrower hereby authorizes
and directs the Issuer to deliver to Agent all instruments, documents, and other
writings and property received by the Issuer pursuant to such letter of credit,
and to accept and rely upon Agent's instructions and agreements with respect to
all matters arising in connection with such letter of credit and the related
application. Borrower may or may not be the "applicant" or "account party" with
respect to such letter of credit.
(d) Costs of Letters of Credit. Any and all customary
fees of the Issuer for issuance, negotiation, settlement, amendments, and
processing, and costs incurred by Agent relating to the letters of credit
guaranteed by an L/C Guaranty (all as set forth in Schedule 2.2(d)), shall be
considered Lender Group Expenses for purposes of this Agreement and immediately
shall be reimbursable by Borrower to Agent.
(e) Termination. Immediately upon the termination of
this Agreement pursuant to Section 3.4, Borrower agrees to either (i) provide
cash collateral to be held by Agent, or a "back up" letter of credit
satisfactory to Agent, in either case in an amount equal to 102% of the maximum
amount of the Lender Group's obligations under Letters of Credit, or (ii) cause
to be delivered to Agent releases of all of the Lender Group's obligations under
outstanding Letters of Credit. At Agent's discretion, any proceeds of Collateral
received by Agent after the occurrence and during the continuation of an Event
of Default may be held as the cash collateral required by this Section 2.2(e).
(f) Participation.
(i) Purchase of Participation. Immediately
upon issuance of any Letter of Credit in accordance with this Section 2.2, each
Lender shall be deemed to have irrevocably and unconditionally purchased and
received without recourse or warranty, an undivided interest and participation
in the credit support or enhancement provided through the
Schedule 1, Pg. 35
42
Agent to the Issuer in connection with the issuance of such Letter of Credit,
equal to such Lender's Pro-Rata Share of the face amount of such Letter of
Credit (including, without limitation, all obligations of Borrower with respect
thereto, and any security therefor or guaranty pertaining thereto).
(ii) Documentation. Upon the request of any
Lender, the Agent shall furnish to such Lender copies of any Letter of Credit,
reimbursement agreements executed in connection therewith, application for any
Letter of Credit and credit support or enhancement provided through the Agent in
connection with the issuance of any Letter of Credit, and such other
documentation as may reasonably by requested by such Lender.
(iii) Obligations Irrevocable. The
obligations of each Lender to make payments to the Agent with respect to any
Letter of Credit or with respect to any credit support or enhancement provided
through the Agent with respect to a Letter of Credit, and the obligations of
Borrower to make payments to the Agent, for the account of the Lenders, shall be
irrevocable, not subject to any qualification or exception whatsoever,
including, without limitation, any of the following circumstances:
(A) any lack of validity or
enforceability of this Agreement or any of the other Loan Documents;
(B) the existence of any claim,
setoff, defense (other than payment in full), or other right which Borrower may
have at any time against a beneficiary named in a Letter of Credit or any
transferee of any Letter of Credit (or any Person for whom any such transferee
may be acting), any Lender, the Agent, the Issuer, or any other Person, whether
in connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transactions between such Borrower or any other Person and the beneficiary named
in any Letter of Credit);
(C) any draft, certificate, or any
other document presented under the Letter of Credit proving to be forged,
fraudulent, invalid, or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;
(D) the surrender or impairment of
any security for the performance or observance of any of the terms of any of the
Loan Documents; or
(E) the occurrence of any Default
or Event of Default.
2.3 [INTENTIONALLY DELETED].
2.4 [INTENTIONALLY DELETED].
2.5 PAYMENTS.
(a) Payments by Borrower.
(i) All payments to be made by Borrower
shall be made without set-off, recoupment, deduction, or counterclaim, except as
otherwise required by law.
Schedule 1, Pg. 36
43
Except as otherwise expressly provided herein, all payments by Borrower shall be
made to Agent for the account of the Lenders or Agent, as the case may be, at
Agent's address set forth in Section 12, and shall be made in immediately
available funds, no later than 11:00 a.m. (California time) on the date
specified herein. Any payment received by Agent later than 11:00 a.m.
(California time), at the option of Agent, shall be deemed to have been received
on the following Business Day and any applicable interest or fee shall continue
to accrue until such following Business Day.
(ii) Except as provided in Section 2.13(b)
with respect to calculating the last day of an Interest Period, whenever any
payment is due on a day other than a Business Day, such payment shall be made on
the following Business Day, and such extension of time shall in such case be
included in the computation of interest or fees, as the case may be.
(iii) Unless Agent receives notice from
Borrower prior to the date on which any payment is due to the Lenders that
Borrower will not make such payment in full as and when required, Agent may
assume that Borrower has made such payment in full to Agent on such date in
immediately available funds and Agent may (but shall not be so required), in
reliance upon such assumption, distribute to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent Borrower
has not made such payment in full to Agent, each Lender shall repay to Agent on
demand such amount distributed to such Lender, together with interest thereon at
the Base Rate for each day from the date such amount is distributed to such
Lender until the date repaid.
(b) Apportionment and Application of Payments. Except
as otherwise provided with respect to Defaulting Lenders and except as otherwise
provided in the Loan Documents (including letter agreements between Agent and
individual Lenders), aggregate principal and interest payments shall be
apportioned ratably among the Lenders (according to the unpaid principal balance
of the Advances to which such payments relate held by each Lender) and payments
of the fees (other than fees designated for Agent's separate account, after
giving effect to any letter agreement between Agent and individual Lenders)
shall, as applicable, be apportioned ratably among the Lenders. All payments
shall be remitted to Agent and all such payments not relating to specific
Advances, or not constituting payment of specific fees and all proceeds of
Collateral received by Agent, shall be applied, first, to pay any fees or
expense reimbursements then due to Agent from Borrower; second, to pay any fees
or Lender Group Expenses then due to the Lenders from Borrower; third, to pay
interest due in respect of all Advances, including Agent Loans and Agent
Advances; fourth, to pay or prepay principal of Agent Loans and Agent Advances;
fifth, ratably to pay principal of the Advances (other than Agent Loans and
Agent Advances) and unreimbursed obligations in respect of Letters of Credit;
and sixth, ratably to pay any other Obligations due to Agent or any Lender by
Borrower. Agent shall promptly distribute to each Lender, pursuant to the
applicable wire transfer instructions received from each Lender in writing, such
funds as it may be entitled to receive, subject to a Settlement delay as
provided for in Section 2.1(i).
2.6 OVERADVANCES. If, at any time or for any reason, the
amount of Obligations owed by Borrower to the Lender Group pursuant to Sections
2.1 and 2.2 is greater than either the Dollar or percentage limitations set
forth in Sections 2.1 or 2.2 (an
Schedule 1, Pg. 37
44
"Overadvance"), Borrower immediately shall pay to Agent, in cash, the amount of
such excess to be used by Agent to reduce the Obligations pursuant to the terms
of Section 2.5(b).
2.7 INTEREST AND LETTER OF CREDIT FEES: RATES, PAYMENTS, AND
CALCULATIONS.
(a) Interest Rate. Except as provided in Section
2.7(c) or elsewhere in the Agreement, below, all non-contingent Obligations
shall bear interest as follows:
(i) All non-contingent Obligations
(including Base Rate Loans) other than Eurodollar Rate Loans shall bear
interest, on the actual Daily Balance, at a per annum rate equal to the Base
Rate plus the Base Rate Margin.
(ii) Each Eurodollar Rate Loan shall bear
interest, on the actual Daily Balance, at a per annum rate equal to the Adjusted
Eurodollar Rate plus the Eurodollar Rate Margin.
(b) Letter of Credit Fee. Borrower shall pay Agent,
for the benefit of the Lender Group, a fee (in addition to the charges,
commissions, fees, and costs set forth in Section 2.2(d)) equal to: (a) from and
including the Closing Date to and including December 31, 2000, 2.00% per annum
times the average aggregate undrawn amount of all Letters of Credit outstanding
during the prior month; and (b) for any date on or after January 1, 2001, the
Eurodollar Rate Margin in effect on such date times the average aggregate
undrawn amount of all Letters of Credit outstanding during the prior month.
(c) Default Rate. Upon the occurrence and during the
continuation of an Event of Default, (i) all non-contingent Obligations shall
bear interest at a per annum rate equal to the Base Rate plus 3.00%; and (ii)
the Letter of Credit fee provided in Section 2.7(b) shall be increased to 4.50%
per annum times the amount of the aggregate undrawn amount of all outstanding
Letters of Credit.
(d) [Intentionally Deleted]
(e) Payments. Letter of Credit fees payable hereunder
shall be due and payable, in arrears, on the first day of each month during the
term hereof. Interest in respect of Base Rate Loans shall be due and payable, in
arrears, on the first day of each month during the term hereof and interest in
respect of each Eurodollar Rate Loan shall be due and payable, in arrears, on
the last day of the Interest Period applicable thereto. Borrower hereby
authorizes Agent, at its option, without prior notice to Borrower (except as
provided below), to charge such interest and Letter of Credit fees, all Lender
Group Expenses (as and when incurred), the charges, commissions, fees, and costs
provided for in Section 2.2(d) (as and when accrued or incurred), the fees and
charges provided for in Section 2.12 (as and when accrued or incurred), and
other payments due under any Loan Document to the Loan Account, which amounts
thereafter shall accrue interest at the rate then applicable to Advances
hereunder. To the extent it is practicable to do so, Agent shall provide notice
to Borrower of the nature and amount of any such Lender Group Expenses or any of
the other foregoing fees, costs, or charges prior to same being charged to the
Loan Account; provided, however, that any failure by Agent to provide such
notice to Borrower shall not in any way diminish Borrower's obligation to
reimburse the
Schedule 1, Xx. 00
00
Lender Group for such Lender Group Expenses or such fees, costs, or charges or
impair the Lender Group's right to receive the same, or give rise to any
liability on the part of the Lender Group; provided, further that if Agent is
unable to give prior notice to Borrower of the Lender Group Expenses or any of
the other fees, costs or charges due (other than interest and regularly
scheduled fees), Agent will, in all events, give subsequent detailed notice to
Borrower of such Lender Expenses or fees, costs, or charges and the constituent
amounts. Any such Lender Group Expenses or other fees, costs, or charges (other
than interest and regularly scheduled fees) which are charged to Borrower's
account at or prior to 9:00 a.m. (California time) shall be credited that same
day, and if after such time, then credited on the next Business Day. Any
interest not paid when due shall be compounded and shall thereafter accrue
interest at the rate then applicable to Advances hereunder.
(f) Computation. The Base Rate as of the date of this
Agreement is 9.50% per annum. In the event the Base Rate is changed from time to
time hereafter, the applicable rate of interest hereunder automatically and
immediately as of the opening of business on the effective date of such change
shall be increased or decreased by an amount equal to such change in the Base
Rate. All interest and fees chargeable under the Loan Documents shall be
computed on the basis of a 360 day year for the actual number of days elapsed.
(g) Intent to Limit Charges to Maximum Lawful Rate.
In no event shall the interest rate or rates payable under this Agreement, plus
any other amounts paid in connection herewith, exceed the highest rate
permissible under any law that a court of competent jurisdiction shall, in a
final determination, deem applicable. Borrower and the Lender Group, in
executing and delivering this Agreement, intend legally to agree upon the rate
or rates of interest and manner of payment stated within it; provided, however,
that, anything contained herein to the contrary notwithstanding, if said rate or
rates of interest or manner of payment exceeds the maximum allowable under
applicable law, then, ipso facto as of the date of this Agreement, Borrower is
and shall be liable only for the payment of such maximum as allowed by law, and
payment received from Borrower in excess of such legal maximum, whenever
received, shall be applied to reduce the principal balance of the Obligations to
the extent of such excess.
2.8 COLLECTION OF ACCOUNTS. Borrower shall at all times
maintain lockboxes (the "Lockboxes") and, immediately after the Closing Date, to
the extent that it has not already done so, shall instruct all Account Debtors
with respect to the Accounts, General Intangibles, and Negotiable Collateral of
Borrower to remit all Collections in respect thereof to such Lockboxes.
Borrower, Agent, and the Lockbox Banks shall enter into the Lockbox Agreements,
which among other things shall provide for the opening of a Lockbox Account for
the deposit of Collections at a Lockbox Bank. Borrower agrees that all
Collections and other amounts received by Borrower from any Account Debtor or
any other source immediately upon receipt shall be deposited into a Lockbox
Account. No Lockbox Agreement or arrangement contemplated thereby shall be
modified by Borrower without the prior written consent of Agent. Upon the terms
and subject to the conditions set forth in the Lockbox Agreements, all amounts
received in each Lockbox Account shall be wired each Business Day into an
account (the "Agent's Account") maintained by Agent at a depositary selected by
Agent.
2.9 CREDITING PAYMENTS; APPLICATION OF COLLECTIONS. The
receipt of any Collections by Agent (whether from transfers to Agent by the
Lockbox Banks pursuant to the
Schedule 1, Pg. 39
46
Lockbox Agreements or otherwise) immediately shall be applied provisionally to
reduce the Obligations outstanding under Section 2.1, but shall not be
considered a payment on account unless such Collection item is a wire transfer
of immediately available federal funds and is made to the Agent's Account or
unless and until such Collection item is honored when presented for payment.
Should any Collection item not be honored when presented for payment, then
Borrower shall be deemed not to have made such payment, and interest shall be
recalculated accordingly. Anything to the contrary contained herein
notwithstanding:
(i) any Collection item shall be deemed
received by Agent only if it is received into the Agent's Account on a Business
Day on or before 11:00 a.m. California time. If any Collection item is received
into the Agent's Account on a non-Business Day or after 11:00 a.m. California
time on a Business Day, it shall be deemed to have been received by Agent as of
the opening of business on the immediately following Business Day; and
(ii) at any time that an Event of Default
has not occurred and is not continuing, Collections will only be applied to
Obligations that are not Eurodollar Rate Loans, and to the extent that all such
Obligations other than Eurodollar Rate Loans have been repaid, additional
Collections will be, at the Borrower's direction, returned to Borrower or
applied to such Eurodollar Rate Loans subject to any required payments under
Section 2.17(d).
2.10 DESIGNATED ACCOUNT. Agent and the Lender Group is
authorized to make the Advances and arrange for the issuance of the Letters of
Credit under this Agreement based upon telephonic or other instructions received
from anyone purporting to be an Authorized Person, or without instructions if
pursuant to Section 2.7(e). Borrower agrees to establish and maintain the
Designated Account with the Designated Account Bank for the purpose of receiving
the proceeds of the Advances requested by Borrower and made by the Lender Group
hereunder. Unless otherwise agreed by Agent and Borrower, any Advance requested
by Borrower and made by the Lender Group hereunder shall be made to the
Designated Account.
2.11 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS.
Agent shall maintain an account on its books in the name of Borrower (the "Loan
Account") on which Borrower will be charged with all Advances made by the Lender
Group to Borrower or for Borrower's account, including, accrued interest, Lender
Group Expenses, and any other payment Obligations of Borrower. In accordance
with Section 2.9, the Loan Account will be credited with all payments received
by Agent from Borrower or for Borrower's account, including all amounts received
in the Agent's Account from any Lockbox Bank. Agent shall render statements
regarding the Loan Account to Borrower, including principal, interest, fees, and
including an itemization of all charges and expenses constituting the Lender
Group Expenses owing, and such statements shall be conclusively presumed to be
correct and accurate and constitute an account stated between Borrower and the
Lender Group unless, within 60 days after receipt thereof by Borrower, Borrower
shall deliver to Agent written objection thereto describing the error or errors
contained in any such statements.
2.12 FEES. Borrower shall pay to Agent the following fees and
charges, each of which shall be fully earned and nonrefundable on the date when
due, and shall be apportioned among the Lenders in accordance with the terms of
letter agreements between the Agent and individual Lenders:
Schedule 1, Pg. 40
47
(a) Fee Letter Fees. As and when due and payable
under the terms of the Agent's Fee Letter, Borrower shall pay to Agent the fees
set forth therein;
(b) Unused Line Fee. On the first day of each month
during the term of this Agreement, an unused line fee in an amount equal to
0.375% per annum times the Average Unused Portion of the Maximum Revolving
Amount;
(c) Financial Examination Fees. For the sole account
of Agent a fee of $750 per day per examiner, plus reasonable out-of-pocket
expenses for each financial analysis and examination (i.e., audits) of Borrower
performed by personnel employed by Agent; provided, however, that, such audits
will not be conducted more often than twice per calendar year not to exceed a
total of 20 examiner days per calendar year and at any other time, and for any
number of examiner days, reasonably determined by Agent if an Event of Default
has occurred and is continuing.
2.13 EURODOLLAR RATE LOANS. Notwithstanding any other
provisions to the contrary contained in this Agreement, the following provisions
shall govern with respect to Eurodollar Rate Loans as to the matters covered:
(a) Borrowing; Conversion; Continuation. Borrower may
from time to time, on or after the Closing Date, request in a written or
telephonic communication with the Agent: (i) a Borrowing consisting of
Eurodollar Rate Loans (pursuant to Section 2.1(d)); (ii) that Base Rate Loans be
converted into Eurodollar Rate Loans; or (iii) that existing Eurodollar Rate
Loans continue for an additional Interest Period. Any such request shall specify
the aggregate amount of the requested Eurodollar Rate Loans, the proposed
Funding Date (which shall be a Business Day, and with respect to continued
Eurodollar Rate Loans shall be the last day of the Interest Period of the
existing Eurodollar Rate Loans being continued), and the proposed Interest
Period, in each case subject to the limitations set forth below). Eurodollar
Rate Loans may only be made, continued, or extended if, as of the proposed
Funding Date each of the following conditions is satisfied:
(i) no Event of Default exists;
(ii) no more than five Interest Periods may
be in effect at any one time;
(iii) the amount of each Eurodollar Rate
Loan borrowed, converted, or continued must be in an amount not less than
$1,000,000 and integral multiples of $500,000 in excess thereof;
(iv) the Agent shall have determined that
the Interest Period or Adjusted Eurodollar Rate is available to Agent through
the Bank and can be readily determined as of the date of the request for such
Eurodollar Rate Loan by Borrower; and
(v) the Agent shall have received such
request at least two Business Days prior to the proposed Funding Date.
Schedule 1, Pg. 41
48
Any request by Borrower to borrow Eurodollar
Rate Loans, to convert Base Rate Loans to Eurodollar Rate Loans or to continue
any existing Eurodollar Rate Loans shall be irrevocable, except to the extent
that the Agent or a Lender shall determine under Sections 2.13(a), 2.14 or 2.15
that such Eurodollar Rate Loans cannot be made or continued.
(b) Determination of Interest Period. By giving
notice as set forth in Section 2.13(a), the Borrower shall have the option of
selecting a one or three month Interest Period for such Eurodollar Rate Loan.
The determination of Interest Periods shall be subject to the following
provisions:
(i) in the case of immediately successive
Interest Periods, each successive Interest Period shall commence on the day on
which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise
expire on a day which is not a Business Day, the Interest Period shall be
extended to expire on the next succeeding Business Day; provided, however, that
if the next succeeding Business Day occurs in the following calendar month, then
such Interest Period shall expire on the immediately preceding Business Day;
(iii) if any Interest Period begins on the
last Business Day of a month, or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period, then
the Interest Period shall end on the last Business Day of the calendar month at
the end of such Interest Period; and
(iv) the Borrower may not select an Interest
Period which expires later than the Maturity Date.
(c) Automatic Conversion; Optional Conversion by
Agent. Any Eurodollar Rate Loan shall automatically convert to a Base Rate Loan
upon the last day of the applicable Interest Period, unless Agent has received a
request to continue such Eurodollar Rate Loan at least two Business Days prior
to the end of such Interest Period in accordance with the terms of Section
2.13(a). Any Eurodollar Rate Loan shall, at Agent's option, upon notice to
Borrower, convert to a Base Rate Loan in the event that (A) an Event of Default
shall have occurred and be continuing as of the last day of the Interest Period
for such Eurodollar Rate Loan, or (B) this Agreement shall terminate, and
Borrower shall pay to Agent (for the benefit of the Lender Group), any amounts
required by Section 2.17 as a result thereof.
2.14 ILLEGALITY. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Rate Loans as contemplated by this Agreement, (a)
the Commitment of such Lender hereunder to make Eurodollar Rate Loans, continue
Eurodollar Rate Loans as such, and convert Base Rate Loans to Eurodollar Rate
Loans shall forth with be cancelled and (b) such Lender's then outstanding
Eurodollar Rate Loans, if any, shall be converted automatically to Base Rate
Loans on the respective last days of the then current Interest Periods with
respect thereto or within such earlier period as required by law; provided,
however, that before making any such demand, each Lender agrees to use
reasonable
Schedule 1, Pg. 42
49
efforts (consistent with its internal policy and legal and regulatory
restrictions and so long as such efforts would not be disadvantageous to it, in
its reasonable discretion, in any legal, economic, or regulatory manner) to
designate a different lending office if the making of such a designation would
allow the Lender or its lending office to continue to perform its obligations to
make Eurodollar Rate Loans. If any such conversion of a Eurodollar Rate Loan
occurs on a day which is not the last day of the then current Interest Period
with respect thereto, the Borrower shall pay to such Lender such amounts, if
any, as may be required pursuant to Section 2.17. If circumstances subsequently
change so that any affected Lender shall determine that it is no longer so
affected, such Lender will promptly notify the Borrower and the Agent, and upon
receipt of such notice, the obligations of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans into Eurodollar Rate Loans
shall be reinstated.
2.15 REQUIREMENTS OF LAW. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof
(i) shall subject any Lender to any tax,
levy, charge, fee, reduction, or withholding of any kind whatsoever with respect
to this Agreement, any Advance, any Note, or any Letter of Credit or change the
basis of taxation of payments to such Lender in respect thereof (except for
taxes covered by Section 2.16 and the establishment of a tax based on the net
income of such Lender or changes in the rate of tax on the net income of such
Lender);
(ii) shall impose, modify or hold applicable
any reserve, special deposit, compulsory loan, or similar requirement against
assets held by, deposits or other liabilities in or for the account of,
Advances, loans, or other extensions of credit (including, without limitation,
Letters of Credit) by, or any other acquisition of funds by, any office of such
Lender; or
(iii) shall impose on such Lender any other
condition with respect to this Agreement, any Advance, or any Letter of Credit;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing, or maintaining Advances or to increase the cost to such Lender, by
an amount which such Lender deems to be material, of issuing or maintaining any
Letter of Credit or participation therein or to reduce any amount receivable
hereunder in respect of Advances and Letters of Credit or to forego any other
sum payable thereunder or make any payment on account thereof, then, in any such
case, the Borrower shall promptly pay such Lender, upon its demand, any
additional amounts necessary to compensate such Lender for such increased cost
or reduced amount receivable; provided, however, that before making any such
demand, each Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions and so long as such
efforts would not be disadvantageous to it, in its reasonable discretion, in any
legal, economic, or regulatory manner) to designate a different Eurodollar
lending office if the making of such designation would allow the Lender or its
Eurodollar lending office to continue to perform its obligations to make
Eurodollar Rate Loans or to continue to fund or maintain Eurodollar Rate Loans
and avoid the need for, or materially reduce the amount of, such increased cost.
If any
Schedule 1, Pg. 43
50
Lender becomes entitled to claim any additional amounts pursuant to this Section
2.15, it shall promptly notify the Borrower, through the Agent, of the event by
reason of which it has become so entitled. A certificate as to any additional
amounts payable pursuant to this Section 2.15 submitted by such Lender, through
the Agent, to the Borrower shall be conclusive in the absence of manifest error.
If the Borrower so notifies the Agent within five Business Days after any Lender
notifies the Borrower of any increased cost pursuant to the foregoing provisions
of this Section 2.15, the Borrower may convert all Eurodollar Rate Loans of such
Lender then outstanding into Base Rate Loans in accordance with Section 2.13
and, additionally, reimburse such Lender for any cost in accordance with Section
2.17. This covenant shall survive the termination of this Agreement and the
payment of the Advances and all other amounts payable hereunder for nine months
following such termination and repayment.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
increasing the amount of capital required to be maintained or reducing the rate
of return on such Lender's or such corporation's capital as a consequence of its
obligations hereunder or under any Letter of Credit to a level below that which
such Lender or such corporation could have achieved but for such change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Agent) of a prompt written request therefor, the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction. This covenant shall survive the
termination of this Agreement and the payment of the Advances and all other
amount payable hereunder for nine months following such termination and
repayment.
2.16 TAXES.
(a) Except as provided below in this Section 2.16,
all payments made by the Borrower under this Agreement and any other Loan
Documents shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions, or withholdings, now or
hereafter imposed, levied, collected, withheld, or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes imposed in lieu of net
income taxes. If any such non-excluded taxes, levies, imposts, duties, charges,
fees, deductions or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to the Agent or any Lender hereunder or under
any other Loan Documents, the amounts so payable to the Agent or such Lender
shall be increased to the extent necessary to yield to the Agent or such Lender
(after payment of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement and
any other Loan Documents, provided, however, that the Borrower shall be entitled
to deduct and withhold any Non-Excluded Taxes and shall not be required to
increase any such amounts payable to any Lender if such Lender fails or is
unable to comply with the requirements of paragraph (b) of this Section 2.16.
Whenever any Non-Excluded Taxes are payable by the Borrower, as promptly as
possible thereafter the Borrower shall send to the Agent for its own account or
for the account of such
Schedule 1, Pg. 44
51
other member of the Lender Group, as the case may be, a certified copy of an
original official receipt received by the Borrower showing payment thereof. If
the Borrower fails to pay any Non-Excluded Taxes when due to the appropriate
taxing authority or fails to remit to the Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the Agent and each
other member of the Lender Group for any incremental taxes, interest or
penalties that may become payable by the Agent or any such member of the Lender
Group as a result of any such failure. The agreements in this Section 2.16 shall
survive the termination of this Agreement and the payment of the Advances and
all other amounts payable hereunder.
(b) Each member of the Lender Group that is not
incorporated under the laws of the United States of America or a state thereof
shall:
(i) (x) on or before the date of any payment
by the Borrower under this Agreement, deliver to the Borrower and the Agent (A)
two duly completed copies of United States Internal Revenue Service Form W-8 BEN
or W-8 ECI, or successor applicable form, as the case may be, certifying that it
is entitled to receive payments under this Agreement without any deduction or
withholding of any United States federal income taxes and (B) a duly completed
Internal Revenue Service Form W-8 or W-9, or successor applicable form, as the
case may be, certifying that it is entitled to an exemption from United States
backup withholding tax;
(y) deliver to the Borrower and the
Agent two further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Borrower, and
(z) obtain such extensions of time
for filing and completing such forms or certifications as may reasonably be
requested by the Borrower or the Agent; or
(ii) in the case of any such Lender that is
not a "bank" within the meaning of Section 881(c)(3)(A) of the IRC and that does
not comply with sub-paragraph (i) of this paragraph (b),
(x) represent to the Borrower (for
the benefit of the Borrower and the Agent) that it is not a bank within the
meaning of Section 881(c)(3)(A) of the IRC,
(y) deliver to the Borrower on or
before the date of any payment by the Borrower, with a copy to the Agent, (A) a
certificate stating that such Lender (1) is not a "bank" under Section
881(c)(3)(A) of the IRC, is not subject to regulatory or other legal
requirements as a bank in any jurisdiction, and has not been treated as a bank
for purposes of any tax, securities law, or other filing or submission made to
any Governmental Authority, any application made to a rating agency or
qualification for any exemption from tax, securities law or other legal
requirements, (2) is not a 10-percent shareholder within the meaning of Section
881(c)(3)(B) of the IRC and (3) is not a controlled foreign corporation
receiving interest from a related person within the meaning of Section
881(c)(3)(C) of the IRC (any such certificate a "U.S. Tax Compliance
Certificate") and (b) two duly completed copies of Internal
Schedule 1, Pg. 45
52
Revenue Service Form W-8 BEN, or successor applicable form, certifying to such
Lender's legal entitlement at the date of such certificate to an exemption from
U.S. withholding tax under the provisions of Section 881(c) of the IRC with
respect to payments to be made under this Agreement (and to deliver to the
Borrower and the Agent two further copies of Form W-8 BEN on or before the date
it expires or becomes obsolete and after the occurrence of any event requiring a
change in the most recently provided form and, if necessary, obtain any
extensions of time reasonably requested by the Borrower or the Agent for filing
and completing such forms), and
(z) agree, to the extent legally
entitled to do so, upon reasonable request by the Borrower, to provide to the
Borrower (for the benefit of the Borrower and the Agent) such other forms as may
be reasonably required in order to establish the legal entitlement of such
Lender to an exemption from withholding with respect to payments under this
Agreement;
(c) Each Lender shall, upon the reasonable request by
the Borrower, deliver to the Borrower or the applicable Governmental Authority,
as the case may be, any form or certificate required in order that any payment
by the Borrower under this Agreement may be made free and clear of, and without
deduction or withholding for or on any net income taxes and franchise taxes
imposed in lieu of net income taxes (or to allow any such deduction or
withholding to be at a reduced rate) imposed on such payment under the laws of
any jurisdiction, provided that such Lender is legally entitled to complete,
execute and deliver such form or certificate and such completion, execution or
submission would not materially prejudice the legal position of such Lender.
unless in any such case any change in treaty, law, or regulation has occurred
after the date such Person becomes a Lender hereunder which renders all such
forms and certificates inapplicable or which would prevent such Lender from duly
completing and delivering any such form or certificate with respect to it and
such Lender so advises the Borrower and the Agent. Each Person that shall become
a Lender or a Participant pursuant to Section 15.1 shall, upon the effectiveness
of the related transfer, be required to provide all of the forms,
certifications, and statements required pursuant to this Section 2.16; provided,
however, that in the case of a Participant the obligations of such Participant
pursuant to this paragraph (b) shall be determined as if such Participant were a
Lender except that such Participant shall furnish all such required forms,
certifications, and statements to the Lender from which the related
participation shall have been purchased.
2.17 INDEMNITY. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in payment when
due of the principal amount of or interest on any Eurodollar Rate Loan, (b)
default by the Borrower in making a borrowing of, conversion into, or
continuation of Eurodollar Rate Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (c)
default by the Borrower in making any prepayment after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (d) the
making of a prepayment of Eurodollar Rate Loans on a day which is not the last
day of an Interest Period with respect thereto (whether due to the termination
of this Agreement upon an Event of Default or otherwise), including, without
Schedule 1, Pg. 46
53
limitation, in each case, any such loss or expense (but excluding loss of
margin) arising from the reemployment of funds obtained by it or from fees
payable to terminate the deposits from which such funds were obtained.
Calculation of all amounts payable to a Lender under this Section 2.17 shall be
made as though such Lender had actually funded its relevant Eurodollar Rate Loan
through the purchase of a deposit bearing interest at the Eurodollar Rate in an
amount equal to the amount of such Eurodollar Rate Loan and having a maturity
comparable to the relevant Interest Period; provided, however, that each Lender
may fund each of its Eurodollar Rate Loans in any manner it sees fit, and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this Section 2.17. This covenant shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder for a period of nine months thereafter.
2.18 REPLACEMENT OF LENDER. If at any time (a) the Borrower
becomes obligated to pay additional amounts described in Sections 2.14, 2.15 or
2.16 as a result of any condition described in such Sections or any Lender
ceases to make Eurodollar Rate Loans pursuant to Section 2.14, any Lender
becomes insolvent and its assets become subject to a receiver, liquidator,
trustee, custodian, or other Person having similar powers, (b) any Lender
becomes a "Nonconsenting Lender" (as defined below in this Section 2.18) or (c)
any Lender becomes a "Defaulting Lender", then either the Agent or the Borrower
may, on ten (10) Business Days' prior written notice to the Agent and such
Lender, replace such Lender by causing such Lender to (and such Lender shall)
assign pursuant to Section 15.1 all of its rights and obligations under this
Agreement to a Lender or other Eligible Assignee selected by the Borrower and
acceptable to the Agent for a purchase price equal to the outstanding principal
amount of such Lender's Advances and all accrued interest and fees and other
amounts payable hereunder; provided that (i) the Borrower shall have no right to
replace the Agent, (ii) neither the Agent nor any Lender shall have any
obligation to the Borrower to find a replacement Lender or other such entity,
(iii) in the event of a replacement of a Nonconsenting Lender or a Lender to
which the Borrower becomes obligated to pay additional amounts pursuant to
clause (a) of this Section 2.18, in order for the Borrower or the Agent to be
entitled to replace such a Lender, such replacement must take place no later
than 180 days after (A) the date the Nonconsenting Lender shall have notified
the Borrower and the Agent of its failure to agree to any requested consent,
waiver, or amendment or (B) the Lender shall have demanded payment of additional
amounts under one of the Sections described in clause (a) of this Section 2.18,
as the case may be, and (iv) in no event shall the Lender hereby replaced be
required to pay or surrender to such replacement Lender or other entity any of
the fees received by such Lender hereby replaced pursuant to this Agreement. In
the case of a replacement of a Lender to which the Borrower becomes obligated to
pay additional amounts pursuant to clause (a) of this Section 2.18, the Borrower
shall pay such additional amounts to such Lender prior to such Lender being
replaced and the payment of such additional amounts shall be a condition to the
replacement of such Lender. In the event that (x) the Borrower or the Agent has
requested the Lenders to consent to a departure or waiver of any provisions of
the Loan Documents or to agree to any amendment thereto, (y) the consent,
waiver, or amendment in question requires the agreement of all Lenders in
accordance with the terms of Section 16.1 and (z) Lenders whose Pro-Rata Shares
aggregate 66 2-3% or more of the Commitments have agreed to such consent, waiver
or amendment, then any Lender who does not agree to such consent, waiver or
amendment shall be deemed a "Nonconsenting Lender." The Borrower's and the
Agent's right to replace a Defaulting Lender pursuant to this Section 2.18 is,
and shall be, in addition to, and not in lieu of, all other rights and remedies
available to the
Schedule 1, Pg. 47
54
Borrower or the Agent (as the case may be) against such Defaulting Lender under
this Agreement, at law, in equity, or by statute.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL ADVANCE. The
obligation of the Lender Group to make the initial Advance is subject to the
fulfillment, to the satisfaction of Agent and their counsel, of each of the
following conditions on or before the Closing Date:
(a) the Closing Date shall occur on or before October
27, 2000;
(b) Agent shall have received UCC searches against
the Borrower and any of the Restricted Subsidiaries executing Subsidiary
Security Agreements reflecting no Liens other than Permitted Liens, and fully
executed financing statements and fixture filings from Borrower and each of such
Restricted Subsidiaries in favor of the Agent for all relevant jurisdictions;
(c) Agent shall have received each of the following
documents, duly executed, and each such document shall be in full force and
effect:
a. the Lockbox Agreements;
b. the Disbursement Letter;
c. the Collateral Agency Agreement;
d. the Stock Pledge, the Subsidiary
Guaranties and the Subsidiary Security Agreements; and
e. all other Loan Documents;
(d) Agent shall have received a certificate from the
Secretary of Borrower and each Restricted Subsidiary of Borrower executing a
Subsidiary Guaranty or Subsidiary Security Agreement attesting to the
resolutions of such Person's Board of Directors authorizing its execution,
delivery, and performance of this Agreement and the other Loan Documents to
which such Person is a party and authorizing specific officers of such Person to
execute the same;
(e) Agent shall have received copies of the Governing
Documents of Borrower and each Restricted Subsidiary of Borrower executing a
Subsidiary Security Agreement, as amended, modified, or supplemented to the
Closing Date, certified by the Secretary of such Person;
(f) Agent shall have received a certificate of status
with respect to Borrower and each Restricted Subsidiary of Borrower executing a
Subsidiary Security Agreement, dated or updated within 10 days of the Closing
Date, such certificate to be issued by the appropriate officer of the
jurisdiction of organization of such Person, which certificate shall indicate
that such Person is in good standing in such jurisdiction;
Schedule 1, Pg. 48
55
(g) Agent shall have received certificates of status
with respect to Borrower and each Subsidiary of Borrower executing a Subsidiary
Security Agreement, each dated or updated within 15 days of the Closing Date,
such certificates to be issued by the appropriate officer of the jurisdictions
in which its failure to be duly qualified or licensed would constitute a
Material Adverse Change, which certificates shall indicate that such Person is
in good standing in such jurisdictions;
(h) Agent shall have received a certificate of
insurance, together with the endorsements thereto, as are required by Section
6.10, the form and substance of which shall be satisfactory to Agent and its
counsel, and Agent shall have received such additional documents and information
regarding Borrower's insurance arrangements as it shall request, all of which
shall be satisfactory to Agent and its counsel;
(i) Agent shall have received duly executed
certificates of title with respect to the Vehicles together with such releases
of liens and applications therefor, as Agent shall reasonably require to enable
the prompt processing of each such title by the appropriate governmental agency
in order to properly reflect Agent's Lien (for the benefit of the Lender Group)
thereon;
(j) Agent shall have received an opinion of
Borrower's and its domestic Restricted Subsidiaries' counsel, in each case in
form and substance reasonably satisfactory to Agent in its sole discretion;
(k) Agent shall have received Current Appraisals of
the Vehicles;
(l) Agent shall have received all fees due and
payable on the Closing Date;
(m) Agent shall have received a calculation of the
Borrowing Base prepared by Borrower and certified by the Chief Financial Officer
of Borrower as of the Closing Date;
(n) Agent shall have received all revisions, if any,
of the Borrower's financial forecast and business assumptions for 2000, 2001 and
2002, together with such other information (financial or otherwise) as may be
reasonably requested by Agent, all of which shall be in form and substance
reasonably satisfactory to Agent;
(o) Borrower shall have on the Closing Date (after
taking into account the payment of all fees owing to the Agent on such date and
the making of all Advances on such date, and with Borrower's accounts payable
being no less current than reflected in Agent's most recent field survey) at
least $25,000,000 of unrestricted cash on hand and excess Availability under
Section 2.1(a);
(p) Borrower shall have provided Agent with a fully
executed copy of the Intercompany Agreement;
(q) there shall not have occurred any Material
Adverse Change since June 30, 2000; and
Schedule 1, Pg. 49
56
(r) all other documents and legal matters in
connection with the transactions contemplated by this Agreement shall have been
delivered, executed, or recorded and shall be in form and substance satisfactory
to Agent and its counsel.
3.2 CONDITIONS PRECEDENT TO ALL ADVANCES AND ALL LETTERS OF
CREDIT. The following shall be conditions precedent to all Advances and all
Letters of Credit hereunder:
(a) the representations and warranties contained in
this Agreement and the other Loan Documents shall be true and correct in all
material respects on and as of the date of such extension of credit, as though
made on and as of such date (except to the extent that such representations and
warranties relate solely to an earlier date);
(b) no Default or Event of Default shall have
occurred and be continuing on the date of such extension of credit, nor shall
either result from the making thereof;
(c) no injunction, writ, restraining order, or other
order of any nature prohibiting, directly or indirectly, the extending of such
credit shall have been issued and remain in force by any Governmental Authority
against Borrower, the Lender Group or any of their Affiliates; and
(d) the amount of any requested Advance or Letter of
Credit shall not exceed the Availability at such time.
3.3 CONDITION SUBSEQUENT. As a condition subsequent to initial
closing hereunder, Borrower shall perform or cause to be performed the following
(the failure by Borrower to so perform or cause to be performed constituting an
Event of Default):
(a) within 30 days of the Closing Date, deliver to
Agent the certified copies of the policies of insurance, together with the
endorsements thereto, as are required by Section 6.10, the form and substance of
which shall be satisfactory to Agent and its counsel;
(b) within 90 days of the Closing Date Borrower shall
have used its commercially reasonable efforts to obtain Collateral Access
Agreements from the lessors of Borrower's downtown Dallas and North Dallas
locations, as Agent may require; and
(c) within 75 days of the Closing Date Borrower shall
have: (i) in respect of each parcel of Real Property Collateral, delivered to
Agent a duly executed Mortgage and (ii) in respect of each parcel identified on
Schedule R-1 as "Core Real Property Collateral", used its commercially
reasonable efforts to cause to be delivered to Agent such appraisals,
environmental reports and title insurance policies or endorsements as would be
necessary for such parcel to be considered Core Real Property Collateral as
defined in this Agreement.
3.4 TERM. This Agreement shall become effective upon the
execution and delivery hereof by Borrower and the Lender Group and shall
continue in full force and effect for a term ending on the earlier of (a)
October 24, 2002 (the "Maturity Date"), or (b) termination hereof by the Lender
Group pursuant to Section 9.1(b) following an Event of Default.
Schedule 1, Pg. 50
57
3.5 EFFECT OF TERMINATION. On the date of termination of this
Agreement, all non-contingent Obligations (including any accrued and unpaid fees
(including unused line fees)) immediately shall become due and payable without
notice or demand, and all Obligations with respect to outstanding Letters of
Credit immediately shall be terminated, backed up, or collateralized pursuant to
Section 2.2(e). No termination of this Agreement, however, shall relieve or
discharge Borrower of Borrower's duties, Obligations, or covenants hereunder,
and the continuing Lien of the Agent, for the benefit of the Lender Group, on
the Collateral shall remain in effect until all non-contingent Obligations have
been fully and finally discharged, the outstanding Letters of Credit terminated,
backed up, or collateralized, and the Lender Group's obligation to provide
additional credit hereunder is terminated.
3.6 EARLY TERMINATION BY BORROWER. The provisions of Section
3.4 notwithstanding, Borrower has the option, at any time upon 90 days prior
written notice to Agent, to terminate this Agreement by paying to Agent (for the
ratable benefit of the Lender Group), in cash, all non-contingent Obligations
(including any accrued and unpaid fees (including unused line fees)), in full
without penalty or premium (other than as set forth in Section 2.17(d)), and
terminating, backing up, or collateralizing all outstanding Letters of Credit
pursuant to Section 2.2(e).
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Borrower hereby grants to
Agent for the benefit of the Lender Group a continuing security interest in all
currently existing and hereafter acquired or arising Personal Property
Collateral in order to secure prompt repayment of any and all Obligations and in
order to secure prompt performance by Borrower of each of its covenants and
duties under the Loan Documents. The security interests of Agent for the benefit
of the Lender Group in the Personal Property Collateral shall attach to all
Personal Property Collateral without further act on the part of the Lender Group
or Borrower. The Liens with respect to Real Property Collateral will be granted
after the Closing Date pursuant to the Mortgages. Except as specifically
provided in this Agreement (including Section 7.4), Borrower has no authority,
express or implied, to dispose of any item or portion of the Personal Property
Collateral or the Real Property Collateral. Notwithstanding anything herein or
in the other Loan Documents to the contrary, in no event shall any Mortgage be
granted in respect of Real Property located in (a) the states of New York,
Georgia, Maryland, or Florida, or (b) the District of Columbia; provided,
however, that Borrower agrees to keep any Real Property in the foregoing
jurisdictions free from Liens other than Permitted Liens.
4.2 NEGOTIABLE COLLATERAL. In the event that any Collateral,
including proceeds, is evidenced by or consists of Negotiable Collateral with a
value in excess of $50,000 per item, Borrower, immediately upon the request of
Agent, shall endorse and deliver physical possession of such item of Negotiable
Collateral to Agent.
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND
NEGOTIABLE COLLATERAL. Agent, Borrower, and the Lockbox Banks have entered into
the Lockbox Agreements, pursuant to which all of Borrower's Collections
(excluding receipts generated from Mexico and Canada and proceeds of
Investments) will be forwarded to Agent on a daily basis. At any time that an
Event of Default has occurred and is continuing, Agent or Agent's designee
Schedule 1, Pg. 51
58
may, and shall if directed by Required Lenders: (a) notify customers or Account
Debtors of Borrower that the Accounts, General Intangibles, or Negotiable
Collateral have been assigned to Agent (on behalf of the Lender Group) or that
Agent has a security interest therein; and (b) collect the Accounts, General
Intangibles, and Negotiable Collateral directly and charge the collection costs
and expenses to the Loan Account. Irrespective of whether an Event of Default
has occurred and is continuing, Borrower agrees that it will hold in trust for
the Lender Group, as the Lender Group's trustee, any Collections that it
receives and immediately will deliver said Collections to Agent in their
original form as received by Borrower.
4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At any time
upon the request of Agent, Borrower shall execute and deliver to Agent all
financing statements, continuation financing statements, fixture filings,
security agreements, pledges, assignments, endorsements of certificates of
title, applications for title, affidavits, reports, notices, schedules of
accounts, letters of authority, and all other documents that Agent reasonably
may request, in form reasonably satisfactory to Agent, to perfect and continue
perfected the Liens of the Lender Group in the Collateral, and in order to fully
consummate all of the transactions contemplated hereby and under the other Loan
Documents.
4.5 POWER OF ATTORNEY. Borrower hereby irrevocably makes,
constitutes, and appoints Agent (and any of Agent's officers, employees, or
agents designated by Agent) as Borrower's true and lawful attorney, with power
to (a) if Borrower refuses to, or fails timely to execute and deliver any of the
documents described in Section 4.4, sign the name of Borrower on any of the
documents described in Section 4.4, (b) at any time that an Event of Default has
occurred and is continuing, sign Borrower's name on any invoice or xxxx of
lading relating to any Account, drafts against Account Debtors, schedules and
assignments of Accounts, verifications of Accounts, and notices to Account
Debtors, (c) send requests for verification of Accounts, (d) endorse Borrower's
name on any Collection item that may come into the Lender Group's possession,
(e) at any time that an Event of Default has occurred and is continuing, notify
the post office authorities to change the address for delivery of Borrower's
mail to an address designated by Agent, to receive and open all mail addressed
to Borrower, and to retain all mail relating to the Collateral and forward all
other mail to Borrower, (f) at any time that an Event of Default has occurred
and is continuing, make, settle, and adjust all claims under Borrower's policies
of insurance and make all determinations and decisions with respect to such
policies of insurance, and (g) at any time that an Event of Default has occurred
and is continuing, settle and adjust disputes and claims respecting the Accounts
directly with Account Debtors, for amounts and upon terms that Agent determines
to be reasonable, and Agent may cause to be executed and delivered any documents
and releases that Agent determines to be necessary. The appointment of Agent as
Borrower's attorney, and each and every one of Agent's rights and powers, being
coupled with an interest, is irrevocable until all of the Obligations have been
fully and finally repaid and performed and the Lender Group's obligation to
extend credit hereunder is terminated. Notwithstanding the foregoing, Agent
shall not be obligated to act as authorized in this Section 4.5, but if Agent
does so, it shall not be accountable for more than it actually receives and
shall not be responsible to Borrower except for any act or omission that
constitutes the gross negligence or wilful misconduct of Agent.
4.6 RIGHT TO INSPECT. Agent (through any of their officers,
employees, or agents) shall have the right, from time to time hereafter to
inspect Borrower's Books and to check
Schedule 1, Pg. 52
59
or test the Collateral in order to verify Borrower's financial condition or the
amount, quality, value, condition of, or any other matter relating to, the
Collateral.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this
Agreement, Borrower makes the following representations and warranties which
shall be true, correct, and complete in all material respects as of the date
hereof, and shall be true, correct, and complete in all material respects as of
the Closing Date, and at and as of the date of the making of each Advance or
Letter of Credit made thereafter, as though made on and as of the date of such
Advance or Letter of Credit (except to the extent that such representations and
warranties relate solely to an earlier date) and such representations and
warranties shall survive the execution and delivery of this Agreement:
5.1 NO ENCUMBRANCES. Borrower has good and indefeasible title
to the Collateral, free and clear of Liens except for Permitted Liens.
5.2 [INTENTIONALLY DELETED].
5.3 LOCATION OF VEHICLES. All Vehicles included in the
Collateral on the date hereof are of the type and quantity, bear the vehicle
identification numbers, and are titled in the jurisdictions listed on Schedule
5.3 hereto. All certificates of title evidencing Borrower's ownership of the
Vehicles have been duly endorsed in favor of, and delivered to, Agent and all
other filings, registrations, releases, assignments, or recordings necessary or
appropriate, to create, preserve, protect, and perfect the Lien granted herein
by Borrower to Agent on behalf of the Lender Group in respect of the Vehicles
have been accomplished, except to the extent arrangements have been made to make
such endorsements and deliveries, filings, registrations, releases, assignments,
and recordings which arrangements are reasonably satisfactory to Agent in its
sole discretion and, upon the completion of such endorsements and deliveries,
filings, registrations, releases, assignments, and recordings, the Lien granted
to Agent pursuant to this Agreement in and to the Vehicles will constitute a
first priority perfected Lien therein superior and prior to the rights of all
other Persons therein subject to no other Liens and is entitled to all the
rights, priorities and benefits afforded by the Code or other relevant law as
enacted in any relevant jurisdiction to perfected security interests.
5.4 [INTENTIONALLY DELETED].
5.5 LOCATION OF INVENTORY AND EQUIPMENT. The Inventory and
Equipment (other than non-material amounts of Equipment located at ticket agents
in the ordinary course of Borrower's business) are not stored with a bailee,
warehouseman, or similar party (without Agent's prior written consent) and,
except for Vehicles, are located only at the locations identified on Schedule
6.12 (as the same may be updated from time to time), or except as the Inventory
or Equipment may be in transit to such locations or out for repairs or otherwise
permitted by Section 6.12.
5.6 INVENTORY RECORDS. Borrower keeps correct and accurate
records itemizing and describing the kind, type, quality, and quantity of the
Inventory, and Borrower's cost therefor.
Schedule 1, Pg. 53
60
5.7 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN. The chief
executive office of Borrower is located at the address indicated in the preamble
to this Agreement and Borrower's FEIN is 00-0000000.
5.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Borrower is duly organized and existing and in
good standing under the laws of the jurisdiction of its incorporation and
qualified and licensed to do business in, and in good standing in, any state
where the failure to be so licensed or qualified reasonably could be expected to
cause a Material Adverse Change.
(b) Set forth on Schedule 5.8 (as the same may be
updated from time to time), is a complete and accurate list of Borrower's direct
and indirect Restricted Subsidiaries, showing: (i) the jurisdiction of their
incorporation; (ii) the number of shares of each class of common and preferred
stock authorized for each of such Restricted Subsidiaries; and (iii) the number
and the percentage of the outstanding shares of each such class owned directly
or indirectly by Borrower. All of the outstanding capital stock of each such
Restricted Subsidiary has been validly issued and is fully paid and
non-assessable.
(c) Except as set forth on Schedule 5.8 (as the same
may be updated from time to time), no Capital Stock (or any securities,
instruments, warrants, options, purchase rights, conversion or exchange rights,
calls, commitments or claims of any character convertible into or exercisable
for Capital Stock) of any direct or indirect Restricted Subsidiary of Borrower
is subject to the issuance of any security, instrument, warrant, option,
purchase right, conversion or exchange right, call, commitment or claim of any
right, title, or interest therein or thereto.
5.9 DUE AUTHORIZATION; NO CONFLICT.
(a) The execution, delivery, and performance by
Borrower of this Agreement and the Loan Documents to which it is a party have
been duly authorized by all necessary corporate action.
(b) The execution, delivery, and performance by
Borrower of this Agreement and the Loan Documents to which it is a party do not
and will not (i) violate any provision of federal, state, or local law or
regulation (including Regulations T, U, and X of the Federal Reserve Board)
applicable to Borrower, the Governing Documents of Borrower, or any order,
judgment, or decree of any court or other Governmental Authority binding on
Borrower, (ii) conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under any material contractual
obligation or material lease to which Borrower is a party, (iii) result in or
require the creation or imposition of any Lien of any nature whatsoever upon any
properties or assets of Borrower, other than Permitted Liens, or (iv) require
any approval of stockholders or any approval or consent of any Person under any
material contractual obligation of Borrower other than those already obtained.
(c) Other than the filing of appropriate financing
statements, fixture filings, certificates of title and Mortgages, the execution,
delivery, and performance by Borrower of this Agreement and the Loan Documents
to which Borrower is a party do not and will not require any registration with,
consent, or approval of, or notice to, or other action with or by, any
Schedule 1, Xx. 00
00
xxxxxxx, xxxxx, xxxxxxx, or other Governmental Authority or other Person that
has not been obtained.
(d) This Agreement and the Loan Documents to which
Borrower is a party, and all other documents contemplated hereby and thereby,
when executed and delivered by Borrower will be the legally valid and binding
obligations of Borrower, enforceable against Borrower in accordance with their
respective terms, except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors' rights generally.
(e) The Liens granted by Borrower to Agent (for the
benefit of the Lender Group) in and to its properties and assets pursuant to
this Agreement and the other Loan Documents are validly created, perfected, and
first priority Liens, subject only to Permitted Liens.
5.10 LITIGATION. Except as disclosed on the most recent of
Borrower's Form 10-Q Quarterly Reports or Form 10-K Annual Report delivered to
Agent prior to the Closing Date, there are no actions or proceedings pending by
or against Borrower before any court or administrative agency and Borrower does
not have knowledge of any pending, threatened, or imminent litigation,
governmental investigations, or claims, complaints, actions, or prosecutions
involving Borrower or any Restricted Subsidiary, except for matters arising
after the date hereof that could not reasonably be expected to cause a Material
Adverse Change.
5.11 NO MATERIAL ADVERSE CHANGE. All financial statements
relating to Borrower or any Guarantor that have been delivered by Borrower to
the Lender Group have been prepared in accordance with GAAP (except, in the case
of unaudited financial statements, for the lack of footnotes and being subject
to year-end audit adjustments) and fairly present Borrower's (or such
Guarantor's, as applicable) financial condition as of the date thereof and
Borrower's results of operations for the period then ended. There has not been a
Material Adverse Change with respect to Borrower (or such Guarantor, as
applicable) since the date of the latest financial statements submitted to the
Lender Group on or before the Closing Date.
5.12 SOLVENCY. Borrower is Solvent. No transfer of property is
being made by Borrower and no obligation is being incurred by Borrower in
connection with the transactions contemplated by this Agreement or the other
Loan Documents with the intent to hinder, delay, or defraud either present or
future creditors of Borrower.
5.13 EMPLOYEE BENEFITS. As of the Closing Date, none of
Borrower, any of its Subsidiaries, or any of their ERISA Affiliates maintains or
contributes to any Benefit Plan, other than those listed on Schedule 5.13.
Borrower, each of its Subsidiaries and each ERISA Affiliate have satisfied the
minimum funding standards of ERISA and the IRC with respect to each Benefit Plan
to which it is obligated to contribute, except as disclosed on Schedule 5.13.
Except as set forth on Schedule 5.13, no ERISA Event has occurred nor has any
other event occurred that may result in an ERISA Event that reasonably could be
expected to result in a Material Adverse Change. None of Borrower or its
Subsidiaries, any ERISA Affiliate, or any fiduciary of any Plan is subject to
any direct or indirect liability with respect to any Plan (except to make
required contributions and to pay Plan benefits) under any applicable law,
treaty, rule, regulation,
Schedule 1, Pg. 55
62
or agreement. None of Borrower or its Subsidiaries or any ERISA Affiliate is
required to provide security to any Plan under Section 401(a)(29) of the IRC.
5.14 ENVIRONMENTAL CONDITION.
(a) Except as may be set forth in Schedule 5.14,
Borrower has not used Hazardous Materials at or affecting the Real Property in
any manner which violates any Act governing the use, storage, treatment,
transportation, manufacturing, refinement, handling, production, or disposal of
Hazardous Materials, or that may make the owner of the premises liable in tort
under a common law public or private nuisance action, except for such uses that
either individually or, in the aggregate, could not reasonably be expected to
cause a Material Adverse Change.
(b) Except as may be set forth in Schedule 5.14, to
the best knowledge of Borrower after due inquiry, no prior or current owner,
occupant or operator of the Real Property has used Hazardous Materials at or
affecting the Real Property in any manner which violates any Act governing the
use, storage, treatment, transportation, manufacturing, refinement, handling,
production, or disposal of Hazardous Materials, or that may make the owner of
the premises liable in tort under a common law public or private nuisance
action, except for such uses that either individually or in the aggregate could
not reasonably be expected to cause a Material Adverse Change.
5.15 COMPLIANCE WITH THE ADA.
(a) To the best of Borrower's knowledge, Borrower has
made all modifications or provided all accommodations which may be required to
be made or provided by Borrower to the Real Property pursuant to the ADA, except
where noncompliance with such requirements would not cause a Material Adverse
Change.
(b) To the best of Borrower's knowledge, Borrower has
received no notice or complaint regarding any material noncompliance with the
ADA of any of the Real Property or of Borrower's business operations and, to the
best of Borrower's knowledge, there has been no threatened litigation alleging
any such material noncompliance by Borrower or the Real Property, except where
noncompliance with such requirements would not cause a Material Adverse Change.
6. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit
hereunder shall be available, the non-contingent Obligations have not been paid
in full, or there exist any Letters of Credit that have not been either
terminated, backed-up, or collateralized pursuant to Section 2.2(e), Borrower
shall do all of the following:
6.1 ACCOUNTING SYSTEM. Maintain a standard system of
accounting that enables Borrower to produce financial statements in accordance
with GAAP, and maintain records pertaining to the Collateral that contain
information as from time to time may be requested by Agent.
Schedule 1, Pg. 56
63
6.2 COLLATERAL REPORTING. Borrower shall deliver to Agent, no
later than the tenth (10th) day of each month during the term of this Agreement,
an aging, by total, of the Accounts, and a summary aging, by vendor, of all
accounts payable and any book overdraft. Borrower shall also deliver to Agent,
no later than the tenth (10th) day of each month during the term of this
Agreement, a Borrower prepared report setting forth payables owing to American
Express with respect to Moneygrams, Western Union (or any other similar
programs), and sales taxes due and payable on sales receipts and similar
proceeds being held by Borrower for the benefit of a third party (collectively,
the "Designated Payables"). At Agent's request at any time that an Event of
Default has occurred and is continuing, the Borrower shall deliver to Agent
copies of sales invoices that shall indicate on their face that the Accounts
have been assigned to Agent and that all payments are to be made directly to
Agent. Borrower shall deliver to Agent, as Agent may from time to time
reasonably require, collection reports, sales journals, invoices, original
delivery receipts, customer's purchase orders, shipping instructions, bills of
lading, and other documentation respecting shipment arrangements. Absent such a
request by Agent, copies of all such documentation shall be held by Borrower as
custodian for Agent.
6.3 [INTENTIONALLY DELETED].
6.4 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. (a) Borrower
agrees to deliver to Agent: (i) as soon as available, but in any event within 45
days after the end of each of the first eleven (11) months during each of
Borrower's fiscal years, a company prepared balance sheet, income statement, and
cash flow statement covering Borrower's operations during such period; and (ii)
as soon as available, but in any event within 90 days after the end of each of
Borrower's fiscal years, financial statements of Borrower for each such fiscal
year, audited by independent certified public accountants of national
recognition or otherwise reasonably acceptable to Agent and certified, without
any qualifications, by such accountants to have been prepared in accordance with
GAAP. Such audited financial statements shall include a balance sheet, profit
and loss statement, and cash flow statement, and, if prepared, such accountants'
letter to management. If Borrower is a parent company of one or more
Subsidiaries or Affiliates, then, in addition to the financial statements
referred to above that are delivered for a month ending a fiscal quarter,
Borrower agrees to deliver financial statements prepared on a consolidating
basis so as to present Borrower and each such related entity separately, and on
a consolidated basis.
(b) Borrower also shall deliver to Agent Borrower's
Form 10-Q Quarterly Reports, Form 10-K Annual Reports, and Form 8-K Current
Reports, and any other filings made by Borrower with the Securities and Exchange
Commission, if any, within one week of such filing, and any other report or
information reasonably requested by Agent relating to the Collateral and
financial condition of Borrower.
(c) Each month, together with the financial
statements provided pursuant to Section 6.4(a), Borrower shall deliver to Agent
a Compliance Certificate signed by its Chief Financial Officer to the effect
that: (i) all reports, statements, or computer prepared information of any kind
or nature delivered or caused to be delivered to Agent hereunder have been
prepared in accordance with GAAP (except to the extent noted thereon) and fairly
present in all material respects the financial condition of Borrower; (ii)
Borrower is in timely compliance with all of its covenants and agreements
hereunder (or, to the extent of any non-compliance,
Schedule 1, Pg. 57
64
describing such non-compliance and what action Borrower has taken, is taking, or
proposes to take with respect thereto); (iii) the representations and warranties
of Borrower contained in this Agreement and the other Loan Documents are true
and correct in all material respects on and as of the date of such certificate,
as though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date) (or, to the
extent of any non-compliance, describing such non-compliance and what action
Borrower has taken, is taking, or proposes to take with respect thereto); (iv)
on the date of the certificate to Agent there does not exist any condition or
event that constitutes an Event of Default (or, to the extent of any
non-compliance, describing such non-compliance and what action Borrower has
taken, is taking, or proposes to take with respect thereto); and (v) Borrower is
keeping current on all Designated Payables.
(d) Within 45 days after the end of each of
Borrower's fiscal quarters, commencing with the fiscal quarter ending December
31, 2000, Borrower shall deliver to Agent a Financial Covenant Compliance
Certificate signed by its Chief Financial Officer, indicating the financial
ratios set forth in Section 7.19, as of the end of such quarter, and containing
such supporting data and calculations, in reasonable detail, as Agent shall
require.
(e) (i) On or before the fifth (5th) Business Day of
each month (or, when Availability is less than $10,000,000, each week) during
the term of this Agreement, Borrower shall deliver to Agent a Borrowing Base
calculation setting forth changes (if any) in Core Vehicles and Core Real
Property Collateral since the prior calculation and the outstanding Obligations
then in effect; and (ii) promptly upon any sales, dispositions, or losses of
Core Vehicles, or with respect to the parcels of Core Real Property Collateral,
a calculation setting forth such change and the outstanding Obligations then in
effect, all of which shall be certified by the Chief Financial Officer,
President, or Treasurer of Borrower in substantially the form of Schedule
6.4(e).
(f) Borrower shall have issued written instructions
to its independent certified public accountants authorizing them to communicate
with Agent and to release to Agent whatever financial information concerning
Borrower that Agent may request. Borrower hereby irrevocably authorizes and
directs all auditors and accountants to deliver to Agent, at Borrower's expense,
copies of Borrower's financial statements, papers related thereto, and other
accounting records of any nature in their possession, and to disclose to Agent
any information they may have regarding Borrower's business affairs and
financial conditions (other than such information which the accountants have
obtained solely in their capacity as advisors to Borrower or any of its
Subsidiaries in any litigation between Borrower or any of its Subsidiaries and
Agent). Notwithstanding the foregoing, Agent shall endeavor to give reasonable
notice to Borrower, on behalf of itself and any such Subsidiary of, and afford
Borrower a reasonable opportunity to participate in, any such communication
between Agent and such accountants or auditors or any requested delivery or
provision of materials; provided, however, that neither the Agent nor the Lender
Group shall have any liability for Agent's failure to so notify Borrower.
6.5 REGISTRATION, USE, MAINTENANCE, IDENTIFICATION OF
VEHICLES. Borrower shall, at its own cost and expense, at all times cause its
Vehicles to be and to remain duly titled and registered (as may be required by
the jurisdiction in which each such title or registration is required by law) in
the name of Borrower as owner.
Schedule 1, Pg. 58
65
(a) Borrower shall, and shall cause any of its
Subsidiaries that owns or operates Vehicles to, use and operate its Vehicles in
a manner and in such locations as is in compliance with Borrower's established
policies as of the Closing Date, with such subsequent changes thereto as would
not result in a material adverse change in the value, or enforceability of, or
any change in the priority of, Agent's Lien on the Vehicles.
(b) Borrower shall, and shall cause any of its
Subsidiaries that owns or operates Vehicles to, at its own expense, keep,
maintain, service, repair, overhaul, and furnish all parts, replacements,
mechanisms, devices and servicing required for each of its Vehicles, (or cause
the same to be done), in compliance with Borrower's established policies as of
the Closing Date, with such subsequent changes thereto as would not result in a
material adverse change in the value or enforceability of, or any change in the
priority of, Agent's Lien on the Vehicles. All such repairs, parts, mechanisms
and devices shall immediately, without further act, become part of the Vehicles
and subject to the security interests created herein. Any part added to a
Vehicle in connection with any improvement, change, addition, or alteration
shall immediately, without further act, become part of the Vehicle and subject
to the security interest created herein.
(c) Upon the "total loss" of any Vehicle, as
reasonably determined by Borrower, Borrower shall promptly notify the Agent and
such Vehicle shall no longer constitute a Core Vehicle.
6.6 ADDITIONAL VEHICLES. If Borrower desires to add buses and
motor vehicles to the Vehicles, it shall (i) give Agent written notice of the
type(s), quantity, vehicle identification numbers, certificate of title
number(s), and jurisdiction(s) of registration of each such bus or motor vehicle
and provide such other information in connection therewith as Agent may
reasonably request and (ii) take such action reasonably satisfactory to Agent as
is necessary or appropriate to create, preserve, protect, and perfect the first
priority Lien of the Agent for the benefit of the Lender Group in such Vehicle
intended to be granted hereby.
6.7 TITLE TO EQUIPMENT. Upon Agent's request, Borrower
immediately shall deliver to Agent, properly endorsed, any and all evidences of
ownership of, certificates of title, or applications for title to any items of
Equipment.
6.8 MAINTENANCE OF EQUIPMENT. Maintain the Equipment in such
operating condition as exists on the date hereof (ordinary wear and tear
excepted), and make all necessary replacements thereto so that the value
(excluding ordinary depreciation thereof) and operating efficiency thereof shall
at all times be maintained and preserved. Except as required by law, Borrower
shall not permit any item of Equipment to become a fixture to real estate (other
than Real Property subject to a Mortgage) or an accession to other property, and
such Equipment shall at all times remain personal property.
6.9 TAXES. Cause all material assessments and taxes, whether
real, personal, or otherwise, due or payable by, or imposed, levied, or assessed
against Borrower or any of its property to be paid in full, before delinquency
or before the expiration of any extension period, except to the extent that the
validity of such assessment or tax shall be the subject of a Permitted Protest.
Borrower shall make due and timely payment or deposit of all material federal,
state, and local taxes, assessments, or contributions required of it by law, and
will execute and deliver
Schedule 1, Pg. 59
66
to Agent, on demand, appropriate certificates attesting to the payment thereof
or deposit with respect thereto except to the extent that the validity thereof
shall be the subject of a Permitted Protest. Borrower will make timely payment
or deposit of all material tax payments and withholding taxes required of it by
applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state
disability, and local, state, and federal income taxes, and will, upon request,
furnish Agent with proof satisfactory to Agent indicating that Borrower has made
such payments or deposits except to the extent that the validity thereof shall
be the subject of a Permitted Protest.
6.10 INSURANCE.
(a) Borrower will, at all times maintain (at its
expense) in full force and effect insurance on all of the Collateral in such
amounts, covering such risks and liabilities and with such deductibles or
self-insured retentions as are commercially reasonable and in accordance with
its established practice and all applicable laws, rules and regulations,
provided that in no event will any such deductible or self-insured retention in
respect of liability claims or in respect of casualty damage exceed, in each
such case, $5,000,000 per occurrence (or such lower amounts as required by the
any applicable Governmental Authority). A schedule of all such insurance
presently maintained by Borrower is attached hereto as Schedule 6.10. If any of
the Real Property Collateral with a book value of more than $250,000 is located
in an area that has been identified by the Secretary of Housing and Urban
Development as an area having special flood hazards (an "SFHA"), the
improvements thereon shall be insured by flood insurance that is provided under
the National Flood Insurance Program (the "Program") in an amount not less than
the outstanding principal amount of the Obligations secured by a Mortgage which
is reasonably allocable to such Real Property Collateral (less the value of the
land) or the maximum amount of coverage under the Program that is available,
whichever is less, and Borrower shall comply with the additional requirements of
such Program. Such flood insurance shall be maintained during such time that the
Program is available. Borrower, at its own expense, shall determine whether any
of the Real Property Collateral is located in an SFHA. As of the Closing Date,
the only Real Property Collateral located in an SFHA is set forth on Schedule
6.10(a). At any time that insurance at the levels described as "Required Levels"
in Schedule 6.10 is not being maintained by Borrower, Borrower will notify Agent
in writing thereof and, if thereafter notified by Agent to do so, Borrower will
obtain insurance at such levels at least equal to those set forth as "Required
Levels" in Schedule 6.10. Borrower will furnish on the Closing Date and annually
thereafter to Agent a summary of the insurance carried in respect of Borrower
and its assets together with certificates of insurance and other evidence of
such insurance, if any, naming Agent as an additional insured with respect to
any liability policy and naming Agent as a co-loss payee on any policy of
casualty insurance and stating that such insurance shall not be cancelled or
materially revised without 30 days' prior written notice by the insurer to
Agent, and that any loss payable thereunder shall be payable notwithstanding any
act or negligence of Borrower.
(b) Original policies or certificates thereof
satisfactory to Agent evidencing such insurance shall be delivered to Agent at
least 30 days prior to the expiration of the existing or preceding policies.
Borrower shall give Agent prompt notice of any loss greater than $500,000 per
incident covered by such insurance and, following an Event of Default, Agent
shall have the right to adjust any loss. Any monies received as payment for any
loss under any
Schedule 1, Pg. 60
67
insurance policy shall be paid over to Agent to be applied to the Obligations;
provided, however, that so long as no Event of Default has occurred and is
continuing, payments with respect to such losses of up to the book value of such
Vehicle and $500,000 per terminal, but in no event more than $2,000,000 per year
for all Vehicles and $2,000,000 per year for all terminals, may be retained by
Borrower to rebuild, repair, or replace such property.
(c) Notwithstanding anything to the contrary
contained in this Agreement, so long as no Event of Default shall have occurred
and be continuing, Borrower may negotiate reductions of insurance deposits, and
transfer such deposits from one carrier to another, and the amount of any
reductions in such deposits may be used in Borrower's business without being
applied to the Obligations.
6.11 [INTENTIONALLY DELETED].
6.12 LOCATION OF BORROWER'S BOOKS, INVENTORY, AND EQUIPMENT.
Keep Borrower's Books, Inventory, and Equipment only at the locations identified
on Schedule 6.12 except for Inventory or Equipment which is in transit to any
such location or out for repairs; provided, however, that Borrower may amend
Schedule 6.12 so long as such amendment occurs by written notice provided
quarterly to Agent and so long as not more than $5,000,000, in the aggregate, of
Inventory or Equipment is located outside the continental United States, and so
long as, at the time of such written notification, Borrower provides any
financing statements or fixture filings necessary to perfect and continue
perfected the Lien of the Agent for the benefit of the Lender Group in such
assets.
6.13 COMPLIANCE WITH LAWS. Comply with the requirements of all
applicable laws, rules, regulations, and orders of any governmental authority,
including any federal, state and local laws respecting common carriers, other
than laws, rules, regulations, and orders the non-compliance with which,
individually or in the aggregate, would not have and could not reasonably be
expected to cause a Material Adverse Change.
6.14 EMPLOYEE BENEFITS.
(a) Deliver to Agent: (i) Promptly, and in any event
within 10 Business Days after Borrower or any of its Subsidiaries knows or has
reason to know that an ERISA Event has occurred that reasonably could be
expected to result in a Material Adverse Change, a written statement of the
Chief Financial Officer of Borrower describing such ERISA Event and any action
that is being taking with respect thereto by Borrower, any such Subsidiary or
ERISA Affiliate, and any action taken or threatened by the IRS, Department of
Labor, or PBGC. Borrower or such Subsidiary, as applicable, shall be deemed to
know all facts known by the administrator of any Benefit Plan of which it is the
plan sponsor, (ii) promptly, and in any event within 3 Business Days after the
filing thereof with the IRS, a copy of each funding waiver request filed with
respect to any Benefit Plan and all communications received by Borrower, any of
its Subsidiaries or, to the knowledge of Borrower, any ERISA Affiliate with
respect to such request, and (iii) promptly, and in any event within 3 Business
Days after receipt by Borrower, any of its Subsidiaries or, to the knowledge of
Borrower, any ERISA Affiliate, of the PBGC's intention to terminate a Benefit
Plan or to have a trustee appointed to administer a Benefit Plan, copies of each
such notice.
Schedule 1, Pg. 61
68
(b) Cause to be delivered to Agent, upon Agent's
request, each of the following: (i) a copy of each Plan (or, where any such Plan
is not in writing, complete description thereof) (and if applicable, related
trust agreements or other funding instruments) and all amendments thereto, all
non-privileged written interpretations thereof and written descriptions thereof
that have been distributed to employees or former employees of Borrower or its
Subsidiaries; (ii) the most recent determination letter issued by the IRS with
respect to each Benefit Plan; (iii) for the three most recent plan years, annual
reports on Form 5500 Series required to be filed with any governmental agency
for each Benefit Plan; (iv) all actuarial reports prepared for the last three
plan years for each Benefit Plan; (v) a listing of all Multiemployer Plans, with
the aggregate amount of the most recent annual contributions required to be made
by Borrower or any ERISA Affiliate to each such plan and copies of the
collective bargaining agreements requiring such contributions; (vi) any
information that has been provided to Borrower or any ERISA Affiliate regarding
withdrawal liability under any Multiemployer Plan; and (vii) the aggregate
amount of the most recent annual payments made to former employees of Borrower
or its Subsidiaries under any Retiree Health Plan.
6.15 LEASES. Pay when due all rents and other amounts payable
under any material leases to which Borrower is a party or by which Borrower's
properties and assets are bound, unless such payments are the subject of a
Permitted Protest.
6.16 ENVIRONMENTAL CONDITION.
(a) Borrower will not generate, use, treat, store,
release or dispose, or permit the generation, use, treatment, storage, release,
or disposal of Hazardous Materials on the Real Property, except for such
Hazardous Materials generated, used, treated, stored, released or disposed of in
material compliance with all applicable Acts and required in connection with the
normal operation, use and maintenance of such Real Property in conduct of the
business undertaken on such Real Property, unless such noncompliance either
individually, or in the aggregate, could reasonably be expected to cause a
Material Adverse Change.
(b) Borrower will and will use its commercially
reasonable efforts to cause all operators, occupants and other third parties to
comply with all applicable Acts, except where noncompliance would not reasonably
be expected to cause a Material Adverse Change.
(c) At any time following an Event of Default, or if
the Lender Group reasonably believes that a material environmental problem
exists with respect to one or more parcels of the Real Property, and upon the
reasonable request of Agent: (i) Borrower shall conduct and complete all
investigations, studies, samplings, and testings in scope reasonably necessary
to address the perceived environmental problem relative to Hazardous Materials
at or affecting the Real Property; (ii) Borrower shall provide Agent at
Borrower's sole cost and expense and without any liability to the Lender Group,
with an environmental site assessment or an environmental audit report, or an
update of such assessment or report, by an environmental engineering firm
acceptable to Agent, which acceptance shall not be unreasonably withheld, all in
scope, form, and content reasonably satisfactory to Agent, to assess with a
reasonable degree of certainty the presence or absence of Hazardous Materials
and the potential cost in connection with the Remediation of any Hazardous
Materials at or related to the Real Property; and (iii) at Borrower's sole cost
and expense, Borrower shall promptly take all actions required by
Schedule 1, Pg. 62
69
applicable Acts to Remediate the Real Property prior to the undertaking of any
enforcement action by the applicable Governmental Authority. All such work shall
be performed by one or more contractors selected by Borrower and approved in
advance by Agent, which approval shall not be unreasonably withheld. Borrower
shall proceed continuously and diligently with such investigatory and remedial
actions, provided that in all cases, such actions shall be conducted in material
compliance with all applicable requirements of all Acts. Any such actions shall
be performed in a good, safe, and workmanlike manner and shall minimize any
material adverse impact to the Real Property or operations conducted thereon.
Borrower shall pay all costs in connection with such investigatory and remedial
activities, including but not limited to, all power and utility costs, any and
all taxes or fees that may be applicable to such activities. Borrower shall
provide Agent with copies of all material reports generated in compliance with
the above activities; provided Borrower shall have no such obligation unless the
problem giving rise to the investigation or Remediation could reasonably be
expected to materially or adversely affect the Real Property. This
notwithstanding, upon reasonable request, Borrower will provide Agent with
copies of any and all such reports. Within ten days of demand therefor, Borrower
shall provide Agent with a bond, letter of credit, or similar financial
insurance evidencing that the necessary funds are available for the obligations
established by this subparagraph; provided, however, that Agent may only make
such a request if (a) Borrower has not previously posted a bond, letter of
credit, or similar financial insurance with a Governmental Authority and (b)
Borrower does not have Availability under this Agreement to complete such work.
(d) The obligations of Borrower and the rights of the
Lender Group with respect to Hazardous Materials are in addition to and not in
substitution of the obligations of Borrower and the rights of the Lender Group
under all applicable, federal, state, and local laws, regulations, and
ordinances relating to health and safety, and protection of the environment. The
obligations of Borrower and the rights of the Lender Group, notwithstanding
anything contained herein or in any other document or agreement which may be
construed to the contrary, (i) shall not be subject to any antideficiency laws
or protections, if any, (ii) shall survive (y) a non-judicial sale, judicial
sale or deed or other transaction in lieu of such sale hereunder, and (z) the
repayment of the Obligations. In the event Borrower does not timely perform any
of its obligations with respect to Hazardous Materials, Agent may perform such
obligations, but is not obligated to, at the expense of Borrower and such
expense shall be added to the obligations and shall not cure Borrower's breach
under this Agreement; provided, however, that the Agent may not exercise its
rights to perform such obligations without providing Borrower with written
notice of any material failure on Borrower's part to undertake work required by
this Section and, after 30 days, Borrower fails to undertake steps to address
such obligations.
(e) The Borrower agrees to promptly notify Agent of
any notice or complaint regarding any material noncompliance with any Act
governing the use, storage, treatment, transportation, manufacturing,
refinement, handling, production, or disposal of Hazardous Materials with
respect to any of the Core Real Property Collateral; or any notices or
complaints with respect to the other Real Property if such notices or complaints
either individually or in the aggregate reflect noncompliance that could
reasonably be expected to cause a Material Adverse Change.
Schedule 1, Pg. 63
70
6.17 COMPLIANCE WITH THE ADA.
(a) Borrower shall promptly provide Agent with copies
of all material claims which may be received by Borrower made by any individual,
entity, or governmental agency as to any alleged noncompliance of the Real
Property with the requirements of the ADA.
(b) Borrower shall observe and comply in all material
respects with all obligations and requirements of the ADA as it applies to the
Real Property or future additional building improvements, which shall include
(to the extent required by the ADA), without limitation, installing or
constructing all improvements or alterations which may be necessary to cause the
Real Property to be accessible to all persons if the use of any of the Real
Property or any part thereof becomes a "public accommodation," as defined in the
ADA, and making any reasonable accommodations which may be necessary to
accommodate the needs or requirements of any existing or future employee of
Borrower.
6.18 UPDATED CURRENT APPRAISALS. New appraisals on the
Vehicles will be completed not later than the first anniversary of the Closing
Date. In addition to the foregoing, at any time after the first anniversary of
the Closing Date the Agent, in its reasonable discretion, may require new
appraisals on the Vehicles or the Core Real Property Collateral if there have
occurred any of the events described in clauses (a) or (b) of the definition of
"Material Adverse Change." Borrower will cooperate with all reasonable requests
and do all acts reasonably required by Agent and any Persons employed by them as
appraisers in order to assure the timely completion of such new appraisals.
7. NEGATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit
hereunder shall be available, the non-contingent Obligations have not been paid
in full, or there exist any Letters of Credit that have not been either
terminated, backed-up, or collateralized pursuant to Section 2.2(e), Borrower
will not, and will not permit any of its Restricted Subsidiaries to, do any of
the following:
7.1 INDEBTEDNESS. Create, incur, assume, permit, guarantee or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness pursuant to this Agreement and the
other Loan Documents together with Indebtedness to issuers of letters of credit
that are the subject of L/C Guarantees;
(b) Capital Lease Obligations, purchase money or
mortgage financing to fund Capital Expenditures, to the extent permitted under
Section 7.20;
(c) purchase money financing in respect of buses and
other motor vehicles that are not Vehicles;
(d) Existing Indebtedness;
(e) Indebtedness incurred in respect of Hedging
Obligations;
Schedule 1, Xx. 00
00
(x) the Xxxxxxx Trade Payables;
(g) intercompany Indebtedness between or among
Borrower and any of its Wholly Owned Restricted Subsidiaries; provided that any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than Borrower or a Wholly Owned
Restricted Subsidiary of Borrower, or any sale or other transfer of any such
Indebtedness to a Person that is neither Borrower nor a Wholly Owned Restricted
Subsidiary of Borrower, shall be deemed to constitute an incurrence of such
Indebtedness by Borrower or such Restricted Subsidiary, as the case may be;
(h) the incurrence by Borrower or any of its
Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for,
or the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund Indebtedness that was permitted by this Agreement to be
incurred; and
(i) Indebtedness as a result of guarantee obligations
permitted under Section 7.6.
(j) additional Indebtedness of Borrower and its
Restricted Subsidiaries so long as (i) in the case of additional Indebtedness
incurred by Borrower, the Consolidated Interest Coverage Ratio for Borrower's
most recently ended four fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred would have been at least 2.0 to 1, determined on a pro
forma basis (including a pro forma application of the net proceeds therefrom),
as if the additional Indebtedness had been incurred at the beginning of such
four-quarter period and (ii) in the case of additional Indebtedness incurred by
any Restricted Subsidiary, the Consolidated Interest Coverage Ratio for
Borrower's and such Restricted Subsidiary's (on a consolidated basis with its
Subsidiaries which are Restricted Subsidiaries) most recently ended four fiscal
quarters for which internal financial statements are available immediately
preceding the date or which such additional Indebtedness is incurred would have
been at least 2.0 to 1, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as of the additional Indebtedness
has been incurred at the beginning of such four-quarter period.
7.2 LIENS. Create, incur, assume, or permit to exist, directly
or indirectly, any Lien on or with respect to any of its property or assets, of
any kind, whether now owned or hereafter acquired, or any income or profits
therefrom, except for Permitted Liens (including Liens that are extensions,
renewals, or replacements of Permitted Liens to the extent that the original
Indebtedness is refinanced under Section 7.1(h) and so long as the replacement
Liens only encumber those assets or property that secured the original
Indebtedness (other than proceeds of the existing collateral in accordance with
the instrument creating such Lien)).
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES. Enter into any
consolidation or merger with or into or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets in one
or more related transactions, to another Person except, so long as no Event of
Default has occurred and is continuing, or would arise as a result thereof:
Schedule 1, Pg. 65
72
(a) any Restricted Subsidiary may be merged or
consolidated with or into Borrower (provided that Borrower shall be the
continuing or surviving corporation) or with or into any one or more Restricted
Subsidiaries or any Unrestricted Subsidiary (provided that the continuing or
surviving corporation shall become a Restricted Subsidiary);
(b) any Restricted Subsidiary may liquidate or
dissolve if, in connection therewith, all of its assets are transferred to
Borrower or a Restricted Subsidiary thereof) or any Unrestricted Subsidiary
provided that such Unrestricted Subsidiary shall become a Restricted Subsidiary;
(c) the sale of a Restricted Subsidiary in accordance
with Section 7.4; and
(d) the sale of Unrestricted Subsidiaries.
7.4 DISPOSAL OF ASSETS. Consummate any Asset Sale unless:
(a) No Default or Event of Default shall have
occurred and be continuing, or would occur as a consequence thereof, and
Borrower or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets or Equity Interests issued or sold or otherwise disposed of;
and
(b) Within 360 days after the receipt of any Net
Proceeds from an Asset Sale, Borrower or any such Restricted Subsidiary may
apply such Net Proceeds to (i) permanently repay the principal of any secured
indebtedness other than the Obligations (to the extent of the fair value of the
assets securing such indebtedness), (ii) permanently repay the Obligations and
make a permanent and corresponding reduction in the Commitments, (iii) acquire
(including by way of a purchase of assets or stock, merger, consolidation or
otherwise) Productive Assets or (iv) make any Investment permitted by this
Agreement. Pending the final application of any such Net Proceeds, Borrower or
any such Restricted Subsidiary shall temporarily reduce outstanding revolving
credit borrowings, including Advances under this Agreement. If at any time
Borrower has received $2,000,000 or more of Net Proceeds from Asset Sales that
it has not applied pursuant to clauses (i), (ii), (iii), or (iv) of this
paragraph within the 360 day time frame, then such amount shall be immediately
turned over to the Agent to be applied to the Obligations. If, notwithstanding
the provisions of this Section 7.4, Borrower conducts an Asset Sale following,
or resulting in, an Event of Default, then the Net Proceeds thereof shall be
immediately turned over to the Agent to be applied to the Obligations.
7.5 CHANGE NAME. Change Borrower's name, FEIN, or corporate
structure (to the extent it would be materially misleading within the meaning of
Division 9 of the Code).
7.6 GUARANTEE. Guarantee or otherwise become in any way liable
with respect to the obligations of any third Person except:
(a) Intentionally Deleted;
(b) Indemnities in favor of title insurers;
Schedule 1, Xx. 00
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(x) Xxxxxxxxxxxxx obligations for Letters of Credit
and letters of credit issued by an Issuer that are guaranteed by an L/C
Guaranty;
(d) Endorsement of instruments or items of payment
for deposit to the account of Borrower or any Restricted Subsidiary or which are
transmitted or turned over to Agent;
(e) Guarantees under the Loan Documents;
(f) guarantees of Borrower or any Restricted
Subsidiary as a guarantor of the lessee under any lease pursuant to which
Borrower or a Restricted Subsidiary is the lessee so long as such lease is
otherwise permitted hereunder;
(g) surety bonds of the type permitted by clause
(h)(z) of the definition of Permitted Liens;
(h) guarantees of Existing Indebtedness (as disclosed
on Schedule 7.6(h)), and guarantees pursuant to Permitted Refinancing
Indebtedness;
(i) guarantees of Indebtedness permitted hereunder;
and
(j) indemnifications and guarantees (other than
guarantees of Indebtedness) made in the ordinary course of business provided
that such indemnities and guarantees could not individually or in the aggregate
cause a Material Adverse Change.
7.7 RESTRUCTURE.
(a) Make any change in the nature of its business
operations other than reasonable extensions thereof.
(b) Make any change in the ending date of its fiscal
year; provided that Borrower or such Restricted Subsidiary may change its fiscal
year with the approval of the Agent, which approval shall not be unreasonably
withheld.
7.8 PREPAYMENTS. Make any optional payment or prepayment on or
redemption of (a) the Senior Notes (other than (i) the issuance of Permitted
Refinancing Indebtedness in connection therewith, or (ii) pursuant to Section
3.07(b) of the Indenture); (b) any Indebtedness which is expressly subordinated
in right of payment to the Obligations (other than the Obligations, the
Convertible Debentures, the Exchange Debentures, and Permitted Refinancing
Indebtedness provided for in Section 7.1(h)); (c) any obligations owing under
the Intercompany Agreement; or (d) any Indebtedness during the existence of an
Event of Default.
7.9 CHANGE OF CONTROL. Cause, permit, or suffer, directly or
indirectly, any Change of Control.
7.10 RESTRICTED PAYMENTS. Borrower shall not, and shall not
permit any of its Restricted Subsidiaries to, directly or indirectly, (i)
declare or pay any dividend or make any
Schedule 1, Pg. 67
74
other payment or distribution on account of Borrower's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment in
connection with any merger or consolidation involving Borrower) or to the direct
or indirect holders of Borrower's Equity Interests in their capacity as such
(other than (x) dividends or distributions payable in Equity Interests (other
than Disqualified Stock) of Borrower or (y) a dividend by Borrower to Xxxxxxx so
long as no Event of Default exists, and after making such dividend, Borrower
would have at least $10,000,000 of unrestricted cash on hand and excess
Availability under Section 2.1(a) of this Agreement); (ii) purchase, redeem or
otherwise acquire or retire for value (including without limitation, in
connection with any merger or consolidation involving Borrower) any Equity
Interests of Borrower (other than any such Equity Interests owned by Borrower or
any Wholly Owned Restricted Subsidiary of Borrower); or (iii) make any
Restricted Investment (all such actions set forth in clauses (i) through (iii)
above being collectively referred to as "Restricted Payments"), except:
(a) Restricted Payments consisting of Restricted
Investments to the extent that:
(i) no Default or Event of Default shall
have occurred and be continuing or would occur as a consequence thereof;
(ii) Borrower would, at the time of such
Restricted Investment and after giving pro forma effect thereto as if such
Restricted Investment had been made at the beginning of the applicable four
quarter period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth
in Section 7.1(j) hereof; and
(iii) such Restricted Investment, together
with the aggregate amount of all other Restricted Payments made by Borrower and
its Restricted Subsidiaries after the date of this Agreement (excluding
Restricted Payments permitted by clause (f), but including, without duplication,
Restricted Payments permitted by clauses (b), (c), (d), and (e) of this Section
7.10), is less than the sum of (A) 50% of the Consolidated Net Income of
Borrower for the period (taken as one accounting period) from July 1, 2000 to
the end of Borrower's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted Payment (or,
if such Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus (B) 100% of the aggregate net cash proceeds received by Borrower
from the issue or sale since the date of this Agreement of Equity Interests of
Borrower (other than Disqualified Stock) or of Disqualified Stock of debt
securities of Borrower that have been converted into such Equity Interests
(other than any such Equity Interests, Disqualified Stock or convertible debt
securities sold to a Restricted Subsidiary of Borrower and other than
Disqualified Stock or convertible debt securities that have been converted into
Disqualified Stock), plus (C) to the extent that any Restricted Investment that
was made after the date of this Agreement is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (1) the cash return of capital with
respect to such Restricted Investment (less the cost disposition, if any) and
(2) the initial amount of such Restricted Investment, plus (D) in the event that
any Unrestricted Subsidiary is redesignated as a Restricted Subsidiary, the
lesser of (1) an amount equal to the fair value of Borrower's Investments in
such Restricted Subsidiary and (2) the amount of Restricted Investments
previously made by Borrower and its Restricted Subsidiaries in such Unrestricted
Schedule 1, Pg. 68
75
Subsidiary, plus (E) the Net Proceeds of Asset Sales permitted under Section 7.4
and the net proceeds of any asset sale that is not an Asset Sale to the extent
not used under Section 7.12(n).
(b) so long as no Default or Event of Default shall
have occurred and be continuing or would occur as a consequence thereof, the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of Borrower held by any member of Borrower's or any of its
Restricted Subsidiaries' management (or the estate or a trust for the benefit of
any such member of management); provided that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Equity Interests shall not
exceed $500,000 in any calendar year;
(c) so long as no Default or Event of Default shall
have occurred and be continuing, or would occur as a consequence thereof, the
payment of regularly scheduled dividends on the Preferred Stock in an amount not
to exceed $1,000,000 in any fiscal year and any payments upon the redemption or
conversion of the Preferred Stock not to exceed $7,500,000;
(d) so long as no Default or Event of Default shall
have occurred and be continuing, or would occur as a consequence thereof,
payments to enable Borrower to redeem or repurchase stock purchase rights or
similar rights in an aggregate amount not to exceed $1,000,000;
(e) so long as no Default or Event of Default shall
have occurred and be continuing, or would occur as a consequence thereof, the
acquisition of Common Stock to be contributed to an employee stock ownership
plan or savings plan of Borrower in an aggregate amount not to exceed $200,000
in any calendar year;
(f) so long as no Default or Event of Default shall
have occurred and be continuing, or would occur as a consequence thereof, the
acquisition of Equity Interests of Borrower in connection with the exercise of
stock options, warrants or stock appreciation or similar rights by way of
cashless exercise or in connection with the satisfaction of withholding tax
obligations; and
(g) the Restricted Subsidiaries may make Restricted
Payments to Borrower or any other Restricted Subsidiary of Borrower.
The amount of all Restricted Payments (other than
cash) shall be the fair market value on the date of the Restricted Payment of
the asset(s) or securities proposed to be transferred or issued by Borrower or
such Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment.
7.11 ACCOUNTING METHODS. Modify or change its method of
accounting (expect in conformity with changes in GAAP).
7.12 ADVANCES, INVESTMENTS AND LOANS. Make any Investment
except:
(a) Investments in cash and Cash Equivalents;
Schedule 1, Pg. 69
76
(b) Borrower and its Restricted Subsidiaries may
acquire and hold Accounts, if created or acquired in its ordinary course of
business and payable or dischargeable in accordance with its customary trade
terms of Borrower or such Restricted Subsidiary;
(c) so long as no Default or Event of Default shall
have occurred and be continuing, or would occur as a consequence thereof,
Borrower and its Restricted Subsidiaries may make loans and advances to
employees for moving and travel expenses and other similar expenses and bridge
loans for the purchase of homes, in each case incurred in the ordinary course of
business, and may make loans and advances to directors, officers and employees,
in an aggregate principal amount not to exceed $1,000,000 at any time
outstanding (determined without respect to any write-down or write-off of any
such loans or advances);
(d) Investments (including debt obligations and
Capital Stock) received in connection with the bankruptcy or reorganization of
suppliers and customers and in settlement of delinquent obligations of, and
other disputes with, customers and suppliers arising in the ordinary course of
business;
(e) so long as no Default or Event of Default shall
have occurred and be continuing, or would occur as a consequence thereof,
Borrower and its Restricted Subsidiaries may make Investments in any domestic
Wholly Owned Restricted Subsidiary and up to $20,000,000 outstanding at any one
time in any foreign Wholly Owned Restricted Subsidiary;
(f) so long as no Default or Event of Default shall
have occurred and be continuing, or would occur as a consequence thereof,
Borrower may invest the deposits held pursuant to the cash collateral
arrangements entered into in connection with its leveraged bus leases in the
investments permitted pursuant to the documents thereof;
(g) so long as no Default or Event of Default shall
have occurred and be continuing, or would occur as a consequence thereof,
Investments made as a result of their receipt of non-cash consideration of an
Asset Sale that was made pursuant to and in compliance with Section 7.4 or a
disposition of assets that does not constitute an Asset Sale;
(h) so long as no Default or Event of Default shall
have occurred and be continuing, or would occur as a consequence thereof,
Investments in Hedging Obligations reasonably acceptable to the Agent;
(i) so long as no Default or Event of Default shall
have occurred and be continuing, or would occur as a consequence thereof,
Investments permitted by Sections 7.1, 7.6 and 7.20;
(j) Investments in existence on the date hereof (as
disclosed on Schedule 7.12(j)) and so long as no Default or Event of Default
shall have occurred and be continuing, or would occur as a consequence thereof,
extensions, renewals, modifications, restatements or replacements thereof so
long as the aggregate dollar amount of all such extensions, renewals,
modifications, restatements, or replacements does not exceed the amount of such
Investments in existence on the date hereof;
Schedule 1, Pg. 70
77
(k) Investments in a Person engaged principally in
the business of providing passenger bus service or businesses reasonably
complementary or related thereto having an aggregate fair market value (measured
on the date such Investment is made and without giving effect to subsequent
changes in value), when taken together with all other Investments made pursuant
to this clause (k), that does not exceed the sum of (i) $35,000,000 plus (ii) an
amount equal to the Fair Market Value of any Common Stock issued to acquire
Productive Assets or a Person that becomes a Wholly Owned Restricted Subsidiary
of Borrower, provided that the aggregate amount of such Investments pursuant to
this clause (k) in Persons that are not Subsidiaries of Borrower shall not
exceed (A) $20,000,000, plus (B) an amount equal to the Fair Market Value of any
Common Stock issued to acquire Productive Assets or a Person that becomes a
Wholly Owned Restricted Subsidiary of Borrower.
(l) so long as no Default or Event of Default shall
have occurred and be continuing, or would occur as a consequence thereof, any
Investment by Borrower or any Restricted Subsidiary in a Person if as a result
of such Investment such Person becomes a Wholly Owned Restricted Subsidiary
(and, if a domestic Wholly Owned Restricted Subsidiary, becomes a Guarantor of
the Obligations and executes a Subsidiary Security Agreement) or such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, transfer of a Wholly
Owned Restricted Subsidiary of Borrower;
(m) so long as no Default or Event of Default shall
have occurred and be continuing, or would occur as a consequence thereof, any
Investment acquired solely in exchange for Equity Interests (other than
Disqualified Stock) of Borrower;
(n) so long as no Default or Event of Default shall
have occurred and be continuing, or would occur as a consequence thereof,
Investments made with the Net Proceeds of Asset Sales permitted under Section
7.4 or with the proceeds of any asset sale that is not an Asset Sale to the
extent not used under Section 7.10(a); and
(o) Investments permitted under clause (a) of Section
7.10.
7.13 TRANSACTIONS WITH AFFILIATES. Enter into any transaction
or series of transactions, whether or not in the ordinary course of business,
with any Affiliate (an "Affiliate Transaction"), unless (i) such Affiliate
Transaction is on terms and conditions substantially as favorable (or more
favorable) to Borrower as would be obtainable by Borrower at the time in a
comparable arm's-length transaction with a Person other than an Affiliate and
(ii) with respect to any Affiliate Transaction involving aggregate consideration
in excess of $5,000,000, an opinion as to the fairness to Borrower of such
Affiliate Transaction from a financial point of view is issued by an accounting,
appraisal or investment banking firm of national standing. In addition,
notwithstanding the foregoing, Borrower and the Restricted Subsidiaries shall be
entitled to make the following payments or enter into the following
transactions:
(a) intercompany loans in compliance with Section
7.12;
(b) cash contributions made to Subsidiaries pursuant
to Section 7.12;
(c) the payment of reasonable and customary fees and
reimbursement of expenses payable to directors;
Schedule 1, Xx. 00
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(x) employment arrangements with respect to the
performance of services of directors, officers and employees in the ordinary
course of business and the payment of reasonable fees in connection therewith;
(e) intercompany transfers among Borrower and its
Restricted Subsidiaries in the ordinary course of business;
(f) Restricted Payments that are in compliance with
Section 7.10;
(g) sales of Equity Interests (other than
Disqualified Stock) of Borrower to the Xxxxxxx Companies;
(h) pay up to $5,000,000 annually to the Xxxxxxx
Companies for management or other services provided by the Xxxxxxx Companies;
and
(i) make payments to, or receive benefits from, the
Xxxxxxx Companies for any income tax liability, or loss, that Borrower would
have been required to pay tax on, or receive benefit for, had Borrower filed on
a separate return basis;
provided, however, that no payments shall be made by Borrower to the Xxxxxxx
Companies if immediately following such payment Borrower would have less than
$10,000,000 of available Cash Equivalents or Availability.
7.14 SUSPENSION. Suspend or go out of a substantial portion of
its business.
7.15 USE OF PROCEEDS. Use the proceeds of the Advances for any
purpose other than (i) to make a payment to the Xxxxxxx Companies of up to
$43,000,000 as a repayment of Xxxxxxx Trade Payables, (ii) to pay transactional
costs and expenses incurred in connection with this Agreement, and (iii)
consistent with the terms and conditions hereof, for its lawful and permitted
corporate purposes.
7.16 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE. Relocate
its chief executive office to a location, or reincorporate in another
jurisdiction, requiring the filing of new UCC-1 financing statements or UCC-2 or
UCC-3 financing statement amendments (as the case may be), without providing 30
days prior written notification thereof to Agent and so long as, at the time of
such written notification, Borrower provides any financing statements or fixture
filings necessary to perfect and continue perfected the Lien of Agent (for the
benefit of the Lender Group), and Borrower shall use its commercially reasonable
efforts to obtain a Collateral Access Agreement (in form reasonably satisfactory
to Agent) from any lessor of any such new location.
7.17 RESTRICTIONS AFFECTING SUBSIDIARIES. Borrower shall not,
and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any Restricted Subsidiary to (a)(i)
pay dividends or make any other distributions to Borrower or any of its
Restricted Subsidiaries on its Capital Stock or with respect to any other
interest or participation in, or measured by, its profits, or (ii) pay any
indebtedness owed to Borrower or any of its Restricted
Schedule 1, Xx. 00
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Xxxxxxxxxxxx; (x) make loans or advances to Borrower or any of its Restricted
Subsidiaries; or (c) transfer any of its properties or assets to Borrower or any
of its Restricted Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of (1) Existing Indebtedness, (2) this Agreement or
the other Loan Documents, (3) the Senior Notes, (4) applicable law, (5) any
instrument governing Indebtedness or Capital Stock of a Person acquired by
Borrower or any of its Restricted Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness was incurred in connection
with or in contemplation of such acquisition), which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so acquired,
provided that, in the case of Indebtedness, such Indebtedness was permitted by
the terms of this Agreement to be incurred, (6) by reason of customary
non-assignment provisions in leases entered into in the ordinary course of
business and consistent with past practices, (7) purchase money obligations for
property acquired in the ordinary course of business that impose restrictions of
the nature described in clause (c) above on the property or assets, (8)
customary provisions in bona fide contracts for the sale of property or assets,
or (9) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing Indebtedness
are not materially more restrictive, taken as a whole, than those contained in
the agreements governing the Indebtedness being refinanced.
7.18 NO PROHIBITED TRANSACTIONS UNDER ERISA. Directly or
indirectly:
(a) engage, or permit any Subsidiary of Borrower to
engage, in any prohibited transaction which is reasonably likely to result in a
civil penalty or excise tax described in Sections 406 of ERISA or 4975 of the
IRC for which a statutory or class exemption is not available or a private
exemption has not been previously obtained from the Department of Labor;
(b) permit to exist with respect to any Benefit Plan
any accumulated funding deficiency (as defined in Sections 302 of ERISA and 412
of the IRC), whether or not waived;
(c) fail, or permit any Subsidiary of Borrower to
fail, to pay timely required contributions or annual installments due with
respect to any waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any Subsidiary of Borrower
to terminate, any Benefit Plan where such event would result in any liability of
Borrower, any of its Subsidiaries or any ERISA Affiliate under Title IV of ERISA
other than liability voluntarily assumed through a commitment to make a Plan
sufficient for benefit liabilities entered into pursuant to 29 C.F.R. Section
2617.7 undertaken in the normal business course of a voluntary Plan termination;
(e) fail, or permit any Subsidiary of Borrower to
fail, to make any required contribution or payment to any Multiemployer Plan;
(f) fail, or permit any Subsidiary of Borrower to
fail, to pay any required installment or any other payment required under
Section 412 of the IRC on or before the due date for such installment or other
payment;
Schedule 1, Pg. 73
80
(g) amend, or permit any Subsidiary of Borrower to
amend, a Plan resulting in an increase in current liability for the plan year
such that either of Borrower, any Subsidiary of Borrower or any ERISA Affiliate
is required to provide security to such Plan under Section 401(a)(29) of the
IRC; or
(h) withdraw, or permit any Subsidiary of Borrower to
withdraw, from any Multiemployer Plan where such withdrawal is reasonably likely
to result in any liability of any such entity under Title IV of ERISA;
which, individually or in the aggregate, results in or reasonably would be
expected to result in a claim against or liability of Borrower, any of its
Subsidiaries or any ERISA Affiliate in excess of $10,000,000.
7.19 FINANCIAL COVENANTS. Fail to maintain:
(a) Maximum Total Indebtedness to Consolidated Cash
Flow Ratio. A ratio of Total Indebtedness to Consolidated Cash Flow that is not
greater than 4.75 to 1.00, as of the end of any fiscal quarter of Borrower,
calculated on a trailing four fiscal quarter basis.
(b) Minimum Consolidated Interest Coverage Ratio. A
Consolidated Interest Coverage Ratio of at least 2.00 to 1.00, as of the end of
any fiscal quarter of Borrower, calculated on a trailing four fiscal quarter
basis.
(c) Minimum Consolidated Net Worth. Consolidated Net
Worth of at least $215,000,000 as of the end of any fiscal quarter of Borrower.
7.20 CAPITAL EXPENDITURES. Make or commit to make any Capital
Expenditure exceeding, in the aggregate for Borrower and its Restricted
Subsidiaries during any fiscal year, the sum of (a) $40,000,000; plus (b) the
amount of any casualty insurance or condemnation proceeds received by Borrower
or its Restricted Subsidiaries in the same fiscal year and applied by such
Person towards the replacement of such assets or the purchase of similar assets;
plus (c) the amount of cash proceeds received by Borrower or its Restricted
Subsidiaries from Asset Sales permitted under Section 7.4 to the extent such
proceeds are reinvested in accordance with the terms of such Section 7.4.
7.21 PAYMENT ON XXXXXXX TRADE PAYABLES. Make any payment in
respect of the Xxxxxxx Trade Payables unless (i) at the time of such payment no
Event of Default exists or would result therefrom, and (ii) after taking such
payment into account, Borrower would have at least $25,000,000 of unrestricted
cash on hand and excess Availability under Section 2.1 (a).
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an
event of default (each, an "Event of Default") under this Agreement:
8.1 If Borrower fails to pay any principal amount of the
Advances when due or shall fail to pay any portion of the Obligations (whether
of interest (including any interest which, but for the provisions of the
Bankruptcy Code, would have accrued on such amounts),
Schedule 1, Pg. 74
81
fees and charges due the Lender Group, reimbursement of Lender Group Expenses,
or other amounts constituting Obligations) other than principal within 5 days
after such amount becomes due and payable;
8.2 If (a) Borrower fails or neglects to perform, keep, or
observe any term, provision, condition, covenant, or agreement contained in
Sections 6.4, 6.10 or 6.18 of this Agreement and such failure continues for a
period of 15 days from the date of such failure or neglect; (b) Borrower fails
or neglects to perform, keep, or observe any other term, provision, condition,
covenant, or agreement contained in Article 6 of this Agreement and such failure
continues for a period of 30 days from the date of such failure or neglect; or
(c) Borrower fails or neglects to perform, keep, or observe any other term,
provision, condition, covenant, or agreement contained in this Agreement (other
than any such term, provision, condition, covenant, or agreement that is the
subject of another provision of this Article 8);
8.3 If there is a Material Adverse Change;
8.4 If any material portion of Borrower's properties or assets
is attached, seized, subjected to a writ or distress warrant, or is levied upon,
or comes into the possession of any third Person;
8.5 If an Insolvency Proceeding is commenced by Borrower;
8.6 If an Insolvency Proceeding is commenced against Borrower
and any of the following events occur: (a) Borrower consents to the institution
of the Insolvency Proceeding against it; (b) the petition commencing the
Insolvency Proceeding is not timely controverted; (c) the petition commencing
the Insolvency Proceeding is not dismissed within 60 calendar days of the date
of the filing thereof; provided, however, that, during the pendency of such
period, the Lender Group shall be relieved of its obligation to extend credit
hereunder; (d) an interim trustee is appointed to take possession of all or a
substantial portion of the properties or assets of, or to operate all or any
substantial portion of the business of, Borrower; or (e) an order for relief
shall have been issued or entered therein;
8.7 If one or more judgments or decrees shall be entered
against Borrower for the payment of money in excess of $5,000,000 in the
aggregate at any time outstanding (which amount is not covered by insurance with
customary deductibles where the insurer has not denied coverage), and the same
shall remain unpaid, unvacated, unbonded, or unstayed pending appeal for a
period of 30 days from the date of entry;
8.8 If a judgment or other claim becomes a Lien or encumbrance
upon any material portion of Borrower's properties or assets;
8.9 If there is a default in any material agreement (including
the Indenture) to which Borrower is a party with one or more third Persons and
such default (a) occurs at the final maturity of the obligations thereunder, or
(b) results in a right by such third Person(s), irrespective of whether
exercised, to accelerate the maturity of Borrower's obligations thereunder or
any such Person has accelerated any such obligations (including any acceleration
of the Senior Notes or the Preferred Stock);
Schedule 1, Pg. 75
82
8.10 If any warranty or representation made or deemed made by
Borrower, any Guarantor, or any officer, employee, agent, or director of
Borrower or any Guarantor in any Loan Document or which is contained in any
certificate, document, or financial, or other statement furnished at any time
under or in connection with any Loan Document shall prove to be incorrect in any
material respect when made or deemed made;
8.11 If the obligation of any Guarantor under its Guaranty is
limited or terminated by operation of law or by the Guarantor thereunder, or any
such Guarantor becomes the subject of an Insolvency Proceeding;
8.12 If Borrower or any Guarantor fails or neglects to
perform, keep or observe any term, provision, condition, covenant, or agreement
contained in, any other Loan Document; provided, however, that to the extent
Borrower would have any grace period available to it under Section 8.2 for its
failure or neglect under this Agreement, Borrower and each Guarantor shall have
the same grace period for their failure or neglect of the same or substantially
similar term, provision, condition, covenant or agreement contained in another
Loan Document;
8.13 If there shall occur a Change in Control; or
8.14 If the holder of any Lien (other than the Lien of Agent
on behalf of the Lender Group or a Lien subject to a Permitted Protest)
affecting Collateral commences to exercise its legal remedies pursuant to such
Lien.
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES.
(a) Acceleration. If any Event of Default described
in Sections 8.5 or 8.6 shall occur, then immediately and without demand all
non-contingent Obligations, whether evidenced by this Agreement, by any of the
other Loan Documents, or otherwise, shall be due and payable, and Borrower shall
satisfy all obligations of the Lender Group under outstanding Letters of Credit
pursuant to Section 2.2(e). If any other Event of Default shall occur, then
Agent may, or at the direction of the Required Lenders shall, declare all
non-contingent Obligations, whether evidenced by this Agreement, by any of the
other Loan Documents, or otherwise, to be due and payable, and require Borrower
to satisfy all obligations of the Lender Group under outstanding Letters of
Credit pursuant to Section 2.2(e).
(b) Other Remedies. In addition to the remedies set
forth in Section 9.1(a), if an Event of Default shall occur Agent may, and at
the direction of the Required Lenders shall, without notice of any such election
exercise any one or more of the following rights and remedies, all of which are
authorized by Borrower:
(i) Cease advancing money or extending
credit to or for the benefit of Borrower under this Agreement, under any of the
Loan Documents, or under any other agreement between Borrower and the Lender
Group;
Schedule 1, Xx. 00
00
(xx) Xxxxxxxxx the Lenders' Commitments, or
terminate this Agreement and any of the other Loan Documents as to any future
liability or obligation of the Lender Group, but without affecting the Lender
Group's rights and security interests in the Collateral and without affecting
the Obligations;
(iii) Settle or adjust disputes and claims
directly with Account Debtors for amounts and upon terms which Agent considers
advisable, and in such cases, Agent will credit Borrower's Loan Account with
only the net amounts received by Agent in payment of such disputed Accounts
after deducting all Lender Group Expenses incurred or expended in connection
therewith;
(iv) Without notice to or demand upon
Borrower or any Guarantor, make such payments and do such acts as Agent
considers necessary or reasonable to protect its Lien on the Collateral.
Borrower agrees to assemble the Personal Property Collateral if Agent so
requires, and to make the Personal Property Collateral available to Agent as
Agent may designate. Borrower authorizes Agent to enter the premises where the
Personal Property Collateral is located, to take and maintain possession of the
Personal Property Collateral, or any part of it, and to pay, purchase, contest,
or compromise any encumbrance, charge, or Lien that in Agent's determination
appears to conflict with the Liens of Agent (for the benefit of the Lender
Group) in the Collateral and to pay all expenses incurred in connection
therewith. With respect to any of Borrower's owned or leased premises, Borrower
hereby grants Agent a license to enter into possession of such premises and to
occupy the same, without charge, for up to 120 days in order to exercise any of
the Lender Group's rights or remedies provided herein, at law, in equity, or
otherwise;
(v) Without notice to Borrower (such notice
being expressly waived), and without constituting a retention of any Collateral
in satisfaction of an obligation (within the meaning of the Code), set-off and
apply to the Obligations any and all (y) balances and deposits of Borrower held
by the Lender Group, or (z) indebtedness at any time owing to or for the credit
or the account of Borrower held by the Lender Group;
(vi) Hold, as cash collateral, any and all
balances and deposits of Borrower held by the Lender Group, and any Collections,
to secure the full and final repayment of all of the Obligations;
(vii) Ship, reclaim, recover, store, finish,
maintain, repair, prepare for sale, advertise for sale, and sell (in the manner
provided for herein) the Personal Property Collateral. Agent is hereby granted a
license or other right to use, without charge, Borrower's labels, patents,
copyrights, rights of use of any name, trade secrets, trade names, trademarks,
service marks, and advertising matter, or any property of a similar nature, as
it pertains to the Personal Property Collateral, in completing production of,
advertising for sale, and selling any Personal Property Collateral and
Borrower's rights under all licenses and all franchise agreements shall inure to
the Lender Group's benefit. In connection with any contemplated sale of the
Personal Property Collateral, or any contemplated sale of the Real Property
Collateral as provided under the Mortgages, Agent may in its discretion order
such updated appraisals on the Collateral and the Subsidiary Collateral as it
determines are necessary and the costs of the same shall be Lender Group
Expenses;
Schedule 1, Pg. 77
84
(viii) Sell the Personal Property Collateral
at either a public or private sale, or both, by way of one or more contracts or
transactions, for cash or on terms, in such manner and at such places (including
Borrower's premises) as Agent determines is commercially reasonable. It is not
necessary that the Personal Property Collateral be present at any such sale;
(ix) Agent shall give notice of the
disposition of the Personal Property Collateral as follows:
(1) Agent shall give Borrower and
each holder of a security interest in the Personal Property Collateral who has
filed with Agent a written request for notice, a notice in writing of the time
and place of public sale, or, if the sale is a private sale or some other
disposition other than a public sale is to be made of the Personal Property
Collateral, then the time on or after which the private sale or other
disposition is to be made;
(2) The notice shall be personally
delivered or mailed, postage prepaid, to Borrower as provided in Section 12, at
least 10 days before the date fixed for the sale, or at least 10 days before the
date on or after which the private sale or other disposition is to be made; no
notice needs to be given prior to the disposition of any portion of the Personal
Property Collateral that is perishable or threatens to decline speedily in value
or that is of a type customarily sold on a recognized market. Notice to Persons
other than Borrower claiming an interest in the Personal Property Collateral
shall be sent to such addresses as they have furnished to Agent;
(3) If the sale is to be a public
sale, Agent also shall give notice of the time and place by publishing a notice
one time at least 10 days before the date of the sale in a newspaper of general
circulation in the county in which the sale is to be held;
(x) Agent may credit bid and purchase at any
public sale; and
(xi) Any deficiency that exists after
disposition of the Personal Property Collateral as provided above will be paid
immediately by Borrower. Any excess will be returned, without interest and
subject to the rights of third Persons, by Agent to Borrower.
9.2 REMEDIES CUMULATIVE. The Lender Group's rights and
remedies under this Agreement, the Loan Documents (including the Mortgages), and
all other agreements shall be cumulative. The Lender Group shall have all other
rights and remedies not inconsistent herewith as provided under the Code, by
law, or in equity. No exercise by the Lender Group of one right or remedy shall
be deemed an election, and no waiver by the Lender Group of any Event of Default
shall be deemed a continuing waiver. No delay by the Lender Group shall
constitute a waiver, election, or acquiescence by it.
9.3 FORECLOSURE NOT A DISCHARGE. Foreclosure shall not operate
as a discharge to Borrower's Obligations to the Lender Group as to Hazardous
Materials and the indemnity provisions in Section 11.3; and in the event
Borrower tenders a deed in lieu of foreclosure for all or part of the Real
Property Collateral, Borrower shall deliver such property to Agent (or its
designee) free of any and all Hazardous Materials.
Schedule 1, Pg. 78
85
9.4 RELEASE OF TRUST MONIES. To the extent that any monies
retained by Agent or the Lender Group from Collections or otherwise in respect
of Designated Payables do not constitute property of Borrower, the Lender Group
agrees and Borrower authorizes Agent from and after an Event of Default, or at
any time that there is a delinquency in paying the Designated Payables, to
segregate and deliver such monies into a separate deposit account controlled by
Borrower. Any such repayment shall constitute an advance under Section 2.1 to
the extent such repayment was previously applied against the Obligations.
Borrower agrees to provide Agent with accurate and complete reporting as
frequently as required by Agent in order to correctly track the amount of such
monies.
10. TAXES AND EXPENSES.
If Borrower fails to pay any monies (including taxes,
assessments, insurance premiums, or, in the case of leased properties or assets,
rents or other amounts payable under such leases) due to third Persons, or fails
to make any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement (subject to Permitted Protests),
then, to the extent that Agent determines that such failure by Borrower could
result in a Material Adverse Change, in its discretion and without prior notice
to Borrower, Agent may do any or all of the following: (a) make payment of the
same or any part thereof (but only to the extent that such payment does not
prejudice Borrower's rights to conduct a Permitted Protest); (b) set up such
reserves in Borrower's Loan Account as Agent deems necessary to protect the
Lender Group from any taxes and Liens that would take priority over the Lien of
Agent for the benefit of the Lender Group, and, for purposes of this clause (b),
irrespective of whether a Permitted Protest is contemplated or has been
undertaken; or (c) obtain and maintain insurance policies of the type described
in Section 6.10, and take any action with respect to such policies as Agent
deems prudent. Any such amounts paid by Agent shall constitute Lender Group
Expenses. Any such payments made by Agent shall not constitute an agreement by
the Lender Group to make similar payments in the future or a waiver by the
Lender Group of any Event of Default under this Agreement. Agent need not
inquire as to, or contest the validity of, any such expense, tax, or Lien and
the receipt of the usual official notice for the payment thereof shall be
conclusive evidence that the same was validly due and owing, unless Borrower has
notified Agent of a Permitted Protest.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC. Except as otherwise provided in
this Agreement, Borrower waives demand, protest, notice of protest, notice of
default or dishonor, notice of payment and nonpayment, nonpayment at maturity,
release, compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees at any time held by the Lender Group
on which Borrower may in any way be liable.
11.2 THE LENDER GROUP'S LIABILITY FOR COLLATERAL. So long as
the Lender Group complies with its obligations, if any, under the Code, the
Lender Group shall not in any way or manner be liable or responsible for: (a)
the safekeeping of the Collateral; (b) any loss or damage thereto occurring or
arising in any manner or fashion from any cause; (c) any diminution in the value
thereof; or (d) any act or default of any carrier, warehouseman, bailee,
forwarding
Schedule 1, Pg. 79
86
agency, or other Person. All risk of loss, damage, or destruction of the
Collateral shall be borne by Borrower.
11.3 INDEMNIFICATION. Borrower agrees to defend, indemnify,
save, and hold each Agent-Related Person, each Lender, each Participant, and
each of their respective officers, directors, employees, counsel, agents, and
attorneys-in-fact (each an "Indemnified Person") harmless against from any of
the following (collectively, the "Indemnified Liabilities"): (a) all
obligations, demands, claims, and liabilities (but as to taxes, only taxes that
are payable by Borrower under Sections 2.15 or 2.16) claimed or asserted by any
other Person arising out of or relating to the transactions contemplated by this
Agreement or any other Loan Document, and (b) all Losses in any way suffered,
incurred, or paid by such Indemnified Person as a result of or in any way
arising out of, following, or consequential to the transactions contemplated by
this Agreement or any other Loan Document; and (c) all Losses suffered or
incurred by any Indemnified Person, regardless of negligence, whether as a
holder of security interests in Real Property, as mortgagee in possession, or as
successor in interest to Borrower as owner of the Real Property by virtue of
foreclosure or acceptance of a deed or other transaction in lieu of foreclosure,
or after partial or total reconveyance of the mortgage, arising from, in respect
of, as a consequence of (whether foreseeable or unforeseeable) or in connection
with the use, storage, disposal, generation, transportation, spill, or treatment
of any Hazardous Materials at or related to the Real Property whether or not
originating or emanating from the Real Property. Notwithstanding the foregoing,
Borrower shall not be required to indemnify any Indemnified Person for such
Person's gross negligence or wilful misconduct or any action by Agent occurring
after foreclosure, acceptance of a deed in lieu of foreclosure, or similar
transfer to any Indemnified Party or its successor, including any losses arising
from or related to any Hazardous Materials that are first used, stored,
disposed, generated, transported, spilled or treated at any Real Property after
such transfer, unless such use, storage, disposal, generation, transportation,
spill or treatment is caused by Borrower or a Subsidiary. The provisions of this
Section 11.3 shall survive the termination of this Agreement.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or
demands by any party relating to this Agreement or any other Loan Document shall
be in writing and (except for financial statements and other informational
documents which may be sent by first-class mail, postage prepaid) shall be
personally delivered or sent by registered or certified mail (postage prepaid,
return receipt requested), overnight courier, or telefacsimile to Borrower or to
Agent, as the case may be, at its address set forth below:
IF TO BORROWER: GREYHOUND LINES, INC.
00000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Chief Financial Officer
Fax No. 000.000.0000
WITH A COPY TO: GENERAL COUNSEL
Fax No. 000.000.0000
Schedule 1, Pg. 80
87
AND WITH ADDITIONAL WEIL, GOTSHAL & XXXXXX LLP
COPIES TO: 000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxxx X. Xxxx, Esq.
Fax No. 000.000.0000
IF TO AGENT FOOTHILL CAPITAL CORPORATION
OR THE LENDER GROUP 0000 Xxxxxxxx Xxxxxx
IN CARE OF AGENT: Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Business Finance Division Manager
Fax No. 000.000.0000
WITH COPIES TO: BUCHALTER, NEMER, FIELDS & YOUNGER
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Fax No. 000.000.0000
The parties hereto may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given to
the other. All notices or demands sent in accordance with this Section 12, other
than notices by Agent in connection with enforcement rights against the
Collateral under the Code, shall be deemed received on the earlier of the date
of actual receipt or 3 days after the deposit thereof in the mail. Borrower
acknowledges and agrees that notices sent by Agent in connection with
enforcement rights against the Collateral under the Code shall be deemed given
when deposited in the mail or personally delivered, or, where permitted by law,
transmitted by telefacsimile or other similar method set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT), THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS
OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER
OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT
GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF. THE PARTIES AGREE
THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND
FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA;
PROVIDED, HOWEVER, THAT NOTHING IN THIS AGREEMENT OR THE LOAN DOCUMENTS SHALL BE
DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION TO PROTECT
Schedule 1, Pg. 81
88
OR REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER. BORROWER AND EACH MEMBER OF THE LENDER
GROUP WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13. BORROWER
AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVES THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF
THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENTS THAT
IT HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
14. DESTRUCTION OF BORROWER'S DOCUMENTS.
All documents, schedules, invoices, agings, or other papers
delivered to Agent may be destroyed or otherwise disposed of by Agent 4 months
after they are delivered to or received by Agent, unless Borrower requests, in
writing, the return of said documents, schedules, or other papers and makes
arrangements, at Borrower's expense, for their return.
15. ASSIGNMENTS AND PARTICIPATION; SUCCESSORS.
15.1 ASSIGNMENTS AND PARTICIPATION.
(a) Any Lender may, with the written consent of the
Agent, assign and delegate to one or more Eligible Transferees (each an
"Assignee") all, or any ratable part, of the Obligations, the Commitments, and
the other rights and obligations of such Lender hereunder and under the other
Loan Documents, in a minimum amount of $5,000,000; provided, however, that
Borrower and Agent may continue to deal solely and directly with such Lender in
connection with the interest so assigned to an Assignee until (i) written notice
of such assignment, together with payment instructions, addresses, and related
information with respect to the Assignee, shall have been given to Borrower and
Agent by such Lender and the Assignee; (ii) such Lender and its Assignee shall
have delivered to Borrower and Agent a fully executed Assignment and Acceptance
("Assignment and Acceptance") in the form of Exhibit A-1; (iii) all formalities
required by Section 15.3 have been met; and (iv) the assignor Lender or Assignee
has paid to Agent for Agent's sole and separate account a processing fee in the
amount of $5,000; provided, however that no such fee shall be required where
such assignment is required pursuant to the provisions of Section 2.18. Anything
contained herein to the contrary notwithstanding, the consent of Agent shall not
be required (and payment of any fees shall not be required) if such assignment
is in connection with any merger, consolidation, sale, transfer, or other
disposition of all or any substantial portion of the business or loan portfolio
of such Lender.
Schedule 1, Pg. 82
89
(b) From and after the date that Agent notifies the
assignor Lender that it has received a fully executed Assignment and Acceptance
and payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, shall have
the rights and obligations of a Lender under the Loan Documents, and (ii) the
assignor Lender shall, to the extent that rights and obligations hereunder and
under the other Loan Documents have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement and the other Loan Documents, such Lender
shall cease to be a party hereto and thereto), and such assignment shall effect
a novation between Borrower and the Assignee.
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (1) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties, or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency, or value of this Agreement or any other Loan Document furnished
pursuant hereto; (2) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrower or any guarantor or the performance or observance by Borrower or any
guarantor of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto; (3) such Assignee confirms that it has
received a copy of this Agreement, together with such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (4) such Assignee will,
independently and without reliance upon Agent, such assigning Lender, or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (5) such Assignee appoints and
authorizes Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement as are delegated to Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (6) such
Assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) Immediately upon the Assignor's or the Assignee's
making its processing fee payment under the Assignment and Acceptance, this
Agreement shall be deemed to be amended to the extent, but only to the extent,
necessary to reflect the addition of the Assignee and the resulting adjustment
of the Commitments of the Assignor and Assignee arising therefrom. The
Commitment allocated to each Assignee shall reduce such Commitment of the
assigning Lender pro tanto.
(e) Any Lender may at any time, with the written
consent of the Agent, which consent shall not be unreasonably withheld, sell to
one or more Persons (a "Participant") participating interests in the
Obligations, the Commitment, and the other rights and interests of that Lender
(the "Originating Lender") hereunder and under the other Loan Documents;
provided, however, that (i) the Originating Lender's obligations under this
Schedule 1, Pg. 83
90
Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrower and
Agent shall continue to deal solely and directly with the Originating Lender in
connection with the Originating Lender's rights and obligations under this
Agreement and the other Loan Documents, (iv) no Originating Lender shall
transfer or grant any participating interest under which the Participant has the
sole and exclusive right to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, except to the extent
such amendment to, or consent or waiver with respect to this Agreement or of any
other Loan Document would (A) extend the final maturity date of the Obligations
hereunder in which such Participant is participating; (B) reduce the interest
rate applicable to the Obligations hereunder in which such Participant is
participating; (C) release all or a material portion of the Collateral (except
to the extent expressly provided herein or in any of the Loan Documents)
supporting the Obligations hereunder in which such Participant is participating;
(D) postpone the payment of, or reduce the amount of, the interest or fees
hereunder in which such Participant is participating; or (E) reduce the amount
or extend the due dates of scheduled principal repayments or prepayments in
respect of the Obligations hereunder in which such Participant is participating;
and (v) all amounts payable by Borrower hereunder shall be determined as if such
Originating Lender had not sold such participation; except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement; provided, however, that no Participant may exercise
any such right of set-off without the notice to and consent of Agent. The rights
of any Participant shall only be derivative through the Originating Lender with
whom such Participant participates and no Participant shall have any direct
rights as to the other Lenders, Agent, Borrower, the Collections, the
Collateral, or otherwise in respect of the Advances or the Letters of Credit. No
Participant shall have the right to participate directly in the making of
decisions by the Lenders among themselves. The provisions of this Section
15.1(e) are solely for the benefit of the Lender Group, and Borrower shall have
no rights as a third party beneficiary of any of such provisions.
(f) Notwithstanding any other provision in this
Agreement, any Lender may at any time create a security interest in, or pledge,
all or any portion of its rights under and interest in this Agreement in favor
of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR Section 203.14, and such Federal Reserve Bank may
enforce such pledge or security interest in any manner permitted under
applicable law.
15.2 SUCCESSORS. This Agreement shall bind and inure to the
benefit of the respective successors and assigns of each of the parties;
provided, however, that Borrower may not assign this Agreement or any rights or
duties hereunder without the Lenders' prior written consent and any prohibited
assignment shall be absolutely void. No consent to assignment by the Lenders
shall release Borrower from its Obligations. A Lender may assign this Agreement
and its rights and duties hereunder pursuant to Section 15.1 and no consent or
approval by Borrower is required in connection with any such assignment.
Schedule 1, Pg. 84
91
15.3 REGISTRY. Borrower hereby designates the Agent to serve
as Borrower's agent, solely for purposes of this Section 15.3, to maintain a
register (the "Register") on which it will record the Commitments from time to
time of each of the Lenders, the Advances made by each of the Lenders and each
repayment in respect of the principal amount of the Obligations owing to each
Lender, including the Agent Advances and Agent Loans owing to Agent. Failure to
make any such recordation, or any error in such recordation shall not affect
Borrower's obligations in respect of the Advances. With respect to any Lender,
the transfer of the Commitment of such Lender and the rights to the principal
of, and interest on, any Advances made pursuant to such Commitment as
contemplated by Section 15.1(a) shall not be effective until such transfer is
recorded on the Register maintained by the Agent with respect to ownership of
such Commitment and Advances and prior to such recordation all amounts owing to
the transferor with respect to such Commitment and Advances shall remain owing
to the transferor.
16. AMENDMENTS; WAIVERS.
16.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by Borrower therefrom, shall be effective unless the
same shall be in writing and signed by the Required Lenders (or by Agent at the
written request of the Required Lenders) and Borrower and then any such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment, or
consent shall, unless in writing and signed by all the Lenders and Borrower and
acknowledged by Agent, do any of the following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment of principal, interest,
fees, or other amounts due to the Lenders (or any of them) hereunder or under
any other Loan Document;
(c) reduce the principal of, or the rate of interest
specified herein on, any Loan, or any fees or other amounts payable to any
Lender hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Advances which is required for the
Lenders or any of them to take any action hereunder;
(e) increase the advance rate with respect to
Advances (except for the restoration of an advance rate after the prior
reduction thereof), change Section 2.1(b), or amend the definition of Borrowing
Base (or the component definitions thereof) in any way that would increase
Availability (except as provided in Section 2.1(l));
(f) amend this Section or any provision of the
Agreement providing for consent or other action by all Lenders;
(g) release Collateral or any Subsidiary Collateral
other than as permitted by Section 17.11;
Schedule 1, Pg. 85
92
(h) change the definition of "Required Lenders"; or
(i) release Borrower from any Obligation for the
payment of money or release any Guarantor from its Guaranty or from any
obligation for the payment of money.
and, provided further, that no amendment, waiver or consent shall, unless in
writing and signed by Agent, affect the rights or duties of Agent under this
Agreement or any other Loan Document; and, provided further, that the limitation
contained in clause (e) above shall not be deemed to limit the ability of Agent
to make Advances or Agent Loans, as applicable, in accordance with the
provisions of Sections 2.1(g), (h), or (l). The foregoing notwithstanding, any
amendment, modification, waiver, consent, termination, or release of or with
respect to any provision of this Agreement or any other Loan Document that
relates only to the relationship of the Lender Group among themselves, and that
does not affect the rights or obligations of Borrower, shall not require consent
by or the agreement of Borrower.
16.2 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Agent or
any Lender to exercise any right, remedy, or option under this Agreement, any
other Loan Document, or any present or future supplement hereto or thereto, or
in any other agreement between or among Borrower and Agent and/or any Lender, or
delay by Agent or any Lender in exercising the same, will operate as a waiver
thereof. No waiver by Agent or any Lender will be effective unless it is in
writing, and then only to the extent specifically stated. No waiver by Agent or
the Lenders on any occasion shall affect or diminish Agent's and each Lender's
rights thereafter to require strict performance by Borrower of any provision of
this Agreement. Agent's and each Lender's rights under this Agreement and the
other Loan Documents will be cumulative and not exclusive of any other right or
remedy which Agent or any Lender may have.
17. AGENT; THE LENDER GROUP.
17.1 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender
hereby designates and appoints Foothill as its agent under this Agreement and
the other Loan Documents and each Lender hereby irrevocably authorizes Agent to
take such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. Agent
agrees to act as such on the express conditions contained in this Article 17.
The provisions of this Article 17 are solely for the benefit of Agent and the
Lenders, and Borrower shall not have any rights as a third party beneficiary of
any of the provisions contained herein; provided, however, that the provisions
of Sections 17.9, 17.10, 17.11, and 17.16(d) also shall be for the benefit of
Borrower. Any provision to the contrary contained elsewhere in this Agreement or
in any other Loan Document notwithstanding, Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall Agent have
or be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations, or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist
against Agent. Except as expressly otherwise provided in this Agreement, Agent
shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions which Agent is expressly entitled to take or assert under or
pursuant to this Agreement
Schedule 1, Pg. 86
93
and the other Loan Documents. Without limiting the generality of the foregoing,
or of any other provision of the Loan Documents that provides rights or powers
to Agent, Lenders agree that Agent shall have the right to exercise the
following powers as long as this Agreement remains in effect: (a) maintain, in
accordance with its customary business practices, ledgers and records reflecting
the status of the Advances, the Collateral, the Collections, and related
matters; (b) execute and/or file any and all financing or similar statements or
notices, amendments, renewals, supplements, documents, instruments, proofs of
claim for Lenders, notices and other written agreements with respect to the Loan
Documents; (c) make Advances for itself or on behalf of Lenders as provided in
the Loan Documents; (d) exclusively receive, apply, and distribute the
Collections as provided in the Loan Documents; (e) open and maintain such bank
accounts and lock boxes as Agent deems necessary and appropriate in accordance
with the Loan Documents for the foregoing purposes with respect to the
Collateral and the Collections; (f) perform, exercise, and enforce any and all
other rights and remedies of the Lender Group with respect to Borrower, the
Advances, the Collateral, the Collections, or otherwise related to any of same
as provided in the Loan Documents; and (g) incur and pay such Lender Group
Expenses as Agent may deem necessary or appropriate for the performance and
fulfillment of its functions and powers pursuant to the Loan Documents.
17.2 DELEGATION OF DUTIES. Except as otherwise provided in
this Section, Agent may execute any of its duties under this Agreement or any
other Loan Document by or through agents, employees, or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. Agent shall not be responsible for the negligence or misconduct of any
agent or attorney-in-fact that it selects as long as such selection was made in
compliance with this Section and without gross negligence or wilful misconduct.
The foregoing notwithstanding, Agent shall not make any material delegation of
duties to subagents or non-employee delegees without the prior written consent
of Required Lenders (it being understood that routine delegation of such
administrative matters as filing financing statements, or conducting appraisals
or audits, is not viewed as a material delegation that requires prior Required
Lender approval).
17.3 LIABILITY OF AGENT-RELATED PERSONS. None of the
Agent-Related Persons shall (i) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or wilful misconduct), or, (ii) be responsible in any manner to any
of the Lenders for any recital, statement, representation or warranty made by
Borrower, or any Subsidiary or Affiliate of Borrower, or any officer or director
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement, or other document referred to or provided for
in, or received by Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books, or records of
Borrower, or any of Borrower's Subsidiaries or Affiliates.
Schedule 1, Pg. 87
94
17.4 RELIANCE BY AGENT. Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex, or
telephone message, statement or other document or conversation believed by it to
be genuine and correct and to have been signed, sent, or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to Borrower or counsel to any Lender), independent accountants, and
other experts selected by Agent. Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Required Lenders
or all Lenders, as applicable, and until such instructions are received, Agent
shall act, or refrain from acting, as they deem advisable so long as they are
not grossly negligent or guilty of wilful misconduct. If Agent so requests, it
shall first be indemnified to its reasonable satisfaction by Lenders against any
and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement or any other Loan
Document in accordance with a request or consent of the Required Lenders or all
Lenders, as applicable, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
17.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except that Agent shall be deemed to have knowledge with respect to
defaults in the payment of principal, interest, fees, and expenses required to
be paid to Agent for the account of the Lender Group, except with respect to
actual knowledge of the existence of an Overadvance, and except with respect to
Defaults and Events of Default of which Agent has actual knowledge, unless Agent
shall have received written notice from a Lender or Borrower referring to this
Agreement, describing such Default or Event of Default, and stating that such
notice is a "notice of default." Agent promptly will notify the Lenders of its
receipt of any such notice or of any Event of Default of which Agent has, or is
deemed to have, actual knowledge. If any Lender obtains actual knowledge of any
Event of Default, such Lender promptly shall notify the other Lenders and Agent
of such Event of Default. Each Lender shall be solely responsible for giving any
notices to its Participants, if any. Subject to Section 17.4, Agent shall take
such action with respect to such Default or Event of Default as may be requested
by the Required Lenders; provided, however, that:
(a) At all times, Agent may propose and, with the
consent of Required Lenders (which shall be deemed to have been given by a
Lender unless such Lender has notified Agent to the contrary in writing within
three days of notification of such proposed actions by Agent) exercise, any
remedies on behalf of the Lender Group; and
(b) At all times, once Required Lenders or all
Lenders, as the case may be, have approved the exercise of a particular remedy
or pursuit of a course of action, Agent may, but shall not be obligated to, make
all administrative decisions in connection therewith or take all other actions
reasonably incidental thereto (for example, if the Required Lenders approve the
foreclosure of certain Collateral, Agent shall not be required to seek consent
for the administrative aspects of conducting such sale or handling of such
Collateral).
Schedule 1, Pg. 88
95
17.6 CREDIT DECISION. Each Lender acknowledges that none of
the Agent-Related Persons has made any representation or warranty to it, and
that no act by Agent hereinafter taken, including any review of the affairs of
Borrower and its Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition, and
creditworthiness of Borrower and any other Person (other than the Lender Group)
party to a Loan Document, and all applicable bank regulatory laws relating to
the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to Borrower. Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals, and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition, and
creditworthiness of Borrower, and any other Person (other than the Lender Group)
party to a Loan Document. Except for notices, reports, and other documents
expressly herein required to be furnished to the Lenders by Agent, Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition, or creditworthiness of Borrower, and any other
Person party to a Loan Document that may come into the possession of any of the
Agent-Related Persons.
17.7 COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and
pay Lender Group Expenses to the extent Agent deems reasonably necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including without limiting the
generality of the foregoing, but subject to any requirements of the Loan
Documents that it obtain any applicable consents or engage in any required
consultation, court costs, reasonable attorneys fees and expenses, costs of
collection by outside collection agencies and auctioneer fees and costs of
security guards or insurance premiums paid to maintain the Collateral, including
costs of Agent or any Nominee arising out of the actions contemplated in Section
17.11(c) respecting Post-Foreclosure Collateral, whether or not Borrower is
obligated to reimburse Agent or Lenders for such expenses pursuant to the Loan
Agreement or otherwise. Agent is authorized and directed to deduct and retain
sufficient amounts from Collections to reimburse Agent for such out-of-pocket
costs and expenses prior to the distribution of any amounts to Lenders. In the
event Agent is not reimbursed for such costs and expenses from Collections, each
Lender hereby agrees that it is and shall be obligated to pay to or reimburse
Agent for the amount of such Lender's Pro-Rata Share thereof. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand the Agent-Related Persons (to the extent not reimbursed by or on
behalf of Borrower and without limiting the obligation of Borrower to do so),
according to their Pro-Rata Shares, from and against any and all Indemnified
Liabilities; provided, however, that no Lender shall be liable for the payment
to the Agent-Related Persons of any portion of such Indemnified Liabilities
resulting solely from such Person's gross negligence, bad faith, or wilful
misconduct. Without limitation of the foregoing, each Lender shall reimburse
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including attorney fees and expenses)
Schedule 1, Pg. 89
96
incurred by Agent in connection with the preparation, execution, delivery,
administration, modification, amendment, or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that Agent is
not reimbursed for such expenses by or on behalf of Borrower. The undertaking in
this Section 17.7 shall survive the payment of all Obligations hereunder and the
resignation or replacement of Agent.
17.8 AGENT IN INDIVIDUAL CAPACITY. Foothill and its Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests, in and generally engage in any kind of banking,
trust, financial advisory, underwriting, or other business with Borrower and its
Subsidiaries and Affiliates and any other Person party to any Loan Documents as
though Foothill was not the Agent hereunder without notice to or consent of the
Lenders. The Lenders acknowledge that, pursuant to such activities, Foothill and
its Affiliates may receive information regarding Borrower or their Affiliates
and any other Person party to any Loan Documents that is subject to
confidentiality obligations in favor of Borrower or such other Person and that
prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver Agent will use its reasonable best
efforts to obtain), Agent shall be under no obligation to provide such
information to them. With respect to the Agent Loans and Agent Advances,
Foothill shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not Agent, and the terms
"Lender" and "Lenders" include Foothill in its individual capacity.
17.9 SUCCESSOR AGENT. Agent may resign as Agent following
notice of such resignation ("Notice") to the Lenders and Borrower, and effective
upon the appointment of and acceptance of such appointment by, a successor
Agent. If Agent resigns under this Agreement, the Required Lenders with the
consent of Borrower (not to be unreasonably delayed or withheld) shall appoint
any Lender or Eligible Transferee as successor Agent for the Lenders. In any
such event, upon the acceptance of its appointment as successor Agent hereunder,
such successor Agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor Agent and the
retiring Agent's appointment, powers, and duties as Agent shall be terminated.
After the retiring Agent's resignation hereunder as the Agent, the provisions of
this Section 17 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was the Agent under this Agreement.
17.10 WITHHOLDING TAX. If the IRS or any other Governmental
Authority of the United States or other jurisdiction asserts a claim that Agent
or Borrower did not properly withhold tax from amounts paid to or for the
account of any Lender (because the appropriate form was not delivered, was not
properly executed, or because such Lender failed to notify Agent and Borrower of
a change in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Lender shall
indemnify Agent and Borrower fully for all amounts paid, directly or indirectly,
by Agent or Borrower as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to Agent
or Borrower under this Section, together with all costs and expenses (including
attorneys fees and expenses). The obligation of the Lenders under this
subsection shall survive the payment of all Obligations and the resignation of
Agent.
Schedule 1, Pg. 90
97
17.11 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize Agent to
release any Lien on any Collateral (i) upon the termination of the Commitments,
the payment and satisfaction in full by Borrower of all non-contingent
Obligations, and the satisfaction of all obligations of the Lender Group under
outstanding Letters of Credit pursuant to Section 2.2(e) and upon such
termination and payment Agent shall deliver to Borrower, at Borrower's sole cost
and expense, all UCC termination statements and any other documents necessary to
terminate the Loan Documents and release the Liens with respect to the
Collateral; (ii) which is the subject of an Asset Sale permitted by Section 7.4
or is a disposition of an asset which does not constitute an Asset Sale and if
Borrower so certifies such facts to Agent (and Agent may rely conclusively on
any such certificate, without further inquiry); (iii) constituting property in
which Borrower owned no interest at the time the Lien was granted or at any time
thereafter; (iv) constituting property leased to Borrower under a lease that has
expired or been terminated in a transaction permitted under this Agreement; (v)
constituting a parcel of non-Core Real Property Collateral, with a book value of
less than $250,000, if such parcel is located in an SFHA, upon the exercise of
the Agent's discretion, or at the request of any Lender to comply with
applicable regulatory requirements; or (vi) upon the exercise of the Agent's
discretion, but the aggregate book value of all such Collateral released under
this clause (v) shall not exceed $5,000,000. Except as provided above, Agent
will not release any Lien on any Collateral without the prior written
authorization of the Lenders. Upon request by Agent or Borrower at any time, the
Lenders will confirm in writing Agent's authority to release any such Liens on
particular types or items of Collateral pursuant to this Section 17.11;
provided, however, that (y) Agent shall not be required to execute any document
necessary to evidence such release on terms that, in Agent's opinion, would
expose Agent to liability or create any obligation or entail any consequence
other than the release of such Lien without recourse, representation, or
warranty, and (z) such release shall not in any manner discharge, affect or
impair the Obligations or any Liens (other than those expressly being released)
upon, or obligations of Borrower in respect of, all interests retained by
Borrower, including the proceeds of any sale, all of which shall continue to
constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any
of the Lenders to assure that the Collateral exists or is owned by Borrower, is
cared for, protected, or insured or has been encumbered, or that the Liens of
the Agent (for the benefit of the Lender Group) have been properly or
sufficiently or lawfully created, perfected, protected, or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure, or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
Agent pursuant to any of the Loan Documents, it being understood and agreed that
in respect of the Collateral, or any act, omission or event related thereto,
subject to the terms and conditions contained herein, Agent may act in any
manner it may deem commercially reasonable, in its sole discretion given Agent's
own interest in the Collateral in its capacity as one of the Lenders and that
Agent shall have no other duty or liability whatsoever to any Lender as to any
of the foregoing, except as otherwise provided herein.
(c) Agent shall exercise all rights and remedies
afforded the Lender Group hereunder with respect to the Collateral, with the
advice and assistance of the Lenders. Agent may in its own name or through the
formation of one or more business entities
Schedule 1, Pg. 91
98
("Nominee"), own or manage any Collateral acquired as a result of "bidding in"
at a foreclosure sale or similar disposition or obtained through a deed in lieu
or the like ("Post-Foreclosure Property"). Agent shall manage any such Nominee,
and manage and dispose of any such Post-Foreclosure Property with a view towards
the realization of the economic benefits of the ownership of the same, and in
such regard the Agent or such Nominee may operate, repair, manage, maintain,
develop, and dispose of any such Post-Foreclosure Collateral as the Agent
determines is appropriate under the circumstances. Agent, and any such Nominee,
with respect to the conduct of such liquidation and management of such
Post-Foreclosure Collateral shall have all of the rights, powers, privileges,
discretions, and immunities granted to the Agent hereunder. Each Lender shall
execute all such instruments and documents as the Agent or such Nominee may
request with respect to the creation and governance of any Nominee, the exercise
of the Lender Group's rights and remedies, and the disposition of any
Post-Foreclosure Collateral.
17.12 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not,
without the express consent of Agent, and that it shall, to the extent it is
lawfully entitled to do so, upon the request of Agent, set-off against the
Obligations any amounts owing by such Lender to Borrower or any accounts of
Borrower now or hereafter maintained with such Lender. Each of the Lenders
further agrees that it shall not, unless specifically requested to do so by
Agent, take or cause to be taken any action, including the commencement of any
legal or equitable proceedings, to foreclose any Lien on, or otherwise enforce
any security interest in, any of the Collateral the purpose of which is, or
could be, to give such Lender any preference or priority against the other
Lenders with respect to the Collateral.
(b) Subject to Section 17.8, if, at any time or times
any Lender shall receive (i) by payment, foreclosure, set-off, or otherwise, any
proceeds of Collateral or any payments with respect to the Obligations of
Borrower to such Lender arising under, or relating to, this Agreement or the
other Loan Documents, except for any such proceeds or payments received by such
Lender from Agent pursuant to the terms of this Agreement, or (ii) payments from
Agent in excess of such Lender's Pro-Rata Share of all such distributions by
Agent, such Lender shall promptly (1) turn the same over to Agent, in kind, and
with such endorsements as may be required to negotiate the same to Agent, or in
same day funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (2) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other Lenders so that
such excess payment received shall be applied ratably as among the Lenders in
accordance with their Pro-Rata Shares; provided, however, that if all or part of
such excess payment received by the purchasing party is thereafter recovered
from it, those purchases of participation shall be rescinded in whole or in
part, as applicable, and the applicable portion of the purchase price paid
therefor shall be returned to such purchasing party, but without interest except
to the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
17.13 AGENCY FOR PERFECTION. Agent and each Lender hereby
appoints each other Lender as agent for the purpose of perfecting the Liens of
the Lender Group in assets
Schedule 1, Xx. 00
00
which, in accordance with Division 9 of the UCC can be perfected only by
possession. Should any Lender obtain possession of any such Collateral, such
Lender shall notify Agent thereof, and, promptly upon Agent's request therefor
shall deliver such Collateral to Agent or in accordance with Agent's
instructions.
17.14 PAYMENTS BY AGENT TO THE LENDERS. All payments to be
made by Agent to the Lenders shall be made by bank wire transfer or internal
transfer of immediately available funds pursuant to the instructions set forth
on Schedule C-1, or pursuant to such other wire transfer instructions as each
party may designate for itself by written notice to Agent. Concurrently with
each such payment, Agent shall identify whether such payment (or any portion
thereof) represents principal, premium or interest on revolving advances or
otherwise.
17.15 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS.
Each member of the Lender Group authorizes and directs Agent to enter into this
Agreement and the other Loan Documents relating to the Collateral, for the
ratable benefit (subject to Section 4.1) of the Lender Group. Each member of the
Lender Group agrees that any action taken by Agent, Required Lenders, or all
Lenders, as applicable, in accordance with the terms of this Agreement or the
other Loan Documents relating to the Collateral and the exercise by Agent,
Required Lenders, or all Lenders, as applicable, of their respective powers set
forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.
17.16 FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY;
DISCLAIMERS BY LENDERS; OTHER REPORTS AND Information. By signing this
Agreement, each Lender;
(a) is deemed to have requested that Agent furnish
such Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by
Agent, and Agent shall so furnish each Lender with such Reports;
(b) expressly agrees and acknowledges that Agent (i)
does not make any representation or warranty as to the accuracy of any Report,
and (ii) shall not be liable for any information contained in any Report;
(c) expressly agrees and acknowledges that the
Reports are not comprehensive audits or examinations, that Agent or other party
performing any audit or examination will inspect only specific information
regarding Borrower and will rely significantly upon Borrower's books and
records, as well as on representations of Borrower's personnel;
(d) agrees to keep all Reports and other material
information obtained by it pursuant to the requirements of this Agreement in
accordance with its reasonable customary procedures for handling confidential
information and in accordance with Section 18.8; and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold Agent
and any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to Borrower,
Schedule 1, Pg. 93
100
or the indemnifying Lender's participation in, or the indemnifying Lender's
purchase of, a loan or loans of Borrower; and (ii) to pay and protect, and
indemnify, defend, and hold Agent and any such other Lender preparing a Report
harmless from and against, the claims, actions, proceedings, damages, costs,
expenses and other amounts (including, attorney costs) incurred by Agent and any
such other Lender preparing a Report as the direct or indirect result of any
third parties who might obtain all or part of any Report through the
indemnifying Lender. The obligations of the Lenders in this Section shall
survive the payment of all Obligations hereunder, the resignation of the Agent
and the termination of this Agreement.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrower to Agent, and, upon receipt of such request, Agent
shall provide a copy of same to such Lender promptly upon receipt thereof; (y)
to the extent that Agent is entitled, under any provision of the Loan Documents,
to request additional reports or information from Borrower, any Lender may, from
time to time, reasonably request Agent to exercise such right as specified in
such Lender's notice to Agent, whereupon Agent promptly shall request of
Borrower the additional reports or information specified by such Lender, and,
upon receipt thereof, Agent promptly shall provide a copy of same to such
Lender; and (z) any time that Agent renders to Borrower a statement regarding
the Loan Account, Agent shall send a copy of such statement to each Lender.
17.17 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that
certain of the Loan Documents now or hereafter may have been or will be executed
only by or in favor of Agent in its capacity as such, and not by or in favor of
the Lenders, any and all obligations on the part of Agent (if any) to make any
Advances or issue such Letters of Credit shall constitute the several (and not
joint) obligations of the respective Lenders on a ratable basis, according to
their respective Commitments, to make an amount of such Advances or to
participate in the issuance of such Letters of Credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in Section 17.7, no member of the Lender Group shall
have any liability for the acts of any other member of the Lender Group. No
Lender shall be responsible to Borrower or any other Person for any failure by
any other Lender to fulfill its obligations to make Advances, nor to advance for
it or on its behalf in connection with its Commitment, nor to take any other
action on its behalf hereunder or in connection with the financing contemplated
herein.
18. GENERAL PROVISIONS.
18.1 EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by Borrower and the Lender Group.
18.2 SECTION HEADINGS. Headings and numbers have been set
forth herein for convenience only. Unless the contrary is compelled by the
context, everything contained in each section applies equally to this entire
Agreement.
Schedule 1, Pg. 94
101
18.3 INTERPRETATION. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved against the
Lender Group or Borrower, whether under any rule of construction or otherwise.
On the contrary, this Agreement has been reviewed by all parties and shall be
construed and interpreted according to the ordinary meaning of the words used so
as to fairly accomplish the purposes and intentions of all parties hereto.
18.4 SEVERABILITY OF PROVISIONS. Each provision of this
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.
18.5 COUNTERPARTS; TELEFACSIMILE EXECUTION. Any of the Loan
Documents may be executed in any number of counterparts and by different parties
on separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall
constitute but one and the same respective agreement. Delivery of an executed
counterpart of such Agreements by telefacsimile shall be equally as effective as
delivery of an original executed counterpart of such Agreements. Any party
delivering an executed counterpart of such Agreements by telefacsimile also
shall deliver an original executed counterpart of such Agreements but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of such Agreements.
18.6 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the
incurrence or payment of the Obligations by Borrower or any Guarantor of the
Obligations or the transfer by any or all of such parties to the Agent or the
other members of the Lender Group of any property of either or both of such
parties should for any reason subsequently be declared to be void or voidable
under any state or federal law relating to creditors' rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, and other voidable or recoverable payments of money or transfers of
property (collectively, a "Voidable Transfer"), and if the Agent or the other
members of the Lender Group are required to repay or restore, in whole or in
part, any such Voidable Transfer, or elect to do so upon the reasonable advice
of their counsel, then, as to any such Voidable Transfer, or the amount thereof
that the Agent or the other members of the Lender Group are required or elect to
repay or restore, and as to all reasonable costs, expenses, and attorneys fees
of the Lender Group related thereto, the liability of Borrower or such Guarantor
automatically shall be revived, reinstated, and restored and shall exist as
though such Voidable Transfer had never been made.
18.7 INTEGRATION. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
18.8 CONFIDENTIALITY.
(a) Subject to the provisions of clause (b) of this
Section 18.8, each member of the Lender Group (a "Recipient") agrees that it
will use its best efforts not to disclose without the prior consent of Borrower
(other than to its employees, authorities, advisors or counsel, provided,
however, that such Persons shall be subject to the provisions of this Section
18.8 to the same extent as such Recipient) any information with respect to
Borrower or
Schedule 1, Pg. 95
102
any of its Subsidiaries which is now or in the future furnished pursuant to this
Agreement or any other Loan Document and which is designated by Borrower to such
Recipient in writing as confidential, provided, however, that such Recipient may
disclose any such information (i) as has become generally available to the
public, (ii) as may be required or appropriate in any report, statement or
testimony submitted to any municipal, state, or Federal regulatory body having
or claiming to have jurisdiction over such Recipient, (iii) as may be required
or appropriate in respect to any summons or subpoena or in connection with any
litigation, (iv) in order to comply with any law, order, regulation or ruling
applicable to such Recipient, (v) to any prospective or actual transferee or
Participant in connection with any contemplated transfer or participation of
this Agreement, the Obligations, or any interest therein by such Recipient,
provided, however, that such prospective transferee or Participant executes an
agreement with such Recipient substantially the same as Schedule 18.8, and (vi)
as may be reasonably required in connection with the Lender Group's enforcement
of this Agreement or the other Loan Documents against Borrower or any Guarantor.
(b) Borrower hereby acknowledges and agrees that each
Recipient may share with any of its affiliates any information related to
Borrower or any of its Subsidiaries (including, without limitation, any
nonpublic customer information regarding the creditworthiness of Borrower and
its Subsidiaries), provided such Persons shall be subject to the provisions of
this Section 18.8 to the same extent as such Recipient.
18.9 SURVIVAL OF INDEMNIFICATION OBLIGATIONS. All of the
indemnification Obligations of Borrower under this Agreement or any of the other
Loan Documents, including, but not limited to, Sections 2.2(b), 2.17, and 11.3,
shall survive the payment of all other Obligations hereunder and the termination
of this Agreement; provided, however, that where so specified herein such
indemnification may be limited to a period of nine months after termination of
this Agreement.
18.10 CONFLICTING TERMS. Notwithstanding anything to the
contrary provided herein, in the Mortgages or in any other Loan Document, if any
provision of the Mortgages or any other Loan Document contradicts a provision in
this Agreement, the provisions of this Agreement shall control.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
Schedule 1, Pg. 96
103
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in Los Angeles, California.
GREYHOUND LINES, INC.,
a Delaware corporation
By
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Title:
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FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent, and
as a Lender
By
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Title:
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Schedule 1, Pg. 97
