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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report: July 14, 1995
XTRA Corporation
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(Exact name of registrant as specified in its charter)
Delaware 1-7654 06-0954158
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State of incorporation (Commission (IRS Employer
of organization File Number) Identification No.)
60 State Street, Boston, MA 02109
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(Address of principal executive offices) Zip Code
Registrant's telephone number including area code: (617) 367-5000
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N/A
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(Former name or former address, if changed since last report)
Exhibit index appears on numbered page 5.
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Item 2. Acquisition of Assets
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On June 30, 1995, XTRA Corporation ("the Company") acquired certain of the
assets and assumed certain of the liabilities of Matson Leasing Company, Inc.
("Matson"), a wholly-owned subsidiary of Alexander & Baldwin, Inc. The total
consideration paid, all cash, amounted to approximately $360 million.
Matson is a major lessor of marine containers. Matson's assets at June 30,
1995 consist primarily of a fleet of approximately 170,000 twenty-foot
equivalent units and revenues for the twelve months ended December 31, 1994
were approximately $64 million.
In connection with the acquisition, the Company's two revolving credit
agreements were replaced with a new $590 million term loan and revolving
credit agreement with an expanded bank group as identified in the Credit
Agreement dated as of June 30, 1995, filed as Exhibit 2.2 to this Current
Report on Form 8-K. The Company used approximately $160 million of the new
revolver commitments to replace the borrowings committed under the previous
revolving credit agreement and approximately $360 million to finance the
acquisition. After giving effect to the acquisition, the Company, as of
June 30, 1995, had approximately $70 million of unused commitment available
under the Credit Agreement.
2
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Item 7. Financial Statements
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Information required for this item has been reported on a previous Form 8-K
filed by the Company on June 20, 1995.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
XTRA Corporation
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(Registrant)
Date: July 14, 1995 /s/ Michael J. Soja
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Michael J. Soja
Vice President and
Chief Financial Officer
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Exhibit Index
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Exhibit No. Description
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2.1 Asset Purchase Agreement among XTRA Inc. and Matson
Navigation Company, Inc., and Matson Leasing Company, Inc. -
Dated June 30, 1995
2.2 Credit Agreement - Dated as of June 30, 1995 Among XTRA Inc.,
Bank of America Illinois and Each of the Other Financial
Institutions From Time to Time Parties Hereto, with Bank
of America National Trust and Savings Association as
Administrative Agent and The First National Bank of Boston
as Documentation Agent
2.3 Guaranty - dated June 30, 1995 by XTRA Corporation
2.4 Guaranty - dated June 30, 1995 by XTRA Missouri Inc.
5
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Exhibit 2.1
Asset Purchase Agreement
among
XTRA, Inc.
and
Matson Navigation Company, Inc., and
Matson Leasing Company, Inc.
dated
June 30, 1995
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<TABLE>
ASSET PURCHASE AGREEMENT
INDEX
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Page
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ARTICLE I
PURCHASE AND SALE OF ASSETS AND RELATED TRANSACTIONS ....................... 1
1.01. Definitions. ....................................................... 1
1.02. Purchase and Sale of Sale Assets; Assumption of Liabilities. ....... 9
1.03. Consideration. ..................................................... 10
1.04. Assignment and Assumptions of Contracts. ........................... 10
1.05. Closing ............................................................ 10
1.06. Matson Trademarks and Trade Names .................................. 11
1.07. Adjustments to Consideration ....................................... 12
1.07(a) Preparation of Consolidated Statement of Net Assets. ............. 12
1.07(b) Adjustments Resulting From The Consolidated
Statements of Net Assets. .......................................... 13
1.08. Accounts Receivable Proceeds ....................................... 13
1.09. Further Assurances ................................................. 14
1.10. CAVN and Jeuro Leases and Containers. .............................. 14
1.11. Termination of Intercompany Arrangements. .......................... 14
ARTICLE II
RELATED MATTERS ........................................................... 15
2.01. Confidentiality. ................................................... 15
2.02. Access to Books and Records. ....................................... 15
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS ............................. 16
3.01. Corporate Organization, Etc ........................................ 16
3.02. Authorization, Etc. ................................................ 17
3.03. No Violation. ...................................................... 17
3.04. Financial Statements ............................................... 17
3.05. Interim Operations. ................................................ 18
3.06. Title to Properties; Encumbrances .................................. 19
3.07. Contracts and Leases ............................................... 20
3.08. Litigation. ........................................................ 20
3.09. Consents and Approvals of Governmental Authorities ................. 20
3.10. Consents ........................................................... 21
3.11. Compliance with Law ................................................ 21
</TABLE>
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<TABLE>
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3.12. Good Title Conveyed ................................................. 21
3.13. Brokers and Finders ................................................. 22
3.14. Insider Interests ................................................... 22
3.15. Insurance ........................................................... 22
3.16. Environmental Matters, Etc. ......................................... 22
3.17. Employees. .......................................................... 24
3.18. Employee Benefits; ERISA. ........................................... 24
3.19. Taxes. .............................................................. 24
3.20. Prohibited Foreign Trade Practices Act; Sensitive Payments .......... 25
3.21. Subsidiaries ........................................................ 25
3.22. Condition of Containers. ............................................ 26
3.23. Purchase Option; Operating Lease Agreements. ........................ 26
3.24. Software; Intellectual Property ..................................... 27
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR ....................................... 27
4.01. Corporate Organization .............................................. 27
4.02. Authorization, Etc. ................................................. 27
4.03. No Violation. ....................................................... 28
4.04. Consents and Approvals of Governmental Authorities. ................. 28
4.05. Litigation .......................................................... 28
4.06. Consents ............................................................ 28
4.07. Brokers and Finders ................................................. 28
4.08. Availability of Funds. .............................................. 28
ARTICLE V
COVENANTS OF THE SELLERS ........................................................ 29
5.01. Full Access. ........................................................ 29
5.02. Consents ............................................................ 29
5.03. Supplements to Company Disclosure Schedule .......................... 29
5.04. Covenant to Satisfy Conditions ...................................... 29
5.05. Certificates ........................................................ 30
5.06. HSR Act Filings ..................................................... 30
5.07. Container Acquisitions .............................................. 30
5.08. Insurance. .......................................................... 30
ARTICLE VI
COVENANTS OF ACQUIROR .......................................................... 30
</TABLE>
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<TABLE>
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6.01. Supplements to Acquiror Disclosure Schedule. ........................ 30
6.02. Covenant to Satisfy Conditions ...................................... 31
6.03. Certificates ........................................................ 31
6.04. HSR Act Filings ..................................................... 31
6.05. Consents ............................................................ 31
6.06. Other Agreements .................................................... 31
6.07. Substitute Letters of Credit. ....................................... 31
6.08. Insurance. .......................................................... 31
6.09. Post Closing Financial Statements. .................................. 32
6.10. Performance of Certain Obligations by Acquiror After Closing Date. .. 32
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF THE SELLERS ..................................... 32
7.01. Representations and Warranties True ................................. 32
7.02. Performance. ........................................................ 33
7.03. HSR Act Waiting Periods; No Governmental Proceeding or Litigation.... 33
7.04. No Litigation ....................................................... 33
7.05. Certificates ........................................................ 33
7.06. Opinion of Acquiror's Counsel ....................................... 33
7.07. Consents Obtained. .................................................. 33
7.08. Other Agreements .................................................... 33
7.09. Opinion of Morgan, Lewis & Bockius. ................................ 33
7.10. Release of Letters of Credit. ....................................... 33
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF ACQUIROR ............................................ 34
8.01. Representations and Warranties True ................................. 34
8.02. Performance ......................................................... 34
8.03. HSR Act Waiting Periods; No Governmental Proceeding or Litigation.... 34
8.04. No Litigation ....................................................... 34
8.05. Opinion of the Sellers' Counsel. .................................... 34
8.06. Consents Obtained ................................................... 35
8.07. Other Agreements .................................................... 35
8.08. Opinion of Morgan, Lewis & Bockius. ................................. 35
8.09. FIRPTA Certificate. ................................................. 35
ARTICLE IX
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<TABLE>
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[INTENTIONALLY OMITTED]
ARTICLE X
EMPLOYEES .......................................................................... 35
10.01. Offer of Employment. ................................................. 36
10.02. Sellers' Obligations. ................................................ 36
10.03. Cooperation. ......................................................... 36
10.04. Non-solicitation. .................................................... 36
ARTICLE XI
SURVIVAL OF REPRESENTATIONS ANDWARRANTIES; INDEMNIFICATION;
ARBITRATION ....................................................................... 37
11.01. Survival of Representations and Warranties. .......................... 37
11.02. Statements as to Representations...................................... 37
11.03. Agreement to Indemnify by the Sellers. ............................... 37
11.04. Agreement to Indemnify by Acquiror. .................................. 38
11.05. Procedures Relating to Indemnifications. ............................. 39
11.06. Losses Net of Insurance, etc. ........................................ 40
11.07. Tax Matters. ......................................................... 41
11.08. Arbitration. ......................................................... 43
ARTICLE XII
TERMINATION AND ABANDONMENT ........................................................ 44
12.01. Methods of Termination. .............................................. 44
12.02. Procedure upon Termination ........................................... 44
ARTICLE XIII
MISCELLANEOUS PROVISIONS ........................................................... 44
13.01. Amendment and Modification. .......................................... 44
13.02. Waiver of Compliance. ................................................ 45
13.03. Expenses; Transfer Taxes. ............................................ 45
13.04. Notices .............................................................. 45
13.05. Assignment. .......................................................... 47
13.06. Publicity. ........................................................... 47
13.07. Governing Law. ....................................................... 47
13.08. Counterparts. ........................................................ 47
</TABLE>
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13.09. Headings. ............................................................. 47
13.10. Entire Agreement. ..................................................... 47
13.11. Third Parties. ........................................................ 47
13.12. Bulk Transfers ........................................................ 48
</TABLE>
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<TABLE>
INDEX TO EXHIBITS
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Heading Tab
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<S> <C>
Sale Assets........................................................... A
Assumed Liabilities................................................... B
Assignment and Assumption of Agency Agreements........................ C
Assignment and Assumption of Container Leases......................... D
Assignment and Assumption of Container Purchase Commitments........... E
Assignment and Assumption of Depot Agreements......................... F
Assignment and Assumption of Employment Agreements.................... G
Assignment and Assumption of Miscellaneous Commitments................ H
Assignment and Assumption of Property and Office Leases............... I
[Omitted]............................................................. J
Branches.............................................................. K-1
Subsidiaries.......................................................... K-2
MNC Subsidiaries...................................................... K-3
Intellectual Property License and Assignment Agreement................ L
Non-Competition Agreement............................................. M
Operating Lease Assignment and Assumption Agreement................... N
[Omitted]............................................................. O
Transition Agreement.................................................. P
Bill of Sale.......................................................... Q
Consolidated Statement of Net Assets (As of 3/31/95).................. R
</TABLE>
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<TABLE>
<S> <C>
Opinion of Ropes & Gray.................................S
Opinion of Morgan, Lewis & Bockius......................T
Opinion of Gibson, Dunn & Crutcher......................U
Software Transfer Agreement.............................V
Office Sublease.........................................W
Opinion of James R. Lajoie..............................X
Opinion of Kevin C. O'Rourke............................Y
</TABLE>
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated June 30, 1995 among Matson Leasing Company,
Inc., a Hawaii corporation, Matson Navigation Company, Inc., a Hawaii
corporation, and XTRA, Inc., a Maine corporation.
This Agreement sets forth the terms and conditions upon which Matson
Leasing Company, Inc. and Matson Navigation Company, Inc. will sell certain
assets to XTRA, Inc. and/or other entities designated by XTRA, Inc., and XTRA,
Inc. and/or such other entities designated by XTRA, Inc. will purchase such
assets as hereinafter set forth.
In consideration of the mutual agreements contained herein, intending to
be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS AND RELATED TRANSACTIONS
1.01. DEFINITIONS. For purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Acquiror" means XTRA, Inc., a corporation formed under the laws of the
State of Maine.
"Acquiror Entities" shall mean XTRA International, XTRA Intermodal and
XTRA Lease.
"Affiliate" and "Associate" have the meanings prescribed by Rule 12b-2 of
the regulations promulgated pursuant to the Securities Exchange Act.
"Agency Agreements" means the agency agreements all as set forth on Part
VII of Exhibit A.
"Agreement" means this agreement and all amendments made hereto by written
agreement between the Sellers and the Acquiror, including all Schedules and
Exhibits attached hereto.
"Assignment and Assumption Agreements" means the Assignment and Assumption
of Agency Agreements, the Assignment and Assumption of Container Leases, the
Assignment and Assumption of Container Purchase Commitments, the Assignment and
Assumption of Depot Agreements, the Assignment and Assumption of Employment
Agreements, the Assignment and Assumption of Miscellaneous Commitments, the
Assignment and Assumption of Property and Office Leases, the Software Transfer
Agreement and the Operating Lease Assignment and Assumption.
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"Assignment and Assumption of Agency Agreements" means the assignment and
assumption of Agency Agreements substantially in the form attached hereto as
Exhibit C delivered by the Company and Acquiror pursuant to Section
1.05(a)(I)(iii) and 1.05(b)(i) of the Agreement.
"Assignment and Assumption of Container Leases" means the assignment and
assumption of the Container Leases substantially in the form attached hereto as
Exhibit D delivered by the Company, MNC, MNC Subsidiaries, Acquiror and the
Acquiror Entities pursuant to Sections 1.05(a)(I)(iii), 1.05(a)(II)(ii),
1.05(a)(III) and 1.05(b)(i) of this Agreement.
"Assignment and Assumption of Container Purchase Commitments" means the
assignment and assumption of the Container Purchase Commitments substantially
in the form attached hereto as Exhibit E delivered by the Company and the
Acquiror pursuant to Sections 1.05(a)(I)(iii) and 1.05(b)(i) of this Agreement.
"Assignment and Assumption of Depot Agreements" means the assignment and
assumption of Depot Agreements substantially in the form attached hereto as
Exhibit F delivered by the Company and Acquiror pursuant to Section
1.05(a)(I)(iii) and 1.05(b)(i) of the Agreement.
"Assignment and Assumption of Employment Agreements" means the assignment
and assumption of the Employment Agreements substantially in the form attached
hereto as Exhibit G delivered by the Company and Acquiror pursuant to Sections
1.05(a)(I)(iii) and 1.05(b)(i) of the Agreement.
"Assignment and Assumption of Miscellaneous Commitments" means the
assignment and assumption of the Miscellaneous Commitments substantially in the
form attached hereto as Exhibit H delivered by the Company and Acquiror
pursuant to Sections 1.05(a)(I)(iii) and 1.05(b)(i) of the Agreement.
"Assignment and Assumption of Property and Office Leases" means an
assignment and assumption of the property and office leases substantially in
the forms attached hereto as Exhibit I delivered by each of the Company and
Acquiror pursuant to Section 1.05(a)(I)(iii) and 1.05(b)(i) of this Agreement.
"Assumed Liabilities" means the liabilities being assumed by Acquiror
pursuant to this Agreement, all as listed and described on Exhibit B.
"Benefit Arrangement" means any benefit arrangement that is not a Plan,
including (i) each employment or consulting agreement, (ii) each incentive
bonus or deferred bonus arrangement, (iii) each arrangement providing
termination allowance, severance or similar benefits, (iv) each equity
compensation plan, (v) each deferred compensation plan, (vi) each individual
insurance arrangement, and (vii) each compensation policy and practice
maintained by
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the Company or any ERISA Affiliate covering the employees, former
employees, directors and former directors of the Company or its ERISA
Affiliates, and the beneficiaries of any of them.
"Bill of Sale" means the bills of sale in the form attached hereto as
Exhibit Q-1 and Q-2 and delivered by the Company pursuant to Section
1.05(a)(I)(i).
"Branches" means branches of the Company all as set forth on Exhibit K-1
of the Agreement.
"CAVN" means Compania Anonima Venezolana de Navegacion, a Venezuelan
entity.
"CAVN and Jeuro Operating Leases" means the Operating Leases between the
Company and CAVN and Jeuro, respectively.
"Closing" means the closing referred to in Section 1.05 of this Agreement.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Matson Leasing Company, Inc., a corporation formed under
the laws of the State of Hawaii.
"Company Disclosure Schedule" means the document delivered by the Sellers
to Acquiror simultaneously with the execution hereof containing the information
required to be included therein pursuant to this Agreement.
"Consolidated Statement of Net Assets" means a consolidated statement of
net assets of the Company and its subsidiaries which shall be prepared on the
basis of generally accepted accounting principles applied on a consistent basis
with the preparation of the Audited Financial Statements (as defined in Section
3.04) except with respect to the specific items for which a methodology has
been established and set forth on Exhibit R. The Consolidated Statement of Net
Assets shall include all of the Sale Assets and Assumed Liabilities for which
amounts are properly reflected on a balance sheet, but shall not include (I)
any accrued payroll or vacation liabilities of the Subsidiaries referred to in
Section 10.02, or (II) any reserves expressly related to any Excluded Asset;
provided that no adjustment to the maintenance and repair reserve shall be made
as a result of the foregoing clause. Attached as Exhibit R is the Consolidated
Statement of Net Assets of the Company and its subsidiaries as of March 31,
1995.
"Containers" means the marine containers listed and described on Part I of
Exhibit A hereto which are owned or leased-in pursuant to the Container Leases
by the Company and those marine containers acquired by the Company on or after
June 28, 1995 through the Closing Date and which are to be acquired by the
Acquiror pursuant to this Agreement.
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"Container Leases" means the so-called cross-border leases and related
agreements of the Sellers and the MNC Subsidiaries, all as set forth on Part IV
of Exhibit A.
"Container Operations" means the leasing of containers by the Company
and all Subsidiaries of the Company or their agents.
"Container Purchase Commitments" means the container purchase
commitments of the Company all as set forth on Part II of Exhibit A and those
container purchase commitments entered into by the Company on or after June 28,
1995 through the Closing Date in compliance with Section 3.05 or with the prior
written consent of Acquiror or its authorized representatives .
"Depot Agreements" means the depot agreements all as set forth on Part
VII of Exhibit A and those depot agreements entered into by the Company on or
after June 28, 1995 through the Closing Date in compliance with Section 3.05 or
with the prior written consent of Acquiror or its authorized representatives .
"Employment Agreements" means the agreements all as set forth on Part
II of Exhibit B.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Assets" means the following assets of the Company and the
Subsidiaries:
(a) Any contracts or agreements (i) between any Subsidiary, on
the one hand, and the Company or MNC, on the other (including any
intercompany receivables of any Subsidiary due from the Company or
MNC), or (ii) between the Company and MNC (including any intercompany
receivables of the Company due from MNC), other than any Operating
Leases between MNC and the Company and any receivables of the Company
due thereunder;
(b) Any deferred Tax assets or deferred Tax benefits and Group
Tax Sharing arrangements, other than in respect of Taxes of the
Subsidiaries and the Branches;
(c) Any trademarks, tradenames or logos used by the Company or
the Subsidiaries in the Container Operations, including the Names and
the Marks;
(d) The CAVN and Jeuro Operating Leases, any accounts
receivable from CAVN and Jeuro under the CAVN and Jeuro Operating
Leases (net of the related allowance for bad debts), any claims against
CAVN or Jeuro or insurance companies for loss of or damage or repair to
Containers
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leased to CAVN and Jeuro and any claims against insurance companies for
lost revenues under the CAVN and Jeuro Operating Leases;
(e) Any assets of the Company that are segregated or set aside
in any manner for the purpose of providing benefits under any Plan or
any Benefit Arrangements to United States employees;
(f) The Company's minute books, tax returns and other
corporate documents;
(g) Any insurance policies or receivables of the Company and
any pre-paid premiums relating to such policies; and
(h) Any pre-paid expenses or other assets of the Company
arising in connection with the Agreement and the transactions
contemplated hereby.
"Excluded Liabilities" means all liabilities of the Company other than the
Assumed Liabilities, including but not limited to the following liabilities and
obligations of the Company and the Subsidiaries:
(a) Any liabilities or obligations of the Company or
the Subsidiaries to MNC and any liabilities or obligations of the
Subsidiaries to the Company (including any intercompany payables of the
Company due to MNC, or of the Subsidiaries due to the Company or MNC),
other than any obligations of the Company to MNC under any Operating
Leases between the Company and MNC ;
(b) Any liability of the Company for Taxes or deferred Taxes;
(c) Any obligation of the Company to indemnify any person by
reason of the fact that such person was a director, officer, employee
or agent of the Company or its Subsidiaries or was serving at the
request of any such entity as a partner, trustee, director, officer,
employee or other agent of another entity;
(d) Any liability resulting from or arising out of, in the
nature of or caused by any breach of contract, breach of warranty,
tort, infringement, violation or noncompliance with law by the Company;
(e) Any liability of the Company for costs and expenses,
including any severance arrangements, incurred or entered into in
connection
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with this Agreement and the transactions contemplated hereby, other
than Transfer Taxes payable by Acquiror pursuant to Section 13.03;
(f) Any liability for indebtedness for money borrowed,
including any accrued interest thereon;
(g) Any liability of the Company under the Plans or any
Benefit Arrangement in respect of employees, other than (i) any
liabilities under the Employment Agreements listed under Part II of
Exhibit B or (ii) any liabilities for fringe or severance benefits
under the laws of any non-United States jurisdiction.
"Foreign Subsidiaries" means the direct and indirect subsidiaries of
the Company all as set forth on Exhibit K-2 of the Agreement.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Intellectual Property Rights" shall have the meaning defined in the
Software Transfer Agreement.
"Jeuro" means Jeuro, Inc., a Japanese entity.
"knowledge" when used in any representation or warranty of the Sellers
or Acquiror, means actual knowledge of the officers of the Sellers, or the
Acquiror, as applicable, without any obligation on their part to investigate
the accuracy of the representation.
"License Agreement" means the Intellectual Property License and
Assignment Agreement in the form attached hereto as Exhibit L described in
Section 1.06 hereof and delivered by the Sellers and Acquiror pursuant to
Sections 1.05(a)(I)(iii), 1.05(a)(II)(ii) and 1.05(b)(i), respectively.
"Miscellaneous Commitments" means the contracts, commitments,
agreements and obligations of the Company other than the Container Leases, the
Container Purchase Commitments, the Operating Leases, the Property and Office
Leases, the Employment Agreements, the Agency Agreements, the Software
Agreements and the Depot Agreements.
"MNC" means Matson Navigation Company, Inc., a corporation formed under
the laws of the State of Hawaii.
"MNC Subsidiaries" means those direct or indirect subsidiaries of MNC
(other than the Company) which are parties to any of the Container Leases all
as listed and set forth on Exhibit K-3.
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"Net Assets" means the assets shown on the Consolidated Statement of Net
Assets less the liabilities shown on the Consolidated Statement of Net Assets.
"Non-Competition Agreement" means the Non-Competition Agreement in the
form attached hereto as Exhibit M delivered by the Sellers, Alexander &
Baldwin, Inc. and Acquiror pursuant to Sections 1.05(a)(I)(iii),
1.05(a)(II)(ii) and 1.05(b)(i), respectively.
"Office Sublease" means the sublease of certain office space in San
Francisco, California in the form attached hereto as Exhibit W delivered by MNC
and Acquiror pursuant to Section 1.05(a)(II)(ii) and 1.05(b)(i) of this
Agreement.
"Operating Leases" means the per diem, master service and term leases
(including those with container purchase options) to customers related to the
Containers, all as set forth on Part III of Exhibit A and those per diem,
master service and term leases entered into by the Company after June 28, 1995
through the Closing Date in compliance with Sections 3.05 or with the prior
written consent of Acquiror or its authorized representatives.
"Operating Lease Assignment and Assumption" means the assignment and
assumption of the Operating Leases substantially in the form attached hereto as
Exhibit N delivered by the Company and the Acquiror pursuant to Sections
1.05(a)(I)(iii) and 1.05(b)(i) of this Agreement.
"Permitted Liens" means (i) minor imperfections of title, if any, which
are insubstantial in amount, and which do not materially detract from the value
or impair the use of the Sale Assets and which have arisen only in the ordinary
course of business and consistent with past practice, (ii) materialmen's,
mechanics', carriers', workmen's, repairmen's or other similar liens arising in
the ordinary course of business and not yet subject to foreclosure, (iii) any
lien for current Taxes not yet due, (iv) possessory liens on Containers held by
depots at which Containers are located pursuant to Depot Agreements to the
extent not yet choate, (v) any rights of any third parties in the Containers
pursuant to the Container Leases, and (vi) the purchase options listed in
Section 3.23 of the Company Disclosure Schedule.
"PICC" means Pacific International Container Corporation, a corporation
formed under the laws of the State of Hawaii.
"Plan" means any employee benefit plan, as defined in Section 3(3) of
ERISA, sponsored or contributed to by the Company covering its employees or
former employees.
"Property and Office Leases" means the leases and subleases related to
office space and other property, all as set forth on Part VI of Exhibit A and
those leases and subleases related to office space and other property entered
into by the Company on and after June 28, 1995 through the Closing Date in
compliance with Sections 3.05 or with the prior written consent of Acquiror or
its authorized representatives.
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"Sale Assets" means the assets being purchased pursuant to this Agreement,
all as listed and described on Exhibit A.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Sellers" means the Company and MNC.
"Sellers Group" is defined in the definition of Tax.
"Software" shall have the meaning defined in the Software Transfer
Agreement.
"Software Agreements" means the software agreements set forth on Part VIII
of Exhibit A.
"Software Transfer Agreement" means the agreement between the Sellers and
Acquiror substantially in the form attached hereto as Exhibit V delivered by
the Sellers and the Acquiror pursuant to Section 1.05(a)(I)(iii), Section
1.05(a)(II)(ii) and Section 1.05(b)(i).
"Subsidiaries" means PICC and the Foreign Subsidiaries.
"Tax" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code section 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property,
sales, use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever or any obligation to contribute
to the payment of Taxes determined on a consolidated, combined or unitary basis
with respect to a group of corporations that includes the Sellers and the
Subsidiaries (the "Sellers Group"), including any interest, penalty, or
addition thereto.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Transfer Taxes" shall have the meaning set forth in Section 13.03.
"Transition Agreement" means the Transition Agreement in the form attached
hereto as Exhibit P.
"XTRA Intermodal" means XTRA Intermodal, Inc., a corporation formed under
the laws of the State of Delaware and a wholly-owned subsidiary of Acquiror.
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<PAGE> 17
"XTRA International" means XTRA International Ltd., a corporation formed
under the laws of the State of Delaware and a wholly-owned subsidiary of
Acquiror.
"XTRA Lease" means XTRA Lease, Inc., a corporation formed under the laws
of the State of Delaware and a wholly-owned subsidiary of Acquiror.
Certain terms used principally in Section 1.07 of this Agreement are
defined in that Section. The plural of any defined term shall have a meaning
correlative to such defined term.
1.02. PURCHASE AND SALE OF SALE ASSETS; ASSUMPTION OF LIABILITIES.
Subject to the terms and conditions of this Agreement, at the Closing:
(a) The Sellers will sell, transfer, convey, assign and
deliver to Acquiror and/or other entities designated by Acquiror, and
Acquiror and/or such other entities designated by Acquiror shall purchase,
acquire and accept from the Sellers, the Sellers' right, title and
interest in and to all of the Sale Assets (subject to the Permitted
Liens). It is the intent of the parties that Exhibit A shall include all
of the June 28, 1995, including, among other things, all of the marine
containers owned or leased by the Company as of June 28, 1995. The
Company will prepare and present not later than two business days prior to
the Closing an Exhibit A listing all Containers as of such date and which
separately reflects containers added or deleted since March 31, 1995 (the
"Exhibit A"). To the extent that any of the Company's marine containers
do not appear on Exhibit A hereto but are discovered after the Closing
Date, and to the extent that the sale of such containers is not otherwise
provided for herein, the Company hereby agrees to sell and the Acquiror
agrees to purchase such marine containers at a price (the "Repurchase
Price") equal to the original purchase price of any such containers less
depreciation to (i) the Closing Date, if Acquiror had use or possession of
such container as of the Closing, or (ii) the date of purchase of such
container by Acquiror, if Acquiror did not have use or possession of such
container as of the Closing.
(b) The Acquiror shall assume and become responsible for all of
the Assumed Liabilities. The parties acknowledge that Acquiror is not
assuming any liabilities except the Assumed Liabilities specifically
assumed hereunder or assumed pursuant to agreements executed in connection
herewith.
EXCEPT FOR SPECIFIC REPRESENTATIONS AND WARRANTIES CONTAINED IN
THIS AGREEMENT, THE CONTAINERS, THE COMPUTER HARDWARE AND SOFTWARE
AND INTELLECTUAL PROPERTY RIGHTS OF THE COMPANY AND MNC INCLUDED IN
THE SALE ASSETS ARE BEING SOLD ON AN "AS IS, WHERE IS" BASIS AND THE SELLERS
MAKE NO WARRANTIES, EXPRESS OR IMPLIED, OF MERCHANTABILITY, FITNESS OR
OTHERWISE WITH RESPECT TO THE
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CONTAINERS WHICH EXTEND BEYOND THE
AFORESAID SPECIFIC REPRESENTATIONS AND WARRANTIES.
1.03. CONSIDERATION. Subject to the terms and conditions of this
Agreement, in reliance on the representations, warranties and agreements of the
Sellers contained herein, and in consideration of the sale, assignment,
transfer and delivery of the Sale Assets referred to in Section 1.02 hereof:
1.03(a). Acquiror will deliver, or cause to be delivered, to the Company
at the Closing (A) $350,000,000, subject to adjustment in accordance with the
provisions of Section 1.07 hereof, (B) the Initial Transfer Tax Payment, and
(C) $7,471,000 (the "Purchase Price Adjustment Deposit") (which amount shall be
considered an advance deposit by Acquiror in respect of the purchase price
adjustment provided for in Section 1.07), which amounts will be paid by wire
transfer in immediately available funds to a bank account designated by the
Company.
1.03(b). The consideration referred to in Section 1.03(a)(A) plus the
Assumed Liabilities (to the extent taken into account for federal income tax
purposes) shall be allocated among the Sale Assets set forth on Exhibit A. In
the event of an adjustment to the consideration as a result of the application
of Section 1.07 hereof, the parties shall, within 30 days following the
resolution of such adjustment, endeavor to adjust the allocation of
consideration in Exhibit A to reflect the revised consideration. The parties
agree to prepare all Tax Returns and reports consistently with all allocations
upon which the parties agree, and not to take an inconsistent Tax position
without the consent of the other party. None of the consideration referred to
in Section 1.03(a)(A) shall be allocated to the license referred to in Section
1.06 of this Agreement.
1.04. ASSIGNMENT AND ASSUMPTIONS OF CONTRACTS. In connection with the
purchase and sale of the Sale Assets as described in Section 1.02, the Company
agrees to assign to Acquiror, and Acquiror agrees to assume and perform the
Container Leases, the Container Purchase Commitments, the Operating Leases, the
Property and Office Leases, the Agency Agreements, the Depot Agreements, the
Employment Agreements, the Software Agreements (to which the Company is a
party) and the Miscellaneous Commitments. In connection with the sale of the
Sale Assets described in Section 1.02, MNC agrees to assign to Acquiror, and
with respect to the Container Leases, cause the MNC Subsidiaries to assign to
Acquiror, and Acquiror agrees to assume and perform, the Container Leases and
the Software Agreements (to which MNC is a party).
1.05. CLOSING. Subject to the satisfaction or waiver of the conditions
to closing set forth in Articles VII and VIII, the Closing of the transactions
contemplated by this Agreement will take place at the offices of Gibson, Dunn &
Crutcher, One Montgomery Street, San Francisco, California on June 30, 1995, at
7:00 A.M., local time, or at such other time and place as may be agreed upon by
the parties hereto.
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<PAGE> 19
1.05(a). At the Closing, (I) the Company will deliver to Acquiror (i) a
duly executed Bill of Sale; (ii) [intentionally omitted]; (iii) a duly executed
counterpart of each of the Assignment and Assumption Agreements, the License
Agreement, the Non-Competition Agreement and the Transition Agreement; (iv)
[intentionally omitted]; (v) an assignment of all guarantees, manufacturers'
warranties, uncollected warranty claims and letters of credit, if any, relating
to the Sale Assets (other than letters of credit entered into by the Company in
connection with Container Purchase Commitments that are not assumed by the
Acquiror in connection with the Closing); (vi) executed copies of the consents
referred to in Section 8.06 hereof that have been obtained; (vii) the opinions
of counsel referred to in Section 8.05 hereof; (viii) all such other deeds,
documents, certificates, assignments, agreements and other instruments as, in
the reasonable opinion of Acquiror's counsel, are necessary to vest in Acquiror
good and marketable title to the Sale Assets; (ix) duly executed stock
assignments with respect to all of the shares of capital stock of the
Subsidiaries owned by the Company; and (x) all other previously undelivered
documents required to be delivered by the Sellers to Acquiror at or prior to
the Closing in connection with the transactions contemplated by this Agreement,
(II) MNC will deliver to Acquiror (i) duly executed stock assignments with
respect to all of the shares of capital stock of the Foreign Subsidiaries owned
by MNC; and (ii) a duly executed counterpart of each of the Software Transfer
Agreement with respect to the Software Agreements to which MNC is a party, the
Assignment and Assumption of Container Leases, the License Agreement, the
Non-Competition Agreement and the Office Sublease; and (III) MNC will cause the
MNC Subsidiaries to deliver to Acquiror duly executed counterparts of the
Assignment and Assumption of Container Leases.
1.05(b). At the Closing, there will be delivered to the Sellers by
Acquiror (i) a duly executed counterpart of each of the Assignment and
Assumption Agreements, the License Agreement, the Non-Competition Agreement,
the Transition Agreement and the Office Sublease; (ii) the consideration
referred to in Section 1.03(a)(A), the Initial Transfer Tax Payment referred to
in Section 1.03(a)(B) hereof and the Purchase Price Adjustment Deposit; (iii)
executed copies of the consents referred to in Section 7.07 hereof; (iv) the
opinions of counsel referred to in Section 7.06 hereof; and (v) all other
previously undelivered documents required to be delivered by Acquiror to the
Sellers at or prior to the Closing in connection with the transactions
contemplated by this Agreement.
1.06. MATSON TRADEMARKS AND TRADE NAMES. The Sellers shall grant to
Acquiror for a maximum period of fifteen years from the date of the Closing, on
a nonexclusive basis without charge, a license to use the name "Matson" and any
derivation thereof or logo, trademark or tradename owned by the Sellers (the
"Names" and "Marks") on the Containers included in the Sale Assets or on any
containers that are acquired by Acquiror following the Closing pursuant to the
Container Purchase Commitments or acquired pursuant to Section 5.07 of the
Company Disclosure Schedule, to the extent the Names and Marks appear on such
Containers as of the date of the Closing or the date of purchase by Acquiror
(with respect to Containers acquired following the Closing pursuant to
Container Purchase Commitments or acquired pursuant to Section 5.07 of the
Company Disclosure Schedule), as applicable, but only for use so long as the
Names or
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<PAGE> 20
Marks remain on such Containers. Such license shall be substantially in the
form attached hereto as Exhibit L. The Sellers shall irrevocably assign to
Acquiror the prefix "MLCU". Sellers agree that they will not assign or grant
during the term of the Non-Competition Agreement the right to use the Names and
Marks to a purchaser or licensee for use in connection with a container leasing
business, except to the extent the Company is permitted to engage in the
Container leasing business pursuant to the Non-Competition Agreement. In the
event Acquiror sells any of the Containers to a party other than an Affiliate,
it shall remove, at its own expense, the Names and Marks from such Containers.
From and after the Closing, the Acquiror shall cause each of the Foreign
Subsidiaries to cease the use of the Names and Marks in connection with their
respective businesses, and, Acquiror shall use its best efforts to cause,
within 30 days following the Closing, each of the Foreign Subsidiaries to
change its corporate name to a name that does not include the Names or Marks.
To the extent that there exists any inconsistency between the provisions of
this Section 1.06 and the provisions of the License Agreement, the provisions
of the License Agreement shall govern. Acquiror acknowledges that except as
contemplated by the License Agreement, any license with respect to the Names
and Marks between the Sellers, on the one hand, and any Subsidiary, on the
other hand, shall terminate as of the Closing.
1.07. ADJUSTMENTS TO CONSIDERATION.
1.07(a) PREPARATION OF CONSOLIDATED STATEMENT OF NET ASSETS.
(i) Within 90 days after the Closing Date, Acquiror will prepare and
deliver to the Sellers a Consolidated Statement of Net Assets for the Company
and its subsidiaries as of the close of business on the Closing Date, which
shall be audited by Arthur Andersen LLP, the independent public accountants of
Acquiror.
(ii) If the Company has no objections to the Consolidated Statement
of Net Assets prepared and delivered by the Acquiror pursuant to Section
1.07(a)(i), it shall so notify Acquiror, and the Consolidated Statement of Net
Assets shall become final on the date the Company provides such notice. If the
Company has any objections to the Consolidated Statement of Net Assets
delivered by Acquiror, it will deliver a detailed statement describing its
objections to the calculation of any item on the Consolidated Statement of Net
Assets to Acquiror within 30 days after receiving such Consolidated Statement
of Net Assets. The Company, and its independent certified public accountants,
Deloitte & Touche LLP, shall, during the period between the delivery by
Acquiror of the Consolidated Statement of Net Assets and the final resolution
of any dispute relating thereto, be permitted to have access to, examine and
make copies of all books and records (including but not limited to
correspondence, memoranda, books of account and the like) in the possession of
Acquiror relating to the Sale Assets and, upon execution of the standard form
indemnity letter of Arthur Andersen LLP, be permitted to review the working
papers of Arthur Andersen LLP relating to such Consolidated Statement of Net
Assets and shall have such access to the Acquiror's and Arthur Andersen LLP's
personnel as may be reasonably necessary to permit Deloitte & Touche LLP
to review in detail the manner in which such Consolidated Statement of Net
Assets was prepared. Acquiror and Arthur Andersen
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<PAGE> 21
LLP shall cooperate with the Company and Deloitte & Touche LLP in facilitating
such review. If any matter cannot be resolved by the parties within 15 days
following delivery of the Company's notice of objection, KPMG Peat Marwick LLP
will be retained to resolve all remaining objections. Any determination shall
be made by KPMG Peat Marwick LLP on the basis of such procedures as it, in its
sole judgment, deems appropriate and expeditious, taking into account the
nature of the issues, the amount in dispute and the positions asserted by the
parties. KPMG Peat Marwick LLP shall not be required to follow any particular
rules or procedures (except as provided in this Agreement), it being the
intention of the parties to create a flexible, practical and expeditious
method for resolving any disagreement hereunder. The parties may submit to
such firm any fact or materials which they deem relevant to the determination.
The determination of KPMG Peat Marwick LLP will be set forth in writing and
will be conclusive, nonappealable and binding upon the parties hereto for all
purposes.
(iii) The parties shall pay the fees and expenses of their
respective internal and independent accountants and personnel incurred pursuant
to this Section 1.07(a). In the event the parties submit any unresolved
objections to KPMG Peat Marwick LLP for resolution as provided in Section
1.07(a)(ii) above, Acquiror on the one hand and the Company on the other hand
shall each bear equal responsibility for the fees and expenses of KPMG Peat
Marwick LLP.
1.07(b) ADJUSTMENTS RESULTING FROM THE CONSOLIDATED STATEMENTS OF NET
ASSETS. The consideration described in Section 1.03(a)(A) will be adjusted as
follows:
(i) if the Net Assets of the Company and its Subsidiaries exceed
$317,671,000, Acquiror will pay to Sellers an amount equal to such excess (the
"Additional Purchase Price Amount") LESS an amount equal to the Purchase Price
Adjustment Deposit, together with interest on the amount of such payment (but
not on the Purchase Price Adjustment Deposit) from the Closing Date until the
date of such payment at a floating rate of interest equal to the prime rate
from time to time in effect as announced by Bank of America, N.A., by wire
transfer or delivery of other immediately available funds within five business
days after the date on which the Net Assets of the Company and its subsidiaries
as reflected on the Consolidated Statement of Net Assets finally are determined
pursuant to Section 1.07(a) above.
(ii) if (a) the Net Assets of the Company and its Subsidiaries are
less than $317,671,000, the Sellers will pay to Acquiror an amount equal to
such deficiency PLUS an amount equal to the Purchase Price Adjustment Deposit,
or (b) the Additional Purchase Price Amount is less than the Purchase Price
Adjustment Deposit, the Sellers will pay to Acquiror an amount equal to such
deficiency, in each case together with interest on the amount of such payment
from the Closing Date until the date of such payment at a floating rate of
interest equal to the prime rate from time to time in effect as announced by
Bank of America, N.A., by wire transfer or delivery of other immediately
available funds within five business days after the date on which the Net
Assets of the Company and its subsidiaries as reflected on the Consolidated
Statement of Net Assets finally are determined pursuant to Section 1.07(a)
above.
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1.08. ACCOUNTS RECEIVABLE PROCEEDS. The Sellers hereby agree to remit,
or assign any claims they may have with respect to, and to endorse to Acquiror
any payment they receive after the Closing in respect of any accounts
receivable included in the Sale Assets.
1.09. FURTHER ASSURANCES. Subject to the provisions of Section 8.06,
after the Closing, each party hereto shall from time to time, at the request of
the other party and without further cost or expense to the other party, execute
and deliver such other necessary instruments of conveyance and transfer and
take such other necessary actions as the other party may reasonably request, in
order to more effectively consummate the transactions contemplated hereby and
to vest in the other party good and marketable title to the assets being
transferred hereunder (including, without limitation, assistance in the
collection or possession of any of such assets being transferred hereunder);
provided, however, that nothing in this Section 1.09 shall require either party
to expend funds, to commence litigation, or to grant or offer any accommodation
(financial or otherwise) to any third party.
1.10. CAVN AND JEURO LEASES AND CONTAINERS. (a) Acquiror agrees that
from and after the Closing, it will cooperate fully with Sellers and will take
such actions as Sellers may request in connection with (1) the collection of
Sellers' monetary claims against CAVN and Jeuro for rents, costs of collection
and all other amounts owing to Sellers on account of Operating Leases and the
recovery of containers subject thereto (the "CAVN and Jeuro Containers"); and
(2) the preparation and collection of Sellers' claims under insurance policies
as the result of losses incurred in connection with the foregoing. Sellers'
agree to reimburse Acquiror, within 30 days of invoice therefor from Acquiror,
for all out-of-pocket costs and expenses incurred by them at the request of the
Sellers in connection with the foregoing. Acquiror shall promptly pay over to
the Sellers any and all amounts that it may receive in respect of the CAVN and
Jeuro Operating Leases.
(b) The Sellers agree to reimburse Acquiror, within 30 days of invoice
therefor from Acquiror, for all out-of-pocket costs and expenses incurred by
Acquiror in connection with the recovery of the CAVN and Jeuro Containers,
including, without limitation, all recovery costs, repatriation costs and
repair costs with respect thereto, PROVIDED, HOWEVER, that Acquiror shall have
obtained Sellers' written approval prior to the incurrence of such costs and
expenses and, PROVIDED, FURTHER, that should Sellers' approval of such costs
and expenses be unreasonably withheld or delayed, Sellers shall repurchase,
within 30 days of invoice therefor from Acquiror, such CAVN and Jeuro Container
at the net book value of such CAVN and Jeuro Container as of the Closing.
(c) Acquiror will deliver to the Company a bill of sale for any CAVN and
Jeuro Container or any other Container for which no value is reflected on the
Consolidated Statement of Net Assets as finally determined. If Sellers
eventually recover any such Container, Sellers will sell and Acquiror will
repurchase such Container at the Repurchase Price.
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<PAGE> 23
1.11. TERMINATION OF INTERCOMPANY ARRANGEMENTS. Concurrently with the
Closing, the Sellers will cause to be terminated all existing contracts and
agreements (other than Operating Leases), whether written or oral, between any
Subsidiary, on the one hand, and the Company or MNC, on the other, including,
without limitation, all service agreements and any and all licenses covering
the Names or the Marks. Also concurrently with the Closing, the Sellers will
cause to be terminated the sublease from MNC to the Company of office space at
333 Market Street in San Francisco, California.
ARTICLE II
RELATED MATTERS
2.01. CONFIDENTIALITY. Each party hereto will hold and will cause its
consultants and advisors to hold in strict confidence, unless compelled to
disclose by judicial or administrative process or, in the opinion of its
counsel, by other requirements of law, all documents and information concerning
the other party furnished it by such other party or its representatives in
connection with the transactions contemplated by this Agreement or prepared by
it in connection with this Agreement and containing such information (except to
the extent that such information can be shown to have been (i) previously known
by the party to which it was furnished, (ii) in the public domain through no
fault of such party or its directors, officers, employees, agents or advisors,
or (iii) later lawfully acquired from other sources by the party to which it
was furnished), and each party will not release or disclose such information to
any other person, except its auditors, attorneys, financial advisors, bankers
and other consultants and advisors in connection with this Agreement who are
made aware of the provisions of this Section 2.01. If the transactions
contemplated by this Agreement are not consummated, such confidence shall be
maintained except to the extent such information comes into the public domain
through no fault of the party required to hold it in confidence, and such
information shall not be used to the detriment of, or in relation to any
investment in, the other party and all such documents (including copies
thereof) shall be returned to the other party immediately upon the written
request of such other party. Each party shall be deemed to have satisfied its
obligation to hold confidential information concerning or supplied by the other
party if it exercises the same care as it takes to preserve confidentiality for
its own similar information. In the event that either party is requested or
becomes legally compelled (by oral questions, interrogatories, requests for
information or document subpoena, civil investigative demand or similar
process) to disclose any such confidential information, such party will provide
the other party with prompt written notice of such request(s) so that the other
party may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Section 2.01. In the event that such
protective order or other remedy is not obtained, or that such party waives
compliance with the provisions of this Section 2.01, the party that is subject
to such request agrees that it will furnish only that portion of the
confidential information that is legally required and will exercise its best
efforts to obtain reliable assurances that confidential treatment will be
accorded to that portion of the confidential information being disclosed. In
the event the Closing does not occur and this Agreement is terminated in
accordance with Section 12.01, for a period of two years following
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<PAGE> 24
such termination, neither party will solicit any employee or officer of the
other party to leave such employment with the other party.
2.02. ACCESS TO BOOKS AND RECORDS.
(a) The Company agrees that for a period equal to the greater of seven
years or any applicable statute of limitations after the Closing, during normal
business hours, it will permit the Acquiror and its auditors and attorneys,
through their authorized representatives, to have access to and examine and
make copies of all books and records (including but not limited to
correspondence, memoranda, books of account, tax reports and returns and the
like) of the Company relating to the Sale Assets and Container Operations and
relating to events occurring prior to the Closing and to transactions or events
occurring subsequent to the Closing which are related to or arise out of
transactions or events occurring prior to such date.
(b) The Acquiror agrees that for a period equal to the greater of seven
years or any applicable statute of limitations after the Closing, during normal
business hours, it will permit the Company and its auditors and attorneys,
through its authorized representatives, to have access to and examine and make
copies of all books and records (including but not limited to correspondence,
memoranda, books of account, tax reports and returns and the like) of the
Company relating to the Sale Assets and Container Operations and relating to
events occurring prior to the date of the Closing and to transactions or events
occurring subsequent to the Closing which are related to or arise out of
transactions or events occurring prior to such date.
(c) Each party will direct its employees to render any assistance which
the other party may reasonably request in examining or utilizing records
referred to in this Section 2.02. For a period equal to the greater or seven
years or any applicable statute of limitations, each party agrees not to
destroy at any time any files or records which are subject to this Section 2.02
without giving reasonable notice to the other party, and within 30 days of
receipt of such notice, such other party may cause to be delivered to it the
records intended to be destroyed, at such other party's expense.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers, jointly and severally, hereby represents, covenants
and warrants to Acquiror as follows:
3.01. CORPORATE ORGANIZATION, ETC. Each of the Sellers is a corporation
duly organized, validly existing and in good standing under the laws of its
respective state of incorporation, and has full corporate power and authority,
directly or indirectly, to own the Sale Assets it now owns; and the Company is
duly qualified or licensed to do business as a foreign corporation in good
standing in the jurisdictions listed in Section 3.01 of the Company Disclosure
Schedule, which
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<PAGE> 25
are all the jurisdictions in which direct or indirect ownership of the Sale
Assets or conduct of the Container Operations requires such qualification
or, if it is not so qualified in any such jurisdiction, it can become so
qualified in such jurisdiction without any material adverse effect upon the
Sale Assets or Container Operations.
3.02. AUTHORIZATION, ETC. Each of the Sellers has full corporate power
and authority to enter into this Agreement and to carry out the transactions
contemplated hereby. Each of the Company and MNC will have taken all corporate
action (including any necessary vote of its board of directors or stockholders)
required by law, its charter documents, by-laws or otherwise to be taken by it
to authorize the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby, and this Agreement is a valid and
binding agreement of each of the Sellers enforceable in accordance with its
terms, except that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. No other corporate action by Sellers is
necessary to consummate the transactions contemplated hereby and any other
substantially contemporaneous transactions involving the sale of assets when
considered in the aggregate. Each of the MNC Subsidiaries has full corporate
power and authority to enter into the Assignment and Assumption of Container
Leases and to carry out the transactions contemplated thereby. Each of the MNC
Subsidiaries has taken all action required by law, its charter documents and
Bylaws or otherwise (including any Board of Director or shareholder action) to
authorize the execution and delivery by such MNC Subsidiaries of the Assignment
and Assumption of Container Leases and the consummation of the transactions
contemplated thereby. The Assignment and Assumption of Container Leases, when
executed and delivered by the MNC Subsidiaries, will be the valid and binding
agreement of the MNC Subsidiaries, enforceable in accordance with its terms
except that (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
3.03. NO VIOLATION. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will violate any
provision of the charter or by-laws of any of the Sellers, any subsidiary of
the Company or any MNC Subsidiary, or, except as specified in Section 3.03 of
the Company Disclosure Schedule, violate, or be in conflict with, or constitute
a default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or acceleration
of the maturity of any debt or obligation pursuant to, or result in the
creation or imposition of any security interest, lien or other encumbrance upon
any of the Sale Assets under, any material agreement or commitment to which any
of the Sellers, any subsidiary of the Company or any MNC Subsidiary is a party
or by which any of the Sellers, any subsidiary of the Company or any MNC
Subsidiary is bound, or
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to which any of the Sale Assets is subject, or violate in any material respect
any statute or law or violate any judgment, decree, order, regulation or
rule of any court or governmental authority.
3.04. FINANCIAL STATEMENTS. The Company has delivered to Acquiror (a)
the audited consolidated balance sheets of the Company and its subsidiaries as
of December 31, 1994 and 1993, and the related consolidated statements of
income, stockholder's equity, and consolidated statements of cash flows for the
two years ended December 31, 1994, certified in each case by Deloitte & Touche
LLP, independent certified accountants, (the "Audited Financial Statements")
and (b) the unaudited consolidated balance sheet of the Company and its
subsidiaries at March 31, 1995, and the related unaudited consolidated
statements of income and cash flows for the three-month period then ended. The
financial information referred to in clause (a) and clause (b) of this Section
3.04 are collectively referred to in this Agreement as the "Financial
Statements". The Financial Statements (including the notes thereto) have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods covered thereby, and present fairly
the financial condition of the Company and its subsidiaries as of such dates
and the results of operations of the Company and its subsidiaries for the
periods specified therein; provided, however, that the Financial Statements for
the three-month period ended March 31, 1995 are subject to normal year-end
adjustments (which will not be material individually or in the aggregate) and
lack footnotes and other presentation items.
3.05. INTERIM OPERATIONS. Except as reflected on the Financial Statement
for the period ended March 31, 1995, since December 31, 1994, the Container
Operations have been conducted only in the ordinary and usual course of
business consistent with past practice and there has not been any material
adverse change in the financial condition of the Container Operations or the
financial condition or results of operations or business of the Company, other
than adverse changes, if any, that resulted solely from the announcement of the
transactions contemplated by this Agreement. Since March 31, 1995, the Sale
Assets have not been materially affected in any way as a result of flood, fire,
explosion or other casualty (whether or not covered by insurance) or by any
customer or supplier default. Except as set forth in Section 3.05 of the
Company Disclosure Schedule, the Sellers are not aware of any circumstances
that, prior to the Closing, have resulted, or would reasonably be expected to
result in, a material adverse change in the Container Operations. Without
limiting the generality of the foregoing, except as set forth on Section 3.05
of the Company Disclosure Schedule, disclosed pursuant to Section 3.17, or as
set forth below, since March 31, 1995:
(i) none of the Company and its subsidiaries has sold, leased,
transferred, or assigned any of its assets, tangible or intangible, other than
in the ordinary course of business;
(ii) none of the Company and its subsidiaries has entered into any
agreement, contract, lease, or license (or series of related agreements,
contracts, leases, and licenses) either involving more than $500,000 or outside
the ordinary course of business;
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(iii) no party (including any of the Company and its
subsidiaries) has accelerated, terminated, modified, or canceled any agreement,
contract, lease, or license (or series of related agreements, contracts,
leases, and licenses) involving more than $500,000 to which any of the Company
and its subsidiaries is a party or by which any of them is bound, except for
terminations of contracts in accordance with their terms or as contemplated by
this Agreement and modifications of agreements in the ordinary course of
business, none of which (individually or in the aggregate) is materially
adverse to the Company or the Container Operations;
(iv) none of the Company and its subsidiaries has delayed or
postponed the payment of accounts payable and other liabilities, in either case
totaling in excess of $500,000 outside the ordinary course of business;
(v) none of the Company and its subsidiaries has canceled,
compromised, waived, or released any right or claim (or series of related
rights and claims) other than in the ordinary course of business consistent
with past practices;
(vi) none of the Company and its subsidiaries has experienced any
damage, destruction or loss (whether or not covered by insurance) to its
property other than damage, destruction or loss incurred the ordinary course of
business;
(vii) none of the Company and its subsidiaries has entered into
any employment contract or collective bargaining agreement, written or oral, or
modified the terms of any such existing contract or agreement, except for
employment arrangements entered into in the ordinary course of business that
are terminable at will by the Company without penalty;
(viii) none of the Company and its subsidiaries has granted any
increase in the base compensation of any of its officers or employees, or
adopted, amended, modified or terminated any bonus, profit-sharing, incentive,
severance, or other plan, contract, or commitment for the benefit of any of its
officers or employees, or any other change in employment terms for any of its
officers and employees;
(ix) Since May 31, 1995, none of the Company and its Subsidiaries has
granted any options to purchase Containers; and
(x) none of the Company and its subsidiaries has committed to any of
the foregoing.
3.06. TITLE TO PROPERTIES; ENCUMBRANCES. MNC has or will have as of the
Closing Date, good, valid and marketable title to the capital stock of the
Foreign Subsidiaries shown as owned by MNC on Exhibit A. The Company and/or
its Subsidiaries and/or the MNC Subsidiaries, have, or will have as of the
Closing Date, good, valid and marketable title to, or a valid leasehold
interest in, all the Sale Assets and except as set forth in Section 3.06 of the
Company Disclosure Schedule, all Sale Assets are free and clear of all title
defects, liens, claims, charges, security
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interests, restrictions on transfer, or any other encumbrances of any nature
whatsoever including, without limitation, leases, chattel mortgages,
conditional sales contracts, collateral security arrangements and other title
or interest retention arrangements, except for Permitted Liens. Neither the
Company nor any Subsidiary thereof owns, or has ever owned, any real property.
Each of the Containers has been validly issued all cargo container prototype
test certificates and cargo container production certificates. The
representations and warranties in this Section 3.06 shall not be deemed to
cover any matters relating to Software, Software Agreements or Intellectual
Property Rights, which are the subject of Section 3.24.
3.07. CONTRACTS AND LEASES. Section 3.07 of the Company Disclosure
Schedule contains an accurate and complete listing of all contracts, leases,
agreements or understandings, whether written or oral, providing for payments
or involving the provision of consideration in excess of $100,000
(collectively, the "Commitments") to which the Company, or any Subsidiary of
the Company, is a party which relate to or affect the Sale Assets or by which
any of the Sale Assets or any purchaser thereof may be bound or which are
included in the Assumed Liabilities. Except as set forth in Section 3.07 of
the Company Disclosure Schedule, each Commitment is valid, binding and
enforceable in accordance with its terms in all material respects, except that
(A) such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, equity of redemption or other similar laws now or hereafter in
effect relating to creditors# rights generally, and (B) general principles of
equity, regardless of whether applied in proceedings in equity or at law; and
that each Commitment is in full force and effect; there are no existing
material defaults by the Company, any Subsidiary of the Company or any MNC
Subsidiary, thereunder; and no event of default has occurred which (whether
with or without notice, lapse of time or the happening or occurrence of any
other event) would constitute a material default by the Company, or any
Subsidiary of the Company or any MNC Subsidiary, thereunder. Prior to the
Closing, Sellers will have delivered to Acquiror true and complete original or
copies of, or true and complete descriptions of, all Commitments. Except as
set forth in Section 3.07 of the Company Disclosure Schedule, no event has
occurred under any tax indemnity agreement included in the Sale Assets and/or
Assumed Liabilities to which the Company or any MNC Subsidiary is a party
relating to the Container Operations (including the Container Leases) which
would cause the Company, any Subsidiary of the Company or any MNC Subsidiary to
incur liability under any such agreement. The representations and warranties
in this Section 3.07 shall not be deemed to cover any matters relating to
Software, Software Agreements or Intellectual Property Rights, which are the
subject of Section 3.24.
3.08. LITIGATION. Except as set forth in Section 3.08 of the Company
Disclosure Schedule, there is no material action, suit, inquiry, proceeding or
investigation by or before any court or governmental or other regulatory or
administrative agency or commission pending or, to the knowledge of the
Sellers, threatened against any of the Sellers, any Subsidiary of the Company
or any MNC Subsidiary, which relates to the Sale Assets or Container
Operations, or which questions or challenges the validity of this Agreement or
any action taken or to be taken by any of the Sellers or any MNC Subsidiary
pursuant to this Agreement or in connection with the transactions contemplated
hereby. None of the Sellers, nor any Subsidiary of the Company
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nor any MNC Subsidiary, is subject to any judgment, order or decree entered
in any lawsuit or proceeding which may have a material adverse effect on the
Sale Assets or the Container Operations.
3.09. CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. Except for
requirements of the HSR Act and any consents, approvals or authorizations
required to be obtained by the Acquiror solely as a result of the Acquiror's
participation in this transaction, or as set forth in Section 3.09 of the
Company Disclosure Schedule, no consent, approval or authorization of any
United States, or to the knowledge of the Sellers, foreign, governmental or
regulatory authority is required in connection with the execution, delivery and
performance of this Agreement by the Sellers or the consummation of the
transactions by them contemplated hereby. Sellers have made all filings which
are required under the HSR Act.
3.10. CONSENTS. Except as set forth in Section 3.10 of the Company
Disclosure Schedule, no consent of any person which has not been obtained
(other than any consents to the assignment of Commitments which are not
Designated Commitments) is necessary to the consummation of the transactions by
the Sellers and the MNC Subsidiaries contemplated hereby, including, without
limitation, consents from parties to loans, contracts, leases or other
agreements. The representations and warranties in this Section 3.10 shall not
be deemed to cover any matters relating to Software, Software Agreements or
Intellectual Property Rights, which are the subject of Section 3.24.
3.11. COMPLIANCE WITH LAW. Except as set forth in Section 3.11 of the
Company Disclosure Schedule, the Container Operations have been conducted in
all material respects in accordance with all applicable material laws,
regulations and other requirements of all United States (or to the knowledge of
the Sellers, foreign) governmental authorities, and of all states,
municipalities and other political subdivisions and agencies thereof, having
jurisdiction over any of the Sellers and any Subsidiary of the Company, or Sale
Assets, including, without limitation, all such laws, regulations and
requirements relating to antitrust, consumer protection, currency exchange,
equal opportunity, health, occupational safety, pension, securities and
trading-with-the-enemy matters, except, in each case, such incidents of
non-compliance that individually or in the aggregate, would not have a material
adverse effect on the Container Operations or would give rise to any liability
on the part of the Acquiror. None of the Company, nor any Subsidiary of the
Company, has received any notification of any asserted present or past failure
by the Company, or any Subsidiary of the Company, to comply with such laws,
rules or regulations, except, in each case, such incidents of non-compliance
that individually or in the aggregate, would not have a material adverse effect
on the Container Operations or would give rise to any liability on the part of
Acquiror. Without limiting the foregoing, to the knowledge of the Sellers, the
Containers have been manufactured, maintained, repaired and operated and are
marked in accordance with prevailing industry standards in all material
respects. The representations and warranties contained in this Section 3.11
shall not be deemed to cover any matters relating to Environmental Laws or
Taxes, which are the subject of Sections 3.16 and 3.19, respectively.
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3.12. GOOD TITLE CONVEYED. The Company and MNC have complete and
unrestricted power and the unqualified right to sell, assign, transfer and
deliver to Acquiror, and upon consummation of the transactions contemplated by
this Agreement, Acquiror will acquire, good, valid and marketable title to, or
valid leasehold interests in, the Sale Assets, free and clear of all mortgages,
pledges, liens, security interests, encumbrances or charges of any kind, except
for Permitted Liens and those listed in Section 3.06 of the Company Disclosure
Schedule or as contemplated by Section 3.06 and except that all of Sellers'
representations to the Acquiror in this Agreement regarding title to the
capital stock of the Foreign Subsidiaries and the legal requirements of any
non-United States jurisdiction applicable to the assignment to the Acquiror of
the capital stock of the Foreign Subsidiaries and/or the effect of
non-compliance with such laws, is to the knowledge of the Sellers. The Bill of
Sale and the deeds, endorsements, assignments, other agreements and other
instruments to be executed and delivered to Acquiror by the Sellers at the
Closing will be valid and binding obligations of the Sellers enforceable in
accordance with their terms, except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought and (iii) except that all of Sellers'
representations to the Acquiror in this Agreement regarding the validity,
binding nature or enforceability of any such documents of assignment to
Acquiror of the capital stock of the Foreign Subsidiaries, or the legal
requirements of any non-United States jurisdiction applicable to the assignment
to the Acquiror of the capital stock of the Foreign Subsidiaries and/or the
effect of non-compliance with such laws, is to the knowledge of the Sellers.
The representations and warranties in this Section 3.12 shall not be deemed to
cover any matters relating to Software, Software Agreements or Intellectual
Property Rights, which are the subject of Section 3.24.
3.13. BROKERS AND FINDERS. Neither the Sellers, nor any of their
subsidiaries, nor any of their officers, directors or employees has employed
any broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated
by this Agreement which could result in any liability being imposed on
Acquiror.
3.14. INSIDER INTERESTS. No officer or director of any of the Sellers,
or any of their subsidiaries, has any material interest in any property, real
or personal, tangible or intangible, including without limitation, inventions,
patents, trademarks or trade names, used in or pertaining to the Sale Assets.
3.15. INSURANCE. Section 3.15 of the Company Disclosure Schedule contains
an accurate and complete description of all forms of insurance owned or held by
the Company with respect to any of the Sale Assets. All such policies are in
full force and effect, all premiums with respect thereto covering all periods
up to and including the Closing Date have been or will be paid, and no notice
of cancellation or termination has been received with respect to any such
policy.
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3.16. ENVIRONMENTAL MATTERS, ETC. Except as set forth in Section 3.16 of
the Company Disclosure Schedule, the Company and each of its Subsidiaries, and
any currently or formerly leased real properties of the Company and its
Subsidiaries, is in compliance in all material respects with all United States
federal, state, local or, to the knowledge of the Sellers, foreign law, rules,
regulations or legal requirements relating to (A) releases or threatened
releases of Hazardous Substances; (B) the manufacture, handling, transport,
use, treatment, storage or disposal of Hazardous Substances or materials
containing Hazardous Substances; or (C) pollution or protection of the
environment or the protection of human health or safety ("Environmental Laws"),
and any other applicable United States federal, state, local or, to the
knowledge of the Sellers, foreign law, statute, ordinance, code, order, rule,
regulation, resolution or promulgation, or any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with any
governmental authority, or any license, franchise, permit, or similar right
granted under any of the foregoing ("Legal Requirements"), relating to
environmental, natural resource, or health and safety matters, except such as
have not had and will not have a material adverse effect upon the Container
Operations, business, assets or financial condition of the Company and its
subsidiaries considered as a whole, except that the Sellers make no
representation herein with respect to the compliance with Environmental Laws or
Legal Requirements by any past or present lessee of Containers, depot operator
or manufacturer of Containers, including, but not limited to, any issues of
compliance arising in connection with any such person's (a) manufacture of
Containers, (b) storage of Containers, (c) transportation of substances in
Containers and/or (d) cleaning or repair (or failure to clean or repair) of
Containers. Except as set forth in Section 3.16 of the Company Disclosure
Schedule, there is no claim, action, cause of action or suit, arbitration,
proceeding or, to the knowledge of the Sellers, investigation by or before any
governmental authority pending (or to Sellers' knowledge, threatened) against
the Company or any of its Subsidiaries, in respect of (i) noncompliance with
any Environmental Laws or any such Legal Requirements, (ii) personal injury,
wrongful death, other tortious conduct, or the existence of any nuisance
relating to materials, commodities or products held, used, sold, transferred,
manufactured, released or disposed of, or (iii) the presence or release or
threatened release into the environment of any Hazardous Substance whether or
not generated by the Company or any of its subsidiaries or located at or about
or emanating from or to a site included in the premises covered by the Property
and Office Leases or any of the property heretofore leased, except that the
Sellers make no representation herein with respect to the compliance with
Environmental Laws or Legal Requirements by any past or present lessee of
Containers, depot operator or manufacturer of Containers, including, but not
limited to, any issues of compliance arising in connection with any such
person's (a) manufacture of Containers (b) storage of Containers, (c)
transportation of substances in Containers and/or (d) cleaning or repair (or
failure to clean or repair) of Containers. To the knowledge of the Sellers, no
event has occurred or condition exists or operating practice is being employed
in the Container Operations that will give rise to any liability, loss, damage,
claims, awards, assessments, amounts paid in settlement, fines and penalties,
costs and expenses, on the part of the Acquiror either at the present or at any
future time under any Environmental Laws, or otherwise resulting from or
relating to the handling, storage, use, transportation or disposal of any
Hazardous Substance by or on behalf of the Sellers, or any subsidiary of the
Company, or any of their respective
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<PAGE> 32
predecessors or otherwise in their respective properties, except that the
Sellers make no representation herein with respect to the compliance with
Environmental Laws or Legal Requirements by any past or present lessee of
Containers, depot operator or manufacturer of Containers, including, but not
limited to, any issues of compliance arising in connection with any such
person's (a) manufacture of Containers, (b) storage of Containers, (c)
transportation of substances in Containers and/or (d) cleaning or repair (or
failure to clean or repair) of Containers.
Neither the Container Operations, nor any of the Sale Assets, are subject
to, or as a result of the transactions contemplated by this Agreement, would be
subject to, the requirements of any Environmental Laws which require notice or
disclosure to any governmental agency, cleanup or approval prior to transfer of
such Sale Assets or Container Operations or which would impose liens on such
Assets, except that the Sellers make no representation herein with respect to
the compliance with Environmental Laws or Legal Requirements by any past or
present lessee of Containers, depot operator or manufacturer of Containers,
including, but not limited to, any issues of compliance arising in connection
with any such person's (a) manufacture of Containers (b) storage of Containers,
(c) transportation of substances in Containers and/or (d) cleaning or repair
(or failure to clean or repair) of Containers. Section 3.16 of the Company
Disclosure Schedule lists all environmental audits, inspections, assessments,
investigations or similar reports in the Company or any Subsidiary of the
Company's possession or of which the Company or any Subsidiary is aware
relating to the Container Operations or compliance of the same with applicable
Environmental Laws. For purposes of this Section 3.16, the term "Hazardous
Substance" means any chemical substance, including but not limited to any: (i)
pollutant, contaminant, chemical, raw material, intermediate, product,
by-product, construction debris; (ii) industrial, solid, toxic or hazardous
substances, material or waste, (iii) petroleum or any fraction thereof; (iv)
asbestos or asbestos-containing material; (v) polychlorinated biphenyls; (vi)
chlorofluorocarbons; and, (vii) any other substance, material or waste which is
identified or regulated under any Environmental Law.
3.17. EMPLOYEES. The Company has provided to Acquiror (by letter dated
the date hereof) an accurate and complete list of all employees employed by the
Company and any Subsidiary of the Company in connection with the Container
Operations ("Employees") as of the date hereof setting forth the rate,
character and amount of any compensation and benefits then payable to each such
Employee, including identification of any changes in such terms since March 31,
1995.
3.18. EMPLOYEE BENEFITS; ERISA. No event has occurred that has resulted,
or could reasonably be anticipated to result, in the assertion of any
withdrawal liability or related lien under Title IV of ERISA against any
Subsidiary or Acquiror.
3.19. TAXES. Except as set forth in Section 3.19 of the Company
Disclosure Schedule to the knowledge of Seller:
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<PAGE> 33
(a) Within the applicable time periods therefor (including any valid
extensions) each of the Subsidiaries and Branches has timely filed (or there
was filed on its behalf) all Tax Returns that were required to be filed. No
Subsidiary or Branch is delinquent in the payment of any Taxes of such
Subsidiary or Branch (whether or not shown on any Tax Return). None of the
Subsidiaries or Branches currently is the beneficiary of any extension of time
within which to file any Tax Return or pay any Tax.
(b) Each of the Subsidiaries and Branches has withheld and paid to the
appropriate taxing authority all Taxes required to have been withheld and paid
in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party.
(c) There is no dispute or claim concerning any Tax liability of the
Subsidiaries or Branches either (A) claimed or raised by any taxing authority
in writing or (B) as to which Sellers and any director, officer or employee
responsible for Tax matters of the Sellers has knowledge based upon personal
contact with any agent of such taxing authority, which, if adversely
determined, would have a material adverse effect on the Container Operations.
Section 3.19 of the Company Disclosure Schedule lists all Tax Returns of the
Subsidiaries or the Branches that are currently the subject of audit and
indicates those jurisdictions in which the Company, the Subsidiaries and
Branches currently file consolidated, combined or unitary Tax Returns.
(d) None of the Subsidiaries or Branches has waived any statute of
limitations in respect of Taxes nor agreed to any extension of time with
respect to a Tax assessment or deficiency. Other than as listed in Section
3.19 of the Sellers Disclosure Schedule, there are no powers of attorney with
respect to Taxes of the Subsidiaries or Branches currently in force.
(e) There are no tax sharing agreements between any of the Subsidiaries
and the Sellers.
3.20. PROHIBITED FOREIGN TRADE PRACTICES ACT; SENSITIVE PAYMENTS. To the
knowledge of the Sellers, the Company and its Subsidiaries are in compliance
with the Prohibited Foreign Trade Practices Act with the respect to the
Container Operations, and have no "sensitive" receipts or disbursements, which
are defined to mean the following types of transactions: (i) illegal receipts
from or payments to governmental officials or employees; (ii) commercial bribes
or a kickbacks; (iii) amounts disbursed or received with an understanding that
rebates or refunds will be made in contravention of the laws of any nation or
other jurisdiction; (iv) illegal political contributions; or (v) payments of
commitments, regardless of form, made with the knowledge or under circumstances
that would indicate that all or part thereof is to be paid ultimately to or for
the benefit of governmental officials or employees or as an influence payment
or kickback.
3.21. SUBSIDIARIES. Section 3.21 of the Company Disclosure Schedule sets
forth for each Subsidiary of the Company (i) its name and jurisdiction of
incorporation and (ii) the number of issued and outstanding shares of its
capital stock, the name of each holder thereof and the
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<PAGE> 34
number of shares held by each such holder. PICC and, to the Sellers'
knowledge, each Foreign Subsidiary listed on the Company Disclosure Schedule is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation. PICC and, to the Sellers'
knowledge, each Foreign Subsidiary is duly authorized to conduct business and
is in good standing under the laws of each jurisdiction where such
qualification is required, except where the failure to be so qualified would
not have a material adverse effect on the Container Operations. PICC and, to
the Sellers' knowledge, each Foreign Subsidiary has full corporate power and
authority and all licenses, permits, and authorizations necessary to carry on
the business in which it is engaged and to own and use the properties owned,
leased and used by it, except where the absence of the license, permit or
authorization would not have a material adverse effect on the Container
Operations. Sellers have delivered to Acquiror correct and complete copies of
the charter and by-laws, or other constituent documents, of each Subsidiary of
the Company, as amended to date. All of the issued and outstanding shares of
capital stock of PICC and, to the Sellers' knowledge, each Foreign Subsidiary
have been duly authorized and are validly issued, fully paid and nonassessable.
Except as set forth in Section 3.17 of the Company Disclosure Schedule, one or
both of the Sellers, or a direct Subsidiary of the Company, holds of record and
owns beneficially all of the outstanding shares of PICC and, to the Sellers'
knowledge, each Foreign Subsidiary, free and clear of any restrictions on
transfer, taxes, security interest, options, warrants, purchase rates,
contracts, commitments, equities, claims, and demands. There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights or other contracts or commitments
that would require any of PICC or, to the Sellers' knowledge, the Foreign
Subsidiaries of the Company to sell, transfer, or otherwise dispose of any
capital stock of any of PICC or, to the Sellers' knowledge, the Foreign
Subsidiaries or that could require PICC or, to the Sellers' knowledge, any
Foreign Subsidiary to issue, sell, or otherwise cause to become outstanding any
of its own capital stock (other than this Agreement). There are no outstanding
stock appreciation, phantom stock, profit participation or similar rights with
respect to PICC or, to the Sellers' knowledge, any Foreign Subsidiary. Except
as set forth in Section 3.21 of the Company Disclosure Schedule, there are no
voting trust, proxies or other agreements or understandings with respect to the
voting of any capital stock of PICC or, to the Sellers' knowledge, any Foreign
Subsidiary. The minute books, the stock certificate books, and the stock
record books of PICC and, to the Sellers' knowledge, the Foreign Subsidiary are
correct and complete in all material respects. Neither PICC nor, to the
Sellers# knowledge, any of the Foreign Subsidiaries is in default under or in
violation of any provision of its charter or bylaws, except where the default
or violation would not have a material adverse effect on the Container
Operations. Neither the Company nor any Subsidiaries of the Company controls
directly or indirectly or has any direct or indirect equity participation in
any corporation, partnership, trust or other business association which is
not a Subsidiary, direct or indirect, of the Company.
3.22. CONDITION OF CONTAINERS. Exhibit A correctly and completely sets
forth, with respect to each container included thereon, the name of
manufacturer, the year of acquisition, dimensions, number of units, original
cost and accumulated depreciation. At the Closing Date, each Container will be
in a condition which complies in all material respects with applicable
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<PAGE> 35
industry standards sufficient to allow such Container to be used in the
Container Operations, or will be subject to an Operating Lease which
requires such Container to be in a condition substantially equivalent to such
standards upon delivery at termination or expiration of such Operating Lease.
All of the Containers were newly manufactured when originally purchased by the
Company.
3.23. PURCHASE OPTION; OPERATING LEASE AGREEMENTS. Except as set forth
in Section 3.23 of the Company Disclosure Schedule and except for Permitted
Liens, the Sellers are exclusively entitled to possess (a) at the date hereof,
the Containers which are not currently on lease to customers and (b) at the
expiration of the relevant Operating Leases, the Containers currently subject
to Operating Leases. Except as set forth in Section 3.23 of the Company's
Disclosure Schedule, there are no options to purchase any Containers or rights
of renewal with respect to any Operating Lease.
3.24. SOFTWARE; INTELLECTUAL PROPERTY. To the Sellers' knowledge, the
Sellers have good, valid and marketable title to the Software. To the Sellers'
knowledge, the Sellers have complete and unrestricted power and the unqualified
right to sell, assign, transfer and deliver to Acquiror, and, to the Sellers'
knowledge, upon consummation of the transaction contemplated by this Agreement,
Acquiror will acquire good, valid and marketable title to the Software and the
Software Agreements, free and clear of all mortgages, pledges, liens, security
interests, encumbrances or charges of any kind, except for Permitted Liens.
The Sellers have established procedures designed to ensure that (i) any
Software developed by or on behalf of the Sellers did not infringe on the
intellectual property rights of third parties, and (ii) the Sellers received
good, valid and marketable title to all Software developed on their behalf,
free and clear of any adverse claims or rights; and, to the Sellers' knowledge,
such procedures have been followed.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror hereby represents, covenants and warrants to the Sellers as
follows:
4.01. CORPORATE ORGANIZATION. Acquiror is a corporation duly organized,
validly existing and in good standing under the laws of the State of Maine.
Each of the Acquiror Entities is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction in which it was
organized.
4.02. AUTHORIZATION, ETC. Acquiror has full corporate power and
authority to enter into this Agreement and to carry out the transactions
contemplated hereby. The Board of Directors of Acquiror has taken all action
required by law, its Certificate of Incorporation and By-Laws or otherwise to
authorize the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, and this Agreement has been duly executed
and delivered and
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<PAGE> 36
is a valid and binding agreement of Acquiror enforceable in accordance with its
terms except that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. Each of the Acquiror Entities has full
corporate power and authority to enter into the Assignment and Assumption
Agreement to which it will be a party and to carry out the transactions
contemplated thereby. The Board of Directors of each of the Acquiror Entities
has taken all action required by law, its charter documents and Bylaws or
otherwise to authorize the execution and delivery by such Acquiror Entity of
the Assignment and Assumption Agreement to which it will be a party and the
consummation of the transactions contemplated thereby. The Assignment and
Assumption Agreements, when executed by the Acquiror Entities, will be valid
and binding agreement of the Acquiror Entities party thereto, enforceable in
accordance with their terms except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
4.03. NO VIOLATION. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will violate any
provisions of the Certificate of Incorporation or By-Laws of Acquiror or any of
the Acquiror Entities, or violate, or be in conflict with, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or cause the acceleration of the maturity of any debt
or obligation pursuant to, or result in the creation or imposition of any
security interest, lien or other encumbrance upon any property or assets of
Acquiror or any of the Acquiror Entities under, any material agreement or
commitment to which Acquiror or any of the Acquiror Entities is a party or by
which Acquiror or any of the Acquiror Entities is bound, or to which the
property of Acquiror or any of the Acquiror Entities is subject, or violate in
any material respect any statute or law or any judgment, decree, order,
regulation or rule of any court or governmental authority.
4.04. CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. Except for
requirements of the HSR Act, no consent, approval or authorization of any
governmental or regulatory authority is required in connection with the
execution, delivery and performance of this Agreement by Acquiror or the
consummation of the transactions by it contemplated hereby.
4.05. LITIGATION. There is no material action, suit, inquiry,
proceeding or investigation by or before any court or governmental or other
regulatory or administrative agency or commission pending or, to the knowledge
of Acquiror, threatened against Acquiror or any subsidiary which questions or
challenges the validity of this Agreement or any action taken or to be taken by
Acquiror or any of the Acquiror Entities pursuant to this Agreement or in
connection with the transactions by Acquiror or any of the Acquiror Entities
contemplated hereby.
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4.06. CONSENTS. No consent of any person is necessary to the
consummation of the transactions by Acquiror or any of the Acquiror Entities
contemplated hereby, including, without limitation, consents from parties to
loans, contracts, leases or other agreements and consents from governmental
agencies, whether federal, state or local.
4.07. BROKERS AND FINDERS. Neither Acquiror nor any of the Acquiror
Entities nor any of their officers, directors or employees has incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated by this Agreement which could result in any
liability being imposed on Sellers.
4.08. AVAILABILITY OF FUNDS. As of the Closing, Acquiror will have cash
available or existing borrowing facilities which together are sufficient to
enable it to consummate the transactions contemplated by this Agreement.
ARTICLE V
COVENANTS OF THE SELLERS
MNC and/or the Company, as applicable, hereby covenants and agrees with
Acquiror:
5.01. FULL ACCESS. The Company shall afford to Acquiror, its counsel,
accountants and other representatives full access prior to the Closing Date to
the depots, offices, properties, books and records of the Sellers in order that
Acquiror may have full opportunity to make such investigations as it shall
desire to make of the affairs of the Company with respect to the Sale Assets
and Container Operations; provided, however, that any such investigation shall
be conducted in such a manner as not to interfere unreasonably with the
operation of the business of the Company.
5.02. CONSENTS. Each Seller will use its best efforts, and will cause
the subsidiaries of the Company to use their best efforts, to obtain, prior to
the Closing, all consents necessary to be obtained by the Sellers, or any
subsidiary of the Company, in connection with the consummation of the
transactions contemplated hereby; provided, however, that such best efforts
shall not include any requirement to expend funds, to commence litigation or to
grant or offer any accommodation (financial or otherwise) to any third party.
The Company covenants that the Commitments designated by an asterisk on
Schedule 3.07 (the "Designated Commitments") will be transferred and assigned
to the Acquiror on the Closing Date and that the Company, or one or more of its
Subsidiaries, as applicable, will have obtained, as of the Closing Date, all
consents necessary to assign to the Acquiror the Designated Commitments without
causing any default, acceleration or termination under any such Designated
Commitment; PROVIDED, HOWEVER, that the Sellers shall have no liability to
Acquiror for breach of this Agreement for failure to obtain any of the
foregoing consents (other than as may be provided in Article XI for any breach
of any of the representations and warranties set forth in Article III), it
being agreed that the procurement of such consents is a condition to closing
only, provided that Sellers have complied with the first
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sentence of this Section 5.02. All such consents will be in writing,
and executed counterparts thereof will be delivered to Acquiror at or prior to
the Closing.
5.03. SUPPLEMENTS TO COMPANY DISCLOSURE SCHEDULE. From time to time
prior to the Closing, the Sellers will notify Acquiror of changes to the
Company Disclosure Schedule of which they become aware with respect to any
matter hereafter discovered or arising which, if existing or occurring at the
date of this Agreement, would have been required to be set forth or described
in the Company Disclosure Schedule. No such disclosure relating to the Company
Disclosure Schedule shall be deemed to cure any breach of any representation of
or warranty made in this Agreement unless Acquiror specifically agrees thereto
in writing.
5.04. COVENANT TO SATISFY CONDITIONS. Each Seller will use its best
efforts to insure that the conditions set forth in Article VIII hereof are
satisfied, insofar as such matters are within its control, provided, however,
that such best efforts shall not include any requirement to expend funds, to
commence litigation or to grant or offer any accommodation (financial or
otherwise) to any third party.
5.05. CERTIFICATES. At the Closing, each Seller will furnish Acquiror
with such certificates of its officers and others to evidence compliance with
the covenants set forth in this Article V as may be reasonably requested by
Acquiror.
5.06. HSR ACT FILINGS. The Sellers will make all filings required to be
made pursuant to the HSR Act in connection with the transactions contemplated
by the Agreement and will furnish to Acquiror such necessary information and
reasonable assistance as Acquiror may request in connection with its
preparation of necessary filings or submissions under provisions of the HSR
Act. The Sellers will supply Acquiror copies of all correspondence, filings or
communications (or memoranda setting forth the substance thereof) between any
of the Sellers or their representatives, on the one hand, and the Federal Trade
Commission, the Antitrust Division of the U.S. Department of Justice or any
other governmental agency or authority or members of their respective staffs on
the other hand, with respect to this Agreement or the transactions contemplated
hereby, other than confidential or proprietary information therein.
5.07. CONTAINER ACQUISITIONS. Between the date hereof and the Closing,
the Company shall be entitled but not required, to expend, subject to the
approval of the Company#s Board of Directors, up to a maximum amount of $21.6
million in accordance with the Company's container purchase plans as set forth
in Section 5.07 of the Company Disclosure Schedule.
5.08. INSURANCE. Upon the payment by Acquiror of any fee required by any
insurance carrier, Acquiror shall be named as an additional insured party on
all insurance policies regarding the Sale Assets and Container Operations, but
only with respect to liabilities to third parties arising prior to the Closing.
The Sellers shall notify the Acquiror of any fees required by any insurance
carrier pursuant to the preceding sentence.
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ARTICLE VI
COVENANTS OF ACQUIROR
Acquiror hereby covenants and agrees with the Sellers:
6.01. SUPPLEMENTS TO ACQUIROR DISCLOSURE SCHEDULE. From time to time
prior to the Closing, Acquiror will notify the Company of any changes to the
Acquiror Disclosure Schedule known to Acquiror with respect to any matter
hereafter discovered or arising which, if existing or occurring at the date of
this Agreement, would have been required to be set forth or described in the
Acquiror Disclosure Schedule. No such disclosure relating to the Acquiror
Disclosure Schedule made pursuant to this Section shall be deemed to cure any
breach of any representation of or warranty made in this Agreement unless the
Company specifically agrees thereto in writing.
6.02. COVENANT TO SATISFY CONDITIONS. Acquiror will use its best efforts
to ensure that the conditions set forth in Article VII hereof are satisfied,
insofar as such matters are within the control of Acquiror provided, however,
that such best efforts shall not include any requirement to expend funds, to
commence litigation, or to grant or offer any accommodation (financial or
otherwise) to any third party.
6.03. CERTIFICATES. At the Closing Acquiror will furnish the Sellers
with such certificates of its officers and others to evidence compliance with
the covenants set forth in this Article VI as may be reasonably requested by
the Company.
6.04. HSR ACT FILINGS. Acquiror will make all filings required to be
made pursuant to the HSR Act in connection with the transactions contemplated
by the Agreement and will furnish to the Sellers such necessary information and
reasonable assistance as the Sellers may request in connection with their
preparation of necessary filings or submissions under provisions of the HSR
Act. Acquiror will supply the Sellers copies of all correspondence, filings or
communications (or memoranda setting forth the substance thereof) between
Acquiror or its representatives, on the one hand, and the Federal Trade
Commission, the Antitrust Division of the U.S. Department of Justice or any
other governmental agency or authority or members of their respective staffs on
the other hand, with respect to this Agreement or the transactions contemplated
hereby, other than confidential or proprietary information therein.
6.05. CONSENTS. Acquiror will use its best efforts to obtain, prior to
the Closing, all consents necessary to be obtained by Acquiror in connection
with the consummation of the transactions contemplated by this Agreement
provided, however, that such best efforts shall not include any requirement to
expend funds, to commence litigation, or to grant or offer any accommodation
(financial or otherwise) to any third party. All such consents will be in
writing and executed counterparts thereof will be delivered to the Company at
or prior to the Closing.
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6.06. OTHER AGREEMENTS. Acquiror shall deliver to the Sellers on the
Closing Date executed counterparts of the agreements and documents set forth in
Section 1.05(b).
6.07. SUBSTITUTE LETTERS OF CREDIT. On or prior to the Closing, Acquiror
shall either assume existing letters of credit tendered by the Company to the
third parties that are parties to the Container Purchase Commitments or tender
substitute letters of credit (to the extent letters of credit are required
under such contracts). To the extent that any such letters of credit of the
Company are not assumed by Acquiror, Acquiror shall take all actions that are
necessary in order to obtain the release of any letters of credit tendered by
the Company pursuant to such Container Purchase Commitments.
6.08. INSURANCE. Upon the payment by the Company or MNC of any fee
required by any insurance carrier, the Company and MNC shall be named as an
additional insured party on all insurance policies regarding the Sale Assets
and Container Operations, but only with respect to liabilities to third parties
arising after the Closing Date so long as the Names and Marks remain on the
Containers. Acquiror shall notify the Sellers of any fees required by any
insurance carrier pursuant to the preceding sentence.
6.09. POST CLOSING FINANCIAL STATEMENTS. If the Closing occurs on or
before June 30, 1995, on or before the close of business on July 17, 1995,
Acquiror will use reasonable efforts to prepare and deliver to the Sellers
consolidated and consolidating financial statements for the Company and its
Subsidiaries, including balance sheets, income statements and cash flow
statements, for the six month period ended June 30, 1995, all prepared in
accordance with generally accepted accounting principles and on a basis
consistent with similar statements prepared by the Company for the year ended
December 31, 1994. The Sellers acknowledge and agree that the Acquiror has
agreed to prepare and deliver such financial statement solely as an
accommodation to Sellers and that Acquiror shall bear no liability with respect
to, nor any responsibility for, the accuracy, adequacy or sufficiency of such
financial statements for any purpose, nor the Sellers' use of such financial
statements, including the Sellers' inclusion of such financial statements in
the consolidated and consolidating financial statements of the Sellers' Group
or Alexander & Baldwin, Inc., a Hawaii corporation, and, notwithstanding
anything herein to the contrary, Sellers agree to immediately indemnify
Acquiror against any Damages (as defined in Article XI) resulting from the
preparation and delivery of such financial statements or the use thereof by
Sellers.
6.10. PERFORMANCE OF CERTAIN OBLIGATIONS BY ACQUIROR AFTER CLOSING DATE.
On and after the Closing Date, Acquiror shall, or shall cause its designated
subsidiaries to, duly, promptly and faithfully pay, perform and discharge when
due, all obligations and liabilities under the Assumed Liabilities.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF THE SELLERS
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Each and every obligation of the Sellers under this Agreement to be
performed on or before the Closing shall be subject to the satisfaction, on or
before the Closing, of each of the following conditions, unless waived in
writing by the Company:
7.01. REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties contained in Article IV hereof and in all certificates delivered and
to be delivered by Acquiror or the Acquiror Entities to the Sellers or their
representatives pursuant hereto or in connection with the transactions
contemplated hereby shall be in all material respects true, complete and
accurate as of the date when made and as of the Closing as though such
representations and warranties were made at and as of such date, except for
changes expressly permitted or contemplated by the terms of this Agreement.
7.02. PERFORMANCE. Acquiror shall have performed and complied with all
agreements, obligations and conditions required by this Agreement to be
performed or complied with by it on or prior to the Closing.
7.03. HSR ACT WAITING PERIODS; NO GOVERNMENTAL PROCEEDING OR LITIGATION.
All waiting periods applicable to the transactions contemplated hereby with
respect to the Sale Assets under the HSR Act shall have expired or been
terminated. No suit, action or other proceeding by any governmental body shall
have been instituted or threatened which questions in any material way the
validity or legality of the transfer of the Sale Assets.
7.04. NO LITIGATION. On the Closing Date, there shall be no litigation
pending or, to the knowledge of the Sellers, threatened, which challenges or
questions the validity or legality of the execution and delivery of this
Agreement or the other documents, instruments or agreements required to be
executed or delivered pursuant hereto or which, if adversely determined, would
materially adversely affect the right, power and authority of the Sellers to
consummate the transactions contemplated hereby, or which imposes any
conditions on the consummation of the transactions contemplated hereby which
the Sellers deem unacceptable in their sole discretion.
7.05. CERTIFICATES. Acquiror shall have furnished the Sellers with such
certificates of its officers and others to evidence compliance with the
conditions set forth in this Article VII as may be reasonably requested by the
Sellers.
7.06. OPINION OF ACQUIROR'S COUNSEL. Acquiror shall have delivered to
the Sellers an opinion of Ropes & Gray, counsel to Acquiror, dated as of the
Closing Date, substantially in the form attached hereto as Exhibit S, and an
opinion of James R. Lajoie, General Counsel of Acquiror, dated as of the
Closing Date, in substantially the form attached hereto as Exhibit X.
7.07. CONSENTS OBTAINED. All necessary consents referred to in Sections
4.02, 4.03, 4.04 and 4.06 shall have been obtained.
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7.08. OTHER AGREEMENTS. Acquiror shall deliver to the Sellers on the
Closing Date executed counterparts of the agreements and documents set forth in
Section 1.05(b).
7.09. OPINION OF MORGAN, LEWIS & BOCKIUS. The Sellers shall have
received an opinion to Morgan, Lewis & Bockius, dated as of the Closing Date,
substantially in the form attached hereto as Exhibit T.
7.10. RELEASE OF LETTERS OF CREDIT. All letters of credit tendered on
behalf of the Company pursuant to Container Purchase Commitments shall have
been released, extinguished, or assumed by Acquiror.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF ACQUIROR
Each and every obligation of Acquiror under this Agreement to be performed
on or before the Closing shall be subject to the satisfaction, on or before the
Closing, of each of the following conditions, unless waived in writing by
Acquiror:
8.01. REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties contained in Article III hereof, the Company Disclosure Schedule and
in all certificates delivered and to be delivered by the Sellers to Acquiror or
its representatives pursuant hereto or in connection with the transactions
contemplated hereby shall be in all material respects true, complete and
accurate as of the date when made and as of the Closing as though such
representations and warranties were made at and as of such date, except for
changes expressly permitted or contemplated by the terms of this Agreement.
8.02. PERFORMANCE. The Sellers shall have performed and complied with
all agreements, obligations and conditions required by this Agreement to be
performed or complied with by it on or prior to the Closing.
8.03. HSR ACT WAITING PERIODS; NO GOVERNMENTAL PROCEEDING OR LITIGATION.
All waiting periods applicable to the transactions contemplated hereby with
respect to the Sale Assets under the HSR Act shall have expired or been
terminated. No suit, action or other proceeding by any governmental body shall
have been instituted or threatened which questions in any material way the
validity or legality of the transfer of the Sale Assets.
8.04. NO LITIGATION. On the Closing Date, there shall be no litigation
pending or, to the knowledge of Acquiror, threatened, which challenges or
questions the validity or legality of the execution and delivery of this
Agreement or the other documents, instruments or agreements required to be
executed or delivered pursuant hereto or which, if adversely determined, would
materially adversely affect the right, power and authority of Acquiror to
consummate the
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transactions contemplated hereby, or which imposes any conditions on the
consummation of the transactions contemplated hereby or adversely affects the
right of Acquiror to own the Sale Assets, to operate the Container Operations
or to control the Subsidiaries of the Company, which the Acquiror deems
unacceptable in its sole discretion.
8.05. OPINION OF THE SELLERS' COUNSEL. The Sellers shall have delivered
to Acquiror the opinion of Gibson, Dunn & Crutcher, counsel to the Sellers,
dated as of the Closing Date, substantially in the form attached hereto as
Exhibit U, and an opinion of Kevin C. O'Rourke, General Counsel of MNC, dated
as of the Closing Date, in substantially the form attached hereto as Exhibit Y.
8.06. CONSENTS OBTAINED. All necessary consents referred to in Sections
3.09 and, with respect to the Designated Commitments, 3.10, shall have been
obtained. The Acquiror acknowledges and agrees that, except to the extent
provided in the first sentence of Section 5.02, the Sellers shall not have any
liability whatsoever to the Acquiror arising out of or relating to the failure
to obtain any consents that may be required for the assignment of any
Commitment to the Acquiror or because of the default, acceleration or
termination of any Commitment as a result thereof, it being understood that the
procurement of such consents is a condition to closing only. With respect to
any Commitment, other than a Designated Commitment, that cannot be assigned to
the Acquiror without resulting in a default, acceleration or termination
thereof, the Company, at the Acquiror's request, shall perform its obligations
as agent for the benefit of the Acquiror under any such Commitment for the
remaining term of any such Commitment and the Acquiror agrees to reimburse the
Company for any and all reasonable costs and expenses incurred by the Company
in the performance of said obligations on behalf of the Acquiror.
8.07. OTHER AGREEMENTS. The Company shall deliver to Acquiror on the
Closing Date executed counterparts of the agreements and documents set forth in
Section 1.05(a)(I) and MNC shall deliver to Acquiror on the Closing Date
executed counterparts of the agreements and documents set forth in Section
1.05(a)(II) and MNC shall cause the MNC Subsidiaries to deliver to Acquiror on
the Closing Date duly executed counterparts of the Assignment and Assumption of
Container Leases.
8.08. OPINION OF MORGAN, LEWIS & BOCKIUS. The Acquiror shall have
received an opinion of Morgan, Lewis & Bockius, dated as of the Closing Date,
substantially in the form attached hereto as Exhibit T.
8.09. FIRPTA CERTIFICATE. Acquiror shall have received from the Sellers
a certificate of non-foreign status under Treas. Reg. Paragraph 1-1445-2(b)(2)
in form and substance reasonably satisfactory to the Acquiror.
8.10. CERTIFICATES. Sellers shall have furnished the Acquiror with such
certificates of its officers and others to evidence compliance with the
conditions set forth in this Article VIII as may be reasonably requested by
Acquiror.
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ARTICLE IX
[INTENTIONALLY OMITTED]
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ARTICLE X
EMPLOYEES
10.01. OFFER OF EMPLOYMENT. Acquiror shall, effective as of the Closing,
offer to employ beginning on the Closing Date all of the Employees at no less
than current base salary and at their current locations, but subject to such
other benefits, terms and conditions of employment as Acquiror may determine,
provided that such other benefits, terms and conditions of domestic employees
are no less favorable than those that Acquiror provides to its current
employees; and provided further that for purposes of Acquiror's welfare and
benefit plans, Acquiror shall waive all pre-existing condition exclusions and
will give the Employees credit for years of service with the Company. Subject
in each case to Section 10.02 below, Acquiror shall bear and discharge any and
all of such liability in respect of the employment (or termination thereof) of
the Employees from and after the Closing. Acquiror shall indemnify and save
harmless Sellers from and against any and all losses, damages, expenses,
liabilities, claims and demands whatsoever made or brought against Sellers by
any Employee who accepts Acquiror's offer of employment or by any federal,
state or local governmental authority which in any way pertains to or arises
out of such liability including, any interest, award, judgement or penalty
relating thereto and any costs or expenses incurred by Sellers in defending any
such claim or demand.
10.02. SELLERS' OBLIGATIONS. With respect to any and all liability in
respect of the employment of the Employees on or prior to the Closing, Sellers
shall, except to the extent expressly included within the Assumed Liabilities,
bear, discharge and be responsible for payment of all severance, termination,
pay in lieu of termination, damages for wrongful or constructive dismissal,
provision of continuation coverage under Section 601 ET. SEQ. of ERISA, and
other similar liabilities incurred in connection with the termination of
employment of any of the Employees at or prior to the Closing (including
without limitation any termination of the employment relationship with Seller
occurring by reason of the transactions contemplated by this Agreement) or who
refuse to accept Acquiror's offer of employment. In addition, Sellers will pay
or reimburse Acquiror for the cost of any accrued payroll and vacation to the
Closing Date of all Employees of the Subsidiaries. Sellers shall indemnify and
save Acquiror harmless from and against any and all losses, damages, expenses,
liabilities, claims and demands whatsoever made or brought against Acquiror by
any such Employee or other person, or any federal, state or local governmental
authority or body which in any way pertains to or rises out of such liability,
including any interest, award, judgement or penalty relating thereto and any
costs or expenses incurred by Acquiror in defending any such claim or demand.
10.03. COOPERATION. During the period following the date hereof, up to
and including the Closing Date, Sellers and Acquiror shall cooperate in
communicating with the Employees any information relating to the acquisition of
the Sale Assets and Container Operations by the Acquiror from the Sellers.
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10.04. NON-SOLICITATION. Sellers agree not to solicit any of the
Employees for the period ending two years following the Closing.
ARTICLE XI
SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNIFICATION; ARBITRATION
11.01. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made in Sections 3.02, 3.06, 3.12 and 4.02 shall survive the
Closing hereunder and any investigation at any time made by or on behalf of the
other party. All representations and warranties made in Section 3.19 shall
expire on the Closing Date. All other representations and warranties shall
survive for two years after the Closing hereunder (the "Expiration Date").
11.02. STATEMENTS AS TO REPRESENTATIONS. All statements contained herein
or in the Disclosure Schedules delivered pursuant hereto (except as
specifically stated) shall be deemed representations and warranties within the
meaning of Sections 7.01, 8.01 and 11.01 hereof. The Acquiror specifically
acknowledges and agrees that (i) other than the representations and warranties
of the Sellers specifically contained in this Agreement, there are no
representations or warranties of the Sellers either expressed or implied with
respect to the Company, the Subsidiaries, the Sale Assets, and Assumed
Liabilities or the Container Operations and (ii) with respect to this
Agreement, Acquiror shall have a right to indemnification solely as provided in
this Article XI (except to the extent provided in Sections 6.09 and 13.12) and
that it shall have no claim or right to indemnification with respect to any
other information, documents or materials furnished by the Sellers or any of
their officers, directors, employees, agents or advisors to the Acquiror,
including, without limitation, any information, documents or material made
available to Acquiror in the "data room" organized for the purposes of the
transactions contemplated by this Agreement.
11.03. AGREEMENT TO INDEMNIFY BY THE SELLERS. Subject to the conditions
and provisions herein set forth, the Sellers, jointly and severally, hereby
agree to indemnify, defend and hold harmless Acquiror and each parent,
subsidiary and Affiliate of Acquiror from and against all demands, claims,
actions or causes of action, assessments, losses, damages, liabilities,
out-of-pocket costs and expenses, including, without limitation, interest,
penalties and attorney's fees, asserted against or imposed upon or incurred by
Acquiror or any parent, subsidiary or Affiliate of Acquiror resulting from (i)
a breach of any then surviving representation or warranty of any of the Sellers
contained in or made pursuant to this Agreement, (ii) any obligation,
responsibility, claim or liability of the Sellers (including, without
limitation, any indemnification or similar arrangement under any lease),
whether known or unknown, contingent, absolute or otherwise, other than those
obligations, responsibilities, claims or liabilities assumed by Acquiror as
part of the Assumed Liabilities under this Agreement, (iii) the nonperformance,
partial or total, of any
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agreement of the Sellers contained in this Agreement or any of the documents
delivered pursuant to Section 1.05(a), (iv) as a result of injury to or
sustained by any person on or prior to the Closing or injury to or destruction
of tangible property on or prior to the Closing arising out of the conduct of
the Container Operations on or prior to the Closing, or (v) as a result of any
failure of Sellers to transfer to Acquiror good, valid, and marketable title in
and to the Software and Intellectual Property Rights, free of any liens,
claims, charges, security interests, restrictions on transfer (or claims
alleging a failure to obtain consent to transfer) or other encumbrances (except
to the extent that any adverse claim or defect in title does not impair
Acquiror's ability to use the Software or Intellectual Property Rights in the
Container Operations) or any infringment of the intellectual property rights of
others arising from the use of such Software or Intellectual Property Rights in
the Container Operations (collectively, "Damages"). With respect to all
representations and warranties of the Sellers other than those set forth in
Sections 3.02, 3.06 and 3.12 hereof, Acquiror shall not be entitled to recover
for and agrees not to assert any claim for breach of any such representations
or warranties (including without limitation any claim for indemnification for
breach of a representation or warranty under clause (i) of this Section 11.03,
unless Acquiror delivers to the Sellers, in writing, on or prior to the
Expiration Date, a notice in accordance with Section 11.05 specifying such
claim of breach. Notwithstanding any language contained herein to the
contrary, (A) the Seller's shall not have any liability under Section 11.03(i)
until the cumulative Damages relating to such representations and warranties
exceeds $200,000 in the aggregate, in which case the Sellers shall pay all such
amounts of Damages claimed; provided, however, that the parties understand and
agree that the $200,000 threshold described in this Section 11.03 is applicable
only with respect to claims for Damages under this Article XI and is
specifically not available to offset adjustments to the consideration set forth
in Section 1.03(a)(A) pursuant to Section 1.07 hereof; (B) Sellers shall have
no liability under clause (i) in respect of any matter or category of matter
(e.g. uncollectible accounts) for which an express reserve or valuation
adjustment or allowance is reflected on the Consolidated Statement of Net
Assets specifically for such matter or category of matters; and (C) Sellers'
aggregate liability under this Section 11.03 shall in no event exceed
$350,000,000. The Acquiror acknowledges and agrees that, except as otherwise
provided in this Agreement or any agreement executed between the parties hereto
in connection with the transactions contemplated hereby, from and after the
Closing, its sole and exclusive remedy with respect to any and all claims
(other than claims of, or causes of action arising from, fraud) for money
damages (as opposed to equitable claims and remedies) relating to the subject
matter of this Agreement shall be pursuant to the indemnification provisions
set forth in this Section 11.03. In furtherance of the foregoing, the Acquiror
hereby waives, from and after the Closing, to the fullest extent permitted
under applicable law, any and all rights, claims and causes of action (other
than claims of, or causes of action arising from, fraud) it may have against
the Sellers relating to the subject matter of this Agreement arising under or
based upon any federal, state or local statute, law, ordinance, rule or
regulation or otherwise.
11.04. AGREEMENT TO INDEMNIFY BY ACQUIROR. Subject to the conditions and
provisions herein set forth, Acquiror, jointly and severally with any Acquiror
Entity, hereby agrees to indemnify, defend and hold harmless the Sellers and
each parent, subsidiary and Affiliate of the
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Sellers from and against all demands, claims, actions or causes of action,
assessments, damages, liabilities, out-of-pocket costs and expenses, including,
without limitation, interest, penalties and attorney's fees, asserted against
or imposed upon or incurred by the Sellers or any parent, subsidiary or
Affiliate of the Sellers resulting from (i) a breach of any surviving
representation or warranty of Acquiror contained in or made pursuant to this
Agreement, (ii) the breach or nonperformance, total or partial, of any Assumed
Liability and any other obligation, responsibility, claim or liability of
Acquiror and its subsidiaries (including, without limitation, any
indemnification or similar arrangement under any lease), whether known or
unknown, contingent, absolute or otherwise, (iii) the breach or nonperformance,
total or partial, of any agreement of Acquiror or any Acquiror Entity contained
in this Agreement or any of the documents or agreements delivered pursuant to
Section 1.05(b) (including any breach or nonperformance by Acquiror or any
Acquiror Entity of the Assignment and Assumption Agreements), (iv) as a result
of injury to or sustained by any person after the Closing or injury to or
destruction of tangible property after the Closing arising out of the conduct
of the Container Operations after the Closing or (v) the Container Operations
after the Closing, including the use of the Names and Marks by Acquiror, any
Acquiror Entity or any Subsidiary (on Containers or otherwise) following the
Closing pursuant to the License Agreement (collectively, "Damages"). With
respect to all representations and warranties of Acquiror, the Sellers shall
not be entitled to recover for and agree not to assert any claim for breach of
any such representations or warranties (including without limitation any claim
for indemnification for breach of a representation or warranty under clause (i)
of this Section 11.04) unless the Sellers deliver to Acquiror, in writing, on
or prior to the Expiration Date, a notice specifying such claim of breach.
Notwithstanding any language to the contrary contained herein (A) Acquiror and
the Acquiror Entities shall not have any liability under Section 11.04(i) until
the cumulative Damages relating to such representations and warranties exceed
$200,000 in the aggregate, in which case the Acquiror shall pay all such
amounts of Damages claimed and (B) Acquiror's aggregate liability under this
Section 11.04 shall in no event exceed $350,000,000. The Sellers acknowledge
and agree that, except as otherwise provided in this Agreement or any agreement
executed between the parties hereto in connection with the transactions
contemplated hereby, from and after the Closing, their sole and exclusive
remedy with respect to any and all claims (other than for, or for courses of
action arising from, fraud) for monetary damages (as opposed to equitable
claims and remedies) relating to the subject matter of this Agreement shall be
pursuant to the indemnification provisions set forth in this Section 11.04. In
furtherance of the foregoing, each of the Sellers hereby waives, from and after
the Closing, to the fullest extent permitted under applicable law, any and all
rights, claims and causes of action (other than claims of, or cause of action
arising from, fraud) it may have against Acquiror relating to the subject
matter of this Agreement arising under or based upon any federal, state or
local statute, law, ordinance rule or regulation or otherwise.
11.05. PROCEDURES RELATING TO INDEMNIFICATIONS. (a) In the event of any
claim by a party seeking indemnification under this Article XI or any other
section of this Agreement expressly providing for indemnification of one party
by the other (an "indemnified party"), the indemnified party shall notify the
party from whom indemnification is sought (the "indemnifying party") in
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writing of said claim, which notice shall set forth the basis of the claim for
Damages and, if then determinable by the indemnified party, a reasonable
estimate of the amount thereof (or if, in the indemnified party's good faith
opinion, no such reasonable estimate can then be made by it, the maximum
potential Damages that, in the indemnified party's good faith opinion, might be
sustained in connection with such claim).
(b) In order for an indemnified party to be entitled to any
indemnification provided for under this Agreement in respect of, arising out of
or involving a claim or demand made by any person, firm , governmental
authority or corporation against the indemnified party (a "Third Party
Claim"), such indemnified party must notify the indemnifying party in writing,
and in reasonable detail, of the Third Party Claim promptly after receipt by
such indemnified party of written notice of the Third Party Claim; provided,
however, that failure to give such notification shall not affect the
indemnification provided hereunder except to the extent the indemnifying party
shall have been actually prejudiced as a result of such failure (except that
the Indemnifying Party shall not be liable for any expenses incurred during the
period in which the indemnified party failed to give such notice). Thereafter
the indemnified party shall deliver to the indemnifying party, promptly after
the indemnified party's receipt thereof, copies of all notices and documents
(including court papers) received by the indemnified party relating to the
Third Party Claim.
If a Third Party Claim is made against an indemnified party, the
indemnifying party will be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
indemnifying party. Should the indemnifying party so elect to assume the
defense of a Third Party Claim, the indemnifying party will not be liable to
the indemnified party for legal fees and expenses subsequently incurred by the
indemnified party in connection with the defense thereof. If the indemnifying
party assumes such defense, the indemnified party shall have the right to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the indemnifying party, it being
understood that the indemnifying party shall control such defense. The
indemnifying party shall be liable for the fees and expenses of counsel
employed by the indemnified party for any period during which the indemnifying
party has not assumed the defense thereof (other than during any period in
which the indemnified party shall have failed to give notice of the Third Party
Claim as provided above). If the indemnifying party chooses to defend or
prosecute any Third Party Claim, all the parties hereto shall cooperate in the
defense or prosecution thereof. Such cooperation shall include the retention
and (upon the indemnifying party's request) the provision to the indemnifying
party of records and information which are reasonably relevant to such Third
Party Claim, and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. Whether or not the indemnifying party shall have assumed the
defense of a Third Party Claim, the indemnified party shall not admit any
liability with respect to, or settle, compromise or discharge, such Third Party
Claim without the indemnifying party's prior written consent (which consent
shall not be unreasonably withheld).
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(c) Notwithstanding anything in this Section 11.05 the contrary, in
the event of a Third Party Claim relating to Transfer Taxes described in
Section 13.03, Sellers shall be entitled to participate in the defense of such
claim at their own expense and on any equal basis with Acquiror, and both
Sellers and Acquiror must consent (which consent may not be unreasonably
withheld) to any resolution of any such claim.
11.06. LOSSES NET OF INSURANCE, ETC. The amount of any loss, liability,
claim, damage, expense or tax for which indemnification is provided under this
Article XI shall be net of any amounts recovered by the indemnified party under
insurance policies with respect to such loss, liability, claim, damage, expense
or tax and shall be reduced to take account of any actual net tax benefit
realized (taking into account the receipt of the indemnity payment) by the
indemnified party arising from the incurrence or payment of any such loss,
liability, claim, damage, expense or tax. In computing the amount of any such
actual net tax benefit realized, (i) the indemnified party shall be deemed to
recognize all other items of income, gain, loss, deduction or credit before
recognizing any item arising from the incurrence or payment of any indemnified
loss, liability claim, damage, expense or tax and (ii) the parties agree to
treat all payments pursuant to this Article XI as an adjustment to the purchase
price for the Sale Assets, unless otherwise required by law.
11.07. TAX MATTERS.
(a) TAX INDEMNIFICATION. The Sellers, jointly and severally,
shall be liable for and indemnify Acquiror and each parent, subsidiary and
Affiliate of Acquiror for any and all Pre-Closing Taxes and any and all
out-of-pocket costs, including attorney's fees, incurred by Acquiror or
any parent, subsidiary or Affiliate of Acquiror relating to any and all
Pre-Closing Taxes. Acquiror shall be liable for and shall indemnify
Sellers and each parent, subsidiary and Affiliate of Sellers for all Taxes
of Acquiror and its Affiliates, including the Subsidiaries, for periods
following the Closing, other than Pre-Closing Taxes. For purposes of this
Agreement, "Pre-Closing Taxes" means all Taxes (i) of the Sellers, the
Subsidiaries and the Branches attributable to periods ending on or prior
to the Closing, and (ii) imposed against the Seller's Group whether under
Treas. Reg. Paragraph 1.1502-6 (or any similar provision of state, local
or foreign law), as a transferee or successor, by contract or otherwise,
but excluding (x) any Transfer Taxes payable by Acquiror pursuant to
Section 13.03 of this Agreement, (y) any Taxes that are Assumed
Liabilities and that are included in the Consolidated Statement of Net
Assets as finally determined, and (z) any Taxes arising from actions
taken outside the ordinary course of business following the Closing on
the Closing Date at the request of or for the benefit of Acquiror.
(b) APPORTIONMENT OF INCOME TAXES. In order to appropriately
determine the amount of Pre-Closing Taxes relating to any taxable year or
period that begins before and ends after the Closing Date, the parties
hereto shall, to the extent permitted by applicable law, elect with the
relevant taxing authority to terminate the taxable year as of
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such date. In any case where applicable law does not permit a Subsidiary
or Branch to treat such date as of the end of a taxable year of such
Subsidiary or Branch, then, for purposes of determining Pre-Closing
Taxes, the taxable year of such Subsidiary or Branch shall be treated as
having ended on the Closing Date and the Taxes attributable to the period
ending on such date shall (unless otherwise agreed to in writing by
Acquiror and Sellers) be determined by a closing of such Subsidiary's or
Branch's books, except that exemptions, allowances or deductions that are
calculated on an annual basis, such as the deduction for depreciation,
shall be apportioned on a time basis.
(c) APPORTIONMENT OF OTHER TAXES. In order to appropriately
determine the amount of Pre-Closing Taxes, other than income Taxes,
relating to any taxable year or period that begins before and ends after
the date of the Financial Statements or the Closing Date, (i) AD VALOREM
Taxes (including, without limitation, real and personal property Taxes)
shall be accrued on a monthly basis over the period for the which the
Taxes are levied, or if it cannot be determined over what period the Taxes
are being levied, over the fiscal period of the relevant taxing authority,
in each case irrespective of the lien or assessment date of such Taxes,
and (ii) franchise and other privilege Taxes not measured by income shall
be accrued on a monthly basis over the period to which the privilege
relates, PROVIDED, HOWEVER, that any increase or decrease in any Taxes
described in clauses (i) or (ii) for periods following the Closing and
resulting from the Closing or other actions taken by Acquiror, its
Affiliates (including the Subsidiaries) or their transferees following the
Closing shall be the responsibility of the Acquiror.
(d) TAX SHARING AGREEMENTS. Any tax sharing agreement between
the Subsidiaries and any of the Sellers or any Affiliate of the Sellers
shall be terminated as of the Closing Date and will have no further effect
for any taxable year (whether the current year, a future year, or a past
year). Each Seller and all Affiliates of the Sellers shall cancel any
intercompany accounts in respect of Taxes with the Subsidiaries as of the
Closing.
(e) ASSISTANCE AND COOPERATION. After the Closing Date, each
of Sellers and Acquiror shall:
(i) take reasonable steps to assist (and cause their respective
Affiliates to assist) the other party, as reasonably requested, in preparing
any Tax Returns which such other party is responsible for preparing and filing
with respect to the Container Operations;
(ii) take reasonable steps to cooperate with the other in preparing for
any audits of, or disputes with taxing authorities regarding, any Tax Returns
of the Sellers, the Subsidiaries and Branches with respect to the Container
Operations;
(iii) make available to the other and to any taxing authority as
reasonably requested all information, records and documents (other than such
items for which a party asserts the attorney-
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client or attorney work-product privilege) relating to Taxes of the Sellers,
Acquiror, the Subsidiaries and Branches with respect to the Container
Operations, which each party shall retain for the latest of the applicable
statute of limitations relating to Taxes to which such information,
records and documents may relate;
(iv) provide timely notice to the other in writing of any pending or
threatened Tax audits or assessments of the Sellers, the Subsidiaries and
Branches on the one hand and Acquiror, the Subsidiaries and Branches on the
other hand for taxable periods for which the other may have an interest; and
(v) furnish the other with copies of all correspondence received from any
taxing authority in connection with any Tax audit or information request with
respect to any such taxable period referred to in the above paragraph (iv).
The covenants set forth in this Section 11.07(e) shall be in addition to
the provisions set forth in Section 2.02.
(f) NO SECTION 338 ELECTION. No person or entity (including
without limitation, following the Closing, PICC) shall make an election
under Section 338 of the Code with respect to the transfer of the stock of
any of the Foreign Subsidiaries pursuant to this Agreement, and Acquiror
shall indemnify and hold harmless Sellers and their Affiliates from and
against any and all Taxes and costs incurred in connection with any such
election.
(g) CALIFORNIA SALES TAX CERTIFICATE. Sellers will cooperate
with Acquiror in Acquiror's efforts to obtain a certificate described in
Section 6813 of the California Revenue and Taxation Code with respect to
the liability of Sellers for California sales and use taxes.
(h) SURVIVAL OF OBLIGATIONS. The obligations of the parties
set forth in this 11.07 relating to Taxes shall, except as provided herein
or otherwise agreed to in writing, be unconditional and absolute and shall
remain in effect without limitation as to time or amount of recovery by
Acquiror or Sellers.
11.08. ARBITRATION. Any dispute as to any claims hereunder, other than
as set forth in Section 1.07, shall be settled by arbitration in the City of
New York by three arbitrators, one of whom shall be appointed by the Sellers,
one by Acquiror and the third of whom shall be appointed by the first two
arbitrators. If either party fails to appoint an arbitrator within 20 days of
a request in writing by the other party to do so or if the first two
arbitrators cannot agree on the appointment of a third arbitrator within 20
days of their designation, then such arbitrator shall be appointed by the Chief
Judge of the United States District Court for the Southern District of New
York. Except as to the selection of arbitrators which shall be as set forth
above, the arbitration shall be conducted promptly and expeditiously in
accordance with the rules of the American
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Arbitration Association so as to enable the arbitrators to render an award as
expeditiously as possible. Judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof. Each party shall bear
the expenses of its arbitrator and shall jointly and equally share with the
other the expenses for the third arbitrator and the arbitration.
ARTICLE XII
TERMINATION AND ABANDONMENT
12.01. METHODS OF TERMINATION. The transactions contemplated herein may
be terminated and/or abandoned at any time, but not later than the Closing:
(a) By mutual consent of the Acquiror and the Company; or
(b) By the Acquiror on or after September 30, 1995, if any of the
conditions provided for in Article VIII of this Agreement shall not have been
met or waived in writing by Acquiror prior to such date; or
(c) By the Company on or after September 30, 1995, if any of the
conditions provided for in Article VII of this Agreement shall not have been
met or waived in writing by the Company prior to such date.
12.02. PROCEDURE UPON TERMINATION. In the event of termination or
abandonment pursuant to Section 12.01 hereof, written notice thereof shall
forthwith be given to the other party and the transactions contemplated by this
Agreement shall be terminated and abandoned, without further action by the
parties hereto. If the transactions contemplated by this Agreement are
terminated and abandoned as provided herein pursuant to Section 12.01:
(a) Each party will redeliver all documents, work papers and other
material of any other party (including all copies) relating to the transactions
contemplated hereby, whether so obtained before or after the execution hereof,
to the party furnishing the same;
(b) All confidential information received by any party hereto with
respect to the business of any other party or its subsidiaries shall be treated
in accordance with Section 2.01 hereof; and
(c) No party hereto shall have any liability or further obligation
to any other party to this Agreement except as stated in subparagraphs (a) and
(b) of this Section 12.02, and except for breaches of this Agreement occurring
prior to termination of this Agreement.
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.01. AMENDMENT AND MODIFICATION. Subject to applicable law, this
Agreement may be amended, modified and supplemented by written agreement of the
Company and Acquiror or by their respective duly authorized officers at any
time prior to the Closing with respect to any of the terms contained herein.
13.02. WAIVER OF COMPLIANCE. Any failure of the Sellers, on the one
hand, or Acquiror, on the other, to comply with any obligation, covenant,
agreement or condition herein may be expressly waived in writing by the
Chairman of the Board, President or a Vice President of Acquiror or the
Company, respectively, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
13.03. EXPENSES; TRANSFER TAXES. Except as otherwise provided in Section
2.02 hereof, whether or not the transactions contemplated by this Agreement
shall be consummated, the Sellers agree that all fees and expenses incurred by
them in connection with this Agreement shall be borne by the Sellers and
Acquiror agrees that all fees and expenses incurred by it in connection with
this Agreement shall be borne by Acquiror including, without limitation, all
fees of counsel, actuaries and accountants. Notwithstanding the foregoing, any
and all sales, use, VAT, transfer, foreign transaction, excise, property or
other similar national, federal, state, local, provincial Taxes, other than any
Taxes based on net income, together with any interest and penalties pertaining
thereto ("Transfer Taxes"), that may be payable in connection with the sale and
transfer of the Sale Assets shall be apportioned among the parties as follows:
Acquiror shall pay all Transfer Taxes up to $240,000 and Sellers on one hand
and Acquiror on the other hand shall each pay one-half of all Transfer Taxes in
excess of such amount. Sellers shall provide to Acquiror, prior to the Closing,
a schedule showing in reasonable detail the amount of any Transfer Taxes
payable by Acquiror in connection with the transfer of the Sale Assets, such
amounts to be determined in a manner consistent with the allocations set forth
on Exhibit A. Acquiror shall pay such amount (the "Initial Transfer Tax
Payment") to Sellers, in the manner provided in Section 1.03(a)(B) hereof at
the Closing, and Sellers shall pay such amount, together with any remaining
amount of Transfer Taxes determined by Seller, to the appropriate taxing
authorities as soon as practicable thereafter. In the event of an adjustment
to the consideration as a result of the application of Section 1.07 hereof,
within a reasonable time following such adjustment, Sellers shall provide to
Acquiror a revised statement of Transfer Taxes, and Sellers shall refund to
Acquiror, or Acquiror shall pay to Sellers, as the case may be, the applicable
portion of any difference between such revised amount and the Initial Transfer
Tax Payment. Sellers and Acquiror shall reasonably cooperate in attempting to
minimize the amount of any Transfer Taxes. Acquiror shall indemnify and hold
harmless Sellers and any Affiliates of Sellers from any Transfer Taxes in
excess of the Transfer Taxes, if any, that are the responsibility of Sellers
pursuant to this Section 13.03.
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13.04. NOTICES. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand or mailed, certified or registered mail
with postage prepaid:
(a) If to Sellers, to:
Matson Leasing Company, Inc.
333 Market Street - 30th Floor
San Francisco, California 94105-2196
Attention: Vice President and CFO
Matson Navigation Company, Inc.
333 Market Street - 30th Floor
San Francisco, California 94105-2196
Attention: Senior Vice President and General Counsel
(with copies to:)
Gibson, Dunn & Crutcher
333 S. Grand Ave.
Los Angeles, California 90071
Attention: Bradford P. Weirick, Esq.
or to such other person or address as Sellers furnish to Acquiror
in writing.
(b) if to the Acquiror, to:
XTRA, Inc. c/o
X-L-Co., Inc.
60 State Street
Boston, Massachusetts 02109
Attention: Vice President and General Counsel
(with copies to:)
Ropes & Gray
One International Place
Boston, Massachusetts 02110
Attention: David A. Fine, Esq.
and
Morgan, Lewis & Bockius
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<PAGE> 56
801 S. Grand Ave.
Los Angeles, California 90017
Attention: William Ellis, Esq.
or to such other person or address as Acquiror shall furnish to
Seller in writing.
13.05. ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties,
except by operation of law. Notwithstanding the foregoing, Acquiror shall be
entitled to designate one or more Acquiror Entities to receive some or all of
the Sale Assets and/or to assume some or all of the Assumed Liabilities at the
Closing; provided, however, that it is expressly agreed and acknowledged that,
for all purposes, Acquiror shall remain a party to this Agreement and shall
remain bound by the covenants and agreements of the Acquiror set forth herein.
13.06. PUBLICITY. Neither the Sellers nor Acquiror shall make or issue,
or cause to be made or issued, any announcement or written statement concerning
this Agreement or the transactions contemplated hereby for dissemination to the
general public without the prior consent of the other party. This provision
shall not apply, however, to any announcement or written statement required to
be made by law or the regulations of any federal or state governmental agency
or any stock exchange, except that the party required to make such announcement
shall, whenever practicable, consult with the other party concerning the timing
and content of such announcement before such announcement is made.
13.07. GOVERNING LAW. This Agreement and the legal relations among the
parties hereto shall be governed by and construed in accordance with the laws
of the State of New York without regard to its conflicts of law doctrine.
13.08. COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
13.09. HEADINGS. The headings of the Sections and Articles of this
Agreement are inserted for convenience only and shall not constitute a part
hereof or affect in any way the meaning or interpretation of this Agreement.
13.10. ENTIRE AGREEMENT. This Agreement, including the Exhibits hereto,
the Company Disclosure Schedule, and the other documents and certificates
delivered pursuant to the terms hereof, sets forth the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein, and supersedes all prior agreements, promises, covenants,
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arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto.
13.11. THIRD PARTIES. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed
to confer upon or give to any person or corporation other than the parties
hereto and their successors or assigns any rights or remedies under or by
reason of this Agreement.
13.12. BULK TRANSFERS. The parties hereto waive compliance with the
requirements of the bulk sales law of any jurisdiction in connection with the
sale of the Sale Assets to Acquiror. Sellers shall indemnify and hold harmless
the Acquiror against all liabilities (other than the Assumed Liabilities) which
may be asserted by third parties with respect to assets sold by the Seller as a
result of noncompliance with any such bulk sales laws.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
XTRA, INC.
By /s/ James R. Lajoie
----------------------------
Title: Vice President
MATSON LEASING COMPANY, INC.
By /s/ Frederick Gutterson
----------------------------
Title: President
MATSON NAVIGATION COMPANY, INC.
By /s/ Kevin C. O'Rourke
----------------------------
Title: Vice President
<PAGE> 59
EXHIBIT A
---------
SALE ASSETS
-----------
PART I
[LIST OF OWNED CONTAINERS AND CONTAINERS SUBJECT TO CONTAINER LEASES,
INCLUDING DESCRIPTIONS REQUIRED BY SECTION 3.24]
PART II
[LIST OF CONTAINER PURCHASE COMMITMENTS TO BE ATTACHED]
PART III
[LIST OF OPERATING LEASES TO BE ATTACHED]
PART IV
[LIST OF CONTAINER LEASES TO BE ATTACHED]
PART V
[LIST OF STOCK OF SUBSIDIARIES]
PART VI
[LIST OF PROPERTY AND OFFICE LEASES TO BE ATTACHED]
PART VII
[LIST OF DEPOT AND AGENCY AGREEMENTS
PART VIII
[SOFTWARE AGREEMENTS]
PART IX
[OTHER ASSETS]
<PAGE> 60
1. All right, title, and interest in and to all of the other assets of
the Company whenever acquired, including, all of its:
(a) real property, leaseholds and subleaseholds therein,
improvements, fixtures and fittings thereon;
(b) tangible personal property such as equipment, inventories of raw
materials and supplies, manufactured and purchased parts, furniture,
automobiles, trucks, tractors, tools, office equipment, furniture and
furnishings;
(c) leases, subleases, and rights thereunder, including the
Operating Leases;
(d) agreements, contracts, commitments;
(e) accounts, notes, prepaid expenses and other receivables and
current assets;
(f) all computers, software and other systems, including licenses
and sublicenses granted and obtained with respect thereto, and rights
thereunder, rights to protection of interests therein, and remedies against
infringement thereof;
(g) all securities;
(h) cash and cash equivalents;
(i) claims, deposits and prepayments (to third parties), refunds,
causes of action, choses in action, rights of recovery, rights of set-off and
rights of recoupment;
(j) franchises, approvals, permits, licenses, orders, registrations,
certificates, variances and similar rights obtained from governments and
governmental agencies;
(k) books, records, files, documents, correspondence, memoranda,
books of account and the like, including all cargo container prototype test
certificates and cargo container production certificates of the Company and the
Subsidiaries (and stock ledgers, tax returns and minute books of the
Subsidiaries), promotional materials, studies, reports and other printed or
written materials related to the Sale Assets and the Container Operations;
(l) intellectual property, goodwill associated therewith, licenses
and sublicenses granted and obtained with respect thereto;
(m) all guarantees, manufacturers' warranties, uncollected warranty
claims and letters of credit, if any, relating to the Sale Assets and the
Container Operations; and
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(n) any deferred Tax assets or deferred tax benefits of the
Subsidiaries and Branches;
in each case, to the extent not included in the definition of Excluded Assets.
2. All right, title and interest in and to all of the software of MNC
used exclusively in the Container Operations.
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<PAGE> 62
EXHIBIT B
---------
ASSUMED LIABILITIES
-------------------
PART I
The Container Purchase Commitments, Operating Leases, Container
Leases, Property and Office Leases; Depot Agreements and Agency Agreements set
forth on Parts II, III, IV, and VII of Exhibit A.
PART II
The Agreement dated as of December, 1994 between the Company and
Frederick M. Gutterson relating to employment and severance.
PART III
(a) The liabilities of the Company or the Subsidiaries arising on or
prior to the Closing Date with respect to the following categories of
liabilities: "Accounts Payable" (other than "Current Insurance Reserve (for
deductible)"), "Other Current Liabilities" (other than "Fringe Benefits - San
Francisco" and "Other - Executive Incentive Program") and "Other Long Term
Liabilities" (other than "Post-retirement Benefits," "General Pension" and
"Executive Pension"), within the meaning of such terms as used on the
Consolidated Statement of Net Assets of the Company as of March 31, 1995,
whether or not the amount of such liabilities are adequately reflected on the
Consolidated Statement of Net Assets of the Company as of March 31, 1995 or as
of the Closing Date;
(b) all liabilities and obligations of the Company or the
Subsidiaries under the agreements, contracts, licenses, leases and other
arrangements included in the Sale Assets, including but not limited to
Container Purchase Commitments, Operating Leases, Container Leases, Depot
Agreements, Agency Agreements, Property and Office Leases, Software Agreements
and Miscellaneous Commitments;
(c) (i) the Transfer Taxes payable by Acquiror pursuant to Section
13.03, (ii) any Taxes of the Subsidiaries and Branches; (iii) any Taxes of the
Subsidiaries and Branches in the form of payroll Taxes payable in respect of
non-United States employees, and (iv) value added Taxes of the Subsidiaries and
Branches;
in each case, to the extent not included in the definition of Excluded
Liabilities.
-54-
<PAGE> 1
Exhibit 2.2
=================================================================
CREDIT AGREEMENT
DATED AS OF JUNE 30, 1995
AMONG
XTRA, INC.,
BANK OF AMERICA ILLINOIS
AND
EACH OF THE OTHER FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTIES HERETO,
WITH
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS ADMINISTRATIVE AGENT
AND
THE FIRST NATIONAL BANK OF BOSTON,
AS DOCUMENTATION AGENT
ARRANGED BY
BA SECURITIES, INC.
=================================================================
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<S> <C> <C>
1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
-----------
1.1 DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
-------------
1.2 Other Interpretive Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-----------------------------
1.3 Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
---------------------
2. THE CREDIT FACILITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
---------------------
2.1 Amounts and Terms of Commitments. . . . . . . . . . . . . . . . . . . . . . . 17
--------------------------------
(a) The Term Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
---------------
(b) The Revolving Credit. . . . . . . . . . . . . . . . . . . . . . . . . 17
--------------------
(c) The Term Out Credit . . . . . . . . . . . . . . . . . . . . . . . . . 18
-------------------
2.2 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
-----
2.3 Procedure for Borrowing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
-----------------------
2.4 Conversion and Continuation Elections . . . . . . . . . . . . . . . . . . . . . . 19
-------------------------------------
2.5 Voluntary Termination or Reduction of Commitment . . . . . . . . . . . . . . . . 20
------------------------------------------------
2.6 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
--------------------
2.7 Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
---------
(a) The Term Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
---------------
(b) The Revolving Credit . . . . . . . . . . . . . . . . . . . . . . . . 21
--------------------
(c) The Term Out Credit . . . . . . . . . . . . . . . . . . . . . . . . . 21
-------------------
2.8 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
--------
2.9 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
----
(a) Arrangement, Agency Fees . . . . . . . . . . . . . . . . . . . . . . 22
------------------------
(b) Non Use Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
-----------
2.10 Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
-----------------------
2.11 Payments by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
-----------------------
2.12 Payments by the Banks to the Administrative Agent . . . . . . . . . . . . . . 24
-------------------------------------------------
3. TAXES, YIELD PROTECTION AND ILLEGALITY . . . . . . . . . . . . . . . . . . . . . . . . 25
--------------------------------------
3.1 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
-----
3.2 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
----------
3.3 Increased Costs and Reduction of Return . . . . . . . . . . . . . . . . . . . 27
---------------------------------------
3.4 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
--------------
3.5 Inability to Determine Rates . . . . . . . . . . . . . . . . . . . . . . . . . 28
----------------------------
3.6 Certificates of Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
---------------------
3.7 Substitution of Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
---------------------
3.8 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
--------
4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
--------------------
4.1 Conditions of Initial Loans . . . . . . . . . . . . . . . . . . . . . . . . . 29
---------------------------
4.2 Conditions to All Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . 30
----------------------------
5. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
------------------------------
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
5.1 Corporate Existence and Good Standing . . . . . . . . . . . . . . . . . . . . 31
-------------------------------------
5.2 Corporate Power; Consent; Absence of Conflict with Other Agreements . . . . . 31
-------------------------------------------------------------------
5.3 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
-------------------
5.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
--------------------
5.5 Holding Company and Investment Company Acts . . . . . . . . . . . . . . . . . 33
-------------------------------------------
5.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
----------
5.7 No Materially Adverse Contracts . . . . . . . . . . . . . . . . . . . . . . . 33
-------------------------------
5.8 Compliance with Other Instruments; Laws . . . . . . . . . . . . . . . . . . . 33
---------------------------------------
5.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
-----
5.10 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
----------
5.11 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
---------------
5.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
-----
5.13 Licenses and Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
---------------------
5.14 Condition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
-------------------
5.15 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
------------
5.16 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
---------------
5.17 Matson Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
------------------
6. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
---------------------
6.1 Punctual Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
----------------
6.2 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
--------------------
6.3 Notification of Defaults and Event of Default . . . . . . . . . . . . . . . . 37
---------------------------------------------
6.4 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
-------------------
6.5 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
-----
6.6 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 38
-------------------------
6.7 Maintenance of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
------------------------
6.8 Records and Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
--------------------
6.9 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
----------
6.10 Notice of Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
--------------------
6.11 Pension Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
------------
6.12 Depreciation Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
---------------------
6.13 Perform Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
-------------------
6.14 Comply with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
-----------------
6.15 Environmental Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
------------------------
6.16 Debt Rating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
-----------
7. CERTAIN NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
--------------------------
7.1 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
-----
7.2 Leverage Ratio of Company . . . . . . . . . . . . . . . . . . . . . . . . . . 42
-------------------------
7.3 Maximum Secured Equipment Indebtedness of Company . . . . . . . . . . . . . . 42
-------------------------------------------------
7.4 Maximum Equipment Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 42
------------------------------
7.5 Consolidated Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . 43
---------------------------
7.6 Consolidated Cash Flow Coverage Ratio . . . . . . . . . . . . . . . . . . . . 43
-------------------------------------
7.7 Consolidated Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . 43
------------------------------------
7.8 Limitations on Restricted Payments . . . . . . . . . . . . . . . . . . . . . . 43
----------------------------------
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
7.9 Investments in the Ultimate Parent or the Parent . . . . . . . . . . . . . . . 43
------------------------------------------------
7.10 Mergers, Acquisitions, etc . . . . . . . . . . . . . . . . . . . . . . . . . . 43
--------------------------
7.11 Changes in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
-------------------
7.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
-----
8. EVENTS OF DEFAULT: ACCELERATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
-------------------------------
9. NOTICE AND WAIVERS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
-----------------------------
9.1 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
-----------------
9.2 Waivers of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
------------------
10. REMEDIES ON DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
-------------------
10.1 Rights of Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
---------------
10.2 Setoff: Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
---------------
(a) Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
-------
(b) Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
-------
11. THE ADMINISTRATIVE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
------------------------
11.1 Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . 50
-----------------------------
11.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
--------------------
11.3 Liability of Administrative Agent . . . . . . . . . . . . . . . . . . . . . . 51
---------------------------------
11.4 Reliance by Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . 51
--------------------------------
11.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
-----------------
11.6 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
---------------
11.7 Indemnification of Administrative Agent . . . . . . . . . . . . . . . . . . . 53
---------------------------------------
11.8 Agents in Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . 53
-----------------------------
11.9 Successor Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . 54
------------------------------
11.10 Withholding Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
---------------
11.11 Documentation Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
-------------------
12. ASSIGNMENT; PARTICIPATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
-------------------------
12.1 Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
-----------
12.2 Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
--------------
13. CONSENT TO JURISDICTION; WAIVER OF TRIAL BY JURY. . . . . . . . . . . . . . . . . . . . . 57
------------------------------------------------
14. BINDING ACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
-----------
15. FEES AND EXPENSES; INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
----------------------------
15.1 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
------------------
15.2 Company Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
-----------------------
16. REMEDIES CUMULATIVE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
-------------------
17. FURTHER ASSURANCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
------------------
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C>
18. SURVIVAL OF COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
---------------------
19. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
------------
20. NOTICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
------
21. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
-------------
22. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
-------------
23. ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
----------------
24. CONSENTS, AMENDMENTS AND WAIVERS. . . . . . . . . . . . . . . . . . . . . . . . . . 62
--------------------------------
</TABLE>
iv
<PAGE> 6
<TABLE>
EXHIBITS
--------
<CAPTION>
<S> <C>
EXHIBIT A Form of Promissory Note
EXHIBIT B Form of Notice of Borrowing
EXHIBIT C Form of Notice of Conversion/Continuation
EXHIBIT D List of Closing Documents
EXHIBIT E Form of Compliance Certificate
EXHIBIT F Form of Assignment and Acceptance Agreement
</TABLE>
v
<PAGE> 7
<TABLE>
SCHEDULES
---------
<CAPTION>
<S> <C>
Schedule 1.1(A) Applicable Margin; Non Use Fee
Schedule 1.1(B) Commitments and Pro Rata Shares
Schedule 1.1(C) Terms of Subordination
Schedule 2.7(a) Scheduled Reductions in Term Loans
Schedule 5.12 Plans
Schedule 5.15 Subsidiaries
Schedule 6.12 Depreciation Schedule
Schedule 20 Eurodollar and Domestic Lending Offices; Addresses for
Notices
</TABLE>
vi
<PAGE> 8
CREDIT AGREEMENT
----------------
THIS CREDIT AGREEMENT, dated as of June 30, 1995, is among the
Company, BAI, each of the other Banks and the Agents.
WHEREAS, the Banks have agreed to make available to the Company
certain term loan and revolving credit facilities, in each case upon the terms
and subject to the conditions set forth herein; and
WHEREAS, the Ultimate Parent and the Parent have each agreed to
guarantee the Obligations of the Company pursuant to the Guaranties;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the parties hereto agree as follows:
1. DEFINITIONS.
------------
1.1 DEFINED TERMS. The following terms have the following meanings:
"ACQUIRED EQUIPMENT INDEBTEDNESS" means, with respect to any specified
Person, all Secured Equipment Indebtedness of such specified Person that was
incurred by another Person either (a) prior to the acquisition by such
specified Person of the Transportation Equipment, or leases thereof, securing
such Secured Equipment Indebtedness, or (b) prior to the acquisition by such
specified Person of the obligor with respect to such Secured Equipment
Indebtedness (but, in each case, only to the extent that at the time of such
acquisition, such Secured Equipment Indebtedness does not exceed the fair value
of the Transportation Equipment, or leases thereof, securing such
Indebtedness). "ACQUIRED EQUIPMENT INDEBTEDNESS" shall also include all
extensions, renewals and refinancings of such Secured Equipment Indebtedness,
but, in each case, only to the extent that the principal amount thereof does
not exceed the outstanding principal amount of such Secured Equipment
Indebtedness immediately prior to such extension, renewal or refinancing.
"ADJUSTED BASE RATE" means, for any day, an interest rate per annum
equal to the sum of (A) the Base Rate and (B) the Applicable Margin, in each
case for such day.
"ADJUSTED EURODOLLAR RATE" means, for any day during any Interest
Period, with respect to Eurodollar Loans comprising part of the same Borrowing,
a rate of interest per annum equal to the sum of (A) the Eurodollar Rate in
effect for such Interest Period, (B) the Reserve Charge in effect for such day,
and (C) the Applicable Margin in effect for such day.
"ADMINISTRATIVE AGENT" means BofA, in its capacity as administrative
agent for the Banks hereunder, and any successor administrative agent appointed
pursuant to SECTION 11.9.
1
<PAGE> 9
"ADMINISTRATIVE AGENT-RELATED PERSONS" means BofA and any successor
agent appointed pursuant to SECTION 11.9, together with their respective
affiliates (including, in the case of BofA, BAI and the Arranger), and the
officers, directors, employees, agents and attorneys-in-fact of such Persons
and affiliates.
"ADMINISTRATIVE AGENT'S PAYMENT OFFICE" means the address for payments
set forth on SCHEDULE 20 in relation to the Administrative Agent, or such other
address as the Administrative Agent may from time to time specify hereunder.
"AGENTS" means, collectively, the Administrative Agent and the
Documentation Agent.
"AGREEMENT" means this Credit Agreement.
"APPLICABLE MARGIN" means, for any day with respect to any Revolving
Loan, Term Loan or Term Out Loan, as the case may be, the respective
percentages set forth on SCHEDULE 1.1(A) corresponding to the Type of such Loan
and the higher on such day of the Company's Debt Ratings; PROVIDED, that if, at
any time, neither of the Rating Agencies rates the Company's long-term senior
unsecured debt, then the respective percentages set forth in COLUMN VI of
SCHEDULE 1.1(A) shall be used to determine the Applicable Margin.
Notwithstanding the foregoing, at any time that the Company's Debt Ratings
differ by more than one level, then, if at such time, (A) the Company maintains
an Investment Grade Rating of such debt from both of the Rating Agencies, the
rating level immediately below the higher of such two ratings shall be used to
determine the Applicable Margin, or (B) the Company maintains an Investment
Grade Rating of such debt from either but not both, or from neither of the
Rating Agencies, the lower of such two ratings shall be used to determine the
Applicable Margin. Any change in the Applicable Margin resulting from a change
in a rating of the Company's Debt Rating shall become effective one Business
Day after the effective date of such change.
"ARRANGER" means BA Securities, Inc., a Delaware corporation.
"ASSIGNEE" has the meaning specified in SUBSECTION 12.1(A).
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in SUBSECTION
12.1(A).
"ATTORNEY COSTS" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the reasonable
allocated cost of internal legal services and all reasonable disbursements of
internal counsel.
"BAI" means Bank of America Illinois, an Illinois banking corporation.
"BOFA" means Bank of America National Trust and Savings Association, a
national banking association.
"BALANCE SHEET DATE" means September 30, 1994.
2
<PAGE> 10
"BANK" means each of the financial institutions listed on the
signature pages hereto and each other financial institution which from time to
time becomes a party hereto pursuant to SUBSECTION 12.1(A).
"BASE RATE" means, for any day, the higher for such day of: (A) the
rate of interest in effect for such day as publicly announced from time to time
by BofA in San Francisco, California, as its "reference rate"; and (B) 0.50%
per annum above the Federal Funds Rate for such day. The "reference rate" is a
rate set by BofA based upon various factors including BofA's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in the reference rate announced by BofA shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"BASE RATE LOAN" means a Loan that bears interest based on the
Adjusted Base Rate.
"BORROWING" means (I) a borrowing under SECTION 2 consisting of Loans
of the same Type (and in the case of Eurodollar Loans, having the same Interest
Period) made to the Company on the same day by the Banks, or (II) one or more
Borrowings converted or continued by the Borrower under SECTION 2 on the same
day into a Borrowing of Loans of the same Type (and in the case of Eurodollar
Loans, having the same Interest Period).
"BORROWING DATE" means, with respect to a Borrowing, the day on which
such Borrowing occurs.
"BUSINESS DAY" means any day on which commercial banking institutions
in Boston, Massachusetts; San Francisco, California; Chicago, Illinois; and New
York, New York, are each open for the transaction of banking business; and, if
the applicable Business Day relates to any Eurodollar Loan, means such a day on
which dealings are carried on in the London dollar interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a
bank.
"CAPITALIZED LEASE" means any lease with respect to which the
obligations of the lessee thereunder are required to be capitalized and
included in determining total liabilities of such lessee, in accordance with
Financial Accounting Standard No. 13 of the Financial Accounting Standards
Board as in effect on the Balance Sheet Date.
"CASH" means, with respect to any Person, cash and cash equivalents of
such Person, in each case as determined in accordance with GAAP.
"CASH FLOW" means, for any period, the sum of (A) Cash Flow From
Continuing Operations for such period, (B) Interest Charges for such period,
and (C) payments in respect of
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<PAGE> 11
Lease Obligations (other than any such payments in respect of obligations under
Capitalized Leases) for such period, all as determined in accordance with GAAP.
"CASH FLOW FROM CONTINUING OPERATIONS" means, for any period (A) cash
flow from continuing operations for such period MINUS (B) the aggregate amount
of the cash portion of all charges as extraordinary items of expense (if any)
made during such period, all determined in accordance with GAAP.
"CASH REQUIREMENTS" means, for any period, the sum of (A) Interest
Charges (excluding imputed interest, accrued original issue discount and
interest payable in kind) for such period, (B) payments (excluding optional
prepayments) due and payable in respect of Lease Obligations (other than such
Obligations under Capitalized Leases) for such period, and (C) scheduled
payments of principal on long-term Indebtedness (including current maturities
of long-term Indebtedness) due and payable pursuant to any document relating to
the borrowing of money or the obtaining of credit (including any such principal
payments in respect of Lease Obligations under Capitalized Leases) for such
period, all as determined in accordance with GAAP.
"CLOSING DATE" means the date on which all conditions precedent set
forth in SECTION 4.1 are satisfied or waived by all Banks (or, in the case of
SUBSECTION 4.1(B)(III), by the Person entitled to receive such payment) and the
initial Loans are made hereunder.
"CODE" means the Internal Revenue Code of 1986.
"COLLATERAL TRUSTEE" has the meaning specified in SECTION 7.1.
"COMMITMENT", with respect to each Bank, has the meaning specified in
SECTION 2.1.
"COMPANY" means XTRA, Inc., a Maine corporation.
"COMPLIANCE CERTIFICATE" has the meaning specified in SUBSECTION
6.2(A).
"CONSOLIDATED" OR "CONSOLIDATED" means, with reference to each such
term, that term as applied to the accounts of the Person in question and its
Subsidiaries consolidated in accordance with GAAP, after eliminating all
intercompany items.
"CONTRIBUTION OF CAPITAL" means an amount equal to the aggregate net
proceeds received by a Person from the issuance or in respect of its capital
stock or upon cancellation of its indebtedness by the holders thereof in
exchange for or in respect of capital stock of such Person.
"CONTROLLED GROUP" means, collectively, all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Company, are
treated as a single employer under Section 414(b), 414(c) or 414(m) of the Code
and Section 4001(a)(2) of ERISA.
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"CONVERSION/CONTINUATION DATE" means any date on which, under SECTION
2.4, the Company (A) converts Loans of one Type to another Type, or (B)
continues as Loans of the same Type, but with a new Interest Period, Loans
having Interest Periods expiring on such date.
"DEBT RATING" means the respective ratings assigned to the Company's
long-term senior unsecured debt by the Rating Agencies.
"DEFAULT" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"DOCUMENTATION AGENT" means The First National Bank of Boston, a
national banking association, in its capacity as documentation agent for the
Banks hereunder.
"ELIGIBLE ASSIGNEE" means (A) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000; (B) a commercial bank organized under the
laws of any other country which (unless the Company shall otherwise consent
thereto) is a member of the Organization for Economic Cooperation and
Development, or a political subdivision of any such country, and having a
combined capital and surplus of at least $100,000,000, PROVIDED that such bank
is acting through a branch or agency located in the United States; and (C) a
Person that is primarily engaged in the business of commercial banking and that
is (I) a Subsidiary of a Bank, (II) a Subsidiary of a Person of which a Bank is
a Subsidiary, or (III) a Person of which a Bank is a Subsidiary.
"ENVIRONMENTAL MATTER" means a release of any Hazardous Material into
the environment or the generation, treatment, storage or disposal of any
Hazardous Material.
"ENVIRONMENTAL LAWS" means, collectively, all environmental, health
and safety laws, regulations, resolutions, and ordinances applicable to the
Company or any of its Subsidiaries or any of their respective assets or
properties, including: (A) all regulations, resolutions, ordinances, decrees,
and other similar documents and instruments of all courts and Governmental
Authorities, whether issued by environmental regulatory agencies or
otherwise, and (B) all laws, regulations, resolutions, ordinances and decrees
relating to Environmental Matters.
"ENVIRONMENTAL LIABILITY" means any liability under any applicable law
for any release of a Hazardous Material caused by the seeping, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping or disposing of Hazardous Material into the
environment, and any liability for the costs of any clean-up or other remedial
action, including costs arising out of security fencing, alternative water
supplies, temporary evacuation and housing and other emergency assistance
undertaken by any environmental regulatory body having jurisdiction over the
Company or any of its Subsidiaries to prevent or minimize any actual or
threatened release by the Company or any of its Subsidiaries of any Hazardous
Material into the environment.
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"ENVIRONMENTAL PROCEEDING" means any judgment, action, proceeding or
investigation pending before any court or Governmental Authority, including,
any environmental regulatory body, with respect to or threatened against or
affecting the Company or any of its Subsidiaries or relating to the assets or
liabilities of any of them, including, in respect of any "facility" owned,
leased or operated by any of them under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, or under any
state, local or municipal statute, ordinance or regulation in respect thereof,
in connection with any release of any Hazardous Material into the environment,
or with the generation, storage or disposal of any Hazardous Material.
"EQUIPMENT INDEBTEDNESS" means, with respect to any Person, (A) all
Indebtedness of such Person MINUS (B) Indebtedness of such Person secured by a
lien on all or any part of the real property (including improvements thereon)
owned by such Person; PROVIDED, that Indebtedness of such Person described in
CLAUSE (B) above shall be excluded only to the extent that the amount of such
Indebtedness does not exceed the greater of the cost or appraised value of the
real property and improvements securing such Indebtedness, at the time such
Indebtedness was incurred.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"EURODOLLAR RATE" means, for any Interest Period, with respect to
Eurodollar Loans comprising part of the same Borrowing, the rate of interest
per annum (rounded upward to the next 1/16 of 1%) at which BofA would offer
dollar deposits for such Interest Period, in an amount approximately equal to
BAI's Eurodollar Loan comprising part of such Borrowing, to major banks in the
eurodollar market at or about 11:00 a.m. (London time) two Business Days prior
to the commencement of such Interest Period.
"EURODOLLAR LOAN" means a Loan that bears interest based on the
Adjusted Eurodollar Rate.
"EVENT OF DEFAULT" has the meaning specified in SECTION 8.
"FRB" means the Board of Governors of the Federal Reserve System, and
any Governmental Authority succeeding to any of its principal functions.
"FEE LETTER" means the letter agreement dated May 17, 1995, among the
Company, the Arranger and the Administrative Agent.
"FEDERAL FUNDS RATE" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor, "H.15(519)") on the immediately preceding Business Day opposite
the caption "Federal Funds (Effective)"; or, if for any relevant day such rate
is not so published on any such preceding Business Day, the rate for such day
will be the arithmetic mean as determined by the Administrative Agent of the
rates for the last transaction in overnight Federal funds arranged prior to
9:00 a.m. (New York City time) on that day by each
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<PAGE> 14
of three leading brokers of Federal funds transactions in New York City
selected by the Administrative Agent.
"GAAP" means generally accepted accounting principles which (A) are
the principles promulgated or adopted by the Financial Accounting Standards
Board and its predecessors, in effect on the Balance Sheet Date; (B) are such
that a certified public accountant would, insofar as the use of accounting
principles is pertinent, be in a position to deliver an unqualified opinion as
to financial statements in which such principles as in effect on the Balance
Sheet Date have been properly applied; and (C) are applied on a basis
consistent with prior periods; PROVIDED that for purposes of the financial
statements required to be delivered pursuant to SECTION 6.2, and for purposes
of SECTION 6.8, GAAP shall mean generally accepted accounting principles, as in
effect from time to time.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"GUARANTIES" means, collectively, each Guaranty of even date herewith,
executed and delivered by the Ultimate Parent and the Parent, respectively, for
the benefit of the Agents and the Banks.
"HAZARDOUS MATERIAL" means any substance (I) the presence of which
requires or may hereafter require notification, investigation or remediation
under any federal, state or local statute, regulation, or rule, ordinance,
order, action or policy; (II) which is or becomes defined as a "hazardous
waste", "hazardous material" or "hazardous substance" or "controlled industrial
waste" or pollutant" or "contaminant" under any present or future federal, state
or local statute, regulation, rule or ordinance or amendments thereto, including
the Comprehensive Environmental Response, Compensation and Liability Act (42
U.S.C. section 9601 et seq.) and any applicable local statutes and the
regulations promulgated thereunder; (III) which is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise
hazardous and is or becomes regulated by any Governmental Authority; (IV) the
presence of which would endanger the public health or the environment; (V)
without limitation, which contains gasoline, diesel fuel or other petroleum
hydrocarbons or volatile organic compounds; (VI) without limitation, which
contains polychlorinated biphenyls (PCBs) or asbestos or urea formaldehyde foam
insulation; or (VII) without limitation, which contains or emits radioactive
particles, waves or material, including radon gas.
"INDEBTEDNESS" means, with respect to any Person, (A) the principal
amount of all indebtedness of such Person (I) for borrowed money, (II) for the
deferred purchase price of property, unless the price thereof was payable in
full within twelve months from the date on which the obligation was created, or
(III) evidenced by notes, bonds or other instruments; (B) all Lease Obligations
of such Person; and (C) all guaranties and other contingent obligations of such
Person in respect of all indebtedness referred to in the foregoing CLAUSES (A)
and (B) of any other Person;
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PROVIDED, that, Indebtedness of the Company, the Parent and the Ultimate Parent,
respectively, shall not include Subordinated Indebtedness.
"INDEMNIFIED LIABILITIES" has the meaning specified in SUBSECTION 15.2.
"INDEMNIFIED PERSON" has the meaning specified in SUBSECTION 15.2.
"INDEPENDENT ACCOUNTANT" means a firm of independent public
accountants of national reputation selected by the Company, the Parent or the
Ultimate Parent, as the case may be, which is "independent" as that term is
defined in Rule 2-01 of Regulation S-X promulgated by the Securities and
Exchange Commission.
"INTEREST CHARGES" means, for any period, all expenses (net of any
interest income earned during such period) accrued for interest (including
imputed interest, accrued original issue discount and interest payable in kind)
on all Indebtedness for such period (including Subordinated Indebtedness and
Indebtedness consisting of Lease Obligations in respect of Capitalized Leases,
but excluding Indebtedness consisting of Lease Obligations other than
Capitalized Leases), all as determined in accordance with GAAP.
"INTEREST PAYMENT DATE" means, as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and, as to
any Base Rate Loan, the last Business Day of each calendar quarter; PROVIDED,
that if any Interest Period for a Eurodollar Loan exceeds three months, the
date that falls three months after the beginning of such Interest Period and
after each Interest Payment Date thereafter is also an Interest Payment Date.
"INTEREST PERIOD" means, as to any Eurodollar Loan, the period
commencing on the Borrowing Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as a Eurodollar Loan, and
ending on the date one, two, three or six months thereafter, as selected by the
Company in its Notice of Borrowing or Notice of Conversion/Continuation;
PROVIDED that:
(I) if any Interest Period would otherwise end on
a day that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless the result of such
extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the preceding
Business Day;
(II) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month in which such
Interest Period would end) shall end on the last Business Day of the
calendar month in question;
(III) no Interest Period for any Term Loan shall extend
beyond the Term Loan Maturity Date; no Interest Period for any
Revolving Loan shall extend beyond the Term Out Date; and no Interest
Period for any Term Out Loan shall extend beyond the Termination Date;
and
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<PAGE> 16
(IV) no Interest Period applicable to a Term Loan or
Term Out Loan, or any portion thereof, shall extend beyond any date
upon which is due any scheduled principal payment in respect of such
Loan unless, in each case, the aggregate principal amount of such Loan
represented by Base Rate Loans, or by Eurodollar Loans having Interest
Periods that will expire on or before such date, equals or exceeds the
amount of such principal payment.
"INVESTMENT" means any loans, capital contributions, advances,
transfers of assets (other than transfers for fair value as determined by the
transferring Person in good faith) and any purchases and other acquisitions for
consideration of evidences of Indebtedness, capital stock or other securities.
With respect to a parent corporation's investment in a consolidated Subsidiary,
"Investment" shall also include any retained earnings of such Subsidiary
reflected on the consolidated balance sheet of such parent and its
Subsidiaries.
"INVESTMENT GRADE RATING" means, on any day with respect to the
Company's long-term senior unsecured debt, a rating (A) of Baa3 or above, if
rated by Moody's, (B) of BBB- or above, if rated by S&P and (C) comparable to
the foregoing ratings, if rated by another nationally recognized rating agency
acceptable to the Banks.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions.
"LENDING OFFICE" means, as to any Bank, the office or offices of such
Bank specified as its "LENDING OFFICE" or "DOMESTIC LENDING OFFICE" or
"EURODOLLAR LENDING OFFICE", as the case may be, on SCHEDULE 20, or such other
office or offices as such Bank may from time to time notify the Company and the
Administrative Agent.
"LEASE OBLIGATION" means, with respect to any Person, all rental
obligations of such Person under leases of property (other than electronic data
processing, computer and similar equipment and leases of real property) either
(A) which are Capitalized Leases, or (B) if not Capitalized Leases, which are
leases of equipment which had an initial term of more than three (3) years
(including any renewal terms at the option of the lessor thereof). The amount
of Lease Obligations shall be equal to the aggregate value of rentals payable
(other than rentals consisting of taxes, indemnities, maintenance items,
replacements and other similar charges which are in addition to the basic
financial rent for the use of the property) by the lessee thereof during the
remaining term thereof, including periods of renewal at the option of the
lessor, discounted to present value using the lessee's "incremental borrowing
rate at the inception of the lease" in accordance with Financial Accounting
Standard No. 13 of the Financial Accounting Standards Board in effect on the
Balance Sheet Date.
"LIABILITIES" means, with respect to any Person at any date as of
which the amount thereof shall be determined, an amount equal (without
duplication) to (A) all liabilities of such Person determined in accordance
with GAAP PLUS (B) all Indebtedness of such Person PLUS (C) the aggregate
amount of such Person's reimbursement obligations in respect of letters of
credit MINUS
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(D) the aggregate deferred income tax liability of such Person MINUS (E) the
aggregate amount of Subordinated Indebtedness of such Person.
"LIENS" has the meaning assigned to such term in SECTION 7.1.
"LOAN" means an extension of credit by a Bank to the Company under
SECTION 2, including each Revolving Loan, Term Loan and Term Out Loan, and may
be a Base Rate Loan or Eurodollar Loan (each, a "TYPE" of Loan).
"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, the
Fee Letter, the Guaranties and such other documents as the parties thereto
designate in writing to be Loan Documents.
"MAJORITY BANKS" means, at any time, Banks holding at such time at
least 66-2/3% of the then aggregate unpaid principal amount of the Loans, or,
if no such principal amount is then outstanding, Banks then having at least
66-2/3% of the Commitments.
"MATERIAL ADVERSE EFFECT" means, with respect to any Person, a
material adverse change in, or a material adverse effect upon, the operations,
business, properties or condition (financial or otherwise) of such Person and
its Subsidiaries taken as a whole.
"MATSON ACQUISITION" means the acquisition of certain of the assets
and the assumption of certain of the liabilities of Matson Leasing Company,
Inc. ("Leasing") pursuant to that certain Asset Purchase Agreement among the
Company, Leasing and Matson Navigation, Inc. dated on or about June 30, 1995.
"MOODY'S" means Moody's Investors Services, Inc. or any successor
thereto performing the same function.
"MULTI-EMPLOYER PLAN" means a "Multi-employer Plan" as defined in
Section 4001(a)(3) of ERISA with respect to which the Company or any other
member of a Controlled Group is making, or is obligated to make, contributions
or has made, or been obligated to make, contributions.
"NET BOOK VALUE" means, with respect to Transportation Equipment of
any Person, (A) in the case of Transportation Equipment owned by such Person
and leased by such Person as lessor under leases the rentals from which are
carried as a finance lease receivable on the balance sheet of such Person in
accordance with GAAP, the sum of (I) the net amounts carried as receivables on
the balance sheet of such Person in respect of such leases, and (II) the
residual value of all Transportation Equipment subject to such leases, all
computed in accordance with GAAP; (B) in the case of other Transportation
Equipment owned by such Person, the initial cost of the Transportation
Equipment to such Person as carried on the balance sheet of such Person
depreciated by such Person in accordance with GAAP and in accordance with the
depreciation schedule for such Transportation Equipment set forth on SCHEDULE
6.12; (C) in the case of Transportation Equipment leased by such Person as
lessee under a Capitalized Lease, the amount
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<PAGE> 18
shown on the asset side of the balance sheet of such Person in accordance with
Financial Accounting Standard No. 13 adopted by the Financial Accounting
Standards Board, as in effect on the Balance Sheet Date in respect of such
Transportation Equipment; and (D) in the case of Transportation Equipment leased
by a Person as lessee under a lease which is not a Capitalized Lease but which
is included as a Lease Obligation under this Agreement, the amount of such Lease
Obligation.
"NET EARNINGS AVAILABLE FOR INTEREST CHARGES" means, for any period,
an amount equal to the sum of (A) Net Income for such period, (B) Interest
Charges for such period, and (C) the aggregate amount of all taxes accrued for
such period, all as determined in accordance with GAAP.
"NET INCOME" means, for any period, the net income or loss, as the
case may be, for such period after eliminating all extraordinary items of
income, as determined in accordance with GAAP.
"NET WORTH" means, at any date as of which the amount thereof shall be
determined with respect to any Person, the sum of the following amounts which
would be set forth on a balance sheet of such Person on such date, in each case
as determined in accordance with GAAP: (A) the par value (or values stated on
the books of such Person) of the capital stock of all classes of such Person,
other than capital stock held in the treasury of such Person, PLUS (B) the
amount of the surplus, whether capital or earned, of such Person, PLUS (C)
Subordinated Indebtedness of such Person MINUS (D) the amount which would be
carried in the asset side of such balance sheet of such Person in respect of
goodwill, trade names, trademarks, patents, unamortized debt issuance expense
and other intangibles, MINUS (E) any increase in the net book value of fixed
assets arising from a revaluation thereof after September 30, 1994. For
purposes of computation of the Net Worth of the Company for the covenants set
forth in SECTIONS 7.2 and 7.3 hereof, there shall also be deducted (I) that
amount, if any, by which the aggregate amount of net inter-company loans ("INTER
COMPANY ADVANCES") from the Company to its Subsidiaries, to the Ultimate Parent,
to the Parent, to Subsidiaries of the Ultimate Parent or to Subsidiaries of the
Parent and to any affiliates of the Company, the Ultimate Parent or the Parent
which are outstanding on such date of determination, exceeds $40,000,000, and
(II) that amount, if any, by which the aggregate amount of Investments (other
than Inter Company Advances) of the Company in its Subsidiaries, in the Ultimate
Parent, in the Parent, in Subsidiaries of the Ultimate Parent or in Subsidiaries
of the Parent and in any affiliates of the Company, the Ultimate Parent or the
Parent, which are outstanding on such date of determination, exceeds an amount
equal to $179,000,000 PLUS the amount of any increase in or MINUS the amount of
any decrease in the aggregate amount of Investments (if any) of the Company
which is a result of changes in the retained earnings of Subsidiaries of the
Company since September 30, 1994 (as reflected on the consolidated balance sheet
of the Company and its Subsidiaries); PROVIDED, that Inter Company Advances or
Investments (as measured by the lesser of their cost or fair market value) in
capital stock or debt instruments of the Ultimate Parent or the Parent of a
class which is publicly traded on a nationally recognized market and as to which
there is an active trading market on the date of determination up to an
aggregate amount of $10,000,000 shall not be included as Inter Company Advances
or Investments in computing the amounts described in CLAUSE (I) or (II) of this
sentence.
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"NON USE FEE" has the meaning specified in SECTION 2.9(B).
"NOTE" means a promissory note executed by the Company in favor of a
Bank, in substantially the form of EXHIBIT A.
"NOTICE OF BORROWING" means a notice in substantially the form of
EXHIBIT B.
"NOTICE OF CONVERSION/CONTINUATION" means a notice in substantially
the form of EXHIBIT C.
"OBLIGATIONS" means all unsatisfied indebtedness, obligations and
liabilities of the Company to any Bank, Agent or Indemnified Person, arising or
incurred under this Agreement or in respect of the Loans made or any notes or
other instruments at any time evidencing any of the foregoing, whether direct or
indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract, operation
of law or otherwise.
"OTHER TAXES" means any present or future stamp or documentary taxes
or similar levies which arise from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any other Loan Documents.
"PARENT" means XTRA Missouri, Inc., a Delaware corporation.
"PARTICIPANT" has the meaning specified in SUBSECTION 12.2.
"PBGC" means the Pension Benefit Guaranty Corporation, created by
Section 4002 of ERISA, and any Governmental Authority succeeding to any of its
principal functions under ERISA.
"PERSON" means any individual, corporation (including a business
trust), partnership, trust, unincorporated association, joint stock company or
other legal entity or organization and any government or agency or political
subdivision thereof.
"PLAN" means, at any time, an employee pension benefit plan as defined
in Section 3(2) of ERISA (including Multi-employer Plans) that at such time is
either: (A) maintained by any member of a Controlled Group, or (B) maintained
pursuant to a collective bargaining agreement or any other arrangement under
which more than one employer makes contributions and to which any member of a
Controlled Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions.
"PRIOR AGREEMENTS" means, collectively, (I) that certain Amended and
Restated Revolving Credit and Term Loan Agreement dated as of January 10, 1995,
by and among the Company, certain banks identified therein, including BAI, and
BofA as agent thereunder; (II) that certain Promissory Note dated May 31, 1995,
in the principal amount of up to $50,000,000, executed by the Company and
payable to BAI; and (III) that certain Amended and Restated Revolving Credit
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<PAGE> 20
and Term Loan Agreement dated as of May 27, 1994, among the Company, certain
banks identified therein and The First National Bank of Boston, as agent
thereunder.
"PRO RATA SHARE" means, as to any Bank, the percentage amount
(expressed as a decimal, rounded to the eighth decimal place) set forth on
SCHEDULE 1.1(B) with respect to such Bank.
"PURCHASE MONEY EQUIPMENT INDEBTEDNESS" means, with respect to any
Person, all Indebtedness of such Person which is Secured Equipment Indebtedness
and which is incurred to finance the purchase of Transportation Equipment if
such Indebtedness (A) shall have been incurred within one hundred and eighty
(180) days of the acquisition of such Transportation Equipment by the Person
whose Purchase Money Equipment Indebtedness is being determined and (B)
does not exceed in principal amount the initial cost of such Transportation
Equipment and shall include all extensions, renewals and refinancings of such
Indebtedness not in excess of the principal amount thereof outstanding
immediately prior to such extension, renewal or refinancing. The initial cost
of Transportation Equipment may include, in addition to the purchase price
thereof and the purchase price of all accessories and equipment installed
thereon, all freight, delivery and handling charges, excise, sales and use
taxes and all other amounts which may be capitalized and included in the cost
of the equipment under GAAP.
"RATING AGENCIES" means Moody's and S&P (or any other nationally
recognized rating agency acceptable to the Administrative Agent and the Banks
that may be substituted for Moody's or S&P).
"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon such Person
or any of its assets or to which such Person or any of its assets is subject.
"RESERVE CHARGE" means, for any day for any Interest Period, with
respect to Eurodollar Loans comprising part of the same Borrowing, a percentage
amount equal to the difference of (a) a fraction (expressed as a percentage)
the numerator of which is the Eurodollar Rate (expressed as a decimal) and the
denominator of which is one MINUS the Reserve Rate, MINUS (b) the Eurodollar
Rate (as so expressed).
"RESERVE RATE" means, for any day for any Interest Period, the maximum
reserve percentage (expressed as a decimal, rounded upward to the next 1/100th
of 1%) in effect on such day (whether or not applicable to any Bank) under
regulations issued from time to time by the FRB for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently referred
to as "Eurocurrency liabilities").
"RESTRICTED PAYMENT" means any payment or other distribution of any
kind, in cash, property, or other assets, upon or in respect of any shares of
any class of capital stock of the Company, the Parent and the Ultimate Parent,
including any such payments and distributions constituting dividends thereon or
any redemption or other repurchase thereof.
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"REVOLVING COMMITMENT" means an amount equal to THREE HUNDRED MILLION
AND NO/100THS DOLLARS ($300,000,000), as such amount may be reduced from time
to time pursuant to SECTION 2.5.
"REVOLVING LOAN" has the meaning specified in SUBSECTION 2.1(B).
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor thereto performing the same
function.
"SECURED EQUIPMENT INDEBTEDNESS" means, with respect to any Person,
all Indebtedness which is secured by any Lien on the Transportation Equipment
of such Person or on leases by such Person of any such Transportation Equipment
and includes all Lease Obligations. Transportation Equipment which is subject
to a lease or contract which is included as a Lease Obligation is deemed to
secure the Indebtedness evidenced thereby.
"SECURED INDEBTEDNESS" means, with respect to any Person, all
Indebtedness which is secured by any Lien on any asset of such Person or on any
lease by such Person of any such assets, and includes all Lease Obligations of
such Person.
"SUBORDINATED INDEBTEDNESS" means, as of any date as of which the
amount thereof shall be determined, that portion of the Indebtedness of the
Company, the Ultimate Parent or the Parent which, at such time, (A) does not in
the aggregate exceed an amount equal to thirty (30%) of the sum of the amounts
referred to in CLAUSES (A) and (B) MINUS the amounts referred to in CLAUSES (D)
and (E), in each case of the defined term "NET WORTH"; and (B) is expressly
subordinated to the payment and performance of the Obligations upon
substantially the terms set forth in SCHEDULE 1.1(C); and (C) is not due and
payable within three (3) years from such time.
"SUBSIDIARY" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than 50% of the voting stock, membership interests or other
equity interests (in the case of Persons other than corporations), is owned or
controlled directly or indirectly by such Person, or one or more of the
Subsidiaries of such Person, or a combination thereof.
"TAXES" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Bank and the Agents, taxes imposed on such
Person's net income and franchise taxes imposed on such Person, except in a
jurisdiction in which such Person is not doing any business except making loans
to the Company hereunder.
"TERM COMMITMENT" means an amount equal to TWO HUNDRED NINETY MILLION
AND NO/100THS DOLLARS ($290,000,000), as such amount may be reduced from time
to time pursuant to SECTION 2.5.
"TERM LOAN" has the meaning specified in SUBSECTION 2.1(A).
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"TERM LOAN MATURITY DATE" means June 30, 2000.
"TERM OUT DATE" means June 30, 1997; PROVIDED, that upon (A) written
request of the Company to the Administrative Agent not later than thirty (30)
days prior to the date set forth above and (B) the prior written consent of each
of the Banks (such consent to be given in the sole discretion of such Bank), the
Term Out Date shall be such later date as the Banks and the Company may agree
upon.
"TERM OUT LOAN" has the meaning specified in SUBSECTION 2.1(C).
"TERMINATION DATE" means the fifth anniversary of the Term Out Date.
"TRANSPORTATION EQUIPMENT" means containers, trucks, tractors,
trailers, chassis, cranes, portable ramps, lifting equipment, railroad rolling
stock, modular office units and mobile office trailers, and includes all
accessories and attachments thereto.
"TYPE" has the meaning specified in the definition of "Loan."
"ULTIMATE PARENT" means XTRA Corporation, a Delaware corporation.
"UNITED STATES" and "U.S." each mean the United States of America.
"WELFARE PLAN" means, with respect to any member of a Controlled Group
at any time, an employee welfare benefit plan as defined in Section 3(1) of
ERISA that is maintained for the employees of such member at such time.
1.2 OTHER INTERPRETIVE PROVISIONS. (A) The meanings of defined
terms are equally applicable to the singular and plural forms of the defined
terms.
(B) The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(C) (I) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(II) The term "including" is not limiting and means
"including without limitation."
(III) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from
and including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including"
(D) Unless otherwise expressly provided herein, (I) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all exhibits and
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schedules thereto, subsequent amendments, restatements and other modifications
thereof, and supplements thereto, but only to the extent such amendments
and other modifications are not prohibited by the terms of any Loan Document,
and (II) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
(E) The captions and headings of this Agreement are for convenience
of reference only and shall not affect the interpretation of this Agreement.
(F) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters.
All such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(G) This Agreement and the other Loan Documents are the
result of negotiations among and have been reviewed by respective counsel to
the Agents, the Banks and the Company and are the products of all parties.
Accordingly, they shall not be construed against any Agent or Bank merely
because of such Person's involvement in their preparation.
(H) As used in the definition of the term "Applicable Margin"
and SECTION 2.9, the term "rating" shall include "preliminary" or "indicative"
senior debt ratings or their equivalents.
1.3 ACCOUNTING PRINCIPLES. Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP.
2. THE CREDIT FACILITIES.
---------------------
2.1 AMOUNTS AND TERMS OF COMMITMENTS.
(A) THE TERM CREDIT. Each Bank severally agrees,
on the terms and conditions set forth herein, upon the request of the Company,
to make a single loan to the Company (each such loan a "TERM LOAN") on the
Closing Date in the amount set forth on SCHEDULE 1.1(B), which amount shall not
exceed such Bank's Pro Rata Share of the Term Commitment. Amounts borrowed as
Term Loans which are repaid or prepaid by the Company may not be reborrowed.
(B) THE REVOLVING CREDIT. Each Bank severally
agrees, on the terms and conditions set forth herein, upon request of the
Company to make loans to the Company (each such loan, a "REVOLVING LOAN") from
time to time on any Business Day during the period from the Closing Date to the
Term Out Date, in an aggregate outstanding amount not to exceed at any time such
Bank's Pro Rata Share of the Revolving Commitment (such Bank's Pro Rata Shares
of the Revolving Commitment and Term Commitment, respectively, in each case as
the same may be reduced from time to time under SECTION 2.5, or as a result of
one or more assignments pursuant to SECTION 12, being herein referred to,
collectively, as such Bank's "COMMITMENT"); PROVIDED, that, after giving effect
to any Borrowing of Revolving Loans, (A) the aggregate
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outstanding amount of the Revolving Loans shall not exceed the Revolving
Commitment in effect at such time and (B) the aggregate outstanding amount of
all Revolving Loans, together with the aggregate outstanding amount of all Term
Loans, in each case at such time, shall not exceed the combined Commitments
in effect at such time. Within the limits of each Bank's Pro Rata Share of the
Revolving Commitment, and subject to the other terms and conditions hereof, the
Company may borrow under this SUBSECTION 2.1(B), prepay under SECTION 2.6 and
reborrow under this SUBSECTION 2.1(B).
(C) THE TERM OUT CREDIT. Each of the Banks
severally agrees, on the terms and conditions set forth herein, upon not less
than five Business Days' prior written notice from the Company to the
Administrative Agent (which shall promptly notify each Bank of its receipt of
such notice and of the amount of such Bank's Pro Rata Share of the aggregate
principal amount of the Term Out Loans requested), to convert, on the Term Out
Date, all or any portion of each Revolving Loan outstanding in favor of such
Bank on such date into a term loan in an equal amount (each such converted
Revolving Loan, a "TERM OUT LOAN"), so long as on such date the aggregate
amount of all (or the same portion) of the outstanding Revolving Loans of each
of the other Banks shall also be so converted. Term Out Loans which are
subsequently repaid or prepaid by the Company may not be reborrowed.
2.2 NOTES. The Loans made by each Bank shall be evidenced by one or
more Notes. Each Bank shall record in its records or, at its option, endorse
on the schedules annexed to its Note(s), the date, amount and maturity of each
Loan made by it and the amount of each payment of principal made by the Company
with respect thereto. Each Bank is irrevocably authorized by the Company to
endorse its Note(s) and each Bank's record shall be rebuttable presumptive
evidence of the principal amount owing and unpaid on such Note(s); PROVIDED,
that the failure of a Bank to make, or an error in making, a notation thereon
with respect to any Loan shall not limit or otherwise affect the obligations of
the Company hereunder or under any such Note to such Bank.
2.3 PROCEDURE FOR BORROWING. (A) Each Borrowing (including any
Borrowing on the Closing Date) shall be made upon the Company's irrevocable
written notice delivered to the Administrative Agent in the form of a Notice of
Borrowing, which notice must be received by the Administrative Agent prior to
9:00 a.m. (San Francisco time), (I) three Business Days prior to the requested
Borrowing Date, in the case of Eurodollar Loans; and (II) on the requested
Borrowing Date, in the case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which shall be in an
aggregate minimum amount of $5,000,000 or any multiple of
$1,000,000 in excess thereof (and the respective portions, if any,
thereof comprised of Revolving Loans, Term Out Loans or Term Loans);
(B) the requested Borrowing Date, which shall be a
Business Day;
(C) the Type of Loans comprising the Borrowing;
and
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(D) the duration of the Interest Period
applicable to any Eurodollar Loans included in such notice. If the
Notice of Borrowing fails to specify the duration of the Interest
Period for any Borrowing comprised of Eurodollar Loans, such Interest
Period shall be one month.
(B) The Administrative Agent will promptly notify
each Bank of its receipt of any Notice of Borrowing and of the amount of such
Bank's Pro Rata Share of that Borrowing.
(C) Each Bank will make the amount of its Pro
Rata Share of each Borrowing available to the Administrative Agent for the
account of the Company at the Administrative Agent's Payment Office by 11:00
a.m. (San Francisco time) on the Borrowing Date requested by the Company in
funds immediately available to the Administrative Agent. The proceeds of all
such Loans will then be made available to the Company by the Administrative
Agent by wire transfer in accordance with written instructions provided to the
Administrative Agent by the Company of like funds as received by the
Administrative Agent.
(D) After giving effect to any Borrowing, there
may not be more than ten (10) different Interest Periods in effect.
2.4 CONVERSION AND CONTINUATION ELECTIONS. (A) The Company may,
upon irrevocable written notice to the Administrative Agent in accordance with
SUBSECTION 2.4(B):
(I) elect, as of any Business Day, in the case of Base
Rate Loans, or as of the last day of the applicable Interest Period,
in the case of Eurodollar Loans, to convert any such Loans (or any
part thereof in an amount not less than $5,000,000, or that is in an
integral multiple of $1,000,000 in excess thereof) into Loans of the
other Type; or
(II) elect, as of the last day of the applicable
Interest Period, to continue as Eurodollar Loans for another Interest
Period any Eurodollar Loans having Interest Periods expiring on such
day (or any part thereof in an amount not less than $5,000,000, or
that is in an integral multiple of $1,000,000 in excess thereof);
PROVIDED, that if at any time the aggregate amount of Eurodollar Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to less than $1,000,000, such Eurodollar Loans shall automatically
convert into Base Rate Loans, and on and after such date the right of the
Company to continue such Loans as, and convert such Loans into, Eurodollar
Loans, as the case may be, shall terminate.
(B) The Company shall deliver a Notice of
Conversion/Continuation to be received by the Administrative Agent not later
than 9:00 a.m. (San Francisco time) at least (I) three Business Days in advance
of the Conversion/Continuation Date, if the Loans are to be converted into or
continued as Eurodollar Loans; and (II) on the Conversion/Continuation Date, if
the Loans are to be converted into Base Rate Loans, specifying:
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(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted
or continued (and the respective portions, if any, thereof comprised
of Revolving Loans, Term Out Loans or Term Loans);
(C) the Type of Loans resulting from the proposed
conversion or continuation; and
(D) other than in the case of conversions into
Base Rate Loans, the duration of the requested Interest Period.
(C) If upon the expiration of any Interest Period applicable
to Eurodollar Loans, the Company has failed to select timely a new Interest
Period to be applicable to such Loans, or if any Default or Event of Default
then exists, the Company shall be deemed to have elected to convert such Loans
into Base Rate Loans effective as of the expiration date of such Interest
Period.
(D) The Administrative Agent will promptly notify each Bank
of its receipt of a Notice of Conversion/Continuation, or, if no timely notice
is provided by the Company, the Administrative Agent will promptly notify each
Bank of the details of any automatic conversion. All conversions and
continuations shall be made ratably according to the respective outstanding
principal amounts of the Loans held by each Bank with respect to which the
notice was given.
(E) Unless the Majority Banks otherwise agree, during the
existence of a Default or Event of Default, the Company may not elect to have a
Loan converted into or continued as a Eurodollar Loan.
(F) After giving effect to any conversion or continuation of
Loans, there may not be more than ten (10) different Interest Periods in
effect.
2.5 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENT. The Company may,
upon not less than five Business Days' prior notice to the Administrative Agent
(which shall promptly notify each Bank thereof), terminate the Revolving
Commitment, or permanently reduce the Revolving Commitment by an aggregate
minimum amount of $5,000,000 or any multiple of $1,000,000 in excess thereof;
UNLESS, after giving effect thereto and to any prepayments of Revolving Loans
made on the effective date thereof, the then-outstanding principal amount of the
Revolving Loans would exceed the amount of the Revolving Commitment then in
effect. Once reduced in accordance with this SECTION 2.5, the Revolving
Commitment may not be increased. Any reduction of the Revolving Commitment
shall be applied to each Bank according to its Pro Rata Share.
2.6 OPTIONAL PREPAYMENTS. Subject to SECTION 3, the Company may, at
any time or from time to time, upon not less than (A) in the case of Base Rate
Loans, one Business Day's irrevocable notice to the Administrative Agent, and
(B) in the case of Eurodollar Loans, three
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Business Days' irrevocable notice to the Administrative Agent (which shall in
each case promptly notify each Bank thereof), ratably prepay Loans in whole or
in part, in minimum amounts of $1,000,000 or any multiple of $100,000 in excess
thereof. Such notice of prepayment shall specify the date and amount of such
prepayment, whether the Loans to be prepaid are Term Loans, Revolving Loans or
Term Out Loans, and the Type(s) of Loans to be prepaid. The Administrative
Agent will promptly notify each Bank of its receipt of any such notice, and of
such Bank's Pro Rata Share of such prepayment. If such notice is given by the
Company, the Company shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein,
together, if such prepayment is a prepayment of Eurodollar Loans, with accrued
interest to each such date on the amount prepaid and any amounts required
pursuant to SECTION 3. Optional prepayments of Term Loans or Term Out Loans
shall be applied on a pro rata basis to remaining scheduled installments of
principal thereon.
2.7 REPAYMENT.
(A) THE TERM CREDIT. The Company shall repay the Term Loans
on the respective dates (each a "PRINCIPAL PAYMENT DATE") and in the respective
amounts set forth on Schedule 2.7(a).
(B) THE REVOLVING CREDIT. Unless and to the extent such
Loans are converted on such date to Term Out Loans pursuant to SUBSECTION
2.1(C), the Company shall repay to the Banks on the Term Out Date the aggregate
principal amount of Revolving Loans outstanding on such date.
(C) THE TERM OUT CREDIT. The Company shall repay the Term
Out Loans in twenty (20) substantially equal installments on the last Business
Day of each consecutive calendar quarter, commencing with the first such date
to occur after the Term Out Date, with a final installment on the Termination
Date in an amount necessary to repay in full the then outstanding principal
amount of the Term Out Loans, PLUS all accrued and unpaid interest thereon.
2.8 INTEREST. (A) Each Loan shall bear interest on the
outstanding principal amount thereof from the applicable Borrowing Date at a
rate per annum equal to the Adjusted Eurodollar Rate or the Adjusted Base Rate,
as the case may be (and subject to the Company's right to convert to other Types
of Loans under SECTION 2.4).
(B) Interest on each Loan shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date of any
prepayment of Eurodollar Loans under SECTION 2.6 for the portion of the
Eurodollar Loans so prepaid and upon payment (including prepayment) in full of
the Loans and also, during the existence of any Event of Default, interest
shall be paid on demand of the Administrative Agent at the request or with the
consent of the Majority Banks.
(C) Notwithstanding SUBSECTION (A) of this SECTION 2.8, if
any amount of principal of or interest on any Loan, or any other amount payable
hereunder or under any other Loan Document is not paid in full when due
(whether at stated maturity, by acceleration, demand or otherwise), the Company
agrees to pay interest on such unpaid principal or other amount, from
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the date such amount becomes due until the date such amount is paid in full, and
after as well as before any entry of judgment thereon to the extent permitted by
law, payable on demand, at a fluctuating rate per annum equal to the interest
rate otherwise applicable hereunder PLUS two percent (2%).
(D) Anything herein to the contrary notwithstanding, the obligations
of the Company to any Bank hereunder shall be subject to the limitation that
payments of interest shall not be required for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by such Bank would be contrary to the provisions of
any law applicable to such Bank limiting the highest rate of interest that may
be lawfully contracted for, charged or received by such Bank, and in such event
the Company shall pay such Bank interest at the highest rate permitted by
applicable law.
2.9 FEES.
-----
(A) ARRANGEMENT, AGENCY FEES. The Company shall pay all of
the fees payable under the Fee Letter as and when such fees become due and
payable pursuant to the terms thereof.
(B) NON USE FEE. The Company shall pay to the Administrative
Agent for the account of each Bank a non use fee (the "NON USE FEE") for the
period from the Closing Date to the Term Out Date at the rate set forth on
SCHEDULE 1.1(A) corresponding to the higher of the Company's Debt Ratings;
PROVIDED, that, if at any time neither of the Rating Agencies rates the
Company's long- term senior unsecured debt, then the respective percentages set
forth in COLUMN VI of SCHEDULE 1.1(A) shall be used to determine the Non Use
Fee. Notwithstanding the foregoing, at any time that the Company's Debt
Ratings differ by more than one level, then, if, at such time, (A) the Company
maintains an Investment Grade Rating of such debt from both of the Rating
Agencies, the rating level immediately below the higher of such two ratings
shall be used to determine the Non Use Fee, and (B) the Company maintains an
Investment Grade Rating of such debt from either but not both, or from neither
of the Rating Agencies, the lower of such two ratings shall be used to
determine the Non Use Fee. Any change in the Non Use Fee resulting from a
change in a Debt Rating shall become effective one Business Day after the
effective date of such change. The Non Use Fee shall be calculated for the
number of actual days elapsed in the then ending quarter based on the daily
average unused portion of the Revolving Commitment, and computed on the actual
number of days elapsed and a year of 360 days, except that the Non Use Fee for
the first calendar quarter shall be calculated for the period beginning with
the Closing Date. The Non Use Fee shall be payable in arrears on or before the
fifth (5th) Business Day following the last day of each calendar quarter and if
the Termination Date occurs on any day other than the last day of a calendar
quarter, on or before the fifth (5th) Business Day following the Termination
Date.
2.10 COMPUTATION OF INTEREST. (A) All computations of
interest for Base Rate Loans when the Base Rate is determined by BofA's
"reference rate" shall be made on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed. All other computations of interest
shall be made on the basis of a 360-day year and actual days elapsed. Interest
and fees
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shall accrue during each period during which interest or such fees are
computed from the first day thereof to the last day thereof.
(B) Each determination of an interest rate by the
Administrative Agent shall be conclusive and binding on the Company and the
Banks in the absence of manifest error.
2.11 PAYMENTS BY THE COMPANY. (A) All payments to be made by
the Company shall be made without set-off, recoupment or counterclaim. Except
as otherwise expressly provided herein, all payments by the Company shall be
made to the Administrative Agent for the account of the Banks at the
Administrative Agent's Payment Office, and shall be made in dollars and in
immediately available funds, no later than 12:00 noon (San Francisco time) on
the date specified herein. The Administrative Agent will promptly distribute
to each Bank its Pro Rata Share (or other applicable share as expressly
provided herein) of such payment in like funds as received. Any payment
received by the Administrative Agent later than 12:00 noon (San Francisco time)
may be deemed by the Administrative Agent to have been received on the
following Business Day, in which case any applicable interest or fee shall
continue to accrue. The Administrative Agent shall be entitled to debit any
general account of the Company with the Administrative Agent in the amount of
any payment to be made by the Company when due in order to effect timely
payment thereof; PROVIDED, HOWEVER, that the Administrative Agent shall
promptly notify the Company that its account has been so debited.
(B) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment of principal, interest or fees 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.
(C) Unless the Administrative Agent receives notice from the
Company prior to the date on which any payment is due to the Banks that the
Company will not make such payment in full as and when required, the
Administrative Agent may assume that the Company has made such payment in full
to the Administrative Agent on such date in immediately available funds and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent the Company has not made such
payment in full to the Administrative Agent, each Bank shall repay to the
Administrative Agent on demand such amount distributed to such Bank, together
with interest thereon at the Federal Funds Rate for each day from the date such
amount is distributed to such Bank until the date repaid.
2.12 PAYMENTS BY THE BANKS TO THE ADMINISTRATIVE AGENT. (A)
Unless the Administrative Agent receives notice from a Bank on or prior to the
Closing Date or, with respect to any Borrowing after the Closing Date, no later
than 10:00 a.m. (San Francisco time) on the date of such Borrowing, that such
Bank will not make available as and when required hereunder to the
Administrative Agent for the account of the Company the amount of that Bank's
Pro Rata Share of the Borrowing, the Administrative Agent may assume that such
Bank has made such amount available to the Administrative Agent in immediately
available funds on the Borrowing Date and the Administrative Agent may (but
shall not be so required), in reliance upon such
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assumption, make available to the Company on such date a corresponding amount.
If any Bank shall not have made its full amount available to the Administrative
Agent in immediately available funds to the extent required by the terms of this
Agreement and the Administrative Agent in such circumstances has made available
to the Company such amount, such Bank shall on the Business Day following such
Borrowing Date make such amount available to the Administrative Agent, together
with interest at the Federal Funds Rate for each day from the date such amount
was made available by the Administrative Agent to the Company until the date on
which such Bank makes such amount available to the Administrative Agent. A
notice of the Administrative Agent submitted to any Bank with respect to amounts
owing under this SUBSECTION (A) shall be conclusive, absent manifest error. If
such amount is so made available, such payment to the Administrative Agent shall
constitute such Bank's Loan on the date of Borrowing for all purposes of this
Agreement. If such amount is not made available to the Administrative Agent on
the Business Day following the Borrowing Date, the Administrative Agent will
notify the Company of such failure to fund and, upon demand by the
Administrative Agent, the Company shall pay such amount to the Administrative
Agent for the Administrative 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 Loans comprising such Borrowing.
(B) The failure of any Bank to make any Loan on any Borrowing
Date shall not relieve any other Bank of any obligation hereunder to make a
Loan on such Borrowing Date, but no Bank shall be responsible for the failure
of any other Bank to make the Loan to be made by such other Bank on any
Borrowing Date.
3. TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------
3.1 TAXES. (A) Any and all payments by the Company to any
Bank or the Administrative Agent under this Agreement or any other Loan
Document shall be made free and clear of, and without deduction or withholding
for, any Taxes, unless the Company is required by law to make such deduction or
withholding. In addition, the Company shall pay all Other Taxes.
(B) The Company agrees to indemnify and hold harmless each
Bank and the Administrative Agent for the full amount of Taxes or Other Taxes
(including any Taxes imposed by any jurisdiction on amounts payable under this
Section) paid by such Bank or the Administrative Agent and any liability
(including penalties, interest, additions to tax and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted; PROVIDED, that the Company shall have the
right to contest, reasonably and in good faith to the appropriate Governmental
Authorities, whether such Taxes or Other Taxes were correctly or legally
asserted if the Company has set aside on its books provisions reasonably
adequate for the payment of such Taxes or Other Taxes. Payment under this
indemnification shall be made within thirty (30) days after the date any Bank
or the Administrative Agent makes written demand therefor.
(C) If the Company shall be required by law to deduct or
withhold any Taxes from or in respect of any sum payable hereunder to any Bank
or the Administrative Agent, then:
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(I) the sum payable shall be increased as necessary so
that after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable
under this Section) such Bank or the Administrative Agent, as the case
may be, receives an amount equal to the sum it would have received had
no such deductions or withholdings been made;
(II) the Company shall make such deductions and
withholdings; and
(III) the Company shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in
accordance with applicable law.
Each Bank agrees that if, after the payment by the Company of any such
additional amount, any amount identifiable as a part thereof is subsequently
recovered or used as a credit by such Bank, such Bank shall reimburse the
Company to the extent of the amount so recovered or used. A certificate of any
officer of such Bank setting forth the amount of such Tax or recovery or use and
the basis therefor shall, in the absence of manifest error, be conclusive.
(D) The provisions of subsections (a), (b) and (c) of this SECTION
3.1 shall not apply to any Bank which fails to comply with the provisions of
SECTION 11.10 hereof.
(E) Within thirty (30) days after the date of any payment by
the Company of Taxes or Other Taxes, the Company shall furnish the
Administrative Agent the original or a certified copy of a receipt evidencing
payment thereof, or other evidence of payment satisfactory to the
Administrative Agent or the relevant Bank, as the case may be.
(F) If the Company is required to pay additional amounts to
any Bank or the Administrative Agent pursuant to subsection (c) of this
Section, then such Bank shall use reasonable efforts (consistent with legal and
regulatory restrictions) to change the jurisdiction of its Lending Office so as
to eliminate any such additional payment by the Company which may thereafter
accrue, if such change in the judgment of such Bank is not otherwise
disadvantageous to such Bank.
3.2 ILLEGALITY. (A) If any Bank determines that the
introduction of any Requirement of Law, or any change in any Requirement of
Law, or in the interpretation or administration of any Requirement of Law, has
made it unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for any Bank or its applicable Lending Office to
make Eurodollar Loans, then, on notice thereof by such Bank to the Company
through the Administrative Agent, any obligation of such Bank to make
Eurodollar Loans shall be suspended until such Bank notifies the Administrative
Agent and the Company that the circumstances giving rise to such determination
no longer exist.
(B) If a Bank determines that it is unlawful to maintain any
Eurodollar Loan, the Company shall, upon its receipt of notice of such fact and
demand from such Bank (with a copy to the Administrative Agent), prepay in full
such Eurodollar Loans of Bank then outstanding, together with interest accrued
thereon and amounts required under SECTION 3.4, either on the last
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day of the Interest Period thereof, if such Bank may lawfully continue to
maintain such Eurodollar Loans to such day, or immediately, if such Bank may
not lawfully continue to maintain such Eurodollar Loan. If the Company is
required to so prepay any Eurodollar Loan, then concurrently with such
prepayment, the Company shall borrow from the affected Bank, in the amount of
such repayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or maintain
Eurodollar Loans has been so terminated or suspended, the Company may elect, by
giving notice to such Bank through the Administrative Agent that all Loans
which would otherwise be made by such Bank as Eurodollar Loans shall be instead
Base Rate Loans.
(d) Before giving any notice to the Agent under this Section,
the affected Bank shall designate a different Lending Office with respect to
its Eurodollar Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Bank, be
illegal or otherwise disadvantageous to the Bank.
3.3 INCREASED COSTS AND REDUCTION OF RETURN. (A) If any
Bank determines that, due to either (I) the introduction of or any change in or
in the interpretation of any law or regulation or (II) the compliance by such
Bank with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any increase
in the cost to such Bank of agreeing to make or making, funding or maintaining
any Eurodollar Loans (which increase is not otherwise reflected in amounts
payable by the Company hereunder), then the Company shall be liable for, and
shall from time to time, upon demand (with a copy of such demand to be sent to
the Administrative Agent), pay to the Administrative Agent for the account of
such Bank, additional amounts as are sufficient, in the good faith judgment of
such Bank, to compensate such Bank for such increased costs.
(B) If any Bank shall have determined that (I) the introduction of
any Capital Adequacy Regulation, (II) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof or (III) compliance by such Bank (or its Lending Office) or any
corporation controlling such Bank with any Capital Adequacy Regulation, affects
or would affect the amount of capital required or expected to be maintained by
such Bank, such Bank shall promptly after its determination of such occurrence
give notice to the Company of (A) the occurrence thereof, and (B) the
additional amount payable by the Company which in such Bank's reasonable
determination will compensate such Bank or such corporation controlling such
Bank for such reduction and, subject to the further terms of this paragraph,
such amount shall be due and payable by the Company to such Bank at the time of
such notice. If, at the time of notice to the Company that amounts are due
under this SUBSECTION 3.3(B), the Company and such Bank disagree as to the
amounts payable, then the Company and such Bank shall thereafter attempt to
negotiate in good faith an adjustment to the compensation payable hereunder
which will adequately compensate such Bank for such reduction. If the Company
and such Bank are unable to agree to such adjustment, then, unless the
Commitments shall have been terminated or any amount on which adjustments are
to be made under this SUBSECTION 3.3(B) has been prepaid in full, as the case
may be, commencing on the thirty first (31st) day following such notice (but
not earlier than
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the effective date of such introduction, change or compliance), the fees payable
hereunder shall increase by an amount which will, in such Bank's reasonable
determination, compensate such Bank for such reduction, such Bank's
determination of such amount to be conclusive and binding on the Company, absent
manifest error. In determining such amount, such Bank or such corporation
controlling such Bank may use any reasonable methods of averaging,
allocating or attributing such reduction among their respective customers.
3.4 FUNDING LOSSES. The Company shall reimburse each Bank
and hold each Bank harmless from any loss or expense which such Bank may
sustain or incur as a consequence of:
(A) the failure of the Company to borrow,
continue or convert a Loan after the Company has given (or is deemed
to have given) a Notice of Borrowing or a Notice of Conversion/
Continuation; or
(B) the prepayment or other payment (including
after acceleration thereof) of a Eurodollar Loan on a day prior to the
last day of the relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Eurodollar Loans or from fees payable
to terminate the deposits from which such funds were obtained.
3.5 INABILITY TO DETERMINE RATES. If the Administrative
Agent determines that for any reason adequate and reasonable means do not exist
for determining the Eurodollar Rate for any requested Interest Period with
respect to a proposed Eurodollar Loan, or that the Adjusted Eurodollar Rate
applicable pursuant to SUBSECTION 2.8(A) for any requested Interest Period with
respect to a proposed Eurodollar Loan does not adequately and fairly reflect
the cost to the Banks of funding such Loan, the Administrative Agent will
promptly so notify the Company and each Bank. Thereafter, the obligation of
the Banks to make or maintain Eurodollar Loans hereunder shall be suspended
until the Administrative Agent upon the instruction of the Majority Banks
revokes such notice in writing. Upon receipt of such notice, the Company may
revoke any Notice of Borrowing or Notice of Conversion/Continuation then
submitted by it. If the Company does not revoke such Notice, the Banks shall
make, convert or continue the Loans, as proposed by the Company, in the amount
specified in the applicable notice submitted by the Company, but such Loans
shall be made, converted or continued as Base Rate Loans instead of Eurodollar
Loans.
3.6 CERTIFICATES OF BANKS. Any Bank claiming reimbursement
or compensation under this SECTION 3 shall deliver to the Company (with a copy
to the Administrative Agent) a certificate setting forth in reasonable detail
the amount payable to such Bank hereunder and such certificate shall be
conclusive and binding on the Company in the absence of manifest error.
3.7 SUBSTITUTION OF BANKS. Upon the receipt by the Company
from any Bank (an "AFFECTED BANK") of a notice pursuant to SECTION 3.2 that it
is unlawful for such Bank to maintain Eurodollar Loans, or of a claim by such
Bank for compensation under SECTION 3.3, the Company may: (I) request one or
more of the other Banks to acquire and assume all or part of such Affected
Bank's Loans and Commitment; or (II) designate a replacement bank or other
financial
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<PAGE> 34
institution. Any such designation of a replacement bank or other
financial institution under this SECTION 3.7 shall be subject to the prior
written consent of the Administrative Agent (which consent shall not be
unreasonably withheld). Nothing in this SECTION 3.7 is intended or shall be
deemed to require any Affected Bank to accept less than payment in full of the
aggregate then outstanding principal balance of the Loans made by such Affected
Bank (together with then accrued interest and fees payable with respect thereto
and all other amounts payable to such Bank hereunder) in connection with the
replacement of such Affected Bank by any other Person hereunder.
3.8 SURVIVAL. The agreements and obligations of the Company
in this SECTION 3 shall survive the payment of all other Obligations and the
termination of this Agreement.
4. CONDITIONS PRECEDENT
--------------------
4.1 CONDITIONS OF INITIAL LOANS. The obligation of each Bank
to make its initial Loan hereunder is subject to the following conditions
precedent:
(A) (I) the Matson Acquisition has been consummated on
terms and conditions substantially as outlined in the press release of
the Ultimate Parent dated May 2, 1995, including the obtaining of all
necessary consents and approvals in connection therewith; and (II) all
Indebtedness of the Company under each of the Prior Agreements has
been (or on the Closing Date will be) paid in full and all Prior
Agreements shall have terminated (or on the Closing Date will
terminate) pursuant to the respective terms and provisions thereof;
and
(B) the Administrative Agent has received on or before
the Closing Date all of the following, in form and substance
satisfactory to the Administrative Agent and each Bank, and in
sufficient copies for each Bank:
(I) CREDIT AGREEMENT AND NOTES. This Agreement
duly executed by each party hereto and the Notes, duly
executed by the Company;
(II) OTHER DOCUMENTS. Each of the other
documents described on EXHIBIT D hereto, in each case in
form and substance satisfactory to the Administrative
Agent and each of the Banks;
(III) PAYMENT OF FEES. Evidence of payment by the
Company of all accrued and unpaid fees, costs and
expenses under this Agreement and the other Loan
Documents, to the extent then due and payable on the
Closing Date;
(IV) OFFICER'S CERTIFICATE. A certificate signed
by the Chief Financial Officer or
Treasurer of the Company, dated as of the Closing Date,
stating that:
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<PAGE> 35
(1) the representations and warranties
contained in SECTION 5 are true and correct on and as
of such date, as though made on and as of such date;
(2) no Default or Event of Default exists or
would result from the initial Borrowing; and
(3) there has not occurred since September
30, 1994, any material adverse change in the
operations, business, properties, condition
(financial or otherwise) of the Ultimate Parent, the
Parent, the Company or the Company and its
Subsidiaries taken as a whole; and
(V) OTHER DOCUMENTS. Such other approvals,
opinions, documents or materials as any Bank may
reasonably request.
4.2 CONDITIONS TO ALL BORROWINGS. The obligation of each
Bank to make any Loan to be made by it (including its initial Loan) or to
continue or convert any Loan (whether under SUBSECTION 2.1(C) OR SECTION 2.4)
is in each case subject to the satisfaction of the following conditions
precedent on the relevant Borrowing Date or on the Term Out Date or, except in
the case of conversions and continuations of Loans under SECTION 2.4, with
respect to which the condition set forth in paragraph (b) below shall not
apply, the Conversion/Continuation Date, as the case may be:
(A) NOTICE. The Administrative Agent shall have
received (with, in the case of the initial Loan only, a copy for each
Bank) a Notice of Borrowing, Notice of Conversion/Continuation or
other notice, as applicable;
(B) CONTINUATION OF REPRESENTATIONS AND
WARRANTIES. The representations and warranties in SECTION 5 shall be
true and correct in all material respects on and as of such Borrowing
Date, or on and as of the Term Out Date, as the case may be, with the
same effect as if made on and as of such date, except to the extent
that the facts upon which such representations and warranties are
based may be changed by transactions permitted or contemplated hereby
or such representations and warranties expressly refer to an earlier
date, in which case they shall be true and correct as of such earlier
date; and
(C) NO EXISTING DEFAULT. No Default or Event of
Default shall exist or shall result from such Borrowing or
continuation or conversion.
Each Notice of Borrowing and Notice of Conversion/Continuation submitted by the
Company hereunder, and any notice submitted by the Company pursuant to
SUBSECTION 2.1(C), shall constitute a representation and warranty by the
Company hereunder, as of the date of each such notice and as of each Borrowing
Date or Conversion/Continuation Date, as the case may be, that the applicable
conditions in this SECTION 4.2 are satisfied.
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5. REPRESENTATIONS AND WARRANTIES.
-------------------------------
The Company represents and warrants to the Agents and each Bank that:
5.1 CORPORATE EXISTENCE AND GOOD STANDING. The Company and
each of its Subsidiaries, (A) are corporations duly organized, validly existing
and in good standing under the laws of the respective jurisdictions in which
they are incorporated, (B) have corporate power to own their property and
conduct their respective businesses as now conducted and as presently
contemplated, and (C) are duly qualified to do business and in good standing as
foreign corporations in each jurisdiction where the conduct of their business
or the nature of their assets require such qualification and as to which the
failure so to be qualified could singly or in the aggregate reasonably be
expected to have a Material Adverse Effect on the Company.
5.2 CORPORATE POWER; CONSENT; ABSENCE OF CONFLICT WITH OTHER
AGREEMENTS. The execution, delivery and performance of this Agreement and the
other Loan Documents by the Company and the borrowings and transactions
contemplated hereby:
(A) are within the corporate powers of the
Company, have been duly authorized by all necessary corporate action,
and do not and will not contravene any provision of law applicable to
it or any contractual restriction binding on or affecting it;
(B) do not require any approval or consent of, or
filing with, any Governmental Authority bearing on the validity of
such documents and borrowings which is required by law or regulation
of any Governmental Authority, except for those which have been duly
obtained or made and are in full force and effect, and are not in
contravention of the terms of the Company's charter documents or
by-laws, or any amendment thereof, and are not in contravention of the
terms of the charter documents or by-laws, or any amendment thereof,
of any Subsidiary of the Company;
(C) will not conflict with or result in any
breach or contravention of or the creation of any lien (other than
Liens permitted under SECTION 7.1) under any document to which
the Company or any of its Subsidiaries is a party or by which the
Company or any Subsidiary is bound and which is material to the
Company and its Subsidiaries taken as a whole; and
(D) are and will be duly executed, valid and
legally binding obligations of the Company and are and will be
enforceable in accordance with their respective terms, except as
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting generally the enforcement of
creditors' rights.
5.3 TITLE TO PROPERTIES. The Company and each of its
Subsidiaries have good and valid title to all properties, assets and rights of
every name and nature now purported to be owned by the Company or such
Subsidiary which are material to the business of the Company and its
Subsidiaries, on a consolidated basis, free from all defects, liens, charges
and encumbrances whatsoever, other than statutory and other similar
non-consensual liens and insubstantial defects
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in title which do not materially detract from the value, or impair the use of,
the affected properties, and liens permitted under SECTION 7.1. The Company and
each of its Subsidiaries possess all patents, patent applications, patent
licenses, copyrights, trademarks, service marks and trade names and rights
with respect to the foregoing necessary for the conduct of the respective
businesses of the Company and its Subsidiaries substantially as now conducted
without any known conflict with the rights of others except conflicts which are
not in the aggregate material to the business of the Company and its
Subsidiaries, on a consolidated basis.
5.4 FINANCIAL STATEMENTS. The Company has furnished to the
Banks the following: (A) (I) consolidated balance sheet as at September 30, 1994
and related consolidated statements of operations, stockholders' equity and cash
flows of the Ultimate Parent and its Subsidiaries for the fiscal year then
ended, all certified by the Ultimate Parent's Independent Accountant, (II)
consolidating balance sheet as at September 30, 1994 and related consolidating
statement of operations of the Ultimate Parent and its Subsidiaries, (III)
consolidated and consolidating balance sheets as at September 30, 1994 of the
Company and its Subsidiaries, and related statements of operations; and (B) as
at March 31, 1995 or for the quarterly fiscal period then ended (I) a
consolidated balance sheet and related consolidated statements of operations,
stockholders' equity and cash flows of the Ultimate Parent and its Subsidiaries,
(II) a consolidating balance sheet and consolidating related statement of
operations of the Ultimate Parent and its Subsidiaries for the portion of the
fiscal year then ended, and (III) consolidated and consolidating balance sheets
and statements of operations of the Company and its Subsidiaries. The balance
sheets, statements of operations, stockholders' equity and cash flows described
above (I) have been prepared in conformity with GAAP applied on a consistent
basis throughout the periods specified, except where such principles are
inconsistent with the applicable provisions of regulatory authorities having
jurisdiction in the premises (and such exception has been noted to the Banks and
explained in reasonable detail in the applicable statements), and (II) present
fairly the financial position of the Ultimate Parent and its Subsidiaries and
the Company and its Subsidiaries as at the dates thereof, subject, with respect
to unaudited statements, to year end audit adjustments.
5.5 HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the
Company nor any of its Subsidiaries is a "registered holding company, or a
"subsidiary company" of a "registered holding company", or an "affiliate" of a
"registered holding company" or of a "subsidiary company" of a "registered
holding company", as each of such terms is defined in the Public Utility
Holding Company Act of 1935. Neither the Company nor any of its Subsidiaries
is a "registered investment company" or an "affiliated company" or a "principal
underwriter" of a "registered investment company", as each of such terms is
defined in the Investment Company Act of 1940.
5.6 LITIGATION. There is no action, suit, investigation or
proceeding pending, or to the knowledge of any officer of any of such Persons,
threatened against the Ultimate Parent, the Parent or any of their respective
Subsidiaries, before any court or administrative agency which, by itself or
taken together with other such litigation, involves an amount not covered by
insurance material to the Ultimate Parent, the Parent and the Company, and
their Subsidiaries, on a consolidated basis, nor is any substantial basis for
any such litigation known to exist.
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5.7 NO MATERIALLY ADVERSE CONTRACTS. Neither the Ultimate
Parent, the Parent, the Company, nor any of their respective Subsidiaries, is
subject to any indenture, bond, note, agreement or charter, corporate or other
legal restriction, or any judgment, decree, order, rule, ordinance, resolution
or regulation which could singly or in the aggregate reasonably be expected to
have a Material Adverse Effect on the Ultimate Parent. Neither the Ultimate
Parent, the Parent, the Company, nor any of their Subsidiaries, is a party to
any contract or agreement which has had, or could reasonably be expected to
have, a Material Adverse Effect on the Ultimate Parent.
5.8 COMPLIANCE WITH OTHER INSTRUMENTS; LAWS. Neither the
Ultimate Parent, the Parent, the Company, nor any of their respective
Subsidiaries, is in violation of any provision of its charter documents or
by-laws or any document by which it or any of its properties may be bound, or
any decree, order, judgment, or, to the knowledge of any officer of any of such
Persons, any statute, license, rule or regulation, in each case in a manner
which could reasonably be expected to, singly or in the aggregate, (I) result
in the imposition of substantial penalties material to the Ultimate Parent, the
Parent, the Company and their respective Subsidiaries, taken as a whole, or
(II) have a Material Adverse Effect on the Ultimate Parent.
5.9 TAXES. All federal, state and other tax returns of the
Ultimate Parent, the Parent, the Company and each of their Subsidiaries required
by law to be filed have been filed, and all federal, state and other taxes,
assessments and other governmental charges upon each of such Persons or their
properties which are due and payable have been paid. The Ultimate Parent and
the Parent have set aside on their books provisions reasonably adequate for the
payment of all taxes for periods subsequent to the periods for which such
returns have been filed to the extent such provisions are required by GAAP.
5.10 NO DEFAULT. No Default or Event of Default exists at the
delivery of this Agreement.
5.11 USE OF PROCEEDS. The proceeds of all Loans will be used
by the Company for general corporate purposes, including financing in whole or
in part the Matson Acquisition. No portion of the Loans is to be or will be
used for the purpose of purchasing or carrying any "margin security" or "margin
stock" of an issuer as such terms are used in Regulations G and U of the Board
of Governors of the Federal Reserve System, 12 C.F.R. 207 and 221, in violation
of such Regulations G and U.
5.12 ERISA. Except as set forth in SCHEDULE 5.12, neither the
Ultimate Parent, the Parent, the Company nor any of their respective
Subsidiaries (I) has or maintains, or has during the past five years maintained
or established, any Plan or Welfare Plan, or (II) is, or during the past five
years has been, a participating employer in any Plan under which more than one
employer makes contributions described in Sections 4063 and 4064 of ERISA or a
Multi-employer Plan. All such Plans and Welfare Plans so scheduled have been
maintained, operated and funded in all material respects in compliance with the
requirements of ERISA, the Code and applicable law. The Ultimate Parent, the
Parent, the Company and each of their respective Subsidiaries have funded all
of their respective obligations to any Multi-employer Plans.
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5.13 LICENSES AND APPROVAL. Each of the Company and its
Subsidiaries has all necessary licenses, permits and governmental
authorizations, including, licenses, permits and authorizations relating to
Environmental Matters, to own and operate its properties and to carry on its
business as now conducted, except where the failure to do so could not singly
or in the aggregate reasonably be expected to have a Material Adverse Effect on
the Company and could not reasonably be expected to have an adverse effect on
the enforceability of any of the Loan Documents.
5.14 CONDITION OF ASSETS. All of the respective assets of the
Company and its Subsidiaries which are reasonably necessary for the operation
of the business of the Company and its Subsidiaries, taken as a whole, are in
good working condition, ordinary wear and tear excepted, and are able to serve
the function for which they are currently being used.
5.15 SUBSIDIARIES. Except for certain inactive Subsidiaries,
SCHEDULE 5.15 attached hereto correctly identifies all Subsidiaries of the
Ultimate Parent, the Parent and the Company. All of the issued and outstanding
shares of the capital stock of each such Subsidiary are duly issued and
outstanding, fully paid and non-assessable and, except for directors' qualifying
shares and shares issued solely for the purpose of satisfying local requirements
concerning the minimum number of shareholders, are owned by the Parent, the
Ultimate Parent, the Company or a Subsidiary thereof free and clear of any
mortgage, pledge, lien, encumbrance, charge or restriction on transfer.
5.16 FULL DISCLOSURE. None of the financial statements nor
any balance sheet, nor any certificate, opinion, or any other statement made or
furnished in writing to the Administrative Agent or any Bank by or on behalf of
the Ultimate Parent, the Parent, the Company or any of their respective
Subsidiaries in connection with this Agreement or the transactions contemplated
herein, contains any untrue statement of a material fact, or omits to state,
under the circumstances in which made, a material fact necessary in order to
make the statements contained therein or herein not misleading, as of the date
such statement was made. There are no facts known to the Company which singly
or in the aggregate have, or could reasonably be expected now or in the
foreseeable future to have, a Material Adverse Effect on the Ultimate Parent,
which fact was required to be and was not set forth in the Ultimate Parent's or
the Parent's reports and filings, if any, filed with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934.
5.17 MATSON ACQUISITION. The Matson Acquisition has been
consummated on terms and conditions substantially as outlined in the press
release of the Ultimate Parent dated May 2, 1995, including the obtaining of
all necessary consents and approvals in connection therewith.
6. AFFIRMATIVE COVENANTS.
---------------------
The Company covenants and agrees that, so long as any portion of the
Commitments remains outstanding or until such date as the Loans and all other
Obligations have been paid and satisfied in full, whichever shall later occur,
it will and each of its Subsidiaries will:
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6.1 PUNCTUAL PAYMENT. Duly and punctually pay or cause to be
paid principal and interest and all other sums due under this Agreement and the
Notes in accordance with the terms hereof and thereof.
6.2 FINANCIAL STATEMENTS. Furnish to the Banks:
(A) as soon as practicable and in any event within
ninety (90) days after the end of each of the first three quarterly
periods of each fiscal year of the Ultimate Parent and the Company,
financial statements of the type set forth in SUBSECTION 5.4(B) hereof
for each of the Company and the Ultimate Parent as at the end of each
of such quarterly periods or for the respective fiscal periods then
ended and for the period from the beginning of the current fiscal year
to the end of such period, setting forth in comparative form the
figures for the corresponding periods of the previous fiscal year, all
in reasonable detail, prepared in accordance with GAAP, subject to
changes resulting from audit and year-end adjustments, and certified by
the principal financial officers of the Ultimate Parent and the
Company, who shall also provide a certificate and covenant compliance
worksheet in the form of EXHIBIT E as to the computations evidencing
compliance by the Company with SECTIONS 7.2 through 7.8 (the
"COMPLIANCE CERTIFICATE");
(B) as soon as practicable and in any event within 120
days after the end of each fiscal year of the Ultimate Parent and the
Company, audited financial statements of the type set forth in
SUBSECTION 5.4(A) hereof as at the end of such year and for the fiscal
year then ended, setting forth in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP and, with respect to the Ultimate Parent, such consolidated
balance sheets and statements, and with respect to the Ultimate Parent
and its Subsidiaries, such consolidating balance sheets and statements
accompanied by a report and opinion of the Independent Accountant,
which report and opinion shall have been prepared in accordance with
generally accepted auditing standards, and all such financial
statements in all cases shall be certified by the principal financial
officer of the Ultimate Parent or the Company, as the case may be;
PROVIDED, that at any time that the assets of the Company and its
consolidated Subsidiaries comprise less than 85% of the consolidated
assets of the Ultimate Parent, the Parent and their respective
Subsidiaries (including the Company and its Subsidiaries), the Company
shall furnish to the Bank, within the time period set forth above, the
consolidated audited financial statements as described above in this
SECTION 6.2(B) for the Company and its Subsidiaries, accompanied by a
report and opinion of the Independent Accountant, which report and
opinion shall have been prepared in accordance with generally accepted
auditing standards, and all such financial statements shall be
certified by the principal financial officer of the Company.
(C) promptly upon their becoming available,
copies of all financial statements, reports, notices and proxy
statements sent by the Ultimate Parent, the Parent, the Company or any
Subsidiary to stock holders, and of all regular and periodic reports
filed by the Ultimate Parent, the Parent, the Company or any
Subsidiary with any
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securities exchange or with the Securities and Exchange Commission or
any Governmental Authority succeeding to any or all of the
functions of said Commission; and
(D) from time to time any such information regarding the
financial and other affairs of the Ultimate Parent, the Parent, the
Company, or any of their respective Subsidiaries as may reasonably be
requested by any Bank, including, copies of all letters issued by the
Independent Accountant or other management consultants with respect to
any material inadequacies in the Company's internal control systems,
and copies of the corporate documents of the Company and each of the
Subsidiaries.
At the time of each delivery of financial statements pursuant to
SUBSECTION 6.2(B), the Company shall furnish a statement of the Independent
Accountant addressed to the Administrative Agent and the Banks that such
accountant has caused the provisions of this Agreement to be reviewed, and that
such accountant has no knowledge of the existence of any Default or Event of
Default, or if such accountant has such knowledge, specifying the nature and
period of existence thereof and reasons therefor. At the time of each delivery
of financial statements pursuant to SUBSECTIONS 6.2(A) and (B), respectively,
the Company shall furnish the Banks a Compliance Certificate evidencing
compliance with the covenants described therein as at the end of the fiscal
period covered by such financial statements which shall include a certification
to the effect that no Default or Event of Default exists, or, if such cannot be
so certified, specifying in reasonable detail the exceptions, if any, to such
statement.
6.3 NOTIFICATION OF DEFAULTS AND EVENT OF DEFAULT. If the
Company or any of its Subsidiaries shall at any other time obtain knowledge of
the existence of any Default or Event of Default, the Company shall forthwith
deliver to the Administrative Agent (for prompt transmittal to the Banks) a
certificate specifying the nature and period of existence thereof and what
action the Company proposes to take with respect thereto.
6.4 CONDUCT OF BUSINESS. Cause to be done all things
necessary to preserve and keep in full force and effect its corporate
existence, corporate rights and franchises; effect and maintain its foreign
qualifications, licensing, domestication or authorization, except as terminated
by its Board of Directors in the exercise of its reasonable judgment; use its
best efforts to comply with all applicable laws, and not become obligated under
any contract or binding arrangement which, at the time it was entered into,
could singly or in the aggregate have a Material Adverse Effect on the Company.
6.5 TAXES. Duly pay and discharge, or cause to be paid and
discharged, before the same shall become in arrears, all taxes, assessments and
other governmental charges imposed upon it and its properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies which if unpaid might by
law become a lien or charge upon any of its property, except such of those
items as are being in good faith appropriately contested by it, if in such case
the Company shall have set aside on its books reserves deemed by it to be
adequate with respect to such tax, assessment, or other charge.
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6.6 MAINTENANCE OF PROPERTIES. Maintain and keep the
properties used or deemed by it to be useful in its business in good repair,
working order and condition, and make or cause to be made all necessary and
proper repairs thereto and replacements thereof.
6.7 MAINTENANCE OF INSURANCE. Maintain with financially
sound and reputable insurers, insurance with respect to properties and business
of the Company and its Subsidiaries against such casualties and contingencies
and in such types and amounts as shall be in accordance with sound business
practices for companies in similar businesses similarly situated.
6.8 RECORDS AND ACCOUNTS. Keep true records and books
of account in which full, true and correct entries will be made in accordance
with GAAP and with the requirements of regulatory authorities having
jurisdiction in the premises and maintain adequate accounts and reserves for
all taxes (including income taxes), all depreciation, depletion, obsolescence
and amortization of its properties, all other contingencies, and all other
proper reserves.
6.9 INSPECTION.
(A) Permit any officer designated by any Bank, at
such Bank's expense, to visit and inspect any of its properties and to
examine its books of account and discuss the affairs, finances and
accounts of the Company or any Subsidiary with its officers, all at
such reasonable times, in a reasonable manner and as often as such
Bank may reasonably request.
(B) All confidential information and documents
concerning the Ultimate Parent, the Parent, the Company, or any of
their respective Subsidiaries supplied by the Company to such Bank
pursuant to the terms of this Agreement shall be held in confidence by
such Bank and such Bank shall not disclose such information and
documents, except the Company hereby authorizes such Bank to disclose
any information obtained pursuant to this Agreement (I) to any other
Bank or to the Administrative Agent, (II) to any bank regulatory
authority, (III) to any independent auditor or counsel or participant
or potential assignee or potential participant of such Bank, PROVIDED
that the independent auditor or counsel or participant or potential
assignee or potential participant enters into a confidentiality
agreement with the Company substantially similar to such Bank's
agreement in this SUBSECTION 6.9(B), and (IV) to all other appropriate
Governmental Authorities to the extent required of such Bank by law or
subpoena, but only to the extent permitted by applicable laws and
regulations, including those applying to classified material. Upon
receipt of a notice of any requirement to disclose any information to
any such Governmental Authority, such Bank will promptly notify,
unless prohibited by applicable law and regulations, the Company of
such notice, and unless otherwise required by law, will not disclose
such information until the Company has been afforded an opportunity to
contest the requirement of such disclosure.
6.10 NOTICE OF LITIGATION. Promptly notify the Administrative
Agent (for prompt transmittal to the Banks) of the commencement of any
litigation against the Ultimate Parent, the
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Parent, the Company or any of their respective Subsidiaries which could
singly or in the aggregate have a Material Adverse Effect on the Ultimate
Parent.
6.11 PENSION PLAN.
-------------
(A) Maintain, operate and administer all Plans in
all material respects in accordance with the requirements of ERISA,
the Code and applicable law.
(B) Fund and cause each of its Subsidiaries to
fund any Plan, if maintained by the Company or any of its
Subsidiaries, as required by the provisions of Section 302 of ERISA
and Section 412 of the Code, or, if the Plan is maintained by a third
party or is a Multi-employer Plan, make payments to such third party
or Multi-employer Plan in the amounts and at the times required by
applicable law. The Company and each of its Subsidiaries will deliver
to the Administrative Agent (for prompt transmittal to the Banks),
copies of any request for waiver from the funding standards or
extension of the amortization periods required by 303 and 304 of ERISA
or 412 of the Code promptly following the date on which the request is
submitted to the Internal Revenue Service.
(C) Upon request made by any Bank, send to such
Bank copies of all Forms 5500, Forms 5500-R and/or Forms 5500-C
relating to a Plan or Welfare Plan (with the exception of
Multi-employer Plans) together with all attachments thereto, including
any actuarial statement required to be made under 103(d) of ERISA
promptly following the date on which such Form is filed with the
Internal Revenue Service.
(D) Furnish to the Administrative Agent forthwith upon
filing or receipt, as the case may be (I) a copy of the Company report,
or any demand sent or received by the Company or any of its
Subsidiaries under Section 4041, 4042, 4043, 4063, 4065, 4066, or 4068
of ERISA; (II) a statement of the action, if any, which the Company or
such Subsidiary proposes to take with respect to such Company report,
or demand sent or received by the Company or such Subsidiary under
Section 4041, 4042, 4043, 4063, 4065, 4066 or 4068 of ERISA; (III) a
copy of all correspondence with the PBGC, the Secretary of Labor or any
representative of the IRS with respect to any Plan, relating to an
actual or threatened change or development which could reasonably be
expected to be materially adverse to the Company or any of its
Subsidiaries; (IV) copies of all actuarial valuations received by the
Company with respect to any Plan: and (V) copies of any notices of Plan
termination filed by any Plan Administrator (as those terms are used in
ERISA) with the PBGC and of any notices from PBGC to the Company with
respect to the intent of the PBGC to institute involuntary termination
proceedings.
(E) Cause any Plan maintained by the Company or
any of its Subsidiaries to pay all benefits guaranteed by the PBGC
when due, except where the obligation to pay such benefits is being
contested in good faith by the Company or any of its Subsidiaries.
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6.12 DEPRECIATION SCHEDULE. For purposes of calculation of
all of the financial covenants contained in this Agreement, the Company will,
and will cause the Ultimate Parent, the Parent and each of the Company's
Subsidiaries to, (A) calculate depreciation on such Person's Transportation
Equipment and all other depreciable assets in accordance with the depreciation
schedules for such assets set forth in SCHEDULE 6.12, and (B) with respect to
depreciable assets acquired from and after the Closing Date, calculate
depreciation for such assets in accordance with depreciation schedules similar
to those set forth in SCHEDULE 6.12 for similar assets.
6.13 PERFORM OBLIGATIONS. Pay and discharge all of its
obligations and liabilities, including, all material taxes, assessments and
governmental charges upon its income and properties, when due, unless and only
to the extent that such obligations, liabilities, taxes, assessments and
governmental charges shall be contested in good faith and by appropriate
proceedings diligently conducted and that, to the extent required by GAAP then
in effect, proper and adequate book reserves relating thereto are established
and maintained by the Company, or, as the case may be, by the appropriate
Subsidiary, the Parent or the Ultimate Parent.
6.14 COMPLY WITH ERISA. Comply with all applicable provisions
of ERISA now or hereafter in effect with respect to the Plans, Welfare Plans
and Multi-employer Plans set forth on SCHEDULE 5.12 and all other Plans,
Welfare Plans and Multi-employer Plans hereafter established unless and only to
the extent that such compliance is contested in good faith and by appropriate
proceedings diligently conducted and that, to the extent required by GAAP then
in effect, proper and adequate book reserves relating thereto are established
and maintained by the Company, or, as the case may be, by the appropriate
Subsidiary, the Parent or the Ultimate Parent. The Company shall promptly
notify the Administrative Agent of the establishment or assumption of any
Plans, Welfare Plans and Multi-employer Plans in addition to the plans set
forth on SCHEDULE 5.12, and upon such notification, such plans shall be deemed
to be included on such Schedule.
6.15 ENVIRONMENTAL COMPLIANCE. If any claim is made, or any
obligation arises, under any Environmental Law, the Ultimate Parent, the Parent,
the Company or such Subsidiary shall, if such claim or obligation could singly
or in the aggregate reasonably be expected to have a Material Adverse Effect on
the Company, undertake any required removal or containment so as to comply with
such Environmental Law or contest such claim or obligation in good faith by
appropriate proceedings diligently conducted and, to the extent required by GAAP
then in effect, establish and maintain proper and adequate book reserves with
respect thereto.
6.16 DEBT RATING. Notify the Administrative Agent, by telephone,
facsimile, telex or cable, in each case confirmed, immediately in the manner
specified in SECTION 20, of any change in the rating of the Company's long-term
senior unsecured debt by Moody's or S&P (or any other applicable rating agency)
within five (5) Business Days of such change.
7. CERTAIN NEGATIVE COVENANTS.
---------------------------
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The Company covenants and agrees that, so long as any portion of the
Commitments remains outstanding, or until such date as the Loans and all other
Obligations have been paid and satisfied in full, whichever shall later occur,
the following covenants will be complied with:
7.1 LIENS. The Company shall not create or permit to exist
any mortgage, charge, pledge, deed of trust, financing lease under which the
Company is the lessee, security interest or other similar consensual
encumbrance ("LIENS") on any of its property, whether owned at the date hereof
or hereafter acquired, other than:
(A) Liens on Transportation Equipment, securing
Acquired Equipment Indebtedness;
(B) Liens on Transportation Equipment, securing
Purchase Money Equipment Indebtedness, but only on the Transportation
Equipment in respect of which such Purchase Money Equipment
Indebtedness was incurred;
(C) Liens on real property;
(D) Liens incurred, or deposits made, in the
ordinary course of business (I) in connection with workmen's
compensation, unemployment insurance, social security and other like
laws, or (II) to secure the performance of letters of credit, bids,
tenders, sales contracts, leases, statutory obligations, surety appeal
and performance bonds and other similar obligations not incurred in
connection with Indebtedness, or (III) in connection with the opening
of commercial letters of credit naming the Company as account party;
(E) Liens on Transportation Equipment securing
Lease Obligations; PROVIDED, that no such Lease Obligations shall arise
out of the sale and leaseback of Transportation Equipment unless the
sale and leaseback in question is entered into prior to, at the
time of or within 180 days of the acquisition of the Transportation
Equipment being sold and leased back; and PROVIDED, FURTHER, that the
leasing of Transportation Equipment which has been remanufactured so
that it is the substantial equivalent of new equipment shall be
considered the leasing of new equipment and not of used equipment which
was remanufactured and subsequently sold and leased back; and
(F) Liens to secure Indebtedness and other
obligations (excluding Subordinated Indebtedness) which are not
referred to as permitted Liens in SUBSECTIONS (A), (B), (C), (D) or
(E) above; PROVIDED, that the aggregate principal amount of
Indebtedness and other obligations secured thereby at any one time
outstanding shall not exceed three percent (3%) of the Net Worth of
the Company and its consolidated Subsidiaries;
unless, prior to or simultaneously with the granting of any such Lien not
referred to in (a) through (f) above, the Company shall have executed and
delivered to a Collateral Trustee (as hereinafter defined), a security
agreement and such other documents as the Collateral Trustee may reasonably
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<PAGE> 46
request, each in form and substance reasonably satisfactory to the
Administrative Agent, granting to the Collateral Trustee a Lien on the assets
of the Company subject to such Lien, such Lien to be for the equal and ratable
benefit of the Administrative Agent and the Banks and such other holder or
holders of Indebtedness with which the Company has agreed to permit such
holders to share in such Lien. Such security agreement and other documents may
provide, at the option of the Company, that the Lien granted to the Collateral
Trustee thereunder shall terminate upon the termination of all other Liens for
the benefit of such other holder or holders of Indebtedness. The Collateral
Trustee shall be such Person as may be selected by the Company, or any holder
of Indebtedness to whom the Company has specifically granted the right to
select such Collateral Trustee, and who shall be entitled to act without
qualification or who, if required, shall qualify to act as such under the Trust
Indenture Act of 1939.
7.2 LEVERAGE RATIO OF COMPANY. The Company shall not permit
the ratio of Liabilities of the Company to Net Worth of the Company to exceed
4.00 to 1.00 as of the end of any fiscal quarter.
7.3 MAXIMUM SECURED EQUIPMENT INDEBTEDNESS OF COMPANY. The
Company shall not permit Secured Equipment Indebtedness (including Lease
Obligations) of the Company to exceed 15% of the Net Worth of the Company at
the end of any fiscal quarter.
7.4 MAXIMUM EQUIPMENT INDEBTEDNESS. The Company shall not
permit (A) the Equipment Indebtedness of the Company to exceed 90% of Net Book
Value of the Company's Transportation Equipment PLUS the amount of its Cash, and
(B) the Equipment Indebtedness (less Secured Equipment Indebtedness) of the
Company to exceed 90% of Net Book Value of the Company's Transportation
Equipment (less the Net Book Value of Equipment which secures or is subject to
leases which secure Secured Equipment Indebtedness) PLUS the amount of its Cash,
in each case as of the end of each fiscal quarter.
7.5 CONSOLIDATED LEVERAGE RATIO. The Ultimate Parent shall
not permit the ratio of Consolidated Liabilities of the Ultimate Parent and its
Subsidiaries to Consolidated Net Worth of the Ultimate Parent and its
Subsidiaries to exceed (A) 4.00 to 1 at any time prior to the Term Out Date and
(B) 3.50 to 1 at any time on or after the Term Out Date.
7.6 CONSOLIDATED CASH FLOW COVERAGE RATIO. The Company shall
not permit the ratio of (A) Consolidated Cash Flow of the Company and its
Subsidiaries for the four (4) fiscal quarters ending on the last day of any
fiscal quarter to (B) the Consolidated Cash Requirements of the Company and its
Subsidiaries for the four (4) fiscal quarters ending on the last day of such
fiscal quarter to be less than 1.25 to 1.00.
7.7 CONSOLIDATED INTEREST COVERAGE RATIO. The Company shall
not permit the ratio of (A) the sum of Consolidated Net Earnings Available for
Interest Charges of the Company and its Subsidiaries for the best four (4) of
the five (5) most recent consecutive fiscal quarters to (B) the sum of
Consolidated Interest Charges of the Company and its Subsidiaries for the four
(4) most recent consecutive fiscal quarters to be less than 1.2 to 1.00.
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7.8 LIMITATIONS ON RESTRICTED PAYMENTS. The Company shall
not, and shall not permit any of its Subsidiaries to, make any Restricted
Payment unless immediately before and after giving effect to such Restricted
Payment the sum of Restricted Payments made by the Company for the period
subsequent to September 30, 1994 would not exceed an amount equal to (A)
$194,000,000, PLUS (B) Contribution of Capital subsequent to September 30, 1994
PLUS or MINUS as the case may be, (C) the cumulative Consolidated Net Income of
the Company and its Subsidiaries for the period subsequent to September 30,
1994. For purposes of calculating Restricted Payments of the Company, all
monies advanced to the Ultimate Parent and the Parent from the Company, net of
repayment of such advances, for the payment of dividends on, or the repurchase
of, the common and preferred stock of the Ultimate Parent and the Parent shall
be treated as dividends and not as advances.
7.9 INVESTMENTS IN THE ULTIMATE PARENT OR THE PARENT. The
Company shall not acquire any of the capital stock of the Ultimate Parent or
the Parent except for the purpose of the immediate retirement of any such
capital stock.
7.10 MERGERS, ACQUISITIONS, ETC.
(A) Neither the Ultimate Parent, the Parent, the Company
nor any of their Subsidiaries shall consolidate with or merge into any
other corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and neither the
Ultimate Parent, the Parent, the Company nor any of their Subsidiaries
shall permit any Person to consolidate with or merge into the
Ultimate Parent, the Parent, the Company or any of their Subsidiaries,
as the case may be, or convey, transfer or lease its properties and
assets substantially as an entirety to the Ultimate Parent, the
Parent, the Company or any of their Subsidiaries, as the case may be,
unless:
(I) in case the Ultimate Parent, the Parent, the
Company or any of their Subsidiaries, as the case may be,
shall consolidate with or merge into another corporation
or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the
corporation formed by such consolidation or into which
the Ultimate Parent, the Parent or the Company or any of
their Subsidiaries, as the case may be, is merged or the
Person which acquires by conveyance or transfer, or which
leases, the properties and assets of the Ultimate Parent,
the Parent or the Company or any of their Subsidiaries,
as the case may be, substantially as an entirety shall be
a corporation organized and existing under the laws of
the United States of America, any State thereof or the
District of Columbia and shall expressly assume, by an
instrument, executed and delivered to the Administrative
Agent, in form reasonably satisfactory to the
Administrative Agent and its counsel, in the case of the
Company, the due and punctual payment of the principal of
(and premium,if any) and interest on the Notes and the
performance and observance of every covenant of this
Agreement on the part of the Company to be performed or
observed and, in the case of the Ultimate Parent or the
Parent, the due and punctual performance of the
Guaranties and the performance and observance
40
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of every covenant in the Guaranties to be performed or
observed by the Ultimate Parent or the Parent, as
applicable;
(II) immediately after giving effect to such
transaction and treating any Indebtedness which becomes
an obligation of the Company or a Subsidiary or of the
Ultimate Parent, the Parent or a Subsidiary as a result
of such transaction as having been incurred by the
Company, the Ultimate Parent, the Parent or such
Subsidiary at the time of such transaction, no Event of
Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall
have happened and be continuing;
(III) as a result of any such consolidation or merger
or conveyance, transfer or lease none of the properties or
assets of the Company or the Ultimate Parent, the Parent
or a Subsidiary would become subject to a Lien, which
would not be permitted by this Agreement; and
(IV) the Company, the Ultimate Parent, or the Parent,
as the case may be, has delivered to the Administrative
Agent a certificate executed by its President or any of
its Vice Presidents and its Secretary, any of its
Assistant Secretaries, its Clerk or any of its Assistant
Clerks and an opinion of counsel reasonably satisfactory
to the Administrative Agent addressed to the Banks, each
stating that all conditions precedent herein provided for
relating to such consolidation, merger, conveyance,
transfer or lease have been complied with.
(B) Upon any consolidation by the Company, the
Ultimate Parent or the Parent, as the case may be, with or merger by
the Company, the Ultimate Parent or the Parent, as the case may be,
into any other corporation or any conveyance, transfer or lease of the
properties and assets of the Company, the Ultimate Parent, or the
Parent, as the case may be, substantially as an entirety in accordance
with this SECTION 7.10, the successor corporation formed by such
consolidation or into which the Company, the Ultimate Parent, or the
Parent, as the case may be, is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company, the Ultimate
Parent or the Parent, as the case may be, under this Agreement and the
other Loan Documents, as the case may be, with the same effect as if
such successor corporation had been named as the Company, the Ultimate
Parent, or the Parent, as the case may be, herein; PROVIDED, that
neither the Company, the Ultimate Parent, nor the Parent, and
thereafter, except in the case of a lease, the predecessor corporation
shall be relieved of their respective obligations and covenants under
this Agreement or any other Loan Document, as the case may be.
(C) The provisions of SUBSECTIONS 7.10(A) and (B)
shall not apply to a consolidation of the Parent and the Ultimate
Parent, a merger of the Parent into the Ultimate Parent, or a merger
of the Ultimate Parent into the Parent, provided that the Company
gives the Administrative Agent no less than five (5) Business Days
prior written notice of such merger or consolidation and as the result
of such merger or consolidation,
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<PAGE> 49
none of the properties or assets of the Company, the Ultimate Parent,
the Parent or a Subsidiary would become subject to a Lien which would
not be permitted by this Agreement. The successor corporation formed by
such consolidation or the succeeding corporation of such merger shall
succeed to, and be substituted for, and may exercise every right and
power of, the Ultimate Parent and the Parent under this
Agreement and the other Loan Documents, with the same effect as if such
successor corporation had been named as the Parent and the Ultimate
Parent; PROVIDED, that neither the Ultimate Parent nor the
Parent, and thereafter, any predecessor corporation, if any, shall be
relieved of their respective obligations and covenants under this
Agreement or any other Loan Document.
(D) The provisions of SUBSECTIONS 7.10(A) and (B) shall
not apply to a concurrent merger of both the Company and the Parent
into the Ultimate Parent or a concurrent merger of both the Ultimate
Parent and the Parent into the Company, provided that each of the
following conditions are met: (I) the Company gives the Administrative
Agent no less than five (5) Business Days prior written notice of such
merger; (II) the merger involves no Persons other than the Company,
the Parent and the Ultimate Parent; (III) immediately after giving
effect to such Merger, no Event of Default, and no event which, after
notice, or lapse of time, or both, would become an Event of Default,
shall have happened and be continuing; (IV) as the result of such
merger or consolidation, none of the properties or assets of the
Company, the Ultimate Parent, the Parent or any of their respective
Subsidiaries would become subject to a Lien which would not be
permitted by this Agreement; and (V) the Company delivers to the
Administrative Agent a certificate executed by its President or any of
its Vice Presidents and its Secretary stating that all conditions of
this SUBSECTION 7.10(D) relating to such merger have been complied
with. The succeeding corporation of such merger shall succeed to, and
be substituted for, and may exercise every right and power of, the
Company, the Ultimate Parent and the Parent under this Agreement or
any other Loan Document, with the same effect as if such successor
corporation had been named as the Company, the Parent and the Ultimate
Parent; PROVIDED, that neither the Company, the Ultimate Parent nor
the Parent, and thereafter, any predecessor corporation, if any, shall
be relieved of their respective obligations and covenants under this
Agreement, the Notes or the Guaranties.
7.11 CHANGES IN BUSINESS. The Company will not, and it will
not permit any of its Subsidiaries, to make any material change in its
business, or in the nature of its operations, or liquidate or dissolve itself
(or suffer any liquidation or dissolution).
7.12 ERISA. The Company shall not directly or indirectly, and
will not permit any member of any Controlled Group, to directly or indirectly
enter into any new Plan, Welfare Plan or Multi-employer Plan without complying
with the notification obligations contained in SECTION 6.14 hereof.
8. EVENTS OF DEFAULT: ACCELERATION.
-------------------------------
Any of the following shall constitute an "EVENT OF DEFAULT":
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(A) the Company shall default in any payment of any principal
amount outstanding hereunder or under any Notes when due and payable, whether at
maturity or at any date fixed for payment or prepayment or by declaration or
otherwise; or
(B) the Company shall fail to pay any interest with respect
to principal outstanding hereunder, or any fee pursuant to the terms of SECTION
2.9, within five (5) Business Days after the date due and payable, whether at
maturity or at any date fixed for payment or prepayment or by declaration or
otherwise, other than due to a failure of the Administrative Agent to charge an
account of the Company having a sufficient credit balance; or
(C) there shall be a default in the performance of or
compliance with any covenant in SECTION 7 hereof; or
(D) the Company shall default in the performance of or
compliance with any term contained herein (other than those referred to above
in this SECTION 8), and such default shall not have been remedied within thirty
(30) Business Days after the occurrence thereof; or
(E) any representation or warranty made in writing by or on
behalf of the Company herein, in any other Loan Document or in connection with
any of the transactions contemplated hereby shall prove to have been false or
incorrect in any material respect on the date as of which made; or
(F) the Ultimate Parent, the Parent, the Company or any of
their respective Subsidiaries shall default (as principal or guarantor or other
surety) in the payment of any principal or premium, if any, of, or interest or
fees on, any other Indebtedness or Subordinated Indebtedness to any Bank, or
any other Indebtedness or Subordinated Indebtedness in respect of borrowed
money in an aggregate principal amount of $10,000,000 or more (which default is
in payment thereof at its stated maturity or shall result in such Indebtedness
or Subordinated Indebtedness becoming or being declared due prior to the
scheduled maturity thereof) or if the Ultimate Parent, the Parent, the Company
or any of their respective Subsidiaries shall fail to comply (and such failure
to comply has not been cured or waived) with any of the terms of any document
evidencing any such Indebtedness or Subordinated Indebtedness, or any mortgage,
pledge, assignment, indenture or other document relating thereto, and as a
consequence of any of the foregoing, the holder of such Indebtedness or
Subordinated Indebtedness shall have the right to declare all amounts payable
with respect thereto to be due and payable by reason of such default prior to
the scheduled maturity thereof or demand payment of all amounts payable in
respect of any Indebtedness payable on demand; or
(G) if the Ultimate Parent, the Parent, the Company or any of
their respective Subsidiaries makes an assignment for the benefit of creditors,
or petitions or applies for the appointment of a liquidator or receiver of or
for any of such Persons, or of any substantial part of the respective assets
thereof, or commences any proceeding relating to any of such Persons under any
bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect; or
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<PAGE> 51
(H) if any such petition or application is filed or any such
proceeding is commenced against the Ultimate Parent, the Parent, the Company or
any of their respective Subsidiaries, and any of such Persons indicates its
approval thereof, consents thereto or acquiesces therein, or any such petition,
application or proceeding remains undischarged for thirty (30) days, or an
order is entered appointing any such liquidator or receiver, or adjudicating
the Ultimate Parent, the Parent, the Company or any of their respective
Subsidiaries bankrupt or insolvent, or approving a petition in any such
proceeding; or
(I) any order is entered in any proceeding by or against the
Ultimate Parent, the Parent, the Company or any of their respective
Subsidiaries decreeing or permitting the dissolution or split-up of any of such
Persons or the winding-up of the affairs of any of such Persons; or
(J) there shall be in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) days, whether or not consecutive, any final
judgment (from which all appeals have been taken and determined or as to which
all time for the taking of appeals has lapsed) in excess of $1,000,000 in the
aggregate against the Ultimate Parent, the Parent, the Company or any of their
respective Subsidiaries; or
(K) any representation or warranty made in writing by or on
behalf of the Ultimate Parent or the Parent in either of the Guaranties, in any
other Loan Document or in connection with any of the transactions contemplated
hereby or thereby shall prove to have been false or incorrect in any material
respect on the date as of when made, or if either of the Ultimate Parent or the
Parent shall default in respect of any of its obligations under either of the
Guaranties or if either of the Guaranties shall cease to be in full force and
effect without the prior written consent of the Banks; or
(L) the Ultimate Parent or the Parent shall at any time own,
beneficially, and of record, less than a majority of all of the issued and
outstanding shares of capital stock of the Parent or the Company, respectively,
having ordinary voting rights for the election of directors.
9. NOTICE AND WAIVERS OF DEFAULT.
------------------------------
9.1 NOTICE OF DEFAULT. If any Person shall give any notice or
take any other action in respect of a claimed default (whether or not
constituting an Event of Default) under this Agreement or any other document as
to which the Ultimate Parent, the Parent, the Company or any of their
respective Subsidiaries is a party or obligor, whether as principal or surety,
the Company shall forthwith give written notice thereof to the Administrative
Agent (which shall promptly give notice thereof to each of the Banks),
describing the notice or action and the nature of the claimed default.
9.2 WAIVERS OF DEFAULT. Any Default or Event of Default may
be waived as provided in SECTION 24. Any Default or Event of Default so waived
shall be deemed to have been cured and to be not continuing; but no such waiver
shall extend to or affect any subsequent like default or impair any rights
arising therefrom.
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10. REMEDIES ON DEFAULT.
--------------------
10.1 RIGHTS OF BANKS. If any Event of Default occurs, the
Administrative Agent shall at the request of, or may with the consent of, the
Majority Banks,
(A) declare the Commitment of each Bank to make Loans to be
terminated, whereupon such Commitments shall be terminated;
(B) declare the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Loan Document to be immediately due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by the Company; and
(C) exercise on behalf of itself and the Banks all rights and
remedies available to it and the Banks under the Loan Documents or applicable
law;
PROVIDED, that upon the occurrence of any event specified in subsection (G),
(H) or (I) of SECTION 8, the obligation of each Bank to make Loans shall
automatically terminate and the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically
become due and payable without further act of the Administrative Agent or any
Bank.
10.2 SETOFF: SHARING.
----------------
(A) SET-OFF. In addition to any rights and remedies of
the Banks provided by applicable law, if an Event of Default exists or the
Loans have been accelerated, each Bank is authorized at any time and from time
to time, without prior notice to the Company, any such notice being waived by
the Company to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held by, and other indebtedness at any time owing by, such Bank to or
for the credit or the account of the Company against any and all Obligations
owing to such Bank, now or hereafter existing, irrespective of whether or not
the Administrative Agent or such Bank shall have made demand under this
Agreement or any Loan Document and although such Obligations may be contingent
or unmatured. Each Bank agrees promptly to notify the Company and the
Administrative Agent after any such set-off and application made by
such Bank; PROVIDED, that the failure to give such notice shall not affect the
validity of such set-off and application.
(B) SHARING. If, other than as expressly
provided elsewhere herein, any Bank shall obtain on account of the Loans made
by it any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its Pro Rata Share, such Bank
shall immediately (A) notify the Administrative Agent of such fact, and (B)
purchase from the other Banks such participations in the Loans made by them as
shall be necessary to cause such purchasing Bank to share the excess payment
pro rata with each of them; PROVIDED, that if all or any portion of such excess
payment is thereafter recovered from the purchasing Bank, such purchase shall
to that extent be rescinded and each other Bank shall repay
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to the purchasing Bank the purchase price paid therefor, together with an amount
equal to such paying Bank's ratable share (according to the proportion of (I)
the amount of such paying Bank's required repayment to (II) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Company agrees that any Bank so purchasing a participation from another Bank
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to this SECTION 10) with respect
to such participation as fully as if such Bank were the direct creditor of the
Company in the amount of such participation. The Administrative Agent will keep
records (which shall be conclusive and binding in the absence of manifest error)
of participations purchased under this SECTION 10.2(B) and will in each case
notify the Banks following any such purchases or repayments.
11. THE ADMINISTRATIVE AGENT.
-------------------------
11.1 APPOINTMENT AND AUTHORIZATION. Each Bank hereby
irrevocably (subject to SECTION 11.9) appoints, designates and authorizes the
Administrative 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. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the
Administrative Agent shall not have any duties or responsibilities, except
those expressly set forth herein, nor shall the Administrative Agent have or be
deemed to have any fiduciary relationship with any Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist
against the Administrative Agent.
11.2 DELEGATION OF DUTIES. The Administrative 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. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
11.3 LIABILITY OF ADMINISTRATIVE AGENT. None of the
Administrative 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 willful misconduct), or (II) be
responsible in any manner to any of the Banks for any recital, statement,
representation or warranty made by the Ultimate Parent, the Parent, the Company
or any of their respective Subsidiaries, or any officer 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 the
Administrative 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
the Company or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Administrative Agent-Related Person shall be under
any obligation to any Bank to ascertain or to inquire as to the observance or
performance
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of any of the agreements contained in, or conditions (other than
delivery to the Administrative Agent of the documents described in SUBSECTIONS
4.1(B)(I), (II) and (IV))) of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Ultimate Parent, the Parent,
the Company or any of their respective Subsidiaries.
11.4 RELIANCE BY ADMINISTRATIVE AGENT. (A) The
Administrative 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 the Company), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Majority Banks as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Majority Banks (or when expressly
required hereby or thereby, all the Banks) and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of the
Banks.
(B) For purposes of determining compliance with the
conditions specified in SECTION 4.1, each Bank that has executed this Agreement
shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter either sent by the Administrative Agent to
such Bank for consent, approval, acceptance or satisfaction, or required
thereunder to be consented to or approved by or acceptable or satisfactory to
such Bank.
11.5 NOTICE OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Administrative Agent for the account of the
Banks, unless the Administrative Agent shall have received written notice from
a Bank or the Company referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". The
Administrative Agent will promptly notify the Banks of its receipt of any such
notice. The Administrative Agent shall take such action with respect to such
Default or Event of Default as may be requested by the Majority Banks in
accordance with SECTION 10.1; PROVIDED, that unless and until the
Administrative Agent has received any such request, the Administrative Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interest of the Banks.
11.6 CREDIT DECISION. Each Bank acknowledges that none of the
Administrative Agent-Related Persons has made any representation or warranty to
it, and that no act by the Administrative Agent hereinafter taken, including
any review of the affairs of the Ultimate Parent, the Parent, the Company and
their respective Subsidiaries, shall be deemed to constitute any
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representation or warranty by any Administrative Agent-Related Person to such
Bank. Each Bank represents to the Administrative Agent that it has,
independently and without reliance upon any Administrative 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 the Ultimate
Parent, the Parent, the Company and their respective Subsidiaries, 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 the Company hereunder. Each Bank also represents that it will,
independently and without reliance upon any Administrative 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 the Company. Except for notices, reports and other
documents expressly herein required to be furnished to the Banks by the
Administrative Agent, the Administrative Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Ultimate Parent, the Parent, the Company,
or any of their respective Subsidiaries, which may come into the possession of
any of the Administrative Agent-Related Persons.
11.7 INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not
the transactions contemplated hereby are consummated, the Banks shall indemnify
upon demand the Administrative Agent-Related Persons (to the extent not
reimbursed by or on behalf of the Company and without limiting the obligation
of the Company to do so), pro rata, from and against any and all Indemnified
Liabilities; PROVIDED, that no Bank shall be liable for the payment to the
Administrative Agent-Related Persons of any portion of such Indemnified
Liabilities to the extent resulting from such Person's gross negligence or
willful misconduct. Without limitation of the foregoing, each Bank shall
reimburse the Administrative Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by the
Administrative 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 the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Company. The undertaking in this SECTION 11.7 shall survive the payment of all
Obligations hereunder and the resignation or replacement of the Administrative
Agent.
11.8 AGENTS IN INDIVIDUAL CAPACITY. Each of the Agents and
its affiliates, including, in the case of the Administrative Agent, BAI, 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 the Ultimate
Parent, the Parent, the Company and their respective Subsidiaries as though
such Person were not an Agent hereunder and without notice to or consent of the
other Agent or the Banks. The Banks acknowledge that, pursuant to such
activities, each Agent and its affiliates, including, in the case
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<PAGE> 56
of the Administrative Agent, BAI, may receive information regarding the Ultimate
Parent, the Parent, the Company or their respective Subsidiaries (including
information that may be subject to confidentiality obligations in favor of any
of such Persons) and acknowledge that such Agent shall be under no obligation
to provide such information to them. With respect to their respective Loans,
the Documentation Agent and BAI shall have the same rights and powers under this
Agreement and the other Loan Documents as any other Bank and may exercise the
same as though such Persons were not an Agent or an affiliate of an Agent, as
the case may be.
11.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent
may resign as Administrative Agent upon 30 days' notice to the Banks and the
Company. If the Administrative Agent resigns under this Agreement, the
Majority Banks shall appoint from among the Banks a successor administrative
agent for the Banks, which successor administrative agent shall be approved by
the Company. If no successor administrative agent is appointed prior to the
effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Banks and the
Company, a successor administrative agent from among the Banks. Upon the
acceptance of its appointment as successor administrative agent hereunder, such
successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term "Administrative Agent"
shall mean such successor administrative agent and the retiring Administrative
Agent's appointment, powers and duties as Administrative Agent shall be
terminated. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this SECTION 11 and SECTION 15 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement. If no successor agent has
accepted appointment as Administrative Agent by the date which is thirty (30)
days following a retiring Administrative Agent's notice of resignation, the
retiring Administrative Agent's resignation shall nevertheless thereupon become
effective and the Banks shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Majority Banks appoint a
successor agent as provided for above.
11.10 WITHHOLDING TAX. (A) If any Bank is a "foreign
corporation, partnership or trust" within the meaning of the Code and such Bank
claims exemption from, or a reduction of, U.S. withholding tax under Section
1441 or 1442 of the Code, such Bank agrees with and in favor of the
Administrative Agent, to deliver to the Administrative Agent:
(I) if such Bank claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, properly
completed IRS Forms 1001 and W-8 before the payment of any interest in
the first calendar year and before the payment of any interest in each
third succeeding calendar year during which interest may be paid under
this Agreement;
(II) if such Bank claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such
Bank, two properly completed and executed copies of IRS Form 4224
before the payment of any interest is due in the first taxable year of
such Bank and in each succeeding taxable year of such Bank during
which interest may be paid under this Agreement, and IRS Form W-9; and
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(III) such other form or forms as may be required under
the Code or other laws of the United States as a condition to exemption
from, or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Administrative Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(B) If any Bank claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form 1001 and such Bank
sells, assigns, grants a participation in, or otherwise transfers all or part
of the Obligations of the Company to such Bank, such Bank agrees to notify the
Administrative Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Company to such Bank. To the extent of
such percentage amount, the Administrative Agent will treat such Bank's IRS
Form 1001 as no longer valid.
(C) If any Bank claiming exemption from United States withholding tax
by filing IRS Form 4224 with the Administrative Agent grants a participation in
all or part of the Obligations of the Company to such Bank, such Bank agrees to
undertake sole responsibility for complying with the withholding tax
requirements imposed by Sections 1441 and 1442 of the Code.
(D) If any Bank is entitled to a reduction in the applicable
withholding tax, the Administrative Agent may withhold from any interest
payment to such Bank an amount equivalent to the applicable withholding tax
after taking into account such reduction. If the forms or other documentation
required by SUBSECTION (A) of this SECTION 11.10 are not delivered to the
Administrative Agent, then the Administrative Agent may withhold from any
interest payment to such Bank not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.
(E) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Administrative
Agent did not properly withhold tax from amounts paid to or for the account of
any Bank (because the appropriate form was not delivered, was not properly
executed, or because such Bank failed to notify the Administrative Agent of a
change in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason that does not constitute
gross negligence or wilful misconduct on the part of the Administrative Agent)
such Bank shall indemnify the Administrative Agent fully for all amounts paid,
directly or indirectly, by the Administrative Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Administrative Agent under this
SECTION 11.10, together with all costs and expenses (including Attorney Costs).
The obligation of the Banks under this subsection shall survive the payment of
all Obligations and the resignation or replacement of the Administrative Agent.
11.11 DOCUMENTATION AGENT. The Documentation Agent shall not
have or be deemed to have any fiduciary relationship with any Bank. Each Bank
acknowledges that it has not relied, and will not rely, on the Documentation
Agent in deciding to enter into this Agreement or in taking or not taking
action hereunder.
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12. ASSIGNMENT; PARTICIPATION.
--------------------------
12.1 ASSIGNMENTS. (A) Any Bank may, with the written consent
of the Company (at all times other than during the existence of an Event of
Default) and the Administrative Agent, which consents shall not be unreasonably
withheld, at any time assign and delegate to one or more Eligible Assignees
(PROVIDED that no written consent of the Company or the Administrative Agent
shall be required in connection with any assignment and delegation by a Bank to
an Eligible Assignee that is an affiliate of such Bank) (each an "ASSIGNEE")
all, or any ratable part of all, of the Loans, the Commitment and the other
rights and obligations of such Bank hereunder, in a minimum amount of
$10,000,000; PROVIDED that the Company and the Administrative Agent may
continue to deal solely and directly with such Bank 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 the Company
and the Administrative Agent by such Bank and the Assignee; (II) such Bank and
its Assignee shall have delivered to the Company and the Administrative Agent
an Assignment and Acceptance in substantially the form of EXHIBIT F
("ASSIGNMENT AND ACCEPTANCE"), together with any Note or Notes subject to such
assignment, and (III) the assignor Bank or Assignee has paid to the
Administrative Agent a processing fee in the amount of $2,500. From and after
the date that the Administrative Agent notifies the assignor Bank that it has
received (and provided its consent with respect to) an 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 Bank under the Loan
Documents, and (II) the assignor Bank 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 the Loan Documents.
(B) Within five (5) Business Days after its receipt of notice
by the Administrative Agent that it has received an executed Assignment and
Acceptance and payment of the processing fee (and provided that it consents to
such assignment in accordance with SUBSECTION 12.1(A)), the Company shall
execute and deliver to the Administrative Agent, a new Note evidencing such
Assignee's assigned Loans and Commitment and, if the assignor Bank has retained
a portion of its Loans and Commitment and so requests, a replacement Note
evidencing such retained Loans and Commitment (such Notes to be in substitution
for, but not in payment of, the Note held by such Bank). Immediately upon
payment of the processing fee 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 arising therefrom. The Commitment allocated to each Assignee
shall reduce such Commitment of the assigning Bank pro tanto.
12.2 PARTICIPATIONS. Any Bank may at any time sell to one
or more commercial banks or other Persons not affiliates of the Company (a
"PARTICIPANT") participating interests in any Loans, the Commitment of that
Bank and the other interests of that Bank (the "ORIGINATING BANK") hereunder
and under the other Loan Documents; PROVIDED, that (I) the originating Bank's
obligations under this Agreement shall remain unchanged, (II) the originating
Bank shall remain
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solely responsible for the performance of such obligations, (III) the Company
and the Administrative Agent shall continue to deal solely and directly with the
originating Bank in connection with the originating Bank's rights and
obligations under this Agreement and the other Loan Documents, and (IV) no Bank
shall transfer or grant any participating interest under which the Participant
has rights 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, consent or waiver would require unanimous consent of the Banks as
described in the FIRST PROVISO to SECTION 24. In the case of any such
participation, the Participant shall not have any rights under this Agreement,
or any other Loan Documents, and all amounts payable by the Company hereunder
shall be determined as if such Bank 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 Bank under this Agreement.
Notwithstanding any other provision in this Agreement, any Bank may at
any time create a security interest in, or pledge, all or any portion of its
rights under and interest in this Agreement and any Note held by it 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.
13. CONSENT TO JURISDICTION; WAIVER OF TRIAL BY JURY.
-------------------------------------------------
(A) The Company hereby irrevocably submits to the jurisdiction
of any Illinois state or federal court sitting in Chicago, Illinois over any
action or proceeding arising out of or relating to this Agreement or any other
Loan Document and the Company hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in such
Illinois state or federal court. Service of copies of the summons and complaint
and any other process in any action or proceeding may be made to the Company by
mailing or delivering a copy of such process to the Company at the Company's
address as specified in SECTION 20 hereof. The Company agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(B) Nothing in this SECTION 13 shall affect the right of the
Administrative Agent or any Bank to serve legal process in any other manner
permitted by law or affect the right of the Administrative Agent or any Bank to
bring any action or proceeding against the Company or its property in the
courts of any other jurisdictions.
(C) Each Agent, each Bank and the Company hereby waive all
rights to trial by jury in any action, suit, proceeding or counterclaim arising
out of or relating to this Agreement or any other Loan Document.
14. BINDING ACT.
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This Agreement shall become effective when it shall have been executed
by all of the parties hereto and the conditions precedent set forth in SECTION
4.1 shall have been satisfied, and shall be binding upon and inure to the
benefit of the Company, the Banks and the Administrative Agent and their
respective successors and assigns, except that the Company shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Banks and any attempted assignment without such consent
shall be void.
15. FEES AND EXPENSES; INDEMNITY.
-----------------------------
15.1 COSTS AND EXPENSES. The Company shall:
(A) whether or not the transactions contemplated hereby are
consummated, pay or reimburse the Administrative Agent and the Arranger within
five Business Days after demand for all costs and expenses incurred by such
Persons in connection with the development, preparation, delivery,
administration and execution of, and any amendment, supplement, waiver or
modification to (in each case, whether or not consummated), this Agreement, any
Loan Document and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby and
thereby, including reasonable Attorney Costs incurred by the Administrative
Agent with respect thereto; and
(B) pay or reimburse the Administrative Agent, the Arranger
and each Bank within five Business Days after demand for all costs and expenses
(including Attorney Costs) incurred by them in connection with the enforcement,
attempted enforcement, or preservation of any rights or remedies under this
Agreement or any other Loan Document during the existence of an Event of
Default or after acceleration of the Loans (including in connection with any
"workout" or restructuring regarding the Loans, and including in any insolvency
proceeding or appellate proceeding).
15.2 COMPANY INDEMNIFICATION. Whether or not the transactions
contemplated hereby are consummated, the Company shall indemnify and hold the
Administrative Agent-Related Persons, and each Bank and each of its respective
officers, directors, employees, counsel, agents and attorneys-in-fact (each, an
"INDEMNIFIED PERSON") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including reasonable Attorney Costs) of
any kind or nature whatsoever which may at any time (including at any time
following repayment of the Loans and the termination, resignation or
replacement of the Administrative Agent or replacement of any Bank) be imposed
on, incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein, or the transactions contemplated hereby, or any action taken or omitted
by any such Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
insolvency proceeding or appellate proceeding) related to or arising out of
this Agreement or the Loans or the use of the proceeds thereof, whether or not
any Indemnified Person is a party thereto (all the foregoing, collectively, the
"INDEMNIFIED LIABILITIES"); PROVIDED, that the Company shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities to
the extent resulting from the gross negligence or willful
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misconduct of such Indemnified Person. The agreements in this SECTION 15.2 shall
survive payment of all other Obligations and termination of this Agreement.
16. REMEDIES CUMULATIVE.
--------------------
Each and every right granted to the Banks and the Administrative Agent
hereunder or under any other document delivered hereunder or in connection
herewith, or allowed them by law or equity, shall be cumulative and may be
exercised from time to time. No failure on the part of any Bank or the
Administrative Agent to exercise, and no delay in exercising, any right shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right preclude any other or future exercise thereof or the exercise of any
other right. The due payment and performance of the Company's Obligations
under this Agreement shall be without regard to any counterclaim, right of
offset or any other claim whatsoever which the Company may have against the
Banks and the Administrative Agent and without regard to any other obligation
of any nature whatsoever which the Banks and the Administrative Agent may have
to the Company, and no such counterclaim (other than any compulsory
counterclaims) or offset shall be asserted by the Company in any action, suit
or proceeding instituted by the Administrative Agent or any Bank for payment or
performance of the Company's Obligations.
17. FURTHER ASSURANCES.
-------------------
At any time and from time to time, upon the request of any Bank or the
Administrative Agent, the Company shall execute, deliver and acknowledge or
cause to be executed, delivered and acknowledged, such further documents and do
such other acts and things as such Bank or the Administrative Agent may
reasonably request in order to fully effect the purposes of this Agreement, the
other Loan Documents and any other documents delivered pursuant hereto or in
connection with the Loans.
18. SURVIVAL OF COVENANTS.
----------------------
All covenants, agreements, representations and warranties made herein
and in any document delivered by or on behalf of the Company pursuant hereto
are material and shall be deemed to have been relied upon by the Administrative
Agent and the Banks, notwithstanding any investigation heretofore or hereafter
made by the Administrative Agent or the Banks, and shall survive the making by
the Banks of the Loans as herein contemplated and shall continue in full force
and effect so long as any Obligations remain outstanding and unpaid. All
statements contained in any certificate or other document delivered to the
Administrative Agent or the Banks at any time by or on behalf of the Company
pursuant hereto or in connection with the transactions contemplated hereby
shall constitute representations and warranties by the Company hereunder.
19. SEVERABILITY.
-------------
The provisions of this Agreement are severable, and if any clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction and
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shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision in this Agreement in any
jurisdiction.
20. NOTICE.
-------
(A) All notices, requests and other communications shall be in
writing (including, unless the context expressly otherwise provides, by
facsimile transmission, provided that any matter transmitted by the Company by
facsimile (I) shall be immediately confirmed by a telephone call to the
recipient at the number specified on SCHEDULE 20, and (II) shall be followed
promptly by delivery of a hard copy original thereof) and mailed, faxed or
delivered, to the address or facsimile number specified for notices on SCHEDULE
20; or, as directed to the Company or the Administrative Agent, to such other
address as shall be designated by such party in a written notice to the other
parties, and as directed to any other party, at such other address as shall be
designated by such party in a written notice to the Company and the
Administrative Agent.
(B) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when
delivered for overnight (next-day) delivery, or transmitted in legible form by
facsimile machine, respectively, or if mailed, upon the third Business Day
after the date deposited into the U.S. mail, or if delivered, upon delivery;
except that notices pursuant to SECTION 2 or SECTION 11 shall not be effective
until actually received by the Administrative Agent.
(C) Any agreement of the Administrative Agent and the Banks
herein to receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Company. The Administrative Agent and
the Banks shall be entitled to rely on the authority of any Person purporting
to be a Person authorized by the Company to give such notice and the
Administrative Agent and the Banks shall not have any liability to the Company
or other Person on account of any action taken or not taken by the
Administrative Agent or the Banks in reliance upon such telephonic or facsimile
notice. The obligation of the Company to repay the Loans shall not be affected
in any way or to any extent by any failure by the Administrative Agent and the
Banks to receive written confirmation of any telephonic or facsimile notice or
the receipt by the Administrative Agent and the Banks of a confirmation which
is at variance with the terms understood by the Administrative Agent and the
Banks to be contained in the telephonic or facsimile notice.
21. GOVERNING LAW.
--------------
This Agreement shall for all purposes be construed in accordance with,
and governed by, the internal substantive laws of the State of Illinois,
without regard to the conflicts of law provisions thereof.
22. MISCELLANEOUS.
--------------
The rights and remedies herein expressed are cumulative and not
exclusive of the other rights which the Banks would otherwise have. Any
documents required by any of the provisions
55
<PAGE> 63
hereof to be in the form annexed hereto as an exhibit shall be substantially in
such form with such changes therefrom, if any, as may be approved by the
Majority Banks and the Company. The captions in this Agreement are for
convenience of reference only and shall not define or limit the provisions
hereof. This Agreement, and any amendment, consent or waiver executed and
delivered hereunder or in connection herewith or with any other Loan
Document, may be executed in separate counterparts, each of which when so
executed and delivered shall be an original, but all of which together shall
constitute one document. In proving this Agreement, it shall not be necessary
to produce or account for more than one Agreement, executed by each of the
parties hereto.
23. ENTIRE AGREEMENT.
-----------------
This Agreement and any other documents executed in connection herewith
express the entire understanding of the parties with respect to the transactions
contemplated hereby. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally or in writing, except as provided in
SECTION 24.
24. CONSENTS, 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 the Company
therefrom, shall be effective unless the same shall be in writing and signed by
the Majority Banks (or by the Administrative Agent at the written request of
the Majority Banks) and the Company (or, in the case of the Guaranties, the
Ultimate Parent or the Parent, as applicable) and acknowledged by the
Administrative Agent, and then any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
PROVIDED, that no such waiver, amendment, or consent shall, unless in writing
and signed by all of the Banks and the Company (or, in the case of the
Guaranties, the Ultimate Parent or the Parent, as applicable) and acknowledged
by the Administrative Agent, do any of the following:
(A) increase or extend the Commitment of any Bank (or
reinstate any Commitment terminated pursuant to SECTION 10.1);
(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 Banks (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 (subject to CLAUSE (II) below) any fees or
other amounts payable hereunder or under any other Loan Document;
(D) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the Banks
or any of them to take any action hereunder; or
56
<PAGE> 64
(E) amend this SECTION 24, or SECTION 10, or any provision
herein providing for consent or other action by all Banks;
(F) release, amend or otherwise modify either of the
Guaranties;
and, PROVIDED, FURTHER, that (I) no amendment, waiver or consent shall, unless
in writing and signed by the Administrative Agent in addition to the Majority
Banks or all the Banks, as the case may be, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document, and (II)
the Fee Letter may be amended, or rights or privileges thereunder waived, in a
writing executed by the parties thereto.
[SIGNATURE PAGE FOLLOWS]
57
<PAGE> 65
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered by its duly authorized officer as
of the day and year first above written.
XTRA, INC.
By: /s/ Christopher P. Joyce
---------------------------------
Name: Christopher P. Joyce
Title: Treasurer
58
<PAGE> 66
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative Agent
By: /s/ Ann E. Mead
---------------------------------
Name: Ann E. Mead
---------------------------------
Title: Vice President
---------------------------------
59
<PAGE> 67
THE FIRST NATIONAL BANK OF BOSTON, as
Documentation Agent
By: /s/ David F. Eusdan
---------------------------------
Name: David F. Eusdan
---------------------------------
Title: Director
---------------------------------
60
<PAGE> 68
ABN AMRO BANK N.V., BOSTON BRANCH
By: /s/ James E. Davis
---------------------------------
Name: James E. Davis
---------------------------------
Title: Vice President
---------------------------------
ABN AMRO BANK N.V., BOSTON BRANCH
By: /s/ Charles J. Wahle
---------------------------------
Name: Charles J. Wahle
---------------------------------
Title: Assistant Vice President
---------------------------------
61
<PAGE> 69
BANK OF AMERICA ILLINOIS
By: /s/ Sharon L. Ephraim
---------------------------------
Name: Sharon L. Ephraim
---------------------------------
Title: Vice President
---------------------------------
62
<PAGE> 70
CORESTATES BANK, N.A.
By: /s/ Verna R. Prentice
---------------------------------
Name: Verna R. Prentice
---------------------------------
Title: Vice President
---------------------------------
63
<PAGE> 71
CREDIT LYONNAIS - New York Branch
By: /s/ R. J. Prouse
---------------------------------
Name: R. J. Prouse
---------------------------------
Title:
---------------------------------
64
<PAGE> 72
LTCB TRUST COMPANY
By: /s/ Noboru Kubota
---------------------------------
Name: Noboru Kubota
---------------------------------
Title: Senior Vice President
---------------------------------
65
<PAGE> 73
MELLON BANK, N.A.
By: /s/ Inba Ponnusamy
---------------------------------
Name: Inba Ponnusamy
---------------------------------
Title: Vice President
---------------------------------
66
<PAGE> 74
PNC BANK, N.A.
By: /s/ Kuan L. Grays
---------------------------------
Name: Kuan L. Grays
---------------------------------
Title: Assistant Vice President
---------------------------------
67
<PAGE> 75
ROYAL BANK OF CANADA
By: /s/ Michael J. Madnick
---------------------------------
Name: Michael J. Madnick
---------------------------------
Title: Manager
---------------------------------
68
<PAGE> 76
SHAWMUT BANK CONNECTICUT, N.A.
By: /s/ Philip S. Walker, Jr., CFA
---------------------------------
Name: Philip S. Walker, Jr., CFA
---------------------------------
Title: Vice President
---------------------------------
69
<PAGE> 77
THE BANK OF CALIFORNIA, N.A.
By: /s/ Alison A. Mason
---------------------------------
Name: Alison A. Mason
---------------------------------
Title: Assistant Vice President
---------------------------------
70
<PAGE> 78
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ David F. Eusdam
---------------------------------
Name: David F. Eusdam
---------------------------------
Title: Director
---------------------------------
71
<PAGE> 79
THE FUJI BANK, LIMITED, NEW YORK BRANCH
By: /s/ Yoshihiko Shiotsuga
---------------------------------
Name: Yoshihiko Shiotsuga
---------------------------------
Title: Vice President and Manager
---------------------------------
72
<PAGE> 80
NATWEST BANK N.A.
By: /s/ Robert Young
---------------------------------
Name: Robert Young
---------------------------------
Title: Vice President
---------------------------------
73
<PAGE> 1
EXHIBIT 2.3
GUARANTY
GUARANTY, dated as of June 30, 1995, by XTRA CORPORATION, a Delaware
corporation (the "GUARANTOR"), in favor of each of the Banks (as such term is
defined in the Credit Agreement referred to below). In consideration of the
Banks extending time, credit or banking facilities or accommodations to XTRA,
Inc., a Maine corporation, and its successors (the "COMPANY"), the Guarantor
agrees as follows:
1. GUARANTY OF PAYMENT AND PERFORMANCE. The Guarantor
hereby irrevocably, absolutely and unconditionally guarantees to the Banks the
full and punctual payment when due (whether at maturity, by acceleration or
otherwise), and the performance, of all liabilities, agreements and other
obligations of the Company to the Banks, whether direct or indirect, absolute
or contingent, due or to become due, secured or unsecured, now existing or
hereafter arising (collectively, the "OBLIGATIONS") under that certain Credit
Agreement of even date herewith (as extended, renewed, amended, restated or
otherwise supplemented from time to time, the "CREDIT AGREEMENT") among the
Company, the Banks from time to time parties thereto, and Bank of America
National Trust and Savings Association and The First National Bank of Boston,
as Administrative Agent and Documentation Agent, respectively, for the Banks
thereunder. Capitalized terms used herein without definition which are defined
in the Credit Agreement shall have the same meanings herein as in the Credit
Agreement. This Guaranty is an absolute, unconditional and continuing guaranty
of the full and punctual payment and performance of the Obligations and not of
their collectibility only and is in no way conditioned upon any requirement
that the Banks first attempt to collect any of the Obligations from the Company
or resort to any security or other means of obtaining payment of the
Obligations which the Banks may now have or may acquire after the date hereof,
or upon any other contingency whatsoever. Should the Company default in the
full and punctual payment or performance of any of the Obligations, the
liabilities and obligations of the Guarantor hereunder shall become immediately
due and payable, without demand or notice of any nature, all of which are
expressly waived by the Guarantor. Payments by the Guarantor hereunder may be
required by the Banks on any number of occasions.
2. GUARANTOR'S AGREEMENT TO PAY. The Guarantor further
agrees, as the principal obligor and not as a guarantor only, to pay to the
Administrative Agent for the benefit of the Banks, on
<PAGE> 2
demand, all costs and expenses (including court costs and reasonable legal fees
and expenses) incurred or expended by the Banks in connection with the
Obligations, this Guaranty and the enforcement thereof.
3. LIMITED GUARANTY. The liability of the Guarantor shall
be limited to the Obligations and the obligations of the Guarantor described in
SECTION 2 hereof.
4. WAIVERS BY GUARANTOR; BANKS' FREEDOM TO ACT. The Guarantor
agrees that the Obligations will be paid and performed strictly in accordance
with their respective terms regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any Bank with respect thereto. The Guarantor waives, to the maximum
extent permitted by law, presentment, demand, protest, notice of acceptance,
notice of Obligations incurred, notice of default or nonpayment, notice of
dishonor and all other notices of any kind, all defenses which may be available
by virtue of any valuation, stay, moratorium law or other similar law now or
hereafter in effect, any right to require the marshalling of assets of the
Company, and all suretyship defenses generally. Without limiting the
generality of the foregoing, the Guarantor agrees to the provisions of any
instrument evidencing, securing or otherwise executed in connection with any
Obligation and agrees, to the maximum extent permitted by law, that the
obligations of the Guarantor hereunder shall not be released or discharged, in
whole or in part, or otherwise affected by (I) the failure of any Bank or the
Administrative Agent to assert any claim or demand or to enforce any right or
remedy against the Company; (II) any extensions or renewals of any Obligation;
(III) any rescissions, waivers, amendments or modifications of any of the terms
or provisions of any agreement or instrument evidencing, securing or otherwise
executed in connection with any Obligation; (IV) the substitution or release of
any entity primarily or secondarily liable for any Obligation; (V) the adequacy
of any rights any Bank or the Administrative Agent may have against any
collateral or other means of obtaining repayment of the Obligations; (VI) the
impairment of any collateral securing the Obligations, including without
limitation the failure to perfect or preserve any rights any Bank or the
Administrative Agent might have in such collateral or the substitution,
exchange, surrender, release, loss or destruction of any such collateral; or
(VII) to the fullest extent permitted by applicable law, any other act or
omission which might in any manner or to any extent vary the risk of the
Guarantor or
-2-
<PAGE> 3
otherwise operate as a release or discharge of the Guarantor, all of which may
be done without notice to the Guarantor.
5. UNENFORCEABILITY OF OBLIGATIONS AGAINST COMPANY. If for any
reason the Company has no legal existence or is under no legal obligation to
discharge any of the Obligations undertaken or purported to be undertaken by it
or on its behalf, of if any of the Obligations have become irrecoverable from
the Company by operation of law or for any other reason, this Guaranty shall
nevertheless be binding on the Guarantor to the same extent as if the Guarantor
at all times had been the principal obligor on all such Obligations. In the
event that acceleration of the time for payment of the Obligations is stayed
upon the insolvency, bankruptcy or reorganization of the Company, or for any
other reason, all such amounts otherwise subject to acceleration under the
terms of any agreement or instrument evidencing, securing or otherwise executed
in connection with any Obligation shall be immediately due and payable by the
Guarantor.
6. WAIVER OF SUBROGATION; SUBORDINATION. Notwithstanding any
other provision of this Guaranty, until such time as all of the Obligations
shall have been paid and performed in full and the Credit Agreement and all
Commitments thereunder shall have terminated pursuant to the terms thereof, the
Guarantor hereby waives all rights of subrogation against the Company arising
as a result of payment by the Guarantor hereunder and will not prove any claim
in competition with any Bank in respect of any payment hereunder in bankruptcy
or insolvency proceedings of any nature. The Guarantor hereby acknowledges
that the waiver contained in the preceding sentence (the "SUBROGATION WAIVER")
is given as an inducement to the Banks to consummate the transactions
contemplated by the Credit Agreement and any other agreement referred to
therein and, in consideration of the willingness of the Banks to consummate
said transactions, the Guarantor agrees that it shall not in any way amend or
modify the Subrogation Waiver without the prior written consent of the Banks.
The Guarantor further acknowledges that the Subrogation Waiver is made for the
benefit of any and all creditors of the Company, whether existing on the date
hereof or thereafter arising, whether the claim of any such creditor against
the Company is direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise. The Subrogation Waiver and the
provisions of this section shall survive the expiration or termination of the
Credit Agreement and all Commitments thereunder, this Guaranty and the
-3-
<PAGE> 4
other Loan Documents. Until such time as all of the Obligations shall have
been paid and performed in full and the Credit Agreement and all Commitments
thereunder shall have been terminated pursuant to the terms thereof, the
Guarantor will not claim any set-off or counterclaim against the Company in
respect of any liability of the Guarantor to the Company; the Guarantor will
not claim any set- off or counterclaim (other than any compulsory counterclaim)
against any Bank in any proceeding or action to enforce this Guaranty; and the
Guarantor waives any benefit of and any right to participate in any collateral
which may be held by the Administrative Agent or any Bank. The payment of any
amounts due with respect to any indebtedness of the Company now or hereafter
held by the Guarantor is hereby subordinated to the prior payment in full of
the Obligations. The Guarantor agrees that after the occurrence of any Event
of Default in the payment or performance of the Obligations, the Guarantor will
not demand, sue for or otherwise attempt to collect any such indebtedness of
the Company to the Guarantor. If, notwithstanding the foregoing sentence, the
Guarantor shall collect, enforce or receive any amounts in respect of such
indebtedness, such amount shall be collected, enforced and received by the
Guarantor as trustee for the Banks and be paid over to the Administrative Agent
on account of the Obligations without affecting in any manner the liability of
the Guarantor under the other provisions of this Guaranty.
7. SETOFF. The Administrative Agent and each of the Banks is
hereby authorized at any time and from time to time, without notice to the
Guarantor (any such notice being expressly waived by the Guarantor) and to the
fullest extent permitted by law, to set off and apply such deposits and other
sums against the obligations of the Guarantor under this Guaranty.
8. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Guarantor
hereby represents, warrants, and covenants to and with the Banks that:
8.1. (a) CORPORATE STATUS. The Guarantor is a corporation
duly formed, validly existing and in good standing under the laws
of the State of Delaware and has the power and authority to own
its property, conduct its business as now being conducted and to
make and perform this Guaranty and the transactions contemplated
hereby, and is duly qualified to do business and in good standing as a
foreign corporation in each jurisdiction where the nature and extent
of the business conducted by it, or property owned by it, and
applicable law
-4-
<PAGE> 5
required such qualification, except where the failure to so qualify
would not have a material adverse effect on the Guarantor and its
Subsidiaries, taken as a whole.
(b) AUTHORIZATION. The execution, delivery and
performance of this Guaranty by the Guarantor have been duly
authorized by all necessary corporate action and will not violate any
provision of law or any order of any court or governmental agency or
the charter, or other incorporation papers or bylaws (or the
equivalent thereof) of the Guarantor or conflict with, or result in a
breach of, or constitute (with or without notice or lapse of time or
both) a default under, or result in the creation of any security
interest, lien, charge or encumbrance upon any property or assets of
the Guarantor pursuant to any agreement, indenture or other instrument
to which it is a party or by which it may be bound which would have a
material adverse effect upon the financial condition or operations of
the Guarantor and its Subsidiaries, taken as a whole.
(c) LITIGATION. Except as disclosed to the
Banks in writing prior to the execution hereof, no action, suit,
investigation or proceeding is pending or known to be threatened
against or affecting the Guarantor which, if adversely determined,
would have a material adverse effect upon the financial condition or
operations of the Guarantor and its Subsidiaries, taken as a whole.
(d) ABSENCE OF DEFAULT. The Guarantor is
not in default under any provision of its charter, or other
incorporation papers, bylaws (or the equivalent thereof) or stock
provisions or any amendment of any thereof, or any provision of law,
or of any agreement, note, indenture or other instrument to which it
is a party or by which it or any of its property is bound, or of any
order of any court or public body or authority by which it or any of
its property is bound, which would have a material adverse effect upon
the financial condition or operations of the Guarantor and its
Subsidiaries, taken as a whole.
(e) NO CONSENTS REQUIRED. No license, consent
or approval of or filing with any governmental body or other
regulatory authority is required for the making and performance of
this Guaranty by the Guarantor or any instrument or transaction
contemplated herein. The Guarantor
-5-
<PAGE> 6
holds all certificates and authorizations of all governmental agencies
and authorities required by law to enable it to engage in the business
currently transacted by it, except where the failure to obtain such
certificates and authorizations would not have a material adverse
effect upon the financial condition or operations of the Guarantor and
its Subsidiaries, taken as a whole.
(f) ENFORCEABILITY. This Guaranty has been duly
executed and delivered by the Guarantor and is the valid and legally
binding obligation of the Guarantor, enforceable in accordance with
its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting
generally the enforcement of creditors' rights.
(g) SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties of the Guarantor made herein shall
survive until payment in full of all of the Obligations.
8.2 CERTAIN NEGATIVE COVENANTS. The Guarantor
covenants and agrees that, until all of the Obligations have been paid
and satisfied in full, the Guarantor shall not create or suffer to
exist any mortgage, pledge, deed of trust or security interest on the
capital stock (or any indebtedness convertible into capital stock) of
any of its Subsidiaries.
9. TERMINATION; REINSTATEMENT. The Obligations of the
Guarantor under this Guaranty shall remain in full force and effect until all
of the Obligations have been indefeasibly satisfied. This Guaranty shall
continue to be effective or be reinstated if at any time any payment made or
value received with respect to an Obligation is rescinded or must otherwise be
returned by any Bank or the Administrative Agent upon the insolvency,
bankruptcy or reorganization of the Company, or otherwise, all as though such
payment had not been made or value received.
10. SUCCESSORS AND ASSIGNS. The obligations represented by this
Guaranty may not be assigned or delegated by the Guarantor without the prior
written consent of the Banks. This Guaranty shall be binding upon the
Guarantor, its permitted successors and assigns, and shall inure to the benefit
of and be enforceable by each of the Banks and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing
sentence, each Bank may assign or otherwise transfer this Guaranty
-6-
<PAGE> 7
and/or any agreement or any note held by it evidencing, securing or otherwise
executed in connection with the Obligations, or sell participations in any
interest therein, to any other person or entity and such other person or entity
shall thereupon become vested to the extent set forth in the agreement
evidencing such assignment, transfer or participation, with all the rights in
respect thereof granted to such Bank herein.
11. AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Guaranty nor consent to any departure by the Guarantor
therefrom shall be effective unless made in writing and the same shall be
signed by the Banks. No failure on the part of any Bank to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other rights.
12. NOTICES. All notices and other communications called
for hereunder shall be made in accordance with SECTION 20 of the Credit
Agreement (and shall be deemed to be effective at the times provided therein),
addressed as follows: if to the Guarantor, at the address set forth beneath
the appropriate signature line hereto, and if to the Banks, at the respective
addresses set forth for the Banks in the Credit Agreement, or at such other
address as any party may designate in writing in accordance with the provisions
hereof.
13. GOVERNING LAW; CONSENT TO JURISDICTION. This Guaranty shall
be governed by, and construed in accordance with, the internal substantive law
of the State of Illinois, without regard to the conflicts of law provisions
thereof. The Guarantor agrees that any suit for the enforcement of this
Guaranty may be brought in any United States federal or Illinois state court
sitting in Chicago, Illinois, and consents to the non-exclusive jurisdiction of
such court and to service of process in any such suit being made upon the
Guarantor by mail at the address of the Guarantor set forth beneath the
appropriate signature line hereto. The Guarantor hereby waives any objection
that it may now or hereafter have to the venue of any such suit or any such
court or that such suit was brought in an inconvenient court.
14. WAIVER OF TRIAL BY JURY. THE GUARANTOR HEREBY WAIVES ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS GUARANTY OR ANY
-7-
<PAGE> 8
OTHER AGREEMENT, INSTRUMENT OR OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH.
15. MISCELLANEOUS. This Guaranty constitutes the entire
agreement of the Guarantor with respect to the matters set forth herein. The
rights and remedies herein provided are cumulative and not exclusive of any
remedies provided by law or any other agreement, and this Guaranty shall be in
addition to any other guaranty of the Obligations. The invalidity or
unenforceability of any one or more sections of this Guaranty shall not affect
the validity or enforceability of its remaining provisions. Captions are for
the ease of reference only and shall not affect the meaning of the relevant
provisions.
-8-
<PAGE> 9
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered by its duly authorized officer as of the date first
written above.
XTRA CORPORATION
By: /s/ James R. Lajoie, Esq.
----------------------------------
Title: Vice President, General Counsel
and Secretary
----------------------------------
Address: 60 State Street
Boston, Massachusetts 02109
Attention: James R. Lajoie, Esq.
General Counsel
Accepted and Agreed to
as of June 30, 1995:
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Administrative Agent
By: /s/ Ann E. Mead
-----------------------------
Title: Vice President
Address: 1455 Market Street, 12th Floor
San Francisco, California 94103
Attention: Ann E. Mead
Vice President
<PAGE> 1
Exhibit 2.4
GUARANTY
GUARANTY, dated as of June 30, 1995, by XTRA MISSOURI, INC., a
Delaware corporation (the "GUARANTOR"), in favor of each of the Banks (as such
term is defined in the Credit Agreement referred to below). In consideration
of the Banks extending time, credit or banking facilities or accommodations to
XTRA, Inc., a Maine corporation, and its successors (the "COMPANY"), the
Guarantor agrees as follows:
1. GUARANTY OF PAYMENT AND PERFORMANCE. The Guarantor hereby
irrevocably, absolutely and unconditionally guarantees to the Banks the full
and punctual payment when due (whether at maturity, by acceleration or
otherwise), and the performance, of all liabilities, agreements and other
obligations of the Company to the Banks, whether direct or indirect, absolute
or contingent, due or to become due, secured or unsecured, now existing or
hereafter arising (collectively, the "OBLIGATIONS") under that certain Credit
Agreement of even date herewith (as extended, renewed, amended, restated or
otherwise supplemented from time to time, the "CREDIT AGREEMENT") among the
Company, the Banks from time to time parties thereto, and Bank of America
National Trust and Savings Association and The First National Bank of Boston,
as Administrative Agent and Documentation Agent, respectively, for the Banks
thereunder. Capitalized terms used herein without definition which are defined
in the Credit Agreement shall have the same meanings herein as in the Credit
Agreement. This Guaranty is an absolute, unconditional and continuing guaranty
of the full and punctual payment and performance of the Obligations and not of
their collectibility only and is in no way conditioned upon any requirement
that the Banks first attempt to collect any of the Obligations from the Company
or resort to any security or other means of obtaining payment of the
Obligations which the Banks may now have or may acquire after the date hereof,
or upon any other contingency whatsoever. Should the Company default in the
full and punctual payment or performance of any of the Obligations, the
liabilities and obligations of the Guarantor hereunder shall become immediately
due and payable, without demand or notice of any nature, all of which are
expressly waived by the Guarantor. Payments by the Guarantor hereunder may be
required by the Banks on any number of occasions.
2. GUARANTOR'S AGREEMENT TO PAY. The Guarantor further
agrees, as the principal obligor and not as a guarantor only, to pay to the
Administrative Agent for the benefit of the Banks, on
<PAGE> 2
demand, all costs and expenses (including court costs and reasonable legal fees
and expenses) incurred or expended by the Banks in connection with the
Obligations, this Guaranty and the enforcement thereof.
3. LIMITED GUARANTY. The liability of the Guarantor shall
be limited to the Obligations and the obligations of the Guarantor described in
SECTION 2 hereof.
4. WAIVERS BY GUARANTOR; BANKS' FREEDOM TO ACT. The Guarantor
agrees that the Obligations will be paid and performed strictly in accordance
with their respective terms regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any Bank with respect thereto. The Guarantor waives, to the maximum
extent permitted by law, presentment, demand, protest, notice of acceptance,
notice of Obligations incurred, notice of default or nonpayment, notice of
dishonor and all other notices of any kind, all defenses which may be available
by virtue of any valuation, stay, moratorium law or other similar law now or
hereafter in effect, any right to require the marshalling of assets of the
Company, and all suretyship defenses generally. Without limiting the
generality of the foregoing, the Guarantor agrees to the provisions of any
instrument evidencing, securing or otherwise executed in connection with any
Obligation and agrees, to the maximum extent permitted by law, that the
obligations of the Guarantor hereunder shall not be released or discharged, in
whole or in part, or otherwise affected by (I) the failure of any Bank or the
Administrative Agent to assert any claim or demand or to enforce any right or
remedy against the Company; (II) any extensions or renewals of any Obligation;
(III) any rescissions, waivers, amendments or modifications of any of the terms
or provisions of any agreement or instrument evidencing, securing or otherwise
executed in connection with any Obligation; (IV) the substitution or release of
any entity primarily or secondarily liable for any Obligation; (V) the adequacy
of any rights any Bank or the Administrative Agent may have against any
collateral or other means of obtaining repayment of the Obligations; (VI) the
impairment of any collateral securing the Obligations, including without
limitation the failure to perfect or preserve any rights any Bank or the
Administrative Agent might have in such collateral or the substitution,
exchange, surrender, release, loss or destruction of any such collateral; or
(VII) to the fullest extent permitted by applicable law, any other act or
omission which might in any manner or to any extent vary the risk of the
Guarantor or
-2-
<PAGE> 3
otherwise operate as a release or discharge of the Guarantor, all of which may
be done without notice to the Guarantor.
5. UNENFORCEABILITY OF OBLIGATIONS AGAINST COMPANY. If for any
reason the Company has no legal existence or is under no legal obligation to
discharge any of the Obligations undertaken or purported to be undertaken by it
or on its behalf, of if any of the Obligations have become irrecoverable from
the Company by operation of law or for any other reason, this Guaranty shall
nevertheless be binding on the Guarantor to the same extent as if the Guarantor
at all times had been the principal obligor on all such Obligations. In the
event that acceleration of the time for payment of the Obligations is stayed
upon the insolvency, bankruptcy or reorganization of the Company, or for any
other reason, all such amounts otherwise subject to acceleration under the
terms of any agreement or instrument evidencing, securing or otherwise executed
in connection with any Obligation shall be immediately due and payable by the
Guarantor.
6. WAIVER OF SUBROGATION; SUBORDINATION. Notwithstanding any
other provision of this Guaranty, until such time as all of the Obligations
shall have been paid and performed in full and the Credit Agreement and all
Commitments thereunder shall have terminated pursuant to the terms thereof, the
Guarantor hereby waives all rights of subrogation against the Company arising
as a result of payment by the Guarantor hereunder and will not prove any claim
in competition with any Bank in respect of any payment hereunder in bankruptcy
or insolvency proceedings of any nature. The Guarantor hereby acknowledges
that the waiver contained in the preceding sentence (the "SUBROGATION WAIVER")
is given as an inducement to the Banks to consummate the transactions
contemplated by the Credit Agreement and any other agreement referred to
therein and, in consideration of the willingness of the Banks to consummate
said transactions, the Guarantor agrees that it shall not in any way amend or
modify the Subrogation Waiver without the prior written consent of the Banks.
The Guarantor further acknowledges that the Subrogation Waiver is made for the
benefit of any and all creditors of the Company, whether existing on the date
hereof or thereafter arising, whether the claim of any such creditor against
the Company is direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise. The Subrogation Waiver and the
provisions of this section shall survive the expiration or termination of the
Credit Agreement and all Commitments thereunder, this Guaranty and the
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other Loan Documents. Until such time as all of the Obligations shall have
been paid and performed in full and the Credit Agreement and all Commitments
thereunder shall have been terminated pursuant to the terms thereof, the
Guarantor will not claim any set-off or counterclaim against the Company in
respect of any liability of the Guarantor to the Company; the Guarantor will
not claim any set- off or counterclaim (other than any compulsory counterclaim)
against any Bank in any proceeding or action to enforce this Guaranty; and the
Guarantor waives any benefit of and any right to participate in any collateral
which may be held by the Administrative Agent or any Bank. The payment of any
amounts due with respect to any indebtedness of the Company now or hereafter
held by the Guarantor is hereby subordinated to the prior payment in full of
the Obligations. The Guarantor agrees that after the occurrence of any Event
of Default in the payment or performance of the Obligations, the Guarantor will
not demand, sue for or otherwise attempt to collect any such indebtedness of
the Company to the Guarantor. If, notwithstanding the foregoing sentence, the
Guarantor shall collect, enforce or receive any amounts in respect of such
indebtedness, such amount shall be collected, enforced and received by the
Guarantor as trustee for the Banks and be paid over to the Administrative Agent
on account of the Obligations without affecting in any manner the liability of
the Guarantor under the other provisions of this Guaranty.
7. SETOFF. The Administrative Agent and each of the Banks is
hereby authorized at any time and from time to time, without notice to the
Guarantor (any such notice being expressly waived by the Guarantor) and to the
fullest extent permitted by law, to set off and apply such deposits and other
sums against the obligations of the Guarantor under this Guaranty.
8. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Guarantor
hereby represents, warrants, and covenants to and with the Banks that:
8.1. (a) CORPORATE STATUS. The Guarantor is a
corporation duly formed, validly existing and in good standing under
the laws of the State of Delaware and has the power and authority to
own its property, conduct its business as now being conducted and to
make and perform this Guaranty and the transactions contemplated
hereby, and is duly qualified to do business and in good standing as a
foreign corporation in each jurisdiction where the nature and extent
of the business conducted by it, or property owned by it, and
applicable law
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required such qualification, except where the failure to so qualify
would not have a material adverse effect on the Guarantor and its
Subsidiaries, taken as a whole.
(b) AUTHORIZATION. The execution, delivery and
performance of this Guaranty by the Guarantor have been duly
authorized by all necessary corporate action and will not violate any
provision of law or any order of any court or governmental agency or
the charter, or other incorporation papers or bylaws (or the
equivalent thereof) of the Guarantor or conflict with, or result in a
breach of, or constitute (with or without notice or lapse of time or
both) a default under, or result in the creation of any security
interest, lien, charge or encumbrance upon any property or assets of
the Guarantor pursuant to any agreement, indenture or other instrument
to which it is a party or by which it may be bound which would have a
material adverse effect upon the financial condition or operations of
the Guarantor and its Subsidiaries, taken as a whole.
(c) LITIGATION. Except as disclosed to the
Banks in writing prior to the execution hereof, no action, suit,
investigation or proceeding is pending or known to be threatened
against or affecting the Guarantor which, if adversely determined,
would have a material adverse effect upon the financial condition or
operations of the Guarantor and its Subsidiaries, taken as a whole.
(d) ABSENCE OF DEFAULT. The Guarantor is
not in default under any provision of its charter, or other
incorporation papers, bylaws (or the equivalent thereof) or stock
provisions or any amendment of any thereof, or any provision of law,
or of any agreement, note, indenture or other instrument to which it
is a party or by which it or any of its property is bound, or of any
order of any court or public body or authority by which it or any of
its property is bound, which would have a material adverse effect upon
the financial condition or operations of the Guarantor and its
Subsidiaries, taken as a whole.
(e) NO CONSENTS REQUIRED. No license, consent
or approval of or filing with any governmental body or other
regulatory authority is required for the making and performance of
this Guaranty by the Guarantor or any instrument or transaction
contemplated herein. The Guarantor
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holds all certificates and authorizations of all governmental agencies
and authorities required by law to enable it to engage in the business
currently transacted by it, except where the failure to obtain such
certificates and authorizations would not have a material adverse
effect upon the financial condition or operations of the Guarantor and
its Subsidiaries, taken as a whole.
(f) ENFORCEABILITY. This Guaranty has been duly
executed and delivered by the Guarantor and is the valid and legally
binding obligation of the Guarantor, enforceable in accordance with
its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting
generally the enforcement of creditors' rights.
(g) SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties of the Guarantor made herein shall
survive until payment in full of all of the Obligations.
8.2 CERTAIN NEGATIVE COVENANTS. The Guarantor
covenants and agrees that, until all of the Obligations have been paid
and satisfied in full, the Guarantor shall not create or suffer to
exist any mortgage, pledge, deed of trust or security interest on the
capital stock (or any indebtedness convertible into capital stock) of
any of its Subsidiaries.
9. TERMINATION; REINSTATEMENT. The Obligations of the
Guarantor under this Guaranty shall remain in full force and effect until all
of the Obligations have been indefeasibly satisfied. This Guaranty shall
continue to be effective or be reinstated if at any time any payment made or
value received with respect to an Obligation is rescinded or must otherwise be
returned by any Bank or the Administrative Agent upon the insolvency,
bankruptcy or reorganization of the Company, or otherwise, all as though such
payment had not been made or value received.
10. SUCCESSORS AND ASSIGNS. The obligations represented by this
Guaranty may not be assigned or delegated by the Guarantor without the prior
written consent of the Banks. This Guaranty shall be binding upon the
Guarantor, its permitted successors and assigns, and shall inure to the benefit
of and be enforceable by each of the Banks and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing
sentence, each Bank may assign or otherwise transfer this Guaranty
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and/or any agreement or any note held by it evidencing, securing or otherwise
executed in connection with the Obligations, or sell participations in any
interest therein, to any other person or entity and such other person or entity
shall thereupon become vested to the extent set forth in the agreement
evidencing such assignment, transfer or participation, with all the rights in
respect thereof granted to such Bank herein.
11. AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Guaranty nor consent to any departure by the Guarantor
therefrom shall be effective unless made in writing and the same shall be
signed by the Banks. No failure on the part of any Bank to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other rights.
12. NOTICES. All notices and other communications called
for hereunder shall be made in accordance with SECTION 20 of the Credit
Agreement (and shall be deemed to be effective at the times provided therein),
addressed as follows: if to the Guarantor, at the address set forth beneath
the appropriate signature line hereto, and if to the Banks, at the respective
addresses set forth for the Banks in the Credit Agreement, or at such other
address as any party may designate in writing in accordance with the provisions
hereof.
13. GOVERNING LAW; CONSENT TO JURISDICTION. This Guaranty shall
be governed by, and construed in accordance with, the internal substantive law
of the State of Illinois, without regard to the conflicts of law provisions
thereof. The Guarantor agrees that any suit for the enforcement of this
Guaranty may be brought in any United States federal or Illinois state court
sitting in Chicago, Illinois, and consents to the non-exclusive jurisdiction of
such court and to service of process in any such suit being made upon the
Guarantor by mail at the address of the Guarantor set forth beneath the
appropriate signature line hereto. The Guarantor hereby waives any objection
that it may now or hereafter have to the venue of any such suit or any such
court or that such suit was brought in an inconvenient court.
14. WAIVER OF TRIAL BY JURY. THE GUARANTOR HEREBY WAIVES ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS GUARANTY OR ANY
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OTHER AGREEMENT, INSTRUMENT OR OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH.
15. MISCELLANEOUS. This Guaranty constitutes the entire
agreement of the Guarantor with respect to the matters set forth herein. The
rights and remedies herein provided are cumulative and not exclusive of any
remedies provided by law or any other agreement, and this Guaranty shall be in
addition to any other guaranty of the Obligations. The invalidity or
unenforceability of any one or more sections of this Guaranty shall not affect
the validity or enforceability of its remaining provisions. Captions are for
the ease of reference only and shall not affect the meaning of the relevant
provisions.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered by its duly authorized officer as of the date first
written above.
XTRA MISSOURI, INC.
By: /s/ James R. Lajoie
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Title: Vice President and Secretary
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Address: 60 State Street
Boston, Massachusetts 02109
Attention: James R. Lajoie, Esq.
General Counsel
Accepted and Agreed to
as of June 30, 1995:
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Administrative Agent
By: /s/ Ann E. Mead
------------------------------
Title: Vice President
Address: 1455 Market Street, 12th Floor
San Francisco, California 94103
Attention: Ann E. Mead
Vice President
