<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(MARK ONE)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the period ended March 25, 1995
----------------------------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from to
--------------------- --------------------
Commission file number 0-10716
ROADWAY SERVICES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 34-1365496
- --------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1077 Gorge Boulevard, P.O.Box 88, Akron, Ohio 44309-0088
- ---------------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code is (216) 384-8184
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
The number of shares of common stock without par value outstanding as of April
21, 1995 was 39,071,192.
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INDEX
ROADWAY SERVICES, INC.
FORM 10-Q
PERIOD ENDED MARCH 25, 1995
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets--March 25, 1995
and December 31, 1994
Condensed Statements of Consolidated Income--Twelve
weeks ended March 25, 1995 and March 26, 1994
Condensed Statements of Consolidated Cash Flows--Twelve
weeks ended March 25, 1995 and March 26, 1994
Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II - OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
- ----------
- 2 -
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PART I - FINANCIAL INFORMATION
ROADWAY SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
March 25, December 31,
1995 1994
---------- ------------
(dollars in thousands)
<S> <C> <C>
ASSETS
Cash................................................. $ 39,476 $ 29,075
Marketable securities................................ 3,821 7,976
Accounts receivable.................................. 483,003 492,560
Prepaid expenses and supplies........................ 85,813 77,361
Deferred income taxes................................ 38,001 35,806
---------- ----------
TOTAL CURRENT ASSETS.............................. 650,114 642,778
Carrier operating property........................... 2,737,086 2,688,277
Less allowances for depreciation..................... 1,514,325 1,478,560
---------- ----------
TOTAL CARRIER OPERATING PROPERTY.................. 1,222,761 1,209,717
Cost in excess of net assets of businesses acquired.. 96,280 96,940
---------- ----------
$1,969,155 $1,949,435
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable..................................... $ 305,903 $ 339,859
Salaries and wages................................... 186,238 219,747
Short-term debt...................................... 85,800 -
Other current liabilities............................ 144,242 137,479
---------- ----------
TOTAL CURRENT LIABILITIES......................... 722,183 697,085
Casualty claims payable after one year............... 107,670 107,427
Future equipment repairs............................. 27,868 26,639
Retiree medical...................................... 60,713 59,243
Deferred income taxes................................ 41,942 43,647
---------- ----------
TOTAL LONG-TERM LIABILITIES....................... 238,193 236,956
Common stock - 40,896,414 shares issued.............. 39,898 39,898
Additional capital................................... 51,160 51,153
Earnings reinvested in the business.................. 970,635 978,459
---------- ----------
1,061,693 1,069,510
Less cost of common stock in treasury - 1,432,000
shares in 1995 and 1,477,000 shares in 1994......... 52,914 54,116
---------- ----------
TOTAL SHAREHOLDERS' EQUITY........................ 1,008,779 1,015,394
---------- ----------
$1,969,155 $1,949,435
========== ==========
See notes to condensed consolidated financial statements.
</TABLE>
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ROADWAY SERVICES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Twelve Weeks Ended
(First Quarter)
--------------------------------
March 25, March 26,
1995 1994
---------- ----------
(amounts in thousands,
except per share data)
<S> <C> <C>
REVENUE.......................................... $1,087,007 $1,023,740
OPERATING EXPENSES
Salaries, wages and benefits................... 572,115 550,355
Purchased transportation....................... 209,511 169,870
Operating supplies and expenses................ 190,269 171,871
Operating taxes and licenses................... 29,373 29,544
Insurance and claims........................... 25,884 25,088
Provision for depreciation..................... 48,081 47,833
Net gain on sale of property................... (392) (9)
---------- ----------
TOTAL OPERATING EXPENSES..................... 1,074,841 994,552
---------- ----------
OPERATING INCOME............................. 12,166 29,188
Other income (expense) - net..................... (1,229) 26
---------- ----------
INCOME BEFORE INCOME TAXES 10,937 29,214
Provision for income taxes....................... 5,086 13,302
---------- ----------
NET INCOME................................. $ 5,851 $ 15,912
========== ==========
NET INCOME PER SHARE....................... $ .15 $ .40
========== ==========
DIVIDENDS DECLARED PER SHARE................. $ .35 $ .35
========== ==========
AVERAGE SHARES OUTSTANDING................... 39,434 39,372
========== ==========
See notes to condensed consolidated financial statements.
</TABLE>
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<TABLE>
ROADWAY SERVICES, INC. AND SUBSIDIARIES
CONDENSED STATEMENT OF CONSOLIDATED
CASH FLOWS (UNAUDITED)
<CAPTION>
Twelve Weeks Ended
(First Quarter)
----------------------------
March 25, March 26,
1995 1994
--------- ---------
(dollars in thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income..................................... $ 5,851 $ 15,912
Adjustments.................................... (11,019) 21,214
------- --------
NET CASH (USED IN) PROVIDED BY
OPERATING ACTIVITIES.................... (5,168) 37,126
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of carrier operating property........ (64,070) (28,095)
Sales of carrier operating property............ 3,337 1,339
Purchases of marketable securities............. - (1,477)
Sales of marketable securities................. 4,155 17,183
-------- --------
NET CASH USED IN INVESTING ACTIVITIES........ (56,578) (11,050)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid................................. (13,653) (13,646)
Increase in short-term debt.................... 85,800 -
-------- --------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES...................... 72,147 (13,646)
-------- --------
NET INCREASE IN CASH......................... 10,401 12,430
CASH AT BEGINNING OF YEAR.................... 29,075 27,628
-------- --------
CASH AT END OF FIRST QUARTER................. $ 39,476 $ 40,058
======== ========
See notes to condensed consolidated financial statements.
</TABLE>
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ROADWAY SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note A - Basis of Presentation
- ------------------------------
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the twelve weeks
ended March 25, 1995 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1995. For further information, refer
to consolidated financial statements and footnotes thereto included in the
registrant's annual report on Form 10-K for the year ended December 31, 1994.
Note B - Accounting Period
- --------------------------
The registrant operates on a 13 four-week period calendar with 12 weeks in each
of the first three quarters and 16 weeks in the fourth quarter.
Note C - Short-Term Debt
- ------------------------
At March 25, 1995, short-term debt included borrowings of $80 million under an
unsecured $300 million Credit Agreement with several banks, which expires in
March 1999. Interest on outstanding borrowings is based on various rates as
defined in the agreement. This agreement, which was entered into by the
registrant during the first quarter of 1995, contains restrictions on secured
borrowings and requires the registrant to maintain a minimum level of
consolidated net worth. Additional borrowings of $5.8 millon were outstanding
at March 25, 1995 under an unsecured $25 million revolving line of credit. The
weighted average interest rate on all borrowings during the first quarter was
6.5%. Due to the short-term nature of the debt, the outstanding balance
approximated fair value.
Item 2. Management's Discussion and Analysis of Financial Condition
- --------------------------------------------------------------------
and Results of Operations
-------------------------
Consolidated revenue for the first quarter ended March 25, 1995 increased
$63,267,000 or 6.2% over revenue for the first quarter of 1994. At Roadway
Express, the registrant's largest operating company, revenue declined 2.6%
compared with the first quarter last year, primarily due to a reduction in
business volumes. Total first quarter tonnage declined 5.8%, with daily LTL
(less-than-truckload) tonnage declining 3.6%, based on 59 shipping days this
year versus 60 days last year. Business volumes continue below the levels
experienced by Roadway Express prior to the 24-day work stoppage in April 1994
by the International Brotherhood of Teamsters. The decline in revenue was also
attributable to a slowing economy and intense price competition from other
national carriers.
- 6 -
<PAGE> 7
The largest increase in consolidated revenue was attributable to Roadway
Package System, Inc. (RPS), the registrant's small package carrier. The
Roadway Regional Group (RRG), consisting of Viking Freight System, Central
Freight Lines, Spartan Express and Coles Express, also experienced an increase
in quarterly revenue. In addition, operations at Roadway Global Air (RGA), the
registrant's 18-month old worldwide air freight carrier, contributed to the
1995 revenue increase.
Operating expenses for the first quarter increased $80,289,000 or 8.1% over
comparable 1994 levels. The majority of the increases resulted from higher
business volumes at RPS, RRG, and RGA. Purchased transportation increased
23.3% in the first quarter of 1995, reflecting increased use of rail by Roadway
Express and increased business levels at RPS and RGA. Operating expenses,
which increased 16.6% at RRG, included investments in PRISM, a major
reengineering and information technology project launched during 1994 that will
continue for several years. At Roadway Express, operating expenses were .8%
below first quarter 1994 levels, due primarily to the reduction in volume. As
a result of reduced volume, fixed costs increased as a percent of revenue and
variable costs were adversely affected by reduced line-haul load averages.
Operating income in the first quarter amounted to $12,166,000 or 58.3% below
the first quarter of 1994. Other expense-net increased due to the reduction in
marketable securities and the addition of short-term debt.
Net income declined from $.40 per share in 1994 to $.15 per share in 1995.
Roadway Express lost $.01 per share in the quarter compared with a profit of
$.14 per share last year. Earnings from the registrant s other operating units
in the aggregate were also below last year but were close to plan. Earnings at
RPS increased 10% from last year and exceeded plan. The loss at RGA was $.02
more than planned at $.38 per share compared with a loss of $.25 per share last
year.
Roadway Express management will focus on regaining market share and
aggressively managing costs. Among steps being taken to improve the
competitive position of Roadway Express are its reengineered scheduled
operations system which is now producing faster transit times and excellent on
time performance and new metro to metro schedules which are competitive with
regional carriers. Aggressive cost management includes curtailment of salaried
staff positions to match current tonnage levels; refinements to the linehaul
operations system to improve load averages and equipment utilization; and a
reduction in capital expenditures.
RGA has entered into an agreement with American International Freight, Inc.
(AIF) of Ypsilanti, Michigan, a major cargo airline, which will result in
service and cost improvements for RGA. Under the arrangement, RGA will lease a
portion of its hub facility at Terre Haute, Indiana to AIF. Each company will
purchase space on the other s aircraft. The air fleet available to RGA will
increase from 13 to 23 all jet aircraft, increasing the extent of direct air
coverage. In conjunction with the recent opening of 29 additional air
logistics centers, RGA s overnight service will reach 75% of the U.S.
population, up from 62% last year.
- 7 -
<PAGE> 8
During the quarter, the registrant entered into two financing agreements to
provide available funds on an as needed basis. One agreement provides a $25
million overnight cash management line of credit. The other consists of a
$300 million Credit Agreement with several participating banks. Borrowings
under financing agreements amounted to $85.8 million at the end of the first
quarter. It is anticipated that borrowings will continue at least at this
level through the remainder of 1995. It is anticipated that funds generated
from future operating activities and financing sources currently in place will
finance projected 1995 capital expenditures and provide adequate levels of
working capital, funds for planned business expansion and other needs of the
business. Total capital expenditures in 1995 are currently projected at
approximately $385 million.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- ----------------------------------------
(a) Exhibits
--------
(I) Credit Agreement among Roadway Services, Inc., several lenders and
Chemical Bank, dated as of March 24, 1995.
(II) Financial Data Schedule
(b) Reports on Form 8-K Filed During the First Quarter of 1995
----------------------------------------------------------
A Form 8-K dated January 20, 1995 was filed under Item 5, Other
Materially Important Events, to report certain important business
information, and under Item 7, Financial Statements and Exhibits, to
file Exhibit 10-Material contracts.
- 8 -
<PAGE> 9
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.
ROADWAY SERVICES, INC.
--------------------------------------
(Registrant)
Date: April 27, 1995 By /s/ D. A. Wilson
---------------- ------------------------------------
D. A. Wilson, Senior Vice President-
Finance and Planning, Secretary and
Chief Financial Officer
Date: April 27, 1995 By /s/ Roy E. Griggs
---------------- ------------------------------------
Roy E. Griggs,
Vice President and Controller
- 9 -
<PAGE> 1
Exhibit 10
================================================================================
$300,000,000
CREDIT AGREEMENT
among
ROADWAY SERVICES, INC.
The Several Lenders
from Time to Time Parties Hereto
and
CHEMICAL BANK,
as Agent
Dated as of March 24, 1995
================================================================================
509235\0232\01652\952NGVKW.CRA
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TABLE OF CONTENTS
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<TABLE>
<S> <C> <C>
Page
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.1 Revolving Credit Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.2 Revolving Credit Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.3 Procedure for Revolving Credit Borrowing . . . . . . . . . . . . . . . . . . . . . . . 13
2.4 Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.5 Termination or Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . 15
2.6 The CAF Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.7 Procedure for CAF Advance Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.8 CAF Advance Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.9 CAF Advance Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.10 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.11 Conversion and Continuation Options . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.12 Interest Rates and Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.13 Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.14 Inability to Determine Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.15 Pro Rata Treatment and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.16 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.17 Requirements of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.18 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.19 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.1 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.2 No Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.3 Corporate Existence; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . 26
3.4 Corporate Power; Authorization; Enforceable Obligations . . . . . . . . . . . . . . . . 27
3.5 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.6 No Material Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.7 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.8 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.9 No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.11 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.12 Investment Company Act; Other Regulations . . . . . . . . . . . . . . . . . . . . . . 28
3.13 Purpose of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.14 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.1 Conditions to Initial Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.2 Conditions to Each Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.2 Certificates; Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.3 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.4 Conduct of Business and Maintenance of Existence . . . . . . . . . . . . . . . . . . . 32
5.5 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 32
509235\0232\01652\952NGVKW.CRA _ i _
<PAGE> 3
<CAPTION>
Page
<S> <C> <C>
5.6 Inspection of Property; Books and Records; Discussions . . . . . . . . . . . . . . 32
5.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.8 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.1 Maintenance of Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . 34
6.2 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.3 Limitation on Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . . 35
6.4 Limitation on Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.5 Limitation on Lines of Business . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 8. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.4 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.6 Non-Reliance on Agent and Other Lenders . . . . . . . . . . . . . . . . . . . . . 40
8.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.8 Agent in Its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.4 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . 44
9.5 Payment of Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.6 Successors and Assigns; Participations and Assignments . . . . . . . . . . . . . . 45
9.7 Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.10 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.11 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.12 Submission To Jurisdiction; Waivers . . . . . . . . . . . . . . . . . . . . . . . 48
9.13 Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.14 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
</TABLE>
509235\0232\01652\952NGVKW.CRA _ ii _
<PAGE> 4
SCHEDULES
Schedule I Commitments and Addresses for Notices
Schedule II Applicable Margin/Facility Fee
EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B Form of CAF Advance Note
Exhibit C Form of CAF Advance Confirmation
Exhibit D Form of CAF Advance Offer
Exhibit E Form of CAF Advance Request
Exhibit F Form of Opinion of General Counsel to the Borrower
Exhibit G Form of Assignment and Acceptance
509235\0232\01652\952NGVKW.CRA _ iii _
<PAGE> 5
CREDIT AGREEMENT, dated as of March 24, 1995, among ROADWAY SERVICES,
INC., an Ohio corporation (the "BORROWER"), the several banks and other
financial institutions from time to time parties to this Agreement (the
"LENDERS") and CHEMICAL BANK, a New York banking corporation, as agent for the
Lenders hereunder.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings:
"ABR" or "ALTERNATE BASE RATE": for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day (or if the
Eurodollar Rate is unavailable pursuant to subsection 2.14 or 2.16,
the Prime Rate in effect on such day minus 1%), (b) the Base CD Rate
in effect on such day plus 1% and (c) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1%. For purposes hereof: "PRIME
RATE" shall mean the rate of interest per annum publicly announced
from time to time by the Agent as its prime rate in effect at its
principal office in New York City (the Prime Rate not being intended
to be the lowest rate of interest charged by Chemical Bank in
connection with extensions of credit to debtors); "BASE CD RATE" shall
mean the sum of (a) the product of (i) the Three-Month Secondary CD
Rate and (ii) a fraction, the numerator of which is one and the
denominator of which is one minus the C/D Reserve Percentage and (b)
the C/D Assessment Rate; "THREE-MONTH SECONDARY CD RATE" shall mean,
for any day, the secondary market rate for three-month certificates of
deposit reported as being in effect on such day (or, if such day shall
not be a Business Day, the next preceding Business Day) by the Board
of Governors of the Federal Reserve System (the "BOARD") through the
public information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so reported on
such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of
major money center banks in New York City received at approximately
10:00 A.M., New York City time, on such day (or, if such day shall not
be a Business Day, on the next preceding Business Day) by the Agent
from three New York City negotiable certificate of deposit dealers of
recognized standing selected by it; and "FEDERAL FUNDS EFFECTIVE RATE"
shall mean, for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of
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New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it. Any change in the ABR due to a
change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective Rate,
respectively.
"ABR LOANS": Revolving Credit Loans the rate of interest
applicable to which is based upon the ABR.
"ABSOLUTE RATE CAF ADVANCE": any CAF Advance made by the
Lenders at an absolute rate (as opposed to a rate composed of the
Eurodollar Rate plus or minus a margin).
"ABSOLUTE RATE CAF ADVANCE REQUEST": any CAF Advance Request
requesting the Lenders to offer to make Absolute Rate CAF Advances.
"ADJUSTMENT DATE": the second Business Day following receipt
by the Agent of both (i) the financial statements required to be
delivered pursuant to subsections 5.1(a) and (b), as the case may be,
for the most recently completed fiscal period and (ii) the related
compliance certificate required to be delivered pursuant to subsection
5.2(b) with respect to such fiscal period.
"AFFILIATE": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"AGENT": Chemical Bank, together with its affiliates, as the
arranger of the Commitments and as the agent for the Lenders under
this Agreement and the Notes.
"AGREEMENT": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"APPLICABLE MARGIN": during the period from the Closing Date
until the first Adjustment Date, the Applicable Margin shall be .14%;
the Applicable Margin will be adjusted on such first Adjustment Date
and on each Adjustment Date thereafter to the applicable rate per
annum set forth under the heading "Applicable Margin" on Schedule
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II hereto which corresponds to the Debt/Capitalization Ratio
determined from the financial statements and compliance certificate
relating to the end of the fiscal quarter immediately preceding such
Adjustment Date; PROVIDED that in the event that the financial
statements required to be delivered pursuant to subsections 5.1(a) and
(b), as applicable, and the related compliance certificate required to
be delivered pursuant to subsection 5.2(b), are not delivered when
due, then (x) if such financial statements and certificate are
delivered after the date such financial statements and certificate
were required to be delivered and the Applicable Margin increases from
that previously in effect as a result of the delivery of such
financial statements, then the Applicable Margin during the period
from the date upon which such financial statements were required to be
delivered (without giving effect to any applicable cure period) until
the date upon which they actually are delivered shall, except as
otherwise provided in clause (z) below, be the Applicable Margin as so
increased; (y) if such financial statements and certificate are
delivered after the date such financial statements and certificate
were required to be delivered and the Applicable Margin decreases from
that previously in effect as a result of the delivery of such
financial statements, then such decrease in the Applicable Margin
shall not become applicable until the date upon which the financial
statements and certificate actually are delivered; and (z) if such
financial statements and certificate are not delivered prior to the
expiration of the applicable cure period, then, effective upon such
expiration, for the period from the date upon which such financial
statements and certificate were required to be delivered (after the
expiration of the applicable cure period) until two Business Days
following the date upon which they actually are delivered, the
Applicable Margin shall be .50% (it being understood that the
foregoing shall not limit the rights of the Agent and the Banks set
forth in Section 7).
"ASSIGNEE": as defined in subsection 9.6(c).
"ASSIGNMENT AND ACCEPTANCE": as defined in subsection 9.6(c).
"AVAILABLE COMMITMENT": as to any Lender at any time, an
amount equal to the excess, if any, of (a) the amount of such Lender's
Commitment over (b) the aggregate principal amount of all Loans made
by such Lender then outstanding.
"BIDDING LENDER": as defined in the subsection 2.7(g).
"BORROWING DATE": in respect of any Loan, the date such Loan
is made.
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"BUSINESS DAY": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close.
"CAF ADVANCE": each loan made pursuant to subsection 2.6.
"CAF ADVANCE COMMITMENT PERIOD": the period from and
including the Closing Date until the date which is 7 days prior to the
Termination Date.
"CAF ADVANCE CONFIRMATION": each confirmation by the Borrower
of its acceptance of CAF Advance Offers, which CAF Advance
Confirmation shall be substantially in the form of Exhibit C and shall
be delivered to the Agent and each Bidding Lender in writing or by
facsimile transmission.
"CAF ADVANCE INTEREST PAYMENT DATE": as to each CAF Advance,
the CAF Advance Maturity Date thereof and each other interest payment
date specified by the Borrower for such CAF Advance in the related CAF
Advance Request.
"CAF ADVANCE MATURITY DATE": as to any CAF Advance, the date
specified by the Borrower in the related CAF Advance Confirmation.
"CAF ADVANCE NOTE": as defined in subsection 2.9;
collectively, the "CAF ADVANCE NOTES."
"CAF ADVANCE OFFER": each offer by a Lender to make one or
more CAF Advances pursuant to a CAF Advance Request, which CAF Advance
Offer shall contain the information specified in Exhibit D and shall
be delivered to the Borrower by telephone, immediately confirmed by
facsimile transmission.
"CAF ADVANCE REQUEST": each request by the Borrower for
Lenders to submit bids to make CAF Advances, which request shall
contain the information in respect of such requested CAF Advances
specified in Exhibit E and shall be delivered to the Lenders in
writing or by facsimile transmission, or by telephone, immediately
confirmed by facsimile transmission.
"CAPITAL STOCK": any and all shares, interests,
participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests in
a Person (other than a corporation) and any and all warrants or
options to purchase any of the foregoing.
"C/D ASSESSMENT RATE": for any day as applied to any ABR
Loan, the annual assessment rate in effect on such day which is
payable by a member of the Bank Insurance Fund
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maintained by the Federal Deposit Insurance Corporation (the "FDIC")
classified as well-capitalized and within supervisory subgroup "B" (or
a comparable successor assessment risk classification) within the
meaning of 12 C.F.R. Section 327.3(d) (or any successor provision) to
the FDIC (or any successor) for the FDIC's (or such successor's)
insuring time deposits at offices of such institution in the United
States.
"C/D RESERVE PERCENTAGE": for any day as applied to any ABR
Loan, that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) (the Board"), for determining the
maximum reserve requirement for a Depositary Institution (as defined
in Regulation D of the Board) in respect of new non-personal time
deposits in Dollars having a maturity of 30 days or more.
"CHEMICAL": Chemical Bank.
"CLOSING DATE": the date on which the conditions precedent
set forth in subsection 4.1 shall be satisfied.
"CODE": the Internal Revenue Code of 1986, as amended from
time to time.
"COMMITMENT": as to any Lender, the obligation of such Lender
to make Loans to the Borrower hereunder in an aggregate principal
amount at any one time outstanding not to exceed the amount set forth
opposite such Lender's name on Schedule I, as such amount may be
reduced from time to time in accordance with the provisions of this
Agreement.
"COMMITMENT PERCENTAGE": as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the
aggregate Commitments (or, at any time after the Commitments shall
have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Loans then outstanding constitutes
of the aggregate principal amount of the Loans then outstanding).
"COMMITMENT PERIOD": the period from and including the date
hereof to but not including the Termination Date or such earlier date
on which the Commitments shall terminate as provided herein.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
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"CONSOLIDATED NET WORTH": at a particular date, with respect
to the Borrower, all amounts which would, in conformity with GAAP, be
included under shareholders' equity on a consolidated balance sheet of
the Borrower and its Subsidiaries as at such date.
"CONTINUING DIRECTORS" as defined in subsection 7(i)
"CONTRACTUAL OBLIGATION": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or
any of its property is bound.
"DEBT/CAPITALIZATION RATIO": at any time, the ratio of (i)
all of the then outstanding Indebtedness of the Borrower and its
Subsidiaries on a consolidated basis to (ii) the sum of (x) the then
Consolidated Net Worth and (y) such Indebtedness.
"DEFAULT": any of the events specified in Section 7, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"DOLLARS" and "$": dollars in lawful currency of the United
States of America.
"ENVIRONMENTAL LAWS": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority
or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any
time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied
to a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors
of the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained
by a member bank of such System.
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"EURODOLLAR BASE RATE": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
equal to the rate at which Chemical is offered Dollar deposits at or
about 10:00 A.M., New York City time, two Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market
where the eurodollar and foreign currency and exchange operations in
respect of its Eurodollar Loans are then being conducted for delivery
on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of its
Eurodollar Loan to be outstanding during such Interest Period.
"EURODOLLAR CAF ADVANCE": any CAF Advance made by the Lenders
at an interest rate equal to the Eurodollar Rate plus (or minus) a
margin.
"EURODOLLAR CAF ADVANCE REQUEST": any CAF Advance Request
requesting the Lenders to offer to make Eurodollar CAF Advances.
"EURODOLLAR LOANS": Revolving Credit Loans the rate of
interest applicable to which is based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EVENT OF DEFAULT": any of the events specified in Section 7,
PROVIDED that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"FACILITY FEE": as defined in subsection 2.4.
"FINANCING LEASE": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"GAAP": generally accepted accounting principles in the
United States of America in effect from time to time.
"GOVERNMENTAL AUTHORITY": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
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"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING
PERSON"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "PRIMARY OBLIGATIONS") of
any other third Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for
the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof; PROVIDED,
HOWEVER, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount
equal to the stated or determinable amount of the primary obligation
in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for
which such guaranteeing person may be liable are not stated or
determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Borrower in good
faith.
"INDEBTEDNESS": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar
instrument, (c) all obligations of such Person under Financing Leases,
(d) all obligations of such Person in respect of acceptances issued or
created for the account of such Person and (e) all liabilities secured
by any Lien on any property owned by such Person even though such
Person
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has not assumed or otherwise become liable for the payment thereof.
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the last day
of each March, June, September and December to occur while such Loan
is outstanding, (b) as to any Eurodollar Loan having an Interest
Period of three months or less, the last day of such Interest Period,
and (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day which is three months or a whole multiple
thereof after the first day of such Interest Period and the last day
of such Interest Period.
"INTEREST PERIOD": with respect to any Eurodollar Loan or
Eurodollar CAF Advance:
(i) initially, the period commencing on the
Borrowing Date or (in the case of Eurodollar Loans only) the
conversion date, as the case may be, and (a) with respect to a
Eurodollar Loan, ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of
borrowing or notice of conversion, as the case may be, given
with respect thereto or (b) with respect to a Eurodollar CAF
Advance, ending on a date at least 7 and not more than 180
days thereafter, as selected by the Borrower in its acceptance
of the related CAF Advance Offer; and
(ii) thereafter, with respect to Eurodollar
Loans, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan
and ending one, two, three or six months thereafter, as
selected by the Borrower by irrevocable notice to the Agent
not less than three Business Days prior to the last day of the
then current Interest Period with respect thereto;
PROVIDED that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period pertaining to a
Eurodollar Loan or a Eurodollar CAF Advance would otherwise
end on a day that is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest
Period into another calendar month in which event such
Interest Period shall end on the immediately preceding
Business Day;
(2) any Interest Period that would otherwise extend
beyond the Termination Date shall end on the Termination Date;
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(3) any Interest Period pertaining to a Eurodollar
Loan or Eurodollar CAF Advance that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month; and
(4) the Borrower shall select Interest Periods so as
not to require a payment or prepayment of any Eurodollar Loan
during an Interest Period for such Loan.
"LIEN": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Financing Lease having substantially the
same economic effect as any of the foregoing).
"LOAN": any loan made by any Lender pursuant to this
Agreement.
"LOAN DOCUMENTS": this Agreement and the Notes.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a)
the business, operations, property or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a whole or
(b) the validity or enforceability of this Agreement or any Note or
the rights or remedies of the Agent or the Lenders hereunder or
thereunder (other than a material adverse effect arising solely from a
work stoppage of the union employees of Roadway Express).
"MATERIAL SUBSIDIARY": at any time, any Subsidiary of the
Borrower from which the Borrower and its Subsidiaries derive at least
10% of their consolidated revenues as reflected in the most recent
audited consolidated financial statements of the Borrower.
"MINIMUM CONSOLIDATED NET WORTH": for the fiscal year 1994,
$750,000,000 and for each fiscal quarter thereafter, the sum of (a)
50% of the Borrower's consolidated net income after dividends for such
period and (b) the Minimum Consolidated Net Worth for the prior
period.
"NON-EXCLUDED TAXES": as defined in subsection 2.18.
"NOTES": the collective reference to the Revolving Credit
Notes and the CAF Advance Notes.
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"PARTICIPANTS": as defined in subsection 9.6(b).
"PERSON": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"PROPERTIES": as defined in subsection 3.14.
"REGISTER": as defined in subsection 9.6(d).
"REQUIRED LENDERS": at any time, Lenders the Commitment
Percentages of which aggregate more than 50%.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"REVOLVING CREDIT LOANS": as defined in subsection 2.1.
"REVOLVING CREDIT NOTE": as defined in subsection 2.2.
"ROADWAY EXPRESS": Roadway Express Inc., a Delaware
corporation and a Material Subsidiary.
"RESPONSIBLE OFFICER": (i) the Chairman and Chief Executive
Officer, (ii) the President and Chief Operating Officer or (iii) any
Vice President of the Borrower or, with respect to financial matters,
the Chief Financial Officer of the Borrower.
"SUBSIDIARY": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless
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otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Borrower.
"TERMINATION DATE": March 24, 1999.
"TRANSFEREE": as defined in subsection 9.6(f).
"TYPE": as to any Revolving Credit Loan, its nature as an ABR
Loan or a Eurodollar Loan.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the Notes or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in the Notes, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Borrower and its Subsidiaries not defined in subsection 1.1 and accounting
terms partly defined in subsection 1.1, to the extent not defined, shall have
the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms
and conditions hereof, each Lender severally agrees to make revolving credit
loans (the "REVOLVING CREDIT LOANS") to the Borrower from time to time during
the Commitment Period in an aggregate principal amount at any one time
outstanding not to exceed the amount of such Lender's Commitment, PROVIDED that
no Lender shall make any Revolving Credit Loan if, after giving effect to such
Revolving Credit Loan, the aggregate outstanding principal amount of all
Revolving Credit Loans plus the aggregate outstanding principal amount of all
CAF Advances would exceed the aggregate Commitments of all the Lenders. During
the Commitment Period the Borrower may use the Commitments by borrowing,
prepaying the Revolving Credit Loans in whole or in part, and reborrowing, all
in accordance with the terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time be
(i) Eurodollar Loans, (ii) ABR Loans or (iii) a combination
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thereof, as determined by the Borrower and notified to the Agent in accordance
with subsections 2.3 and 2.11, PROVIDED that no Revolving Credit Loan shall be
made as a Eurodollar Loan after the day that is one month prior to the
Termination Date.
2.2 REVOLVING CREDIT NOTES. The Revolving Credit Loans made
by each Lender shall be evidenced by a promissory note of the Borrower,
substantially in the form of Exhibit A, with appropriate insertions as to
payee, date and principal amount (a "REVOLVING CREDIT NOTE"), payable to the
order of such Lender and in a principal amount equal to the lesser of (a) the
amount of the initial Commitment of such Lender and (b) the aggregate unpaid
principal amount of all Revolving Credit Loans made by such Lender. Each
Lender is hereby authorized to record the date, Type and amount of each
Revolving Credit Loan made by such Lender, each continuation thereof, each
conversion of all or a portion thereof to another Type, the date and amount of
each payment or prepayment of principal thereof and, in the case of Eurodollar
Loans, the length of each Interest Period with respect thereto, on the schedule
annexed to and constituting a part of its Revolving Credit Note, and any such
recordation shall constitute PRIMA FACIE evidence of the accuracy of the
information so recorded PROVIDED, HOWEVER, that the failure to make any such
recordation shall not affect the obligations of the Borrower hereunder or under
any Revolving Credit Note. Each Revolving Credit Note shall (x) be dated the
Closing Date, (y) be stated to mature on the Termination Date and (z) provide
for the payment of interest in accordance with subsection 2.12.
2.3 PROCEDURE FOR REVOLVING CREDIT BORROWING. The Borrower
may borrow Revolving Credit Loans under the Commitments during the Commitment
Period on any Business Day, PROVIDED that the Borrower shall give the Agent
irrevocable notice (which notice must be received by the Agent prior to 10:00
A.M., New York City time, (a) three Business Days prior to the requested
Borrowing Date, if all or any part of the requested Revolving Credit Loans are
to be initially Eurodollar Loans or (b) prior to 10:00 A.M., New York City
time, on the requested Borrowing Date, otherwise), specifying (i) the amount to
be borrowed, (ii) the requested Borrowing Date, (iii) whether the borrowing is
to be of Eurodollar Loans, ABR Loans or a combination thereof and (iv) if the
borrowing is to be entirely or partly of Eurodollar Loans, the respective
amounts of such Type of Revolving Credit Loan and the respective lengths of the
initial Interest Periods therefor. Each such borrowing under the Commitments
shall be in an amount equal to $10,000,000 or a whole multiple of $1,000,000 in
excess thereof (or, if the then Available Commitments are less than
$10,000,000, such lesser amount). Upon receipt of any such notice from the
Borrower, the Agent shall promptly notify each Lender thereof. Each Lender
will make the amount of its pro rata share of each borrowing available to the
Agent for the account of the Borrower at the office of the Agent specified in
subsection 9.2 prior to 12:00 Noon, New York City time, on the Borrowing Date
requested by the Borrower in funds immediately available to
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14
the Agent. Such borrowing will then be made available to the Borrower by the
Agent crediting the account of the Borrower on the books of such office with
the aggregate of the amounts made available to the Agent by the Lenders and in
like funds as received by the Agent.
2.4 FACILITY FEE. The Borrower agrees to pay to the Agent
for the account of each Lender a facility fee (the "FACILITY FEE") for the
period from and including the date of this Agreement to the Termination Date,
payable quarterly in arrears on the last day of each March, June, September and
December and on the Termination Date or such earlier date as the Commitments
shall terminate as provided herein, commencing on the first of such dates to
occur after the date hereof. During the period from the Closing Date until the
first Adjustment Date, the Facility Fee shall be equal to .06% of the aggregate
Commitments. The Facility Fee will be adjusted on such first Adjustment Date
and on each Adjustment Date thereafter to the applicable rate per annum set
forth under the heading "Facility Fee" on Schedule II hereto which corresponds
to the Debt/Capitalization Ratio determined from the financial statements and
compliance certificate relating to the end of the fiscal quarter immediately
preceding such Adjustment Date; PROVIDED that in the event that the financial
statements required to be delivered pursuant to subsections 5.1(a) and (b), as
applicable, and the related compliance certificate required to be delivered
pursuant to subsection 5.2(b), are not delivered when due, then (x) if such
financial statements and certificate are delivered after the date such
financial statements and certificate were required to be delivered and the
Facility Fee increases from that previously in effect as a result of the
delivery of such financial statements, then the Facility Fee during the period
from the date upon which such financial statements were required to be
delivered (without giving effect to any applicable cure period) until the date
upon which they actually are delivered shall, except as otherwise provided in
clause (z) below, be the Facility Fee as so increased; (y) if such financial
statements and certificate are delivered after the date such financial
statements and certificate were required to be delivered and the Facility Fee
decreases from that previously in effect as a result of the delivery of such
financial statements, then such decrease in the Facility Fee shall not become
applicable until the date upon which the financial statements and certificate
actually are delivered; and (z) if such financial statements and certificate
are not delivered prior to the expiration of the applicable cure period, then,
effective upon such expiration, for the period from the date upon which such
financial statements and certificate were required to be delivered (after the
expiration of the applicable cure period) until two Business Days following the
date upon which they actually are delivered, the Facility Fee shall be .25% (it
being understood that the foregoing shall not limit the rights of the Agent and
the Banks set forth in Section 7).
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2.5 TERMINATION OR REDUCTION OF COMMITMENTS. The Borrower
shall have the right, upon not less than five Business Days' notice to the
Agent, to terminate the Commitments or, from time to time, to reduce the amount
of the Commitments. Any such reduction shall be in an amount equal to
$5,000,000 or a whole multiple of $1,000,000 in excess thereof and shall reduce
permanently the Commitments then in effect.
2.6 THE CAF ADVANCES. Subject to the terms and conditions of
this Agreement, the Borrower may borrow CAF Advances from time to time during
the CAF Advance Commitment Period on any Business Day. CAF Advances shall be
borrowed in amounts such that the aggregate amount of Loans outstanding at any
time shall not exceed the aggregate amount of the Commitments at such time.
Within the limits and on the conditions hereinafter set forth with respect to
CAF Advances, the Borrower from time to time may borrow, repay and reborrow CAF
Advances.
2.7 PROCEDURE FOR CAF ADVANCE BORROWING. (a) The Borrower
shall request CAF Advances by delivering a CAF Advance Request to the Lenders,
not later than 10:00 A.M. (New York City time) four Business Days prior to the
proposed Borrowing Date (in the case of a Eurodollar CAF Advance Request), and
not later than 10:00 A.M. (New York City time) one Business Day prior to the
proposed Borrowing Date (in the case of an Absolute Rate CAF Advance Request).
Each CAF Advance Request may solicit bids for CAF Advances in an aggregate
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof and having not more than three alternative maturity dates. The
maturity date for each CAF Advance shall be not less than 7 days nor more than
180 days after the Borrowing Date therefor (and in any event shall be not later
than the Termination Date).
(b) In the case of a Eurodollar CAF Advance Request, upon
receipt of notice from the Borrower of the contents of such CAF Advance
Request, each Lender may elect, in its sole discretion, to offer irrevocably to
make one or more CAF Advances at the Eurodollar Rate plus or minus a margin
determined by such Lender in its sole discretion for each such CAF Advance.
Any such irrevocable offer shall be made by delivering a CAF Advance Offer to
the Borrower, before 10:00 A.M. (New York City time) on the day that is three
Business Days before the proposed Borrowing Date, setting forth:
(1) the maximum amount of CAF Advances for each maturity date
and the aggregate maximum amount of CAF Advances for all maturity
dates which such Lender would be willing to make (which amounts may,
subject to subsection 2.6, exceed such Lender's Commitment); and
(2) the margin above or below the Eurodollar Rate at which
such Lender is willing to make each such CAF Advance.
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(c) In the case of an Absolute Rate CAF Advance Request, upon
receipt of notice from the Borrower of the contents of such CAF Advance
Request, each Lender may elect, in its sole discretion, to offer irrevocably to
make one or more CAF Advances at a rate of interest determined by such Lender
in its sole discretion for each such CAF Advance. Any such irrevocable offer
shall be made by delivering a CAF Advance Offer to the Borrower before 9:15
A.M. (New York City time) on the proposed Borrowing Date, setting forth:
(1) the maximum amount of CAF Advances for each maturity
date, and the aggregate maximum amount for all maturity dates, which
such Lender would be willing to make (which amounts may, subject to
subsection 2.6, exceed such Lender's Commitment); and
(2) the rate of interest at which such Lender is willing to
make each such CAF Advance.
(d) A CAF Advance Offer that does not conform substantially
with the format of Exhibit D hereto and the terms hereof may be rejected by the
Borrower in the Borrower's reasonable discretion. The Borrower shall notify
the relevant Lender of any such rejection as soon as practicable.
(e) Before 11:30 A.M. (New York City time) three Business
Days before the proposed Borrowing Date (in the case of CAF Advances requested
by a Eurodollar CAF Advance Request) and before 10:30 A.M. (New York City time)
on the proposed Borrowing Date (in the case of CAF Advances requested by an
Absolute Rate CAF Advance Request), the Borrower, in its absolute discretion,
shall:
(1) cancel such CAF Advance Request by giving the Agent and
the Bidding Lenders telephone notice to that effect, or
(2) by giving telephone notice to the Bidding Lenders
(immediately confirmed by delivery to the Bidding Lenders of a CAF
Advance Confirmation in writing or by fax transmission) (A) subject to
the provisions of subsection 2.7(f), accept one or more of the offers
made by any Lender or Lenders pursuant to subsection 2.7(b) or
subsection 2.7(c), as the case may be, of the amount of CAF Advances
for each relevant maturity date and (B) reject any remaining offers
made by Lenders pursuant to subsection 2.7(b) or subsection 2.7(c), as
the case may be.
(f) The Borrower's acceptance of CAF Advances in response to
any CAF Advance Request shall be subject to the following limitations:
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(1) The amount of CAF Advances accepted for each maturity
date specified by any Lender in its CAF Advance Offer shall not exceed
the maximum amount for such maturity date specified in such CAF
Advance Offer;
(2) the aggregate amount of CAF Advances accepted for all
maturity dates specified by any Lender in its CAF Advance Offer shall
not exceed the aggregate maximum amount specified in such CAF Advance
Offer for all such maturity dates;
(3) the Borrower may not accept offers for CAF Advances for
any maturity date in an aggregate principal amount in excess of the
maximum principal amount requested in the related CAF Advance Request;
and
(4) if the Borrower accepts any of such offers, it must
accept offers based solely upon pricing for such relevant maturity
date and upon no other criteria whatsoever and if two or more Lenders
submit offers for any maturity date at identical pricing and the
Borrower accepts any of such offers but does not wish to (or by reason
of the limitations set forth in subsection 2.6 or in clause (3) of
this subsection 2.7(f), cannot) borrow the total amount offered by
such Lenders with such identical pricing, the Borrower shall accept
offers from all of such Lenders in amounts allocated among them PRO
RATA according to the amounts offered by such Lenders (or as nearly
PRO RATA as shall be practicable after giving effect to the
requirement that CAF Advances made by a Lender on a Borrowing Date for
each relevant maturity date shall be in a principal amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof).
(g) If the Borrower accepts pursuant to subsection 2.7(e)(2)
one or more of the offers made by any Lender or Lenders, the Borrower promptly
shall notify the Agent and each Lender which has made such a CAF Advance Offer
(a "BIDDING LENDER") of (1) the aggregate amount of such CAF Advances to be
made on such Borrowing Date for each maturity date and (2) the acceptance or
rejection of any offers to make such CAF Advances made by such Lender. Before
12:00 Noon (New York City time) on the Borrowing Date specified in the
applicable CAF Advance Request, each Lender whose CAF Advance Offer has been
accepted shall make available to the Agent at its office set forth in
subsection 9.2 the amount of CAF Advances to be made by such Lender, in
immediately available funds. The Agent will make such funds available to the
Borrower as soon as practicable on such date at the Agent's aforesaid address,
and to the extent that such funds are received by the Agent from the Lenders
prior to 12:00 Noon, New York City time, on such Borrowing Date, the Agent will
make such funds available to the Borrower at or before 1:00 P.M., New York City
time, on such Borrowing Date. As soon as practicable after each Borrowing
Date, the Agent shall notify
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each Lender of the aggregate amount of CAF Advances advanced on such Borrowing
Date and the respective maturity dates thereof.
2.8 CAF ADVANCE PAYMENTS. (a) The Borrower shall repay to
the Agent for the account of each Lender which has made a CAF Advance on the
applicable CAF Advance Maturity Date the then unpaid principal amount of such
CAF Advance. The Borrower shall not have the right to prepay any principal
amount of any CAF Advance without the prior written consent of the applicable
Lender then making such CAF Advance.
(b) The Borrower shall pay interest on the unpaid principal
amount of each CAF Advance from the Borrowing Date thereof to the applicable
CAF Advance Maturity Date at the rate of interest specified in the CAF Advance
Offer accepted by the Borrower in connection with such CAF Advance (calculated
on the basis of a 360-day year for actual days elapsed), payable on each
applicable CAF Advance Interest Payment Date.
(c) If all or a portion of the principal amount of any CAF
Advance shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue principal amount shall, without
limiting any rights of any Lender under this Agreement, bear interest from the
date on which such payment was due at a rate per annum which is 2% above the
rate which would otherwise be applicable pursuant to the CAF Advance Note
evidencing such CAF Advance until the stated maturity date of such CAF Advance,
and for each day thereafter at a rate per annum which is 2% above the ABR, in
each case until paid in full (as well after as before judgment).
2.9 CAF ADVANCE NOTES. The CAF Advances made by each Lender
shall be evidenced by a promissory note of the Borrower, substantially in the
form of Exhibit B with appropriate insertions (a "CAF ADVANCE NOTE"), payable
to the order of such Lender and representing the obligation of the Borrower to
pay the unpaid principal amount of all CAF Advances made by such Lender, with
interest on the unpaid principal amount from time to time outstanding of each
CAF Advance evidenced thereby as prescribed in subsection 2.8(b). Each Lender
is hereby authorized to record the date and amount of each CAF Advance made by
such Lender, the maturity date thereof, the date and amount of each payment of
principal thereof and the interest rate with respect thereto on the schedule
annexed to and constituting part of its CAF Advance Note; PROVIDED, HOWEVER,
that the failure to make any such recordation shall not affect the obligations
of the Borrower hereunder or under any CAF Advance Note. Each CAF Advance Note
shall be dated the Closing Date, and each CAF Advance evidenced thereby shall
bear interest for the period from and including the Borrowing Date of such CAF
Advance on the unpaid principal amount thereof from time to time outstanding at
the applicable rate per annum determined as provided in, and such interest
shall be payable as specified in, subsection 2.8(b).
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2.10 OPTIONAL PREPAYMENTS. The Borrower may on the last day
of any Interest Period with respect thereto, in the case of Eurodollar Loans,
or at any time and from time to time, in the case of ABR Loans, prepay the
Revolving Credit Loans, in whole or in part, without premium or penalty, upon
at least four Business Days' irrevocable notice to the Agent, specifying the
date and amount of prepayment and whether the prepayment is of Eurodollar
Loans, ABR Loans or a combination thereof, and, if of a combination thereof,
the amount allocable to each. Upon receipt of any such notice the Agent shall
promptly notify each Lender thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified
therein, together with any amounts payable pursuant to subsection 2.19.
Partial prepayments shall be in an aggregate principal amount of $5,000,000 or
a whole multiple of $1,000,000 in excess thereof.
2.11 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower
may elect from time to time to convert Eurodollar Loans to ABR Loans by giving
the Agent at least two Business Days' prior irrevocable notice of such
election, PROVIDED that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Agent at least three Business Days' prior irrevocable notice of such
election. Any such notice of conversion to Eurodollar Loans shall specify the
length of the initial Interest Period or Interest Periods therefor. Upon
receipt of any such notice the Agent shall promptly notify each Lender thereof.
All or any part of outstanding Eurodollar Loans and ABR Loans may be converted
as provided herein, PROVIDED that (i) no Revolving Credit Loan may be converted
into a Eurodollar Loan when any Event of Default has occurred and is continuing
and the Agent has or the Required Lenders have determined that such a
conversion is not appropriate and (ii) no Revolving Credit Loan may be
converted into a Eurodollar Loan after the date that is one month prior to the
Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Agent, in accordance with the applicable
provisions of the term "Interest Period" set forth in subsection 1.1, of the
length of the next Interest Period to be applicable to such Eurodollar Loans,
PROVIDED that no Eurodollar Loan may be continued as such (i) when any Event of
Default has occurred and is continuing and the Agent has or the Required
Lenders have determined that such a continuation is not appropriate or (ii)
after the date that is one month prior to the Termination Date and PROVIDED,
FURTHER, that if the Borrower shall fail to give any required notice as
described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso such Eurodollar Loans shall be automatically
converted to ABR Loans on the last day of such then expiring Interest Period.
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2.12 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
day plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR.
(c) If all or a portion of (i) the principal amount of any
Revolving Credit Loan, (ii) any interest payable thereon or (iii) any facility
fee or other amount payable hereunder shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), such overdue amount shall
bear interest at a rate per annum which is (x) in the case of overdue
principal, the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this subsection plus 2% or (y) in the case of overdue
interest, facility fee or other amount, the rate described in paragraph (b) of
this subsection plus 2%, in each case from the date of such non-payment until
such amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, PROVIDED that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
2.13 COMPUTATION OF INTEREST AND FEES. (a) The Facility Fee
and interest shall be calculated on the basis of a 360-day year for the actual
days elapsed. The Agent shall as soon as practicable notify the Borrower and
the Lenders of (i) each determination of a Eurodollar Rate; (ii) each change
in the Applicable Margin and (iii) each change in the Facility Fee. Any change
in the interest rate on a Loan resulting from a change in the ABR, the
Eurocurrency Reserve Requirements, the C/D Assessment Rate or the C/D Reserve
Percentage shall become effective as of the opening of business on the day on
which such change becomes effective. The Agent shall as soon as practicable
notify the Borrower and the Lenders of the effective date and the amount of
each such change in interest rate.
(b) Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The Agent
shall, at the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Agent in determining any interest rate
pursuant to subsection 2.12(a).
2.14 INABILITY TO DETERMINE INTEREST RATE. If prior to the
first day of any Interest Period the Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for
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ascertaining the Eurodollar Rate for such Interest Period, the Agent shall give
telecopy or telephonic notice thereof to the Borrower and the Lenders as soon
as practicable thereafter. If such notice is given (x) any Eurodollar Loans
requested to be made on the first day of such Interest Period shall be made as
ABR Loans, (y) any Revolving Credit Loans that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be continued as
ABR Loans and (z) any outstanding Eurodollar Loans shall be converted, on the
first day of such Interest Period, to ABR Loans. Until such notice has been
withdrawn by the Agent, no further Eurodollar Loans shall be made or continued
as such, nor shall the Borrower have the right to convert ABR Loans to
Eurodollar Loans.
2.15 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing of
Revolving Credit Loans by the Borrower from the Lenders hereunder, each payment
by the Borrower on account of any facility fee hereunder and any reduction of
the Commitments of the Lenders shall be made pro rata according to the
respective Commitment Percentages of the Lenders. Each payment (including each
prepayment) by the Borrower on account of principal of and interest on the
Revolving Credit Loans shall be made pro rata according to the respective
outstanding principal amounts of the Loans then held by the Lenders. All
payments (including prepayments) to be made by the Borrower hereunder and under
the Notes, whether on account of principal, interest, fees or otherwise, shall
be made without set off or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Agent, for the account of
the applicable Lenders, at the Agent's office specified in subsection 9.2, in
Dollars and in immediately available funds. The Agent shall distribute such
payments to the applicable Lenders promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on the Eurodollar
Loans and Eurodollar CAF Advances) becomes due and payable on a day other than
a Business Day, such payment shall be extended to the next succeeding Business
Day, and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If any payment on a
Eurodollar Loan or Eurodollar CAF Advance becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend
such payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day.
(b) Unless the Agent shall have been notified in writing by
any Lender prior to a borrowing that such Lender will not make the amount that
would constitute its Commitment Percentage of such borrowing (or, in the case
of a CAF Advance, the amount of the CAF Advance to be made by it) available to
the Agent, the Agent may assume that such Lender is making such amount
available to the Agent, and the Agent may, in reliance upon such assumption,
make available to the Borrower a
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corresponding amount. If such amount is not made available to the Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to the
Agent, on demand, such amount with interest thereon at a rate equal to the
daily average Federal Funds Effective Rate for the period until such Lender
makes such amount immediately available to the Agent. A certificate of the
Agent submitted to any Lender with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error. If such
Lender's Commitment Percentage of such borrowing is not made available to the
Agent by such Lender within three Business Days of such Borrowing Date, the
Agent shall also be entitled to recover such amount with interest thereon at
the rate per annum applicable to ABR Loans hereunder, on demand, from the
Borrower.
2.16 ILLEGALITY. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans or Eurodollar CAF Advances as contemplated by
this Agreement, (a) the commitment of such Lender hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert ABR Loans to Eurodollar
Loans shall forthwith be cancelled and (b) such Lender's Loans then outstanding
as Eurodollar Loans or Eurodollar CAF Advances, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan or Eurodollar CAF
Advance occurs on a day which is not the last day of the then current Interest
Period with respect thereto, the Borrower shall pay to such Lender such
amounts, if any, as may be required pursuant to subsection 2.19.
2.17 REQUIREMENTS OF LAW. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application
thereof or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note or any Eurodollar
Loan or Eurodollar CAF Advance made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by subsection 2.18 and changes in the rate
of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise
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included in the determination of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or Eurodollar CAF Advance or
to reduce any amount receivable hereunder in respect thereof, then, in any such
case, the Borrower shall promptly pay such Lender, upon its demand, any
additional amounts necessary to compensate such Lender for such increased cost
or reduced amount receivable. If any Lender becomes entitled to claim any
additional amounts pursuant to this subsection, it shall promptly notify the
Borrower (with a copy to the Agent) of the event by reason of which it has
become so entitled. A certificate as to any additional amounts payable
pursuant to this subsection submitted by such Lender to the Borrower (with a
copy to the Agent) shall be conclusive in the absence of manifest error. This
covenant shall survive the termination of this Agreement and the payment of the
Notes and all other amounts payable hereunder. Notwithstanding the foregoing,
no Lender shall be entitled to request compensation under this paragraph with
respect to any CAF Advance if the change giving rise to such request was
applicable to such Lender at the time of submission of the CAF Advance Offer
pursuant to which such CAF Advance was made.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such
Lender or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender
to be material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Agent) of a written request therefor, the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction.
2.18 TAXES. (a) All payments made by the Borrower under
this Agreement and the Notes shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding net income taxes and
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franchise taxes (imposed in lieu of net income taxes) imposed on the Agent or
any Lender as a result of a present or former connection between the Agent or
such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Agent or such Lender having
executed, delivered or performed its obligations or received a payment under,
or enforced, this Agreement or the Notes). If any such non-excluded taxes,
levies, imposts, duties, charges, fees deductions or withholdings
("NON-EXCLUDED TAXES") are required to be withheld from any amounts payable to
the Agent or any Lender hereunder or under the Notes, the amounts so payable to
the Agent or such Lender shall be increased to the extent necessary to yield to
the Agent or such Lender (after payment of all Non-Excluded Taxes) interest or
any such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement and the Notes, PROVIDED, HOWEVER, that the Borrower
shall not be required to increase any such amounts payable to any Lender that
is not organized under the laws of the United States of America or a state
thereof if such Lender fails to comply with the requirements of paragraph (b)
of this subsection. Whenever any Non-Excluded Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Agent for its own account or for the account of such Lender, as the case may
be, a certified copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes
when due to the appropriate taxing authority or fails to remit to the Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Agent or any Lender as a result of any
such failure. The agreements in this subsection shall survive the termination
of this Agreement and the payment of the Notes and all other amounts payable
hereunder.
(b) Each Lender that is not incorporated under the laws of
the United States of America or a state thereof shall:
(i) deliver to the Borrower and the Agent (A) two duly
completed copies of United States Internal Revenue Service Form 1001
or 4224, or successor applicable form, as the case may be, and (B) an
Internal Revenue Service Form W-8 or W-9, or successor applicable
form, as the case may be;
(ii) deliver to the Borrower and the Agent two further
copies of any such form or certification on or before the date that
any such form or certification expires or becomes obsolete and after
the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
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(iii) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be requested
by the Borrower or the Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the Agent.
Such Lender shall certify (i) in the case of a Form 1001 or 4224, that it is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and (ii) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Lender or a Participant
pursuant to subsection 9.6 shall, upon the effectiveness of the related
transfer, be required to provide all of the forms and statements required
pursuant to this subsection, provided that in the case of a Participant such
Participant shall furnish all such required forms and statements to the Lender
from which the related participation shall have been purchased.
2.19 INDEMNITY. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurodollar
Loans on a day which is not the last day of an Interest Period with respect
thereto. Such indemnification may include an amount equal to the excess, if
any, of (i) the amount of interest which would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to
the last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such Loans
PROVIDED for herein (excluding, however, in the case of Eurodollar Loans, the
Applicable Margin) over (ii) the amount of interest (as reasonably determined
by such Lender) which would have accrued to such Lender on such amount by
placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market. This covenant shall survive the termination
of this Agreement and the payment of the Notes and all other amounts payable
hereunder.
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SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this
Agreement and to make the Loans, the Borrower hereby represents and warrants to
the Agent and each Lender that:
3.1 FINANCIAL CONDITION. The consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at December 31, 1994 and the
related consolidated statements of income and of cash flows for the fiscal year
ended on such date, reported on by Ernst & Young, copies of which have
heretofore been furnished to each Lender, present fairly the consolidated
financial condition of the Borrower and its consolidated Subsidiaries as at
such date, and the consolidated results of their operations and their
consolidated cash flows for the fiscal year then ended. All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by such accountants and as disclosed therein).
Neither the Borrower nor any of its consolidated Subsidiaries had, at December
31, 1994, any material Guarantee Obligation, contingent liability or liability
for taxes, or any long-term lease or unusual forward or long-term commitment,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction, which is not reflected in the foregoing statements or the
notes thereto. During the period from December 31, 1994 to and including the
date hereof there has been no sale, transfer or other disposition by the
Borrower or any of its consolidated Subsidiaries of any material part of its
business or property and no purchase or other acquisition of any business or
property (including any capital stock of any other Person) material in relation
to the consolidated financial condition of the Borrower and its consolidated
Subsidiaries at December 31, 1994.
3.2 NO CHANGE. Since December 31, 1994 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect.
3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the
Borrower and its Material Subsidiaries (a) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
(b) has the corporate power and authority, and the legal right, to own and
operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
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3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
The Borrower has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents and to borrow hereunder and has
taken all necessary corporate action to authorize the borrowings on the terms
and conditions of this Agreement and the Notes and to authorize the execution,
delivery and performance of the Loan Documents. No consent or authorization
of, filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery, performance, validity or
enforceability of the Loan Documents. This Agreement has been, and each of
the Notes will be, duly executed and delivered on behalf of the Borrower. This
Agreement constitutes, and each of the Notes when executed and delivered will
constitute, a legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
3.5 NO LEGAL BAR. The execution, delivery and performance of
the Loan Documents, the borrowings hereunder and the use of the proceeds
thereof will not violate any Requirement of Law or Contractual Obligation of
the Borrower or of any of its Material Subsidiaries and will not result in, or
require, the creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation.
3.6 NO MATERIAL LITIGATION. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby or (b) which could reasonably be
expected to have a Material Adverse Effect.
3.7 NO DEFAULT. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a
Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
3.8 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and
its Material Subsidiaries has good record and marketable title in fee simple
to, or a valid leasehold interest in, all its real property, and good title to,
or a valid leasehold interest in, all its other property (except to the extent
that the failure to have such title or interest, in any instance or in the
aggregate, could not reasonably be expected to
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have a Material Adverse Effect), and none of such property is subject to any
Lien except as permitted by subsection 6.2.
3.9 NO BURDENSOME RESTRICTIONS. No Requirement of Law or
Contractual Obligation of the Borrower or any of its Material Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
3.10 TAXES. Each of the Borrower and its Material
Subsidiaries has filed or caused to be filed all tax returns which, to the
knowledge of the Borrower, are required to be filed and has paid all taxes
shown to be due and payable on said returns or on any assessments made against
it or any of its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority (other than any the
amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which accruals in conformity with
GAAP have been provided on the books of the Borrower or its Material
Subsidiaries, as the case may be); no tax Lien has been filed, and, to the
knowledge of the Borrower, no claim is being asserted, with respect to any such
tax, fee or other charge.
3.11 ERISA. To the best knowledge of the Borrower, there has
not occurred any event or condition of non-compliance with any provisions of
ERISA that, in any instance or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
3.12 INVESTMENT COMPANY ACT; OTHER REGULATIONS. The Borrower
is not an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
The Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
3.13 PURPOSE OF LOANS. The proceeds of the Loans shall be
used to pay down, on or before March 30, 1995, all Indebtedness under the
existing $150,000,000 Credit Agreement, dated as of March 31, 1994, among the
Borrower, the several banks and other financial institutions parties thereto
and Chemical, as agent, and, until all such Indebtedness has been paid in full,
no borrowings may be made hereunder for any purpose other than to pay such
Indebtedness in full. All remaining proceeds of the Loans shall be used by the
Borrower for general corporate purposes. The proceeds of the Loans shall not
be used by the Borrower or any of its Subsidiaries in connection with any
"hostile acquisition." As used in this subsection, "hostile acquisition" shall
mean any acquisition by the Borrower or any of its Subsidiaries of a business
or any portion of a business (including any of its assets or equity securities)
if such
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29
acquisition is deemed by a majority of the Borrower's Board of Directors, in
its reasonable judgment, to be hostile.
3.14 ENVIRONMENTAL MATTERS. To the best knowledge of the
Borrower, there has not occurred any event or condition of non- compliance with
any Environmental Laws by the Borrower or any of its Subsidiaries that could,
in any instance or in the aggregate, reasonably be expected to have a Material
Adverse Effect. All licenses, permits or registrations required for the
business of the Borrower or any of its Subsidiaries under any Environmental
Laws have been secured, and the Borrower and its Subsidiaries are in compliance
therewith, except such licenses, permits or registrations the failure of which
to secure or comply with, in any instance or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. To the best
knowledge of the Borrower, there are no substances at, in, on or beneath any
real property owned or leased by the Borrower or any of its Subsidiaries, or
elsewhere, that in any instance or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
SECTION 4. CONDITIONS PRECEDENT
4.1 CONDITIONS TO INITIAL LOANS. The agreement of each
Lender to make the initial Loan requested to be made by it is subject to the
satisfaction, immediately prior to or concurrently with the making of such Loan
on the Closing Date, of the following conditions precedent:
(a) LOAN DOCUMENTS. The Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of the
Borrower, with a counterpart for each Lender, (ii) for the account of
each Lender, a Revolving Credit Note conforming to the requirements
hereof and executed by a duly authorized officer of the Borrower, and
(iii) for the account of each Lender, a CAF Advance Note conforming to
the requirements hereof and executed by a duly authorized officer of
the Borrower.
(b) CORPORATE PROCEEDINGS OF THE BORROWER. The Agent shall
have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance satisfactory to the Agent, of the
Executive and Finance Committee of the Board of Directors of the
Borrower authorizing (i) the execution, delivery and performance of
this Agreement and the Notes and (ii) the borrowings contemplated
hereunder, certified by the Secretary or an Assistant Secretary of the
Borrower as of the Closing Date, which certificate shall be in form
and substance satisfactory to the Agent and shall state that the
resolutions thereby certified have not been amended, modified, revoked
or rescinded.
(c) BORROWER INCUMBENCY CERTIFICATE. The Agent shall have
received, with a counterpart for each Lender, a
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certificate of the Borrower, dated the Closing Date, as to the
incumbency and signature of the officers of the Borrower executing any
Loan Document satisfactory in form and substance to the Agent,
executed by the President or any Vice President and the Secretary or
any Assistant Secretary of the Borrower.
(d) CORPORATE DOCUMENTS. The Agent shall have received, with
a counterpart for each Lender, true and complete copies of the
certificate of incorporation and by-laws of the Borrower, certified as
of the Closing Date as complete and correct copies thereof by the
Secretary or an Assistant Secretary of the Borrower.
(e) LEGAL OPINIONS. The Agent shall have received, with a
counterpart for each Lender, the executed legal opinion of John M.
Glenn, Vice President and General Counsel of the Borrower,
substantially in the form of Exhibit F. Such legal opinion shall
cover such other matters incident to the transactions contemplated by
this Agreement as the Agent may reasonably require.
4.2 CONDITIONS TO EACH LOAN. The agreement of each Lender to
make any Loan requested to be made by it on any date (including, without
limitation, its initial Loan) is subject to the satisfaction of the following
conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the Borrower in or pursuant to
the Loan Documents shall be true and correct in all material respects
on and as of such date as if made on and as of such date.
(b) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
Loans requested to be made on such date.
(c) ADDITIONAL MATTERS. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection
with the transactions contemplated by this Agreement and the Notes
shall be satisfactory in form and substance to the Agent, and the
Agent shall have received such other documents in respect of any
aspect or consequence of the transactions contemplated hereby or
thereby as it shall reasonably request.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date of such Loan that the conditions
contained in this subsection 4.2 have been satisfied.
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SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Note remains outstanding and unpaid or any other amount
is owing to any Lender or the Agent hereunder, the Borrower shall and, in the
case of subsections 5.3, 5.4, 5.5 and 5.6, shall cause each of its Material
Subsidiaries to, and in the case of subsections 5.7 and 5.8 shall cause each of
its Subsidiaries to:
5.1 FINANCIAL STATEMENTS. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related consolidated
statements of income and retained earnings and of cash flows for such
year, setting forth in each case in comparative form the figures for
the previous year, reported on without a "going concern" or like
qualification or exception, by Ernst & Young or other independent
certified public accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of
each fiscal year of the Borrower, the unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated statements of
income and retained earnings and of cash flows of the Borrower and its
consolidated Subsidiaries for such quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each
case in comparative form the figures for the previous year, certified
by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
all such financial statements shall be fairly presented in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
5.2 CERTIFICATES; OTHER INFORMATION. Furnish to each Lender:
(a) concurrently with the delivery of the financial
statements referred to in subsections 5.1(a) and 5.1(b), a certificate
of a Responsible Officer stating that, to the best of such Officer's
knowledge, the Borrower during such period has observed or performed
all of its covenants and other agreements, and satisfied every
condition, contained
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in this Agreement and in the Notes to be observed, performed or
satisfied by it, and that such Officer has obtained no knowledge of
any Default or Event of Default except as specified in such
certificate;
(b) within ten days after the same are sent, copies of all
financial statements and reports which the Borrower sends to its
stockholders, and within ten days after the same are filed, copies of
all financial statements and reports which the Borrower may make to,
or file with, the Securities and Exchange Commission or any successor
or analogous Governmental Authority; and
(c) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
5.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and accruals in conformity with GAAP with respect thereto have been PROVIDED on
the books of the Borrower or its Material Subsidiaries, as the case may be.
5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
Continue to engage in business of the same general type as now conducted by it
and preserve, renew and keep in full force and effect its corporate existence
and take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business except
as otherwise permitted pursuant to Section 6; comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, be reasonably expected to have a
Material Adverse Effect.
5.5 MAINTENANCE OF PROPERTY; INSURANCE. Keep all property
useful and necessary in its business in good working order and condition;
maintain with financially sound and reputable insurance companies insurance on
all its property in at least such amounts and against at least such risks as
are usually insured against in the same general area by companies engaged in
the same or a similar business; and furnish to each Lender, upon written
request, full information as to the insurance carried.
5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of
all dealings and transactions in relation to its business and activities; and
permit representatives of any Lender to visit and inspect any of its properties
and examine any of its books and records at any
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reasonable time and as often as may reasonably be necessary and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Material Subsidiaries with officers of the Borrower and its
Material Subsidiaries and with its independent certified public accountants.
5.7 NOTICES. Promptly give notice to the Agent and each
Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority, which in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or
any of its Subsidiaries in which the amount involved is $25,000,000 or
more and not covered by insurance or in which injunctive or similar
relief is sought; and
(d) any development or event which could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto.
5.8 ENVIRONMENTAL LAWS. (a) Comply with, and ensure
compliance by all tenants and subtenants, if any, with, all applicable
Environmental Laws and obtain and comply in all material respects with and
maintain, and ensure that all tenants and subtenants obtain and comply in all
material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required
under Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being contested in
good faith by appropriate proceedings and accruals in conformity with GAAP with
respect thereto have been provided on the books of the Borrower or its
Subsidiaries, as the case may be.
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SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Note remains outstanding and unpaid or any other amount
is owing to any Lender or the Agent hereunder, the Borrower shall not, and
(except with respect to subsection 6.1) shall not permit any of its Material
Subsidiaries to, directly or indirectly:
6.1 MAINTENANCE OF CONSOLIDATED NET WORTH. Permit
Consolidated Net Worth at any time to be less than the applicable Minimum
Consolidated Net Worth.
6.2 LIMITATION ON LIENS. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, PROVIDED that adequate
accruals with respect thereto are maintained on the books of the
Borrower or its Material Subsidiaries, as the case may be, in
conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers
under insurance or self-insurance arrangements;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or such Material Subsidiary;
(f) Liens in existence on the date hereof, PROVIDED that no
such Lien is spread to cover any additional property after the Closing
Date and that the amount of Indebtedness secured thereby is not
increased;
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(g) Liens securing Indebtedness of the Borrower and its
Material Subsidiaries incurred to finance the acquisition of fixed or
capital assets, PROVIDED that (i) such Liens shall be created
substantially simultaneously with the acquisition of such fixed or
capital assets, (ii) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness, (iii)
the amount of Indebtedness secured thereby is not increased and (iv)
the principal amount of Indebtedness secured by any such Lien shall at
no time exceed 100% of the original purchase price of such property at
the time it was acquired;
(h) Liens on the property or assets of a corporation which
becomes a Material Subsidiary after the date hereof, PROVIDED that (i)
such Liens existed at the time such corporation became a Material
Subsidiary and were not created in anticipation thereof, (ii) any such
Lien is not spread to cover any property or assets of such corporation
after the time such corporation becomes a Material Subsidiary, and
(iii) the amount of Indebtedness secured thereby is not increased; and
(i) Liens (not otherwise permitted hereunder) which secure
obligations not exceeding (as to the Borrower and all Material
Subsidiaries) $25,000,000 in aggregate amount at any time
outstanding, PROVIDED that the property subject to such Liens secures
the Loans and all obligations and liabilities of the Borrower
hereunder and under the Notes, equally and ratably with the
indebtedness and other obligations secured by such Liens.
6.3 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets, or make any material change in its present method of
conducting business, except:
(a) any Material Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (PROVIDED that the Borrower
shall be the continuing or surviving corporation) or with or into any
one or more wholly owned Material Subsidiaries of the Borrower
(PROVIDED that the wholly owned Material Subsidiary or Material
Subsidiaries shall be the continuing or surviving corporation); and
(b) any wholly owned Material Subsidiary may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or any other
wholly owned Material Subsidiary of the Borrower.
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6.4 LIMITATION ON SALE OF ASSETS. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or
assets (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Material
Subsidiary, issue or sell any shares of such Material Subsidiary's Capital
Stock to any Person other than the Borrower or any wholly owned Material
Subsidiary, except:
(a) the sale or other disposition of obsolete or worn out
property in the ordinary course of business;
(b) the sale or other disposition of any property in the
ordinary course of business, PROVIDED that (other than inventory) the
aggregate book value of all assets so sold or disposed of in any
period of twelve consecutive months shall not exceed 10% of
consolidated total assets of the Borrower and its Subsidiaries as at
the beginning of such twelve-month period;
(c) the sale of inventory in the ordinary course of business;
(d) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in connection
with the compromise or collection thereof; and
(e) as permitted by subsection 6.3(b).
6.5 LIMITATION ON LINES OF BUSINESS. Enter into any
business, either directly or through any Subsidiary, except for the businesses
of transportation and logistics or any other business directly related thereto.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Note
when due in accordance with the terms thereof or hereof; or the
Borrower shall fail to pay any interest on any Note, or any other
amount payable hereunder, within five days after any such interest or
other amount becomes due in accordance with the terms thereof or
hereof; or
(b) Any representation or warranty made or deemed made by the
Borrower herein or in any Note or which is contained in any
certificate, document or financial or other statement furnished by it
at any time under or in connection with this Agreement or any such
Note shall prove to have been incorrect in any material respect on or
as of the date made or deemed made and, in the case of any default
pursuant to
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this paragraph (b) that is capable of being remedied, such default
shall continue unremedied for a period of 30 days; or
(c) The Borrower shall default in the observance or
performance of any agreement contained in subsection 6.3, 6.4 or 6.5;
or
(d) The Borrower shall default in the observance or
performance of any other agreement contained in this Agreement or any
Note (other than as provided in paragraphs (a) through (c) of this
Section), and such default shall continue unremedied for a period of
30 days; or
(e) The Borrower or any of its Material Subsidiaries shall
(i) default in any payment of principal of or interest of any
Indebtedness (other than the Notes) or in the payment of any Guarantee
Obligation, beyond the period of grace (not to exceed 30 days), if
any, provided in the instrument or agreement under which such
Indebtedness or Guarantee Obligation was created; or (ii) default in
the observance or performance of any other agreement or condition
relating to any such Indebtedness or Guarantee Obligation or contained
in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit
the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Guarantee Obligation (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Indebtedness to
become due prior to its stated maturity or such Guarantee Obligation
to become payable; or
(f) (i) The Borrower or any of its Material Subsidiaries
shall commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any
substantial part of its assets, or the Borrower or any of its Material
Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Borrower or
any of its Material Subsidiaries any case, proceeding or other action
of a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or appointment
or (B) remains undismissed, undischarged or unbonded for a period
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of 60 days; or (iii) there shall be commenced against the Borrower or
any of its Material Subsidiaries any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets
which results in the entry of an order for any such relief which shall
not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) the Borrower or any of
its Material Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) the
Borrower or any of its Material Subsidiaries shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay
its debts as they become due; or
(g) Any event or condition shall occur or exist with respect
to a Plan which could reasonably be expected to have a Material
Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
the Borrower or any of its Material Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance) of
$25,000,000 or more, and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 60
days from the entry thereof; or
(i) (i) Any Person or "group" (within the meaning of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) (A)
shall have acquired beneficial ownership of 20% or more of any
outstanding class of Capital Stock having ordinary voting power in the
election of directors of the Borrower or (B) shall obtain the power
(whether or not exercised) to elect a majority of the Borrower's
directors or (ii) the Board of Directors of the Borrower shall not
consist of a majority of Continuing Directors; "CONTINUING DIRECTORS"
shall mean the directors of the Borrower on the Closing Date and each
other director, if such other director's nomination for election to
the Board of Directors of the Borrower is recommended by a majority of
the then Continuing Directors;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under
this Agreement and the Notes shall immediately become due and payable, and (B)
if such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Required Lenders, the Agent
may, or upon the request of the Required Lenders, the Agent shall, by notice to
the Borrower declare the Commitments to be terminated forthwith, whereupon the
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Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Agent may, or upon the request of the Required Lenders,
the Agent shall, by notice to the Borrower, declare the Loans hereunder (with
accrued interest thereon) and all other amounts owing under this Agreement and
the Notes to be due and payable forthwith, whereupon the same shall immediately
become due and payable. Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
SECTION 8. THE AGENT
8.1 APPOINTMENT. Each Lender hereby irrevocably designates
and appoints the Agent as the agent of such Lender under this Agreement and the
Notes, and each such Lender irrevocably authorizes the Agent, in such capacity,
to take such action on its behalf under the provisions of this Agreement and
the Notes and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Agreement and the Notes, together
with such other powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary elsewhere in this Agreement, the Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or the Notes or otherwise exist against the Agent.
8.2 DELEGATION OF DUTIES. The Agent may execute any of its
duties under this Agreement and the Notes by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
8.3 EXCULPATORY PROVISIONS. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall
be (i) liable for any action lawfully taken or omitted to be taken by it or
such Person under or in connection with this Agreement or any Note (except for
its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any officer thereof
contained in this Agreement or any Note or in any certificate, report,
statement or other document referred to or provided for in, or recieved by the
Agent under or in connection with, this Agreement or any Note or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the Notes or for any failure of the Borrower to perform its
obligations hereunder or thereunder. The Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of
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any of the agreements contained in, or conditions of, this Agreement or any
Note, or to inspect the properties, books or records of the Borrower.
8.4 RELIANCE BY AGENT. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by the Agent. The Agent may deem and treat the payee of any
Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or the Notes unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
Notes in accordance with a request of the Required Lenders, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.
8.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall give notice thereof to the Lenders.
The Agent shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders; PROVIDED that
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
8.6 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made
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its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and made its
own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon
the Agent or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the Notes, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower. Except for notices, reports
and other documents expressly required to be furnished to the Lenders by the
Agent hereunder, the Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrower which may come into the possession of the
Agent or any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates.
8.7 INDEMNIFICATION. The Lenders agree to indemnify the
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Commitment Percentages in effect on the date on which
indemnification is sought under this subsection (or, if indemnification is
sought after the date upon which the Commitments shall have terminated and the
Loans shall have been paid in full, ratably in accordance with their Commitment
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Notes) be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of, the Commitments, this Agreement, the Notes or
any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Agent under or in connection with any of the foregoing; PROVIDED that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the Agent's gross negligence or
willful misconduct. The agreements in this subsection shall survive the
payment of the Notes and all other amounts payable hereunder.
8.8 AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower as though the Agent were not the Agent
hereunder and under the Notes. With respect to its Loans made or renewed by it
and any
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Note issued to it, the Agent shall have the same rights and powers under this
Agreement and the Notes as any Lender and may exercise the same as though it
were not the Agent, and the terms "Lender" and "Lenders" shall include the
Agent in its individual capacity.
8.9 SUCCESSOR AGENT. The Agent may resign as Agent upon 10
days' notice to the Lenders. If the Agent shall resign as Agent under this
Agreement and the Notes, then the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders, which successor agent shall be
approved by the Borrower, whereupon such successor agent shall succeed to the
rights, powers and duties of the Agent, and the term "Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Agent's rights, powers and duties as Agent shall be terminated, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Agreement or any holders of the Notes. After any retiring
Agent's resignation as Agent, the provisions of this Section 8 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement and the Notes.
SECTION 9. MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS. Neither this Agreement or any
Note nor any terms hereof or thereof may be amended, supplemented or modified
except in accordance with the provisions of this subsection. The Required
Lenders may, or, with the written consent of the Required Lenders, the Agent
may, from time to time, (a) enter into with the Borrower written amendments,
supplements or modifications hereto and to the Notes for the purpose of adding
any provisions to this Agreement or the Notes or changing in any manner the
rights of the Lenders or of the Borrower hereunder or thereunder or (b) waive,
on such terms and conditions as the Required Lenders or the Agent, as the case
may be, may specify in such instrument, any of the requirements of this
Agreement or the Notes or any Default or Event of Default and its consequences;
PROVIDED, HOWEVER, that no such waiver and no such amendment, supplement or
modification shall (i) reduce the amount or extend the scheduled date of
maturity of any Note or of any installment thereof, or reduce the stated rate
of any interest or fee payable hereunder or extend the scheduled date of any
payment thereof or increase the amount or extend the expiration date of any
Lender's Commitment, in each case without the consent of each Lender affected
thereby, or (ii) amend, modify or waive any provision of this subsection or
reduce the percentage specified in the definition of Required Lenders, or
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement and the Notes, in each case without the
written consent of all the Lenders, or (iii) amend, modify or waive any
provision of Section 8 without the written consent of the then Agent. Any such
waiver and any
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such amendment, supplement or modification shall apply equally to each of the
Lenders and shall be binding upon the Borrower, the Lenders, the Agent and all
future holders of the Notes. In the case of any waiver, the Borrower, the
Lenders and the Agent shall be restored to their former position and rights
hereunder and under the outstanding Notes, and any Default or Event of Default
waived shall be deemed to be cured and not continuing; but no such waiver shall
extend to any subsequent or other Default or Event of Default, or impair any
right consequent thereon.
9.2 NOTICES. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or 5 days after being deposited in
the mail, postage prepaid, or, in the case of telecopy notice, when received,
addressed as follows in the case of the Borrower and the Agent, and as set
forth in Schedule I in the case of the other parties hereto, or to such other
address as may be hereafter notified by the respective parties hereto and any
future holders of the Notes:
The Borrower: Roadway Services, Inc.
1077 Gorge Boulevard
Akron, Ohio 44309-0088
Attention: John P. Chandler
Telecopy: 216-258-2550
with a copy to: Roadway Services, Inc.
1077 Gorge Boulevard
Akron, Ohio 44309-0088
Attention: John M. Glenn
Telecopy: 216-258-6034
The Agent: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: Rosemary Bradley
Telecopy: 212-972-9854
PROVIDED that any notice, request or demand to or upon the Agent or the Lenders
pursuant to subsection 2.3, 2.5, 2.10, 2.11 or 2.15 shall not be effective
until received.
9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of the Agent or any Lender, any right,
remedy, power or privilege hereunder or under the Notes shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
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9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder, in the Notes and in any
document, certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement and the
Notes and the making of the Loans hereunder.
9.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a)
to pay or reimburse the Agent for all its reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement and the
Notes and any other documents prepared in connection herewith or therewith, and
the consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements
of counsel to the Agent, (b) to pay or reimburse each Lender and the Agent for
all its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement and the Notes and any such
other documents, including, without limitation, the fees and disbursements of
counsel to each Lender and of counsel to the Agent, (c) to pay, indemnify, and
hold each Lender and the Agent harmless from any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement and the
Notes and any such other documents, and (d) to pay, indemnify, and hold each
Lender and the Agent harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the Notes, and any such other documents, including, without
limitation, any of the foregoing relating to the violation of, noncompliance
with or liability under, any Environmental Law applicable to the operations of
the Borrower, any of its Subsidiaries or any of the Properties (all the
foregoing in this clause (d), collectively, the "indemnified liabilities"),
PROVIDED, that the Borrower shall have no obligation hereunder to the Agent or
any Lender with respect to indemnified liabilities arising from (i) the gross
negligence or willful misconduct of the Agent or any such Lender or (ii) legal
proceedings commenced against the Agent or any such Lender by any security
holder or creditor thereof arising out of and based upon rights afforded any
such security holder or creditor solely in its capacity as such. The
agreements in this subsection shall survive repayment of the Notes and all
other amounts payable hereunder.
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9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agent, all future holders of the Notes and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to one
or more banks or other entities ("PARTICIPANTS") participating interests in any
Loan owing to such Lender, any Note held by such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder. In the event of any
such sale by a Lender of a participating interest to a Participant, such
Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Note for all purposes under this Agreement, and the Borrower and the Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and such Note. The
Borrower agrees that if amounts outstanding under this Agreement and the Notes
are due or unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall, to
the maximum extent permitted by applicable law, be deemed to have the right of
setoff in respect of its participating interest in amounts owing under this
Agreement and any Note to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement or any
Note, PROVIDED that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in subsection 9.7 as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be entitled to
the benefits of subsections 2.17, 2.18 and 2.19 with respect to its
participation in the Commitments and the Loans outstanding from time to time as
if it was a Lender; PROVIDED that, in the case of subsection 2.18, such
Participant shall have complied with the requirements of said subsection and
PROVIDED, FURTHER, that no Participant shall be entitled to receive any greater
amount pursuant to any such subsection than the transferor Lender would have
been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time and from
time to time assign to any Lender or any affiliate thereof or, with the consent
of the Borrower (which consent shall not be unreasonably withheld), to an
additional bank or financial institution ("an ASSIGNEE") all or any part of its
rights and obligations under this Agreement and the Notes
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pursuant to an Assignment and Acceptance (an "ASSIGNMENT AND ACCEPTANCE"),
substantially in the form of Exhibit G, executed by such Assignee, such
assigning Lender (and, in the case of an Assignee that is not then a Lender or
an affiliate thereof, by the Borrower and the Agent) and delivered to the Agent
for its acceptance and recording in the Register. Upon such execution,
delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment as set forth therein, and (y) the assigning Lender
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such assigning Lender
shall cease to be a party hereto).
(d) The Agent shall maintain at its address referred to in
subsection 9.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "REGISTER") for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to, each
Lender from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as the owner of the
Loan recorded therein for all purposes of this Agreement. The Register shall
be available for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an affiliate thereof, by the Borrower and the Agent),
together with payment to the Agent of a registration and processing fee of
$2,500, the Agent shall (i) promptly accept such Assignment and Acceptance and
(ii) on the effective date determined pursuant thereto record the information
contained therein in the Register and give notice of such acceptance and
recordation to the Lenders and the Borrower. On or prior to such effective
date, the Borrower, at its own expense, shall execute and deliver to the Agent
(in exchange for the Revolving Credit Note and, if applicable, the CAF Advance
Notes of the assigning Lender) a new Revolving Credit Note and CAF Advance
Notes, as applicable, to the order of such Assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance (or, in the
case of a CAF Advance Note, the aggregate Commitments) and, if the assigning
Lender has retained a Commitment hereunder, a new Revolving Credit Note to the
order of the assigning Lender in an amount equal to the Commitment retained by
it hereunder. Such new Notes shall be
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dated the Closing Date and shall otherwise be in the form of the Note replaced
thereby.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "TRANSFEREE") and, with the consent of the
Borrower, any prospective Transferee subject to the provisions of subsection
9.15, any and all financial information in such Lender's possession concerning
the Borrower and its Affiliates which has been delivered to such Lender by or
on behalf of the Borrower pursuant to this Agreement or which has been
delivered to such Lender by or on behalf of the Borrower in connection with
such Lender's credit evaluation of the Borrower and its Affiliates prior to
becoming a party to this Agreement.
(g) Nothing herein shall prohibit any Lender from pledging or
assigning any Note to any Federal Reserve Bank in accordance with applicable
law.
9.7 ADJUSTMENTS. If any Lender (a "BENEFITTED LENDER") shall
at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Loans, or interest thereon, such benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loan, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders;
PROVIDED, HOWEVER, that if all or any portion of such excess payment or
benefits is thereafter recovered from such benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest.
9.8 COUNTERPARTS. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Agent.
9.9 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
509235\0232\01652\952NGVKW.CRA
<PAGE> 52
48
9.10 INTEGRATION. This Agreement and the Notes represent the
agreement of the Borrower, the Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the Notes.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.
9.12 SUBMISSION TO JURISDICTION; WAIVERS. The Borrower
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement and the Notes, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New
York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding shall be effected by telecopying a copy thereof to the
Borrower at its telecopy number set forth in subsection 9.2 or at such
other telecopy number of which the Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this subsection any special, exemplary,
punitive or consequential damages.
9.13 ACKNOWLEDGEMENTS. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the Notes;
(b) neither the Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or
509235\0232\01652\952NGVKW.CRA
<PAGE> 53
49
in connection with this Agreement or the Notes, and the relationship
between Agent and Lenders, on one hand, and the Borrower, on the other
hand, in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the Notes or
otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Borrower and the Lenders.
9.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES AND FOR ANY
COUNTERCLAIM THEREIN.
9.15 CONFIDENTIALITY. The Agent and the Lenders agree to
keep confidential this Agreement and the Notes and all non-public information
PROVIDED to it by the Borrower pursuant to this Agreement that is designated by
the Borrower in writing as confidential (this Agreement, the Notes and such
non-public information is collectively referred to herein as the
"INFORMATION"); PROVIDED, HOWEVER, that nothing herein shall prevent the Agent
or any Lender from disclosing any Information (i) to the Agent or any other
Lender, (ii) to any Transferee which receives such Information having been made
aware of the confidential nature thereof, (iii) to its employees, directors,
agents, Affiliates, attorneys, accountants and other professional advisors,
(iv) upon the request or demand of any Governmental Authority having
jurisdiction over the Agent or such Lender, (v) in response to any order of any
court or other Governmental Authority or as may otherwise be required pursuant
to any Requirement of Law, (vi) which has been publicly disclosed other than in
breach of this Agreement or (vii) in connection with the exercise of any remedy
hereunder.
509235\0232\01652\952NGVKW.CRA
<PAGE> 54
50
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
ROADWAY SERVICES, INC.
By: /s/ D.A. Wilson
--------------------------------------------------
Title: Senior Vice President - Finance & Planning,
Secretary & Chief Financial Officer
CHEMICAL BANK,
as Agent and as a Lender
By: /s/ Rosemary Bradley
--------------------------------------------------
Title: Rosemary Bradley
Vice President
ABN-AMRO BANK N.V., as a Lender
By: /s/ Thomas J. O'Bryant /s/ Dennis F. Lennon
--------------------------------------------------
Title: Senior Vice President Vice President
NATIONAL CITY BANK, as a Lender
By: /s/ David R. Evans
--------------------------------------------------
Title: Senior Vice President
SOCIETY NATIONAL BANK, as a Lender
By: /s/ Helen W. France V.P.
--------------------------------------------------
Title: Vice President
BANK ONE, AKRON, N.A., as a Lender
By: /s/ Steven B. Currier
--------------------------------------------------
Title: Vice President
509235\0232\01652\952NGVKW.CRA
<PAGE> 55
Schedule I
LENDERS, ADDRESSES AND COMMITMENTS
<TABLE>
<CAPTION>
LENDER COMMITMENT
------ ----------
<S> <C>
Chemical Bank $70,000,000
270 Park Avenue
New York, New York 10017
Attention: Rosemary Bradley
Telecopy: (212) 270-9854
ABN-AMRO Bank, N.V. $40,000,000
135 South LaSalle Street
Chicago, Illinois
Attention: Thomas J. O'Bryant
Telecopy: (312) 904-2849
National City Bank $60,000,000
1900 East 9th Street
Cleveland, Ohio
Attention: David R. Evans
Telecopy: (216) 575-9396
Society National Bank $65,000,000
127 Public Square
Cleveland, Ohio
Attention: Helen W. France
Telecopy: (216) 689-4981
Bank One, Akron, N.A. $65,000,000
50 South Main Street
2nd Floor
Akron, Ohio
Attention: Steven B. Currier
Telecopy: (216) 972-1598
============
$300,000,000
</TABLE>
509235\0232\01652\952NGVKW.CRA
<PAGE> 56
Schedule II
APPLICABLE MARGIN/FACILITY FEE
<TABLE>
<CAPTION>
Applicable Facility
Debt/Capitalization Ratio Level Margin Fee
------------------------- ----- ---------- --------
<S> <C> <C> <C>
Equal to or less than 10%: I .14% .06%
Equal to or less than 20% but greater than 10%: II .165% .065%
Equal to or less than 25% but greater than 20%: III .20% .075%
Equal to or less than 30% but greater than 25%: IV .21% .09%
Equal to or less than 40% but greater than 30%: V .24% .12%
Less than 50% but greater than 40%: VI .30% .20%
Greater than or equal to 50%: VII .50% .25%
</TABLE>
509235\0232\01652\952NGVKW.CRA
<PAGE> 57
EXHIBIT A
FORM OF REVOLVING CREDIT NOTE
$___________
New York, New York
March __, 1995
FOR VALUE RECEIVED, the undersigned, Roadway Services, Inc., an Ohio
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of ________________ (the "Lender") at the office of Chemical Bank,
located at 270 Park Avenue, New York, New York 10017, in lawful money of the
United States of America and in immediately available funds, on the Termination
Date the principal amount of (a) ___________ ____ DOLLARS $(__________), or, if
less, (b) the aggregate unpaid principal amount of all Loans made by the Lender
to the Borrower pursuant to subsection 2.1 of the Credit Agreement, as
hereinafter defined. The Borrower further agrees to pay interest in like money
at such office on the unpaid principal amount hereof from time to time
outstanding at the rates and on the dates specified in subsection 2.12 of such
Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of each
Loan made pursuant to the Credit Agreement and the date and amount of each
payment or prepayment of principal thereof, each continuation thereof, each
conversion of all or a portion thereof to another Type and, in the case of
Eurodollar Loans, the length of each Interest Period with respect thereto.
Each such endorsement shall constitute prima facie evidence of the accuracy of
the information endorsed. The failure to make any such endorsement shall not
affect the obligations of the Borrower in respect of such Loan.
This Note (a) is one of the Notes referred to in the Credit Agreement
dated as of March __, 1995 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among the Borrower, the Lender, the
other banks and financial institutions from time to time parties thereto and
Chemical Bank, as agent, (b) is subject to the provisions of the Credit
Agreement and (c) is subject to optional and mandatory prepayment in whole or
in part as provided in the Credit Agreement.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or
509235\0232\01652\952NGVKW.CRA
<PAGE> 58
2
otherwise, hereby waive presentment, demand, protest and all other notices of
any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
ROADWAY SERVICES, INC.
By: ________________________________
Name: ________________________________
Title: ________________________________
509235\0232\01652\952NGVKW.CRA
<PAGE> 59
SCHEDULE A
TO REVOLVING CREDIT NOTE
------------------------
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
<TABLE>
|---------------------------------------------------------------------------------------------------------------------------------|
| | | AMOUNT | | AMOUNT OF ABR LOANS | | |
| | |CONVERTED TO | AMOUNT OF PRINCIPAL OF | CONVERTED TO | UNPAID PRINCIPAL | NOTATION MADE |
|DATE | AMOUNT OF ABR LOANS | ABR LOANS | ABR LOANS REPAID | EURODOLLAR LOANS | BALANCE OF ABR LOANS | BY |
|<S> | <C> |<C> | <C> | <C> | <C> | <C> |
|-----|---------------------|-------------|------------------------|---------------------|------------------------|---------------|
| | | | | | | |
|-----|---------------------|-------------|------------------------|---------------------|------------------------|---------------|
| | | | | | | |
|-----|---------------------|-------------|------------------------|---------------------|------------------------|---------------|
| | | | | | | |
|-----|---------------------|-------------|------------------------|---------------------|------------------------|---------------|
| | | | | | | |
|-----|---------------------|-------------|------------------------|---------------------|------------------------|---------------|
| | | | | | | |
|-----|---------------------|-------------|------------------------|---------------------|------------------------|---------------|
| | | | | | | |
|-----|---------------------|-------------|------------------------|---------------------|------------------------|---------------|
| | | | | | | |
|-----|---------------------|-------------|------------------------|---------------------|------------------------|---------------|
| | | | | | | |
|-----|---------------------|-------------|------------------------|---------------------|------------------------|---------------|
| | | | | | | |
|-----|---------------------|-------------|------------------------|---------------------|------------------------|---------------|
| | | | | | | |
|-----|---------------------|-------------|------------------------|---------------------|------------------------|---------------|
| | | | | | | |
|-----|---------------------|-------------|------------------------|---------------------|------------------------|---------------|
| | | | | | | |
|-----|---------------------|-------------|------------------------|---------------------|------------------------|---------------|
| | | | | | | |
|-----|---------------------|-------------|------------------------|---------------------|------------------------|---------------|
| | | | | | | |
|-----|---------------------|-------------|------------------------|---------------------|------------------------|---------------|
| | | | | | | |
|-----|---------------------|-------------|------------------------| --------------------|------------------------|---------------|
</TABLE>
509235\0232\01652\952NGVKW.CRA
<PAGE> 60
SCHEDULE B
TO REVOLVING CREDIT NOTE
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
|-----------------------------------------------------------------------------------------------------------------------------|
| | | | INTEREST PERIOD | AMOUNT OF | AMOUNT OF | | |
| | AMOUNT OF |AMOUNT CONVERTED| AND EURODOLLAR | PRINCIPAL OF | EURODOLLAR LOANS | UNPAID PRINCIPAL| |
|DATE | EURODOLLAR | TO EURODOLLAR | RATE WITH RESPECT | EURODOLLAR LOANS | CONVERTED TO ABR | BALANCE OF | NOTATION |
| | LOANS | LOANS | THERETO | REPAID | LOANS | EURODOLLAR LOANS| MADE BY |
|-----|-------------|----------------|--------------------|------------------|------------------|-----------------|-----------|
| | | | | | | | |
|-----|-------------|----------------|--------------------|------------------|------------------|-----------------|-----------|
| | | | | | | | |
|-----|-------------|----------------|--------------------|------------------|------------------|-----------------|-----------|
| | | | | | | | |
|-----|-------------|----------------|--------------------|------------------|------------------|-----------------|-----------|
| | | | | | | | |
|-----|-------------|----------------|--------------------|------------------|------------------|-----------------|-----------|
| | | | | | | | |
|-----|-------------|----------------|--------------------|------------------|------------------|-----------------|-----------|
| | | | | | | | |
|-----|-------------|----------------|--------------------|------------------|------------------|-----------------|-----------|
| | | | | | | | |
|-----|-------------|----------------|--------------------|------------------|------------------|-----------------|-----------|
| | | | | | | | |
|-----|-------------|----------------|--------------------|------------------|------------------|-----------------|-----------|
| | | | | | | | |
|-----|-------------|----------------|--------------------|------------------|------------------|-----------------|-----------|
| | | | | | | | |
|-----|-------------|----------------|--------------------|------------------|------------------|-----------------|-----------|
| | | | | | | | |
|-----|-------------|----------------|--------------------|------------------|------------------|-----------------|-----------|
| | | | | | | | |
|-----|-------------|----------------|--------------------|------------------|------------------|-----------------|-----------|
| | | | | | | | |
|-----|-------------|----------------|--------------------|------------------|------------------|-----------------|-----------|
| | | | | | | | |
|-----|-------------|----------------|--------------------|------------------|------------------|-----------------|-----------|
| | | | | | | | |
|-----|-------------|----------------|--------------------|------------------|------------------|-----------------|-----------|
</TABLE>
509235\0232\01652\952NGVKW.CRA
<PAGE> 61
EXHIBIT B
[FORM OF CAF ADVANCE NOTE]
PROMISSORY NOTE
---------------
$___________ New York, New York
March __, 1995_
FOR VALUE RECEIVED, the undersigned, ROADWAY SERVICES, INC., a Ohio
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of _________________________________ (the "Lender") at the office of
Chemical Bank located at 270 Park Avenue, New York, New York 10017, in lawful
money of the United States of America and in immediately available funds, the
principal amount of (a) ______________________________ DOLLARS $(___________),
or, if less, (b) the aggregate unpaid principal amount of all CAF Advances made
by the Lender to the Borrower pursuant to subsection 2.6 of the Credit
Agreement, as hereinafter defined. The principal amount of each CAF Advance
evidenced hereby shall be payable on the maturity date therefor set forth on
the schedule annexed hereto and made a part hereof or on a continuation of such
schedule which shall be attached hereto and made a part hereof (the "Grid").
The Borrower further agrees to pay interest in like money at such office on the
unpaid principal amount of each CAF Advance evidenced hereby, at the rate per
annum set forth in respect of such CAF Advance on the Grid, calculated on the
basis of a year of 360 days and actual days elapsed from the date of such CAF
Advance until the due date thereof (whether at the stated maturity, by
acceleration or otherwise) and thereafter at the rates determined in accordance
with subsection 2.8(c) of the Credit Agreement. Interest on each CAF Advance
evidenced hereby shall be payable on the date or dates set forth in respect of
such CAF Advance on the Grid. CAF Advances evidenced by this Note may not be
prepaid.
The holder of this Note is authorized to endorse on the Grid the date,
amount, interest rate, interest payment dates and maturity date in respect of
each CAF Advance made pursuant to subsection 2.6 of the Credit Agreement and
each payment of principal with respect thereto. The failure to make any such
endorsement shall not affect the obligations of the Borrower in respect of such
CAF Advance.
This Note is one of the CAF Advance Notes referred to in the Credit
Agreement dated as of [March 31], 1995 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions from time to time parties
thereto, and Chemical Bank, as agent, and is subject to the provisions of the
Credit Agreement.
509235\0232\01652\952NGVKW.CRA
<PAGE> 62
2
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
ROADWAY SERVICES, INC.
By: _______________________________________
Name: _______________________________________
Title: _______________________________________
509235\0232\01652\952NGVKW.CRA
<PAGE> 63
SCHEDULE OF CAF ADVANCES
------------------------
_______________________, LENDER
ROADWAY SERVICES, INC., BORROWER
CREDIT AGREEMENT DATED AS OF [MARCH 31], 1995
<TABLE>
==============================================================================================================================
| | | | INTEREST PAYMENT | | | |
| DATE OF LOAN | AMOUNT OF LOAN |INTEREST RATE| DATES | MATURITY DATE | PAYMENT DATE | AUTHORIZATION |
|<S> | <C> |<C> | <C> | <C> | <C> | <C> |
|--------------|---------------------|-------------|-------------------|---------------------|---------------|---------------|
| | | | | | | |
|--------------|---------------------|-------------|-------------------|---------------------|---------------|---------------|
| | | | | | | |
|--------------|---------------------|-------------|-------------------|---------------------|---------------|---------------|
| | | | | | | |
|--------------|---------------------|-------------|-------------------|---------------------|---------------|---------------|
| | | | | | | |
|--------------|---------------------|-------------|-------------------|---------------------|---------------|---------------|
| | | | | | | |
|--------------|---------------------|-------------|-------------------|---------------------|---------------|---------------|
| | | | | | | |
|--------------|---------------------|-------------|-------------------|---------------------|---------------|---------------|
| | | | | | | |
|--------------|---------------------|-------------|-------------------|---------------------|---------------|---------------|
| | | | | | | |
|--------------|---------------------|-------------|-------------------|---------------------|---------------|---------------|
| | | | | | | |
|--------------|---------------------|-------------|-------------------|---------------------|---------------|---------------|
| | | | | | | |
|--------------|---------------------|-------------|-------------------|---------------------|---------------|---------------|
| | | | | | | |
|--------------|---------------------|-------------|-------------------|---------------------|---------------|---------------|
| | | | | | | |
|--------------|---------------------|-------------|-------------------|---------------------|---------------|---------------|
| | | | | | | |
|--------------|---------------------|-------------|-------------------|---------------------|---------------|---------------|
</TABLE>
509235\0232\01652\952NGVKW.CRA
<PAGE> 64
EXHIBIT C
---------
[FORM OF CAF ADVANCE CONFIRMATION]
___________, 19__
[Lender]
[Address}
Reference is made to the Credit Agreement, dated as of [March 31], 1995,
among the undersigned, the Lenders named therein, and Chemical Bank, as Agent
(as the same may be amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"). Terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.
In accordance with subsection 2.7(e) of the Credit Agreement, the
undersigned accepts and confirms the offers by Lender(s) to make CAF Advances
to the undersigned on __________, 19__ [CAF Advance Date] under subsection
[2.7(b)][2.7(c)] in the (respective) amount(s) set forth on the attached list
of CAF Advances offered.
Very truly yours,
ROADWAY SERVICES, INC.
By ___________________________
Title: _______________________
509235\0232\01652\952NGVKW.CRA
<PAGE> 65
EXHIBIT D
---------
[FORM OF CAF ADVANCE OFFER]
______________, 199__
Roadway Services, Inc.
1077 Gorge Boulevard
Akron, Ohio 44309-0088
Attention: John P. Chandler
Reference is made to the Credit Agreement, dated as of [March 31],
1995, among the undersigned, the Lenders named therein, and Chemical Bank, as
Agent (as the same may be amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"). Terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
In accordance with subsection 2.7 of the Credit Agreement, the
undersigned Lender offers to make CAF Advances thereunder in the following
amounts with the following maturity dates:
<TABLE>
<S> <C>
====================================================================================================
CAF Advance Date: Aggregate Maximum Amount:
__________, 199__ $_________
====================================================================================================
Maturity Date 1: Maximum Amount: $__________
__________, 199__ $________ offered at _______*
$________ offered at _______*
====================================================================================================
__________________________________
<FN>
* Insert the interest rate offered for the specified loan amount. In
the case of Eurodollar Rate CAF Advances, insert a margin bid. In the
case of Absolute Rate CAF Advances, insert a fixed rate bid.
</TABLE>
509235\0232\01652\952NGVKW.CRA
<PAGE> 66
2
<TABLE>
<S> <C>
====================================================================================================
Maturity Date 2: Maximum Amount: $__________
__________, 199__ $________ offered at _______*
$________ offered at _______*
====================================================================================================
Maturity Date 3: Maximum Amount: $__________
__________, 199__ $________ offered at _______*
$________ offered at _______*
====================================================================================================
</TABLE>
Very truly yours,
[NAME OF BIDDING LENDER]
By _________________________________
Name _______________________________
Title ______________________________
Telephone No. ______________________
Fax No. ____________________________
509235\0232\01652\952NGVKW.CRA
<PAGE> 67
EXHIBIT E
---------
[FORM OF CAF ADVANCE REQUEST]
_________________, 199___
[Lender]
[Address]
Reference is made to the Credit Agreement, dated as of [March 31],
1995, among the undersigned, the Lenders named therein, and Chemical Bank, as
Agent (as the same may be amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"). Terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
This is a [Eurodollar Rate] [Absolute Rate] CAF Advance Request
pursuant to subsection 2.7 of the Credit Agreement requesting quotes for the
following CAF Advances:
<TABLE>
<CAPTION>
Loan 1 Loan 2 Loan 3
<S> <C> <C> <C>
Aggregate Principal Amount $__________ $__________ $_________
CAF Advance Date
Interest Period 2
Maturity Date 3
Interest Payment Dates
Very truly yours,
ROADWAY SERVICES, INC.
By: __________________________________
Title: _______________________________
__________________________________
<FN>
2. Insert only in a Eurodollar Rate Bid Request.
3. In a Eurodollar Rate Bid Request, insert last day of Interest
Period.
</TABLE>
509235\0232\01652\952NGVKW.CRA
<PAGE> 68
EXHIBIT F
FORM OF OPINION OF
GENERAL COUNSEL TO THE BORROWER
Chemical Bank, as Agent and a Lender
270 Park Avenue
New York, NY 10017
Gentlemen:
I am Vice President and General Counsel of Roadway Services, Inc., an
Ohio corporation (the Borrower). This opinion is delivered in connection with
the Credit Agreement dated as of March _____, 1995 by and among the Borrower,
Chemical Bank, as Agent and a Lender (Chemical) and the other financial
institutions from time to time parties thereto (the Credit Agreement).
The opinion expressed below is furnished to you pursuant to subsection
4.1(e) of the Credit Agreement. Unless otherwise defined herein, the terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement.
In rendering the following opinion either I, or members of my staff
acting under my supervision, have examined or are familiar with, and have
relied upon, originals or copies, identified to our satisfaction, of such
certificates of public officials and officers of the Borrower and other such
documents and records as I deemed appropriate, and have examined such matters
of law as I deemed necessry for the purpose of this opinion.
In rendering the opinions expressed below, I have assumed, with your
permission, without independent investigation or inquiry, (a) the authenticity
of all documents submitted to the Borrower as originals, (b) the genuineness of
all signatures on all documents that I examined (other than those of the
Borrower and officers of the Borrower) and (c) the conformity to authentic
originals of documents submitted to me as certified, conformed or photostatic
copies.
Based upon and subject to the foregoing, I am of the opinion that:
1. Each of the Borrower and its Material Subsidiaries (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the corporate power and authority and
the legal right to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged
and (c) is duly qualified as a foreign corporation and in good standing under
the laws of each jurisdiction where its ownership, lease or operation of
property or
<PAGE> 69
Chemical Bank
March 24, 1995
Page 2
the conduct of its business requires such qualification, except to the extent
that the failure to be so qualified could not, in the aggregate, have a
Material Adverse Effect.
2. The Borrower has the corporate power and authority, and the legal
right, to make, deliver and perform its obligations under the Loan Documents
and to borrow thereunder. The Borrower has taken all necessary corporate
action to authorize the borrowings on the terms and conditions of the Loan
Documents and to authorize the execution, delivery and performance of the Loan
Documents. No consent or authorization of, approval by, notice to, filing with
or other act by or in respect of, any Governmental Authority or any other
Person is required in connection with the borrowings under the Loan Documents
or with the execution, delivery, performance, validity or enforceability of the
Loan Documents.
3. The Loan Documents have been duly executed and delivered on behalf of
the Borrower and constitute a legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law).
4. The execution and delivery of the Loan Documents and the performance
by the Borrower of its obligations thereunder, the consummation of the
transactions contemplated thereby, the compliance by the Borrower and each of
its Subsidiaries or Material Subsidiaries, as the case may be, with any of the
provisions thereof, the borrowings under the Loan Documents and the use of
proceeds thereof, all as provided therein, (a) will not violate, or constitute
a default under, any Requirement of Law or any Contractual Obligations of the
Borrower or of any of its Subsidiaries or Material Subsidiaries, as the case
may be, and (b) will not result in, or require, the creation or imposition of
any Lien on any of its or their respective properties or revenues.
5. No litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or threatened by or against the
Borrower or any of its Subsidiaries or against any of its or their respective
properties or revenues (a) with respect to the Credit Agreement or any of the
Notes or (b) that could reasonably be expected to have a Material Adverse
Effect.
6. Neither the Borrower nor any of its Subsidiaries is in default under
or with respect to any Contractual Obligations in any respect that could
reasonably be expected to have a Material Adverse Effect.
7. The Borrower is not (a) an "investment company," or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended, or (2) a "holding company" as defined in, or
otherwise subject to regulation under, the Public Utility Holding Company Act
of 1935. The Borrower is not subject to regulation under any Federal or state
statute or regulation which limits its ability to incur Indebtedness.
<PAGE> 70
Chemical Bank
Page 3
Since I am a member only of the bar of the State of Ohio, I express no
opinion as to the laws of any other jurisdictions. This opinion is provided
solely for the benefit of the Agent, the Lenders and for the benefit of any
purchasing Lenders pursuant to Section 9.6 of the Credit Agreement in
connection with the Credit Agreement and the transactions contemplated thereby
and may not be relied upon in any manner by any other person without my prior
written consent; PROVIDED, HOWEVER, that this opinion may be delivered to the
Lenders' regulators, accountants, attorneys and other professional advisers and
may be used in connection with any legal or regulatory proceeding relating to
the subject matter of this opinion.
Very truly yours,
<PAGE> 71
EXHIBIT G
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of March _, 1995,
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Roadway Services, Inc. (the "Borrower"), the Lenders named
therein and Chemical Bank, as agent for the Lenders (in such capacity, the
"Agent"). Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
____________________ (the "Assignor") and ____________________ (the
"Assignee") agree as follows:
I. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), a ___% interest (the "Assigned Interest") in
and to the Assignor's rights and obligations under the Credit Agreement with
respect to the revolving credit facility contained therein (the "Assigned
Facility") in the principal amount set forth on Schedule 1 hereto.
II. The Assignor (a) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any Note or any other instrument or document furnished pursuant
thereto, other than that it has not created any adverse claim upon the interest
being assigned by it hereunder and that such interest is free and clear of any
such adverse claim; (b) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower, any of
its Subsidiaries or any other obligor or the performance or observance by the
Borrower, any of its Subsidiaries or any other obligor of any of their
respective obligations under the Credit Agreement or any Note or any other
instrument or document furnished pursuant hereto or thereto; and (c) attaches
the Notes held by it evidencing the Assigned Facility and requests that the
Agent exchange such Notes for new Notes payable to the Assignee and (if the
Assignor has retained any interest in the Assigned Facility) new Notes payable
to the Assignor in the respective amounts which reflect the assignment being
made hereby (and after giving effect to any other assignments which have become
effective on the Effective Date).
III. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements delivered pursuant to subsection 3.1 thereof and such
other documents and information as it has deemed appropriate to make its own
credit
509235\0232\01652\952NGVKW.CRA
<PAGE> 72
2
analysis and decision to enter into this Assignment and Acceptance; (c)
agrees that it will, independently and without reliance upon the Assignor, the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Credit Agreement, the Notes or any
other instrument or document furnished pursuant hereto or thereto; (d) appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Credit Agreement, the Notes or
any other instrument or document furnished pursuant hereto or thereto as are
delegated to the Agent by the terms thereof, together with such powers as are
incidental thereto; and (e) agrees that it will be bound by the provisions of
the Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to paragraph
2.18(b) of the Credit Agreement.
IV. The effective date of this Assignment and Acceptance shall be
_________ ___, 19__ (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Agent for acceptance by
it and recording by the Agent pursuant to subsection 9.6 of the Credit
Agreement, effective as of the Effective Date (which shall not, unless
otherwise agreed to by the Agent, be earlier than five Business Days after the
date of such acceptance and recording by the Agent).
V. Upon such acceptance and recording, from and after the Effective
Date, the Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignee whether such amounts have accrued prior to the Effective Date or
accrue subsequent to the Effective Date. The Assignor and the Assignee shall
make all appropriate adjustments in payments by the Agent for periods prior to
the Effective Date or with respect to the making of this assignment directly
between themselves.
VI. From and after the Effective Date, (a) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Lender thereunder and
under the Notes and shall be bound by the provisions thereof and (b) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
509235\0232\01652\952NGVKW.CRA
<PAGE> 73
3
VII. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their
respective duly authorized officers on Schedule 1 hereto.
509235\0232\01652\952NGVKW.CRA
<PAGE> 74
SCHEDULE 1
TO ASSIGNMENT AND ACCEPTANCE
RELATING TO THE CREDIT AGREEMENT, DATED AS OF MARCH ___, 1995,
AMONG
ROADWAY SERVICES, INC.,
THE LENDERS NAMED THEREIN
AND
CHEMICAL BANK, AS AGENT FOR THE LENDERS (IN SUCH CAPACITY, THE "AGENT")
- -------------------------------------------------------------------------------
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
<TABLE>
<S> <C>
Credit Principal Commitment Percentage
Facility Assigned Amount Assigned Assigned 4
----------------- --------------- ---------------------
Revolving Credit $ . %
Facility --------------- --- ---------------
[Name of Assignee] [Name of Assignor]
By _____________________________________ By _____________________________________
Name: Name:
Title: Title:
Accepted: Consented To:
Chemical Bank, as Agent Roadway Services, Inc.
By _____________________________________ By _____________________________________
Name: Name:
Title: Title:
__________________________________
<FN>
4. Calculate the Commitment Percentage that is assigned to at least 15 decimal
places and show as a percentage of the aggregate commitments of all
Lenders.
</TABLE>
509235\0232\01652\952NGVKW.CRA
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-25-1995
<CASH> 39,476
<SECURITIES> 3,821
<RECEIVABLES> 483,003
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 650,114
<PP&E> 2,737,086
<DEPRECIATION> 1,514,325
<TOTAL-ASSETS> 1,969,155
<CURRENT-LIABILITIES> 722,183
<BONDS> 0
<COMMON> 39,898
0
0
<OTHER-SE> 968,881
<TOTAL-LIABILITY-AND-EQUITY> 1,969,155
<SALES> 0
<TOTAL-REVENUES> 1,087,007
<CGS> 0
<TOTAL-COSTS> 1,074,841
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 10,937
<INCOME-TAX> 5,086
<INCOME-CONTINUING> 5,851
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,851
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
</TABLE>
