SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the period ended September 30, 1996
[ ] 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 1-10720
ILLINOIS CENTRAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-3545405
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
455 North Cityfront Plaza Drive, Chicago, Illinois 60611-5504
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 755-7500
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
As of September 30, 1996, 61,419,756 common shares were outstanding.
ILLINOIS CENTRAL CORPORATION
AND SUBSIDIARIES
FORM 10-Q
Quarter and Nine Months Ended September 30, 1996
CONTENTS
Part I - Financial Information: Page
Item 1. Financial Statements:
Consolidated Statements of Income 3
Consolidated Balance Sheets 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Part II - Other Information:
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
Exhibit Index E-1
ILLINOIS CENTRAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
($ in millions, except share data)
(Unaudited)
Three Months Nine Month
Ended September 30, Ended September 30
1996 1995 1996 1995
Revenues $ 167.9 $ 161.3 $ 483.9 $ 485.8
Operating expenses:
Labor and fringe benefits 49.3 50.2 141.9 144.5
Leases and car hire 11.8 16.2 32.8 39.4
Diesel fuel 9.5 8.2 27.1 25.3
Materials and supplies 8.8 8.8 24.8 27.4
Depreciation and
amortization 10.5 7.9 28.5 24.0
Casualty, insurance
and losses 4.1 3.5 9.2 11.1
Other taxes 5.5 3.0 14.1 13.5
Other 6.9 10.4 27.3 29.1
Operating expenses 106.4 108.2 305.7 314.3
Operating income 61.5 53.1 178.2 171.5
Other income
(expense), net (0.4) 0.4 0.7 0.2
Interest expense, net (9.8) (6.8) (24.4) (22.7)
Income before income
taxes and
extraordinary item,
net 51.3 46.7 154.5 149.0
Provision for income
taxes 19.2 17.5 57.9 55.9
Income before
extraordinary item, 32.1 29.2 96.6 93.1
Extraordinary item, net - - - (11.4)
Net income $ 32.1 $ 29.2 $ 96.6 $ 81.7
Income per share:
Income before
extraordinary item,
net $ 0.52 $ 0.47 $ 1.56 $ 1.47
Extraordinary item,
net - - - (0.18)
Income per share $ 0.52 $ 0.47 $ 1.56 $ 1.29
Weighted average
number of shares
of common stock
and common stock
equivalents
outstanding 61,843,972 62,595,266 61,817,730 63,157,679
The following notes are an integral part of the consolidated financial
statements.
ILLINOIS CENTRAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
($ in millions)
(Unaudited)
ASSETS September 30,1996 December 31, 1995
Current assets:
Cash and temporary
cash investments $ 22.0 $ 5.0
Receivables, net of
allowance for doubtful
accounts of $1.6 in
1996 and $2.0 in 1995 99.5 84.8
Materials and supplies,
at average cost 18.9 14.9
Assets held for
disposition 6.1 7.7
Deferred income taxes
- current 2.2 19.1
Other current assets 8.0 2.6
Total current assets 177.7 134.1
Investments 14.0 13.6
Properties:
Transportation:
Road and structures,
including land 1,338.9 1,052.1
Equipment 254.8 225.6
Other, principally land 41.5 41.0
Total properties 1,635.2 1,318.7
Accumulated depreciation (48.9) (44.0)
Net properties 1,586.3 1,274.7
Other assets 15.6 15.1
Total assets $ 1,793.6 $ 1,437.5
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of
long-term debt $ 6.5 $ 12.4
Accounts payable 61.6 56.6
Dividends payable 12.3 11.9
Income taxes payable - 5.0
Casualty and freight
claims 25.1 24.9
Employee compensation and
vacations 16.5 16.9
Taxes other than income
taxes 12.6 16.3
Accrued redundancy reserves 4.3 4.3
Other accrued expenses 78.5 61.9
Total current liabilities 217.4 210.2
Long-term debt 575.0 383.6
Deferred income taxes 345.5 246.2
Other liabilities and reserves 125.7 127.4
Contingencies and commitments
Stockholders' equity:
Common stock, par value
$.001, authorized 100,000,000
shares, 64,295,584 shares
issued and 61,419,756 shares
outstanding 0.1 0.1
Additional paid-in capital 167.0 166.3
Retained income 427.9 368.2
Treasury stock
(2,875,828 shares) (65.0) (64.5)
Total stockholders'
equity 530.0 470.1
Total liabilities and
stockholders' equity $ 1,793.6 $ 1,437.5
The following notes are an integral part of the consolidated financial
statements.
ILLINOIS CENTRAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
($ in millions)
(Unaudited)
Nine Months Ended September 30,
1996 1995
Cash flows from operating activities :
Net income $ 96.6 $ 81.7
Reconciliation of net income to
net cash provided by (used for)
operating activities :
Extraordinary item, net - 11.4
Depreciation and amortization 28.5 24.0
Deferred income taxes 21.4 25.6
Equity in undistributed
earnings of affiliates,
net of dividends received (0.5) (0.5)
Net gains on sales of real
estate (1.5) (0.3)
Cash changes in working capital (11.0) (1.9)
Changes in other assets (0.4) (2.1)
Changes in other liabilities
and reserves (12.0) (5.8)
Net cash provided by
operating activities 121.1 132.1
Cash flows from investing activities :
Additions to properties (82.0) (76.3)
Acquisition of CCPH (146.8) -
Proceeds from real estate sales 2.6 2.1
Proceeds from equipment sales 2.6 2.2
Proceeds from sales of investments - 0.7
Other (8.0) (2.8)
Net cash (used for) investing activities (231.6) (74.1)
Cash flows from financing activities :
Proceeds from issuance of debt 210.5 250.0
Principal payments on debt (50.4) (255.2)
Net proceeds (payments) in
commercial paper 5.0 15.0
Dividends paid (36.4) (31.6)
Stock repurchases (0.5) (47.1)
Purchase of subsidiary's common
stock (0.7) (0.1)
Net cash provided by (used for) financing
activities 127.5 (69.0)
Changes in cash and temporary cash
investments 17.0 (11.0)
Cash and temporary cash investments
at beginning of period 5.0 24.2
Cash and temporary cash investments
at end of period $ 22.0 $ 13.2
Supplemental disclosure of cash flow information :
Cash paid during the year for:
Interest (net of amount
capitalized) $ 21.7 $ 21.8
Income taxes $ 45.4 $ 28.7
The following notes are an integral part of the consolidated financial
statements.
ILLINOIS CENTRAL CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
1. Basis of Presentation
Except as described below, the accompanying unaudited consolidated
financial statements have been prepared in accordance with
accounting policies described in the 1995 Annual Report on Form 10-K
and should be read in conjunction with the disclosures therein.
In the opinion of management, these interim financial statements
reflect all adjustments, consisting of normal recurring accruals,
necessary to present fairly the financial position, results of
operations and cash flows for the periods presented. Interim
results are not necessarily indicative of results for the full year.
Certain 1995 amounts have been reclassified to conform with the
presentation used in the 1996 financial statements.
Income Per Share
Income per common share of the Company is based on the weighted
average number of shares of common stock and common stock
equivalents outstanding during the period.
2. Common Stock and Dividends
On September 11, 1996, the Board of Directors approved a quarterly
dividend of $.20 per share which was paid October 8, 1996. The
Board intends to continue its policy of quarterly dividends. Future
dividends may be dependent on the ability of the Railroad and CCP
Holdings, Inc. ("CCPH") to pay dividends to the Company. The Railroad
is no longer subject to specific dividend restrictions. Covenants of
the Railroad's Revolver and CCPH's Revolver require specified levels
of tangible net worth. At September 30, 1996, the Railroad and CCPH
exceeded their tangible net worth covenants by $25.7 million and
$20.9 million, respectively.
3. Stock Repurchase Program
In 1995, the Company was in the midst of a $60 million stock
repurchase program. A total of 2,475,000 shares of common stock
were acquired in 1995 with $46.6 million being spent in the nine
months ended September 30, 1995. In late 1995, the Board determined
that the capital needed to fund the acquisition of CCPH (see Note 4),
the expansion of the intermodal facility in Chicago and the
construction of a bulk terminal facility in Louisiana precluded
stock repurchases in 1996.
4. CCP Holdings, Inc. Acquisition
On June 12, 1996, the Railroad used proceeds it received from the
issuance of Commercial Paper (average interest rate 5.52% and
average maturity 30 days) to pay a $50.0 million dividend to IC and
to loan $59.9 million (5.625% per annum) to IC. IC used the $109.9
million and its bank credit lines to acquire CCPH. The transaction
closed June 13, 1996, following the effective date of the approval
order issued by the Surface Transportation Board ("STB"). The
purchase price was $145.2 million in cash (including $1.6 million
in sellers' expenses), the assumption of approximately $2.5 million
in debt, and approximately $17.3 million of capitalized lease
obligations. Additionally, the actual purchase price is subject to
various potential adjustments for up to one year after the closing date.
CCPH has two principal operating subsidiaries - the Chicago Central
and Pacific Railroad ("CCPR") and the Cedar River Railroad ("CRR") -
which together comprise a Class II railroad system operating 850
miles of road. CCPR operates from Chicago to Omaha, Nebraska, with
connecting lines to Cedar Rapids and Sioux City, Iowa. CRR runs
from Waterloo, Iowa to Albert Lea, Minnesota.
The acquisition has been accounted for under the purchase method of
accounting. Accordingly, the Company has allocated the purchase
cost to CCPH's assets and liabilities as of June 13, 1996, and the
accompanying unaudited consolidated financial statements reflect the
operations of CCPH for the period June 13, 1996, to September 30,
1996. The allocation of the purchase cost has been based upon
preliminary estimates. Revisions to the carrying values of CCPH's
assets and liabilities will be made as detailed studies of CCPH's
operations, assets and obligations are completed. In general, the
purchase price allocations will be subject to adjustment for one
year following the acquisition.
The following pro-forma results of the Company are presented to
reflect the Company's results of operations for the year ended
December 31, 1995, and for the nine-month period ended September 30,
1996, as if CCPH had been acquired on January 1, 1995, and January
1, 1996, respectively ($ in millions except per share data):
Unaudited Unaudited
Year Ended Nine Month Period
December 31, 1995 Ended September 30, 1996
Revenues $719.8 $523.7
Operating income 251.5 192.5
Income before extraordinary
item 135.5 103.2
Net income 124.1 103.2
Income per share:
- Before extraordinary item $ 2.15 $ 1.67
- Net $ 1.97 $ 1.67
5. Subsequent Event - RAIL Sale
On October 3, 1996, the Railroad sold its investment in an
industry-captive company which will result in a one-time gain in
the fourth quarter of approximately $7 million or $.07 per share.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The discussion below takes into account the financial
condition and results of operations of the Company for the periods
presented in the consolidated financial statements. The results of CCP
Holdings, Inc. ("CCPH") since acquisition on June 13, 1996 (see Note 4)
are included in the three month and nine month periods ended September 30,
1996.
Results of Operations
Three Months Ended September 30, 1996 Compared to Three Months Ended
September 30, 1995
Revenues for 1996 increased from the prior year quarter by
$6.6 million or 4.1% to $167.9 million. At the Railroad revenues declined
$10.5 million following a 3.3% decrease in the number of carloadings
coupled with a 3.4% decrease in the average freight revenue per carload.
In addition to decreased carloadings in paper and forest products (9.5%)
and grain and grain mill products (35.2%), the most significant factor
affecting both declines was the lack of export grain in 1996 compared with
the high levels of 1995. For the quarter intermodal loads increased
11.7%. At CCPH, third quarter revenues of $17.0 million were comprised
of grain (29.0%), coal (39.4%), chemicals (11.2%) and all others (20.4%).
Operating expenses overall declined in the third quarter
of 1996 $1.8 million or 1.7%. Labor and fringe costs include wage
increases negotiated with eight of the Railroads' eleven unions. This
category declined, however, from 1995 primarily as a result of lower
traffic levels in 1996 and elimination of high overtime caused by
congestion experienced in 1995. Leases and car hire also benefited from
the elimination of congestion to return to more normal operating levels.
In 1995, favorable one time adjustments on several capital leases were
recorded. Other taxes in 1996 reflect normal accruals based on
current assessments. The prior year was reduced by negotiated settlements
with various taxing authorities. Other expenses reflect the one time reversal
of non revenue related accruals to actual experience ($2.5 million) and
favorable performance payments in joint facilities that congestion in
1995 prevented us from receiving ($.7 miilion).
Operating income for 1996 increased by $8.4 or 15.8% to
$61.5 million for the reasons cited above.
Net interest expense of $9.8 million for 1996 increased
44.1% compared to $6.8 million in 1995. The 1996 expense includes $1.8
million from increased commercial paper borrowings to support the $109.9
million transferred from the Railroad in June 1996 in connection with
the acquisition of CCPH. Overall in 1996, average borrowings have been
greater than 1995 and interest rates have been lower.
Nine Months Ended September 30, 1996 Compared to Nine Months Ended
September 30, 1995
Revenues for 1996 decreased from the prior year by $1.9
million to $483.9 million. At the Railroad revenues increased $23.0
million as a result of a 6.3% decrease in the number of carloadings
coupled with a 1.5% decrease in the average revenue per carload. In
1996, the Railroad experienced decreased carloadings in coal (10.2%),
chemicals (1.6%) grain and grain products (22.0%) paper and forest
products (5.1%) partially offset by increased intermodal loads (11.0%).
At CCPH, revenues of $20.9 million were comprised of grain and grain mill
products (31.9%), coal (37.9%), chemicals (10.1%) and all others (20.1%).
Operating expenses overall declined in 1996 $8.6 million
or 2.7%. Labor and fringe costs include wage increases negotiated with
eight of the Railroads' eleven unions. This category declined, however,
from 1995 primarily as a result of lower traffic levels in 1996 and
elimination of high overtime caused by the congestion experienced in 1995.
Leases and car hire also benefited from the elimination of congestion to
return to more normal operating levels. In 1995, favorable one time
adjustments on several capital leases were recorded. Other taxes
in 1996 reflects normal accruals based on current assessments. The prior
year was reduced by negotiated settlements with various taxing
authorities. Other expenses reflect the one time reversal of non revenue
related accruals to actual experience ($2.5 miilion).
Operating income for 1996 decreased by $6.7 million or 3.9%
to $178.2 million for the reasons cited above.
Net interest expenses of $24.4 million for 1996 increased
7.5% compared to $22.7 million in 1995. The 1996 expense includes $2.1
million from the Railroad's increased commercial paper borrowings to
support the $109.9 million transferred to the Company in June 1996.
Overall in 1996, average borrowings have been greater than 1995 and
interest rates have been lower.
Liquidity and Capital Resources
Operating Data:
Nine Months Ended September 30,
1996 1995
($ in millions)
Cash flows provided by (used for):
Operating activities $ 121.1 $ 132.1
Investing activities (231.6) (74.1)
Financing activities 127.5 (69.0)
Net change in cash and
temporary cash investments $ 17.0 $(11.0)
Operating activities in 1996 provided $121.1 million in cash,
primarily from net income before depreciation and deferred taxes.
Additions to property were as follows:
Nine Months Ended September 30,
1996 1995
($ in millions)
Communications and signals $ 14.2 $ 7.1
Equipment-rolling stock 23.4 31.8
Track and bridges 38.3 34.9
Other 6.1 2.5
Total $ 82.0 $ 76.3
Property retirements and removals generated proceeds of $5.2 million
and $4.3 million in 1996 and 1995, respectively.
The Company anticipates that capital expenditures for 1996,
excluding the acquisition cost of CCP Holdings, Inc., will be
approximately $126 million of which $86 million of base expenditures will
concentrate on track maintenance (i.e., renewal of track structure
including bridges) and freight car upgrades. Approximately $20 million
will be incurred to expand the Company's intermodal facility in Chicago
to serve Canadian National Railway. Additionally, expenditures of $12.2
million of the $50 million needed to construct a bulk transfer facility
along the Mississippi River in Louisiana are anticipated in 1996. Delays
in negotiations with a tenant for this facility are the primary reason for
timing shift of expenditures from 1996 to 1997. These expenditures are
expected to be met from current operations or other available sources.
The Railroad has a commercial paper program whereby a total of $200
million can be issued and outstanding at any one time. The program is
supported by a $250 million Revolver with the Railroad's lending group
(see below). At September 30, 1996, the commercial paper has been rated
A2, P2 and F2 and $62.0 million was outstanding. The average interest
rate on commercial paper for the nine month period ended September 30,
1996, was 5.62% with a range of 5.41% to 6.06%. The Railroad views this
program as a significant long-term funding source and intends to issue
replacement notes as each existing issue matures. Therefore, commercial
paper borrowings are classified as long-term. The Railroad's public debt
is rated Baa2 by Moody's and BBB by S&P.
In 1994, the Railroad entered into a revolving agreement to sell
undivided percentage interests in certain of its accounts receivable, with
recourse, to a financial institution. The agreement, which expires in
June 1998, allows for sales of accounts receivable up to a maximum of $50
million at any one time. The Railroad services the accounts receivable
sold under the agreement and retains the same exposure to credit loss as
existed prior to the sale. At September 30, 1996, $50 million had been
sold pursuant to the agreement. Costs related to the agreement fluctuate
with changes in prevailing interest rates. These costs, which are
included in Other Income (Expense), Net, were $2.3 million and $2.3
million for the nine month periods ended September 30, 1996 and 1995,
respectively.
In April 1996, the Railroad concluded negotiations with its bank
lending group whereby the Railroad's $250 million Revolver was amended and
restated, for the fourth time since becoming unsecured in September 1993.
The amendment reduced various facility fees and borrowing spreads,
lowered the tangible net worth requirement beginning in the second quarter
of 1996 and extended the expiration date to 2001. Fees and borrowing
spreads are predicated on the Railroad's long-term credit ratings.
Currently, the annual facility fee is 15 basis points and borrowings under
this agreement are at Eurodollar offered rate plus 22.5 basis points. The
Revolver is used primarily for backup for the Railroad's commercial paper
program but can be used for general corporate purposes. The available
amount is reduced by the outstanding amount of commercial paper borrowings
and any letters of credit issued on behalf of the Railroad under the
facility. No amounts have been drawn under the Revolver. At September
30, 1996, the $250 million was limited to $188.0 million because $62.0
million in commercial paper was outstanding.
In June 1996, CCPH entered into a revolving credit agreement with
its bank lending group for an unsecured $50 million revolving credit
facility, (the "CCPH Revolver"). The CCPH Revolver has a $5 million
sublimit for letters of credit and expires June 14, 2001. The revolver
can be used for general corporate purposes. Fees and borrowing spreads
are predicated on the ratio of CCPH's funded debt to CCPH's earnings
before income taxes, interest, depreciation and amortization ("EBITDA").
Through December 31, 1996, the commitment fee is 35 basis points and
borrowings are at the Eurodollar offered rate plus 100 basis points. The
credit agreement contains various financial covenants including minimum
consolidated tangible net worth, minimum interest coverage and maximum
leverage ratio. CCPH does not anticipate any difficulty in maintaining
compliance with such covenants.
At September 30, 1996, $40.5 million of CCPH's Revolver was
outstanding. CCPH used $5 million to repay amounts outstanding under a
predecessor revolver which was then cancelled and $35 million to fund a
dividend to the Company following its acquisition of CCPH.
The Company has a $50 million 364-day floating-rate revolving loan
agreement which expires in August 1997. In June 1996, the Company
borrowed $40 million under this agreement to acquire CCPH (see Note 4),
which was repaid in June. At September 30, 1996, no amounts were
drawn under this agreement. The Company's financing/leasing subsidiaries
lease equipment to the Railroad and have approximately $10.0 million in
long-term borrowing agreements which were used to acquire locomotive and
freight car equipment during 1993 and 1991. Lease revenue and corresponding
expense eliminated in consolidation was $3.6 million and $10.8 million in
the third quarter of 1996 and for the nine months ended September 30, 1996.
On July 30, 1996, the Railroad issued $50 million of 7.12% medium
term notes due 2001 and $30 million of 6.85% medium term notes due 1999.
On August 9, 1996, the Railroad issued $50 million of 6.72% medium term
notes due 2001 (together the "MTN's"). The MTN's were issued under a $200
million shelf registration declared effective July 23, 1996.
The Railroad has entered into various diesel fuel collar agreements
designed to mitigate significant changes in fuel prices. As a result,
approximately 17% of the Railroad's short-term diesel fuel requirements
through June 1997 are protected against significant price changes.
In October 1996, the Brotherhood of Maintenance of Way Employees (BMWE)
memebership ratified a new agreement which settles wage and work rules
through 1999. The Railroad continues to negotiate with its two remaining
operating unions on a local level, while no agreements are pending
agreements may be reached that require significant lump sum payments.
It is too early to determine if separate agreements will be reached but
management believes available funding sources will be sufficient to meet
any required payments.
The Company believes that its available cash, cash generated by its
operations and cash available from the facilities described above will be
sufficient to meet foreseeable liquidity requirements. Additionally, the
Company believes it has access to the public debt market if needed.
Certain covenants of the Railroad's debt agreements and CCPH's
Revolver require among others specific levels of tangible net worth but
not a specific dividend restriction. Both the Railroad and CCPH were in
compliance with all covenants at September 30, 1996, and do not
contemplate any difficulty maintaining such compliance.
The Railroad paid dividends to the Company of $107.7 million in
1995, $42.5 million in 1994 and $27.4 million in 1993. At September 30,
1996, the Railroad and CCPH exceeded their tangible net worth covenants
by $25.7 million and $20.9 million, respectively. Through October 1996,
the Railroad has declared and paid total dividends of $109.8 million to
the Company, which includes the March 1996 transfer by the Railroad of
its ownership in the Chicago Intermodal Company ("CIC") via a dividend of
CIC stock. The book value of the CIC investment was $5.7 million.
Long-Term Equity Enhancement Program
The Company paid its eighteenth consecutive quarterly cash dividend
on October 8, 1996. The Board believes quarterly dividends are an
integral part of its announced Long-Term Equity Enhancement Program
designed to increase stockholder value through dividend payments and stock
repurchases. Actual dividends are declared by the Board of Directors
based on profitability, capital expenditure requirements, debt service and
other factors.
During 1995, the Company acquired a total of 2,475,000 shares in
open market transactions for $60 million. While share repurchases were
intended to be an annual component of the Long-Term Equity Enhancement
Program, the Board concluded that the level of other capital needs (see
above) warranted the suspension of share repurchases in 1996. The Board
intends to review the level of stock repurchase annually.
Environmental Liabilities
The Company's operations are subject to comprehensive environmental
regulation by federal, state and local authorities. Compliance with such
regulation requires the Company to modify its operations and expend
substantial manpower and financial resources.
Under the federal Comprehensive Environmental Response, Compensation
and Liability Act of 1980 ("Superfund"), and similar state and federal
laws, the Company is potentially liable for the cost of clean-up of
various contaminated sites. The Company has been notified that it is a
Potentially Responsible Party at sites ranging from those with hundreds
of potentially responsible parties to sites at which the Company is
primarily responsible. The Company generally participates in the clean-up
at sites where other substantial parties share responsibility through
cost-sharing arrangements, but under Superfund and other similar laws the
Company can be held jointly and severally liable for all environmental
costs associated with such sites.
The Company is aware of approximately 30 contaminated sites and
various fueling facilities at which it is probably liable for some portion
of the clean-up. The Company paid approximately $6.3 million in 1995
toward the investigation and remediation of those sites, and anticipates
future expenditures of between $1 million and $2 million annually.
Furthermore, recent amendments to the Clean Air Act require the
Environmental Protection Agency to promulgate regulations restricting the
level of pollutants in locomotive emissions which could impose significant
retrofitting requirements, operational inefficiencies or capital
expenditures in the future.
For all known sites of environmental contamination where Company
loss or liability is probable, the Company has recorded an estimated
liability at the time when a reasonable estimate of remediation cost and
Company liability can first be determined. Adjustments to initial
estimates are recorded as necessary based upon additional information
developed in subsequent periods. Estimates of the Company's potential
financial exposure for environmental claims or incidents are necessarily
imprecise because of the difficulty of determining in advance the nature
and extent of contamination, the varying costs of alternative methods of
remediation, the regulatory clean-up standards which will be applied, and
the appropriate allocation of liability among multiple responsible
parties. At September 30, 1996, the Company estimated the probable range
of its estimated liability to be $14.0 million to $48.5 million, and in
accordance with the provisions of SFAS No. 5 had a reserve of $14.0
million for environmental contingencies. This amount is not reduced for
potential insurance recoveries or third-party contribution where the
Company is primarily liable.
The risk of incurring environmental liability in connection with
both past and current activities is inherent in railroad operations.
Decades-old railroad housekeeping practices were not always consistent
with contemporary standards, historically the Company leased substantial
amounts of property to industrial tenants, and the Company continues to
haul hazardous materials which are subject to occasional accidental
release. Because the ultimate cost of known contaminated sites cannot be
definitively established and because additional contaminated sites yet
unknown may be discovered or future operations may result in accidental
releases, no assurance can be given that the Company will not incur
material environmental liabilities in the future. However, based on its
assessments of the facts and circumstances now known, management believes
that it has recorded adequate reserves for known liabilities and does not
expect future environmental charges or expenditures to have a material
adverse effect on the Railroad's financial position, results of
operations, cash flow or liquidity.
CCP Holdings, Inc. Acquisition
On June 12, 1996, the Railroad used proceeds it received from the
issuance of Commercial Paper (average interest rate 5.52% and average
maturity 30 days) to pay a $50.0 million dividend to the Company and to
loan $59.9 million (5.625% per annum) to the Company. The Company used
the $109.9 million and its bank credit lines to acquire CCP Holdings, Inc.
("CCPH"). The transaction closed June 13, 1996, following the effective
date of the approval order issued by the Surface Transportation Board
("STB"). The purchase price was $145.2 million in cash (including $1.6
million in sellers' expenses), the assumption of approximately $2.5
million in debt, and approximately $17.3 million of capitalized lease
obligations. Additionally, the actual purchase price is subject to
various potential adjustments for up to one year after the closing date.
CCPH has two principal operating subsidiaries - the Chicago Central
and Pacific Railroad ("CCPR") and the Cedar River Railroad ("CRR") - which
together comprise a Class II railroad system operating 850 miles of road.
CCPR operates from Chicago west to Omaha, Nebraska, with connecting lines
to Cedar Rapids and Sioux City, Iowa. CRR runs from Waterloo, Iowa north
to Albert Lea, Minnesota.
RAIL
On October 3, 1996, the Railroad sold its investment in an industry-
captive insurance company which will result in a one-time gain in the
fourth quarter of approximately $7 million or $.07 per share.
Recent Accounting Pronouncements
In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123 "Accounting for Stock-
Based Compensation" ("SFAS No. 123"). SFAS No. 123 establishes a fair
value based method of accounting for stock-based compensation plans. The
Company has elected to measure compensation cost using the intrinsic value
based method as permitted under SFAS 123.
In June 1996, the Financial Accounting Standards Board issued
"Statement of Financial Accounting Standards No. 125-Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities" ("SFAS No. 125"). SFAS No. 125 provides accounting and
reporting standards for transfers and servicing of financial assets and
extinguishments of liabilities. SFAS No. 125 provides consistent
standards for distinguishing transfers of financial assets that are sales
from transfers that are secured borrowings. The standard is effective for
events occurring after December 31, 1996 and is to be applied
prospectively. Earlier or retroactive application is not permitted. The
Company is reviewing the standard to ascertain its impact on its
receivable sales program. No determination has been made to date.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
See Exhibit Index on page E-1
ILLINOIS CENTRAL CORPORATION
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf
by the undersigned hereto duly authorized.
ILLINOIS CENTRAL CORPORATION
/s/ DALE W. PHILLIPS
Dale W. Phillips
Vice President & Chief Financial
Officer
/s/ JOHN V. MULVANEY
John V. Mulvaney
Controller
Date: November 8, 1996
ILLINOIS CENTRAL CORPORATION AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Sequential
No. Description Page No.
4 Form of Revolving Credit Agreement
between CCP Holdings, Inc., Chicago,
Central & Pacific Railroad Company,
Cedar River Railroad Company,
Iron Horse Properties, Inc.,
Missouri River Bridge
Company and the First National Bank
of Boston and Bank of America National
Trust and Savings
Association dated as of June 14, 1996. (A)
11 Computation of Income per Common Share E-2
27 Financial Data Schedule (This exhibit
is required to be submitted
electronically pursuant to the rules
and regulations of the Securities and
Exchange Commission and shall not be
deemed filed for the purposes of
Section 11 of the Securities Act of 1933
or Section 18 of the Securities Exchange
Act of 1934).
(A) Included herein as filed but not reproduced.
REVOLVING CREDIT AGREEMENT
Dated as of June 14, 1996
among
CCP HOLDINGS, INC.,
CHICAGO, CENTRAL & PACIFIC RAILROAD COMPANY,
CEDAR RIVER RAILROAD COMPANY,
IRON HORSE PROPERTIES, INC.,
MISSOURI RIVER BRIDGE COMPANY,
as Borrowers,
THE FIRST NATIONAL BANK OF BOSTON and
THE OTHER LENDING INSTITUTIONS LISTED
ON SCHEDULE 1 HERETO
as Banks,
THE FIRST NATIONAL BANK OF BOSTON,
as Administrative Agent and Issuing Bank
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
Co-Agent;
THE FIRST NATIONAL BANK OF BOSTON and BA SECURITIES, INC.,
having acted as co-arrangers for this transaction
and
BA SECURITIES, INC. having acted as Syndication Agent for
this transaction
-ii-
TABLE OF CONTENTS
EXHIBITS AND SCHEDULES
Exhibit A Form of Note
Exhibit B Form of Loan Request
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance
Schedule 1 Banks, Commitments, Commitment Percentages
Schedule 5.3 Titles to Properties; Leases
Schedule 5.7 Litigation
Schedule 5.10 Tax Status
Schedule 5.14 Certain Transactions
Schedule 5.17 Environmental Compliance
Schedule 5.18 Subsidiaries
Schedule 5.22 Agreements with Labor Unions
Schedule 6.2 Chief Executive Offices
Schedule 7.1 Existing Indebtedness
Schedule 7.2 Existing Liens
Schedule 7.3 Existing Investments
-2-
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of June 14, 1996 by
and among (a) CCP HOLDINGS, INC., a Delaware corporation ("CCP
Holdings"), CHICAGO, CENTRAL & PACIFIC RAILROAD COMPANY, a
Delaware corporation ("Chicago Pacific"), CEDAR RIVER RAILROAD COMPANY,
an Iowa corporation ("Cedar River"), IRON HORSE PROPERTIES, INC., a
Delaware corporation ("Iron Horse"), MISSOURI RIVER BRIDGE COMPANY, a
Delaware corporation ("Missouri River" and collectively with CCP
Holdings, Chicago Pacific, Cedar River and Iron Horse, the
Borrowers"), (b) THE FIRST NATIONAL BANK OF BOSTON, a national
banking association and the other lending institutions listed
on Schedule 1 hereto (c) THE FIRST NATIONAL BANK OF BOSTON, as
administrative agent for itself and such other lending institutions
listed on Schedule 1 hereto and as issuing bank with respect to
letters of credit issued hereunder, and (d) BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as co-agent for itself and such other
lending institutions listed on Schedule 1 hereto.
DEFINITIONS AND RULES OF INTERPRETATION.
Definitions.
The following terms shall have the meanings set forth in this Sect.1
or elsewhere in the provisions of this Credit Agreement referred to
below:
Acquisition. The acquisition by IC from the Sellers of the capital
stock of CCP Holdings pursuant to the Acquisition Documents.
Acquisition Documents. The Stock Purchase Agreement, including all
exhibits and schedules thereto, the Escrow Agreement (as defined in
the Stock Purchase Agreement), the Non-Competition Agreement (as
defined in the Stock Purchase Agreement), and all other agreements and
documents required to be entered into or delivered pursuant to
the Stock Purchase Agreement or in connection with the Acquisition,
each in the form delivered to the Administrative Agent on or prior to
the Closing Date.
Adjustment Date. The date which is the first day of the month
immediately following the month in which the Agent and the Banks
shall have received the Borrowers quarterly unaudited financial
statements for the previous fiscal quarter pursuant to Sect. 6.4(b)
and the related Compliance Certificate pursuant to Sect. 6.4(c).
The first Adjustment Date shall occur with respect to the
quarterly financial statements of the Borrowers and related
Compliance Certificate as of December 31, 1996.
Administrative Agent. The First National Bank of Boston acting
as administrative agent for the Banks.
Administrative Agent's Head Office. The Administrative Agent's head
office located at 100 Federal Street, Boston, Massachusetts 02110, or
at such other location as the Administrative Agent may designate
from time to time.
Administrative Agent's Special Counsel. Bingham, Dana & Gould LLP or
such other counsel as may be approved by the Administrative Agent.
Affected Bank. See Sect. 4.9(b). Affiliate. Any Person that would
be considered to be an affiliate of any of the Borrowers under Rule
144(a) of the Rules and Regulations of the Securities and Exchange
Commission, as in effect on the date hereof, if any of the Borrowers
were issuing securities.
Agent's Fees. See Sect. 4.2. Applicable Margin. For each period
commencing on an Adjustment Date through the date immediately
preceding the next Adjustment Date (each a "Rate Adjustment Period"),
the Applicable Margin shall be the applicable margin or rate (in each
case per annum) set forth below with respect to the Borrowers'
Funded Debt to EBITDA Ratio, as determined for the applicable fiscal
period of the Borrowers and their Subsidiaries ending immediately
prior to the applicable Rate Adjustment Period and pertaining to such
Adjustment Date:
Funded Debt Base Rate Eurodollar Rate
to EBITDA Applicable Applicable Commitment
Ratio Margin Margin Fee
Greater than
or equal to
2.50 to 1.00 0.00% 1.000% 0.35%
Less than 2.50
to 1.00 but 0.00% 0.750% 0.30%
greater than
or equal to
1.75 to1.00
Less than 1.75
to 1.00 but 0.00% 0.625%
greater than
or equal to
1.25 to1.00
Less than 1.25
to 1.00 but 0.00% 0.500% 0.20%
greater than
or equal to
0.75 to 1.00
Less than 0.75
to 1.00 0.00% 0.375% 0.15%
Notwithstanding the foregoing, (a) for the period commencing on the
Closing Date to (but not including) the first Adjustment Date
which occurs following December 31, 1996, the Applicable Margin
shall be at least equal to the Applicable Margin set forth above
which would apply given a Funded Debt to EBITDA Ratio of less than
2.50 to 1.00 but greater than or equal to 1.75 to 1.00, (b) if the
Borrowers fail to deliver any quarterly financial statements when due
pursuant to Sect. 6.4(b) hereof or any Compliance Certificate when
due pursuant to Sect. 6.4(c) hereof, then for the period commencing
on the date which is ten (10) Business Days following the date
when such materials are due (if such failure is then continuing
uncured) until the relevant next Adjustment Date, the Applicable
Margin shall be the highest Applicable Margin set forth above, and (c)
if the Rating in effect as of any Adjustment Date shall be less than
BBB- or Baa3 (as applicable) (or if no Rating is available), then
(i) the Applicable Margin solely with respect to interest on Loans
(and not with respect to commitment fees) for the relevant Rate
Adjustment Period shall be equal to the Applicable Margin as
otherwise determined pursuant to the foregoing provisions of this
definition plus an additional 0.25% per annum, and (ii) the Applicable
Margin with respect to commitment fees for the relevant Rate
Adjustment Period as otherwise determined pursuant to the foregoing
provisions of this definition shall in no event be less than 0.30% per
annum.
Assignment and Acceptance. See Sect. 17.1.
Balance Sheet Date. December 31, 1995.
Banks. FNBB and the other lending institutions listed on Schedule 1
hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to Sect. 17.
Base Rate. The higher of (i) the annual rate of interest
announced from time to time by FNBB at its head office in Boston,
Massachusetts, as its "base rate" and (ii) one-half of one percent
(1/2%) above the Federal Funds Effective Rate.
Base Rate Loans. Loans bearing interest calculated by reference to
the Base Rate.
Board. The Surface Transportation Board (the entity which succeeded
to the function and duties of the Interstate Commerce Commission) or
any governmental authority(ies) which succeeds to the function or
duties of the Surface Transportation Board or any portion thereof.
Borrowers. See preamble.
Business Day. Any day (other than a Saturday or Sunday) on
which banking institutions in Boston, Massachusetts are open for
the transaction of banking business and, in the case of Eurodollar
Rate Loans, also a day which is a Eurodollar Business Day.
Capitalized Leases. Leases under which any of the Borrowers or
any of their Subsidiaries is the lessee or obligor, the discounted
future rental payment obligations under which are required to be
capitalized on the balance sheet of the lessee or obligor in
accordance with generally accepted accounting principles.
CCP Holdings. See preamble.
Cedar River. See preamble.
CERCLA. See Sect. 5.17.
Chicago Pacific. See preamble.
Closing Date. The first date on which the conditions set forth in
Sect. 9 and Sect. 10 have been satisfied and any Loans are to be
made or any Letter of Credit is to be issued hereunder.
Closing Fee. See Sect. 4.1.
Co-Agent. Bank of America National Trust and Savings Association
acting as co-agent for the Banks.
Code. The Internal Revenue Code of 1986.
Comfort Letter. The comfort letter relating hereto, dated as of
June 14, 1996 issued by IC and accepted by the Administrative Agent.
Commitment. With respect to each Bank the amount set forth in
Schedule 1 hereto as the amount of such Bank's commitment to
make Loans to, and to participate in the issuance, extension and
renewal of Letters of Credit for the account of, the Borrowers, as the
same may be reduced from time to time; or if such commitment is
terminated pursuant to the provisions hereof, zero; or as such
commitment may be adjusted from time to time pursuant to Sect. 4.9(b)
or pursuant to any assignments entered into by any Bank in
accordance with the provisions of Sect. 17.
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks, as such percentage may be adjusted
from time to time pursuant to Sect. 4.9(b) or pursuant to any
assignments entered into by any Bank in accordance with the provisions
of Sect. 17.
Compliance Certificate. See Sect. 6.4(c).
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of the
Borrowers and their Subsidiaries, consolidated in accordance with
generally accepted accounting principles.
Consolidated Adjusted EBIT. For any fiscal period of the Borrowers
and their Subsidiaries, an amount equal to the sum of (a)
Consolidated EBIT for such fiscal period, plus (b) to the extent
deducted in computing Consolidated Net Income (i) the aggregate
amount of amortization of any good will which is directly attributable
to the Acquisition for such fiscal period, plus (ii) the
aggregate incremental amount of depreciation for such fiscal
period that is directly attributable to (and arises solely in
respect of) any applicable write-up in the book value of assets of
the Borrowers and their Subsidiaries which is directly
attributable to the Acquisition.
Consolidated EBIT. For any fiscal period of the Borrowers and
their Subsidiaries, the sum of (a) Consolidated Net Income
for such period before provisions for federal and state income taxes,
minus (b) the aggregate amount of all extraordinary gains or
extraordinary items of income included in the calculation of
Consolidated Net Income for such period, plus (c) Consolidated
Interest Charges for such period, all as determined in accordance
with generally accepted accounting principles.
Consolidated EBITDA. For any fiscal period of the Borrowers and
their Subsidiaries, an amount equal to the sum of (a) Consolidated EBIT
for such fiscal period, plus (b) to the extent deducted in computing
Consolidated Net Income, the aggregate amount of depreciation and
amortization for such fiscal period.
Consolidated Funded Debt. As at any date of
determination, an amount equal to the sum (without
duplication) of (a) all consolidated Indebtedness of the Borrowers
and their Subsidiaries for borrowed money and Indebtedness in
respect of Capitalized Leases, plus (b) the aggregate amount of all
Government Program Obligations, in each case as such amounts are
outstanding or would be calculated on the date as of which
Consolidated Funded Debt is to be determined and determined in
accordance with generally accepted accounting principles.
Consolidated Interest Charges. For any fiscal period, the
consolidated expenses of the Borrowers and their Subsidiaries
paid or accrued for such period for interest on Indebtedness (including
the current portion thereof) which are deducted in the calculation of
Consolidated Net Income for such period, net of consolidated
interest income, if any, all as determined in accordance with generally
accepted accounting principles.
Consolidated Net Income. For any fiscal period, the consolidated
net income of the Borrowers and their Subsidiaries, after
deduction of all expenses, taxes, and other proper charges,
determined in accordance with generally accepted accounting
principles.
Consolidated Tangible Net Worth. As at any date of determination,
the excess of Consolidated Total Assets over Consolidated Total
Liabilities, and less the sum of:
(a) the total book value of all assets of the Borrowers and their
Subsidiaries properly classified as intangible assets under generally
accepted accounting principles, including such items as good will,
the purchase price of acquired assets in excess of the fair market
value thereof, trademarks, trade names, service marks, brand names,
copyrights, patents and licenses, and rights with respect to the
foregoing; plus
(b) all amounts representing any write-up in the book value of any
assets of the Borrowers or their Subsidiaries resulting from a
revaluation thereof subsequent to the Balance Sheet Date,
excluding adjustments to translate foreign assets and liabilities for
changes in foreign exchange rates made in accordance with
Financial Accounting Standards Board Statement No. 52;
provided, however, that there shall not be deducted in
determining Consolidated Tangible Net Worth, and
Consolidated Tangible Net Worth shall include, in any event, all
applicable good will and write-ups in asset values (if any) which
are, in each case, directly attributable to the Acquisition.
Consolidated Total Assets. All assets of the Borrowers and their
Subsidiaries determined on a consolidated basis in accordance with
generally accepted accounting principles.
Consolidated Total Liabilities. All liabilities of the Borrowers and
their Subsidiaries determined on a consolidated basis in accordance
with generally accepted accounting principles and all Indebtedness of
the Borrower and its Subsidiaries, whether or not so classified.
Conversion Request. A notice given by the Borrowers to the
Administrative Agent of the Borrowers' election to convert or
continue a Loan in accordance with Sect. 2.7.
Credit Agreement. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto.
Default. See Sect. 11.1.
Delinquent Bank. See Sect. 13.5.3
Distribution. The declaration or payment of any dividend on
or in respect of any shares of any class of capital stock or other
equity interests of any of the Borrowers, other than dividends
payable solely in shares of common stock or similar non-preferred
equity interests of any of the Borrowers; the purchase, redemption,
or other retirement of any shares of any class of capital stock or
other equity interests of any of the Borrowers, directly or indirectly
through a Subsidiary of such Borrower or otherwise; the return
of capital by any of the Borrowers to its shareholders or equity
holders as such; or any other distribution on or in respect of any
shares of any class of capital stock or other equity interests of
any of the Borrowers.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank designated
as such in Schedule 1 hereto; thereafter, such other office of such
Bank, if any, located within the United States that will be making or
maintaining Base Rate Loans.
DOT. The United States Department of Transportation or any
governmental authority(ies) which succeeds to all or any portion of
the functions or duties of such governmental authority.
Drawdown Date. The date on which any Loan is made or is to be made,
and the date on which any Loan is converted or continued in
accordance with Sect. 2.7.
Eligible Assignee. Any of (i) a commercial bank organized
under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of
$1,000,000,000; (ii) a savings and loan association or savings
bank organized under the laws of the United States, or any State
thereof or the District of Columbia, and having a net worth of at
least $100,000,000, calculated in accordance with generally accepted
accounting principles; (iii) a commercial bank organized under the laws
of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a political
subdivision of any such country, and having total assets in excess of
$1,000,000,000, provided that such bank is acting through a branch or
agency located in the country in which it is organized or another
country which is also a member of the OECD; and (iv) if, but only if,
any Event of Default has occurred and is continuing, any other
bank,insurance company, commercial finance company or other
financial institution or other Person approved by the
Administrative Agent, such approval not to be unreasonably withheld.
Employee Benefit Plan. Any employee benefit plan within the
meaning of Sect. 3(3) of ERISA maintained or contributed to
by any of the Borrowers or any ERISA Affiliate, other than a
Multiemployer Plan.
Environmental Laws. See Sect. 5.17(a).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer
with any of the Borrowers under Sect. 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a
Guaranteed Pension Plan within the meaning of Sect. 4043 of ERISA and
the regulations promulgated thereunder as to which the requirement of
notice has not been waived.
Eurocurrency Reserve Rate. For any day during an Interest Period
with respect to a Eurodollar Rate Loan, that percentage (expressed as a
decimal) which is in effect on such day under Regulation D of the
Board of Governors of the Federal Reserve System (or any
successor or similar regulation relating to reserve requirements) for
determining the maximum reserve requirement for a member bank of
the Federal Reserve System in New York City with deposits
exceeding $1 billion in respect of "Eurocurrency
Liabilities" (as such term is used in Regulation D)
outstanding from time to time, or in respect of any other category
of liabilities which might be incurred by such member bank in
any eurodollar interbank market to fund Eurodollar Rate Loans.
The Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open
for international business (including dealings in Dollar deposits) in
the London interbank market.
Eurodollar Lending Office. Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other
office of such Bank, if any, that shall be making or maintaining
Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (i) the arithmetic average
of the rates per annum for each Reference Bank (rounded upwards to
the nearest 1/16 of one percent) of the rate at which such
Reference Bank's Eurodollar Lending Office is offered Dollar
deposits by prime banks at or about 10:00 a.m., local time,
two Eurodollar Business Days prior to the beginning of such
Interest Period in the London interbank market, 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 the Eurodollar
Rate Loan of such Reference Bank to which such Interest Period applies,
divided by (ii) a number equal to 1.00 minus the Eurocurrency Reserve
Rate.
Eurodollar Rate Loans. Loans bearing interest calculated by
reference to the Eurodollar Rate.
Event of Default. See Sect. 11.1.
Excess Asset Sale Proceeds. The aggregate, cumulative amount of Net
Cash Proceeds received by any of the Borrowers or their Subsidiaries
pursuant to asset dispositions undertaken under Sect. 7.5.2(b) or
Sect. 7.6; provided, that, ExcessAsset Sale Proceeds shall not in any
event include the Net Cash Proceeds of any Materials and Supplies
Transactions effected by any of the Borrowers; and further provided
that the first $500,000 of other Net Cash Proceeds (determined on an
aggregate, cumulative basis from and after the Closing Date for all
such asset dispositions) shall be excluded from the determination of
Excess Asset Sale Proceeds.
Federal Funds Effective Rate. For any day, the rate per annum
equal to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day)
by the FederalReserve Bank of New York, or, if such rate is not
so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the
Administrative Agent from three funds brokers of recognized
standing selected by the Administrative Agent.
Fee Letter. See Sect. 4.2.
FNBB. The First National Bank of Boston, a national banking
association, in its individual capacity.
FRA. The United States of America, represented by the Secretary of
Transportation acting through the Administrator of Federal Railroad
Administration or the Federal Railroad Administrator's designee.
Fronting Fee. See Sect. 3.6.
Funded Debt to EBITDA Ratio. At any date as of which such ratio
shall be determined, the ratio of (a) the aggregate outstanding
amount of Consolidated Funded Debt as of such date to (b)
Consolidated EBITDA for the period of four consecutive fiscal quarters
ended on such date.
generally accepted accounting principles. (i) When used in Sect.
8, whether directly or indirectly through reference to a capitalized
term used therein, means (A) principles that are consistent with
the principles promulgated or adopted by the Financial Accounting
Standards Board and its predecessors, in effect for the fiscal year
ended on the Balance Sheet Date (subject to changes in generally
accepted accounting principles referred to in the proviso of this
clause (i) of this definition), and (B) to the extent consistent
with such principles, the accounting practice of the Borrowers
reflected in their financial statements for the year ended on the
Balance Sheet Date (subject to changes in generally accepted accounting
principles referred to in the proviso of this clause (i) of this
definition), provided that if any changes in generally accepted
accounting principles with which the Borrowers' independent certified
public accountants concur result in a change in the method of
calculation of any of the financial covenants, standards or terms
contained in this Credit Agreement, the Borrowers and the Banks agree
to amend such provisions to reflect such changes in generally accepted
accounting principles so that the criteria for evaluating the
consolidated financial condition of the Borrowers and their
Subsidiaries shall be the same after such changes as if such changes
had not been made, and (ii) when used in general, other than as
provided above, means principles that are (A) consistent with the
principles promulgated or adopted by the Financial Accounting
Standards Board and its predecessors, as in effect from time to
time, and (B) consistently applied with past financial statements of
the Borrowers adopting the same principles, provided that in each case
referred to in this definition of "generally accepted accounting
principles" a certified public accountant would, insofar as the
use of such accounting principles is pertinent, be in a position to
deliver an unqualified opinion (other than a qualification regarding
changes in generally accepted accounting principles) as to
financial statements in which such principles have been properly
applied.
Government Program Obligations. Obligations and Indebtedness of
any of the Borrowers and their Subsidiaries, on a consolidated
basis, in respect of grants and reimbursements from government
agencies, as referred to in the consolidated balance sheet of the
Borrowers, and the footnotes thereto, in accordance with generally
accepted accounting principles.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Sect. 3(2) of ERISA maintained or contributed to by
any of the Borrowers or any ERISA Affiliate the benefits of
which are guaranteed on termination in full or in part by the PBGC
pursuant to Title IV of ERISA, other than a Multiemployer Plan.
Hazardous Substances. See Sect. 5.17(b).
IC. Illinois Central Corporation, a Delaware corporation.
IC Material Subsidiary(ies). Each of ICR, Waterloo Railway
Company, and, from and after the Closing Date, any other Subsidiary
of IC (a) with total assets having a fair market value, as at any
date of determination, in excess of $5,000,000, or (b) which is
material to the business, assets or financial condition of IC and its
Subsidiaries, taken as a whole.
ICR. Illinois Central Railroad Company, a Delaware corporation.
Indebtedness. Without duplication, (i) all debt and similar
monetary obligations, whether direct or indirect (including,
without limitation, obligations under Capitalized Leases); (ii)
all Indebtedness of others secured by any mortgage, pledge, security
interest, lien, charge, or other encumbrance existing on property
owned or acquired subject thereto, whether or not the
Indebtedness secured thereby shall have been assumed; (iii) all
guarantees, endorsements and other contingent obligations,
whether direct or indirect, in respect of Indebtedness of others,
including any obligation to supply funds to or in any manner to invest
in, directly or indirectly, the debtor, to purchase
Indebtedness, or to assure the owner of Indebtedness against
loss, through an agreement to purchase goods, supplies, or services for
the purpose of enabling the debtor to make payment of the
Indebtedness held by such owner or otherwise; (iv) the Government
Program Obligations, (v) the obligations to reimburse the issuer in
respect of any letters of credit or bankers acceptances and
(vi) obligations to repurchase, redeem, retire, or otherwise make any
required payment of Distributions in respect of, any equity
interests.
Interest Payment Date. (i) As to any Base Rate Loan, the last day
of each calendar quarter, including the calendar quarter in which
there occurs the Drawdown Date thereof; and (ii) as to any
Eurodollar Rate Loan in respect of which the Interest Period is (A)
3 months or less, the last day of such Interest Period and (B) more
than 3 months, the date that is 3 months from the first day of
such Interest Period and, in addition, the last day of such
Interest Period.
Interest Period. With respect to each Loan (i) initially, the
period commencing on the Drawdown Date of such Loan and ending on
the last day of one of the periods set forth below, as selected
by the Borrowers in a Loan Request (A) for any Base Rate Loan, the
last day of the calendar quarter; and (B) for any Eurodollar Rate
Loan, 1, 2, 3 or 6 months; and (ii) thereafter, each period
commencing on the last day of the next preceding Interest Period
applicable to such Loan and ending on the last day of one of the
periods set forth above, as selected by the Borrowers in a
Conversion Request; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a Eurodollar Rate
Loan would otherwise end on a day that is not a Eurodollar Business
Day, that Interest Period shall be extended to the next succeeding
Eurodollar 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
Eurodollar Business Day;
(b) if any Interest Period with respect to a Base Rate Loan would end
on a day that is not a Business Day, that Interest Period shall
end on the next succeeding Business Day;
(c) if the Borrowers shall fail to give notice as provided in Sect.
2.7, the Borrowers shall be deemed to have requested a conversion of
the affected Eurodollar Rate Loan to a Base Rate Loan and the
continuance of all Base Rate Loans as Base Rate Loans on the last
day of the then current Interest Period with respect thereto;
(d) any Interest Period relating to any Eurodollar Rate
Loan that begins on the last Eurodollar 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 Eurodollar Business Day of a calendar month;
and
(e) any Interest Period relating to any Eurodollar Rate Loan
that would otherwise extend beyond the Maturity Date shall end on the
Maturity Date.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock (except
redemptions or repurchases by a corporation of any shares of its
capital stock) or Indebtedness of, or for loans, advances, or capital
contributions to, or in respect of any guaranties (or other
commitments as described under Indebtedness) of obligations of, any
Person, except accounts receivable arising in the ordinary course of
business. In determining the aggregate amount of Investments
outstanding at any particular time: (i) the amount of any
Investment represented by a guaranty shall be taken at not less than
the principal amount of the obligations guaranteed and still
outstanding; (ii) there shall be included as an Investment all
interest accrued with respect to Indebtedness constituting an
Investment unless and until such interest is paid; (iii) there shall be
deducted in respect of each such Investment any amount received as a
return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (iv)
there shall not be deducted in respect of any Investment any amounts
received as earnings on such Investment, whether as dividends,
interest or otherwise, except that accrued interest included as
provided in the foregoing clause (ii) may be deducted when paid;
and (v) there shall not be deducted from the aggregate amount of
Investments any decrease in the value thereof.
Iron Horse. See preamble.
Issuing Bank. The First National Bank of Boston acting as Issuing Bank
with respect to Letters of Credit.
Lending Office. See Sect. 4.3.2(a).
Letter of Credit. See Sect. 3.1.1.
Letter of Credit Application. See Sect. 3.1.1.
Letter of Credit Fee. See Sect. 3.6.
Letter of Credit Participation. See Sect. 3.1.4.
Liens. Any mortgage, lien, charge, security interest or other
encumbrance of any kind upon any property or assets of any character,
or upon the income or profits therefrom and any conditional sale or
other title retention agreement, device or arrangement (including
Capitalized Leases).
Lien Search Questionnaires. The respective Lien Search Questionnaires
each dated on or prior to the Closing Date and executed by each
of the Borrowers, each in form and substance satisfactory to the
Administrative Agent.
Loan Documents. This Credit Agreement, the Notes, the Letter of
Credit Applications, the Letters of Credit, the Comfort Letter, and
the Fee Letter.
Loan Request. See Sect. 2.6.
Loans. Revolving credit loans made or to be made by the Banks to
the Borrowers pursuant to Sect. 2.
Majority Banks. As of any date, the Banks holding at least sixty-six
and two-thirds percent (66 2/3%) of the outstanding principal
amount of the Loans on such date; and if no such principal is
outstanding, the Banks whose aggregate Commitments constitutes at
least sixty-six and two-thirds percent (66 2/3%) of the Total
Commitment.
Materials and Supplies Transactions. The sale of certain
materials and supplies of the Borrowers having an aggregate book
value not to exceed $4,000,000 to ICR for a price approximately equal
to the book value of such assets, which sale shall occur within three
months after the Closing Date.
Maturity Date. June 14, 2001.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of
Credit, as such aggregate amount may be reduced from time to time
pursuant to the terms of the Letters of Credit.
Missouri River. See preamble.
Moody's. Moody's Investors Service, Inc.
Multiemployer Plan. Any multiemployer plan within the meaning of
Sect. 3(37) of ERISA maintained or contributed to by any of the
Borrowers or any ERISA Affiliate.
Net Cash Proceeds. With respect to any sale or other disposition of
any asset by any Person, the excess of (i) the gross cash proceeds
received by such Person from the sale or disposition of any such
asset of such Person, plus, as and when received, all cash payments
received subsequent to such sale or disposition representing (A) any
deferred purchase price therefor or (B) any cash proceeds from the
sale or other disposition of any cash equivalents (or any deferred
purchase price obligations) received therefor over (ii) the sum of (A)
a reasonable reserve for any liabilities payable incident to such
sale or disposition, (B) the reasonable direct costs and expenses
incurred by such Person in connection with such sale or
disposition (including, without limitation, reasonable brokerage
fees and commissions),(C)all payments actually made on any
Indebtedness (other than the Obligations) or other
obligations which are secured by any assets subject to such sale or
disposition which are required to be repaid out of the proceeds
from such transaction and (D) actual tax payments made or to be
made in connection therewith.
New Equity Issuances. The aggregate amount of any proceeds from
(a) the sale or issuance by CCP Holdings to IC of any of the
capital stock or equity interests of CCP Holdings or any warrants,
rights, or options to acquire its capital stock or equity
interests, or (b) any capital contributions made by IC in respect
of any such capital stock, equity interests, warrants, rights or
options.
Non-Affected Bank(s). As at any date of determination, those Banks
which are not Affected Banks.
Notes. See Sect. 2.4.
Obligations. All indebtedness, obligations and liabilities of
any of the Borrowers and their Subsidiaries to any of the Banks, the
Issuing Bank and the Administrative Agent, individually or
collectively, existing on the date of this Credit Agreement or
arising thereafter, direct or indirect, joint or several, absolute
or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law
or otherwise, in each case arising or incurred under this Credit
Agreement or any of the other Loan Documents or in respect of any
of the Loans made or Reimbursement Obligations incurred or any
of the Notes, Letter of Credit Applications, Letters of Credit or
other instruments at any time evidencing any thereof.
outstanding. With respect to the Loans, the aggregate unpaid
principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by Sect. 4002
of ERISA and any successor entity or entities having similar
responsibilities.
Phantom Stock Unit Holders. Collectively, R. Kevin Trout, John A.
Adair and Gregory L. Amys.
Permitted Liens. Liens, security interests and other encumbrances
permitted by Sect. 7.2.
Person. Any individual, corporation, limited liability company,
partnership, trust, unincorporated association, business, or other
legal entity, and any government or any governmental agency or
political subdivision thereof.
Rate Adjustment Period. See the definition of Applicable
Margin.
Rated Debt. ICR's 1993 Senior Notes (as defined in the Third Amended
and Restated Revolving Credit Agreement dated as of April 28, 1995
among ICR, FNBB, as administrative agent, Bank of America Illinois,
as co-agent, and certain other lenders, as in effect on the date
hereof).
Rating. The higher of the rating by Moody's or by S&P of the Rated
Debt of ICR, provided that (i) if either Moody's or S&P shall not
have in effect a Rating for the Rated Debt (other than because such
rating agency shall no longer be in the business of rating
corporate debt obligations), the Rating shall be deemed to be the
Rating of the other rating agency in respect of Rated Debt, (ii) if
both Moody's and S&P shall not have in effect a Rating for the Rated
Debt (other than because such rating agencies shall no longer be in
the business of rating corporate debt obligations or because no Rated
Debt shall be outstanding), then no Rating shall be deemed to be
available for purposes of determining the Applicable Margin, (iii) if
the rating system of Moody's or S&P shall change, or if either such
rating agency shall cease to be in the business of rating corporate
debt obligations, or if no Rated Debt shall be outstanding, then
the Borrowers and the Banks shall negotiate in good faith to
amend the references to specific ratings for Rated Debt in the
provisions hereof for determining the Applicable Margin to reflect
such changed rating system, the non-availability of ratings from
such rating agency, or the repayment of all Rated Debt
outstanding, as applicable, and (iv) to determine the higher of the
rating of Rated Debt by Moody's and by S&P, the S&P ratings set
forth in the chart below shall be deemed to be equivalent to the
Moody's rating set forth opposite such S&P rating:
S&P Moody's
A A2
A- A3
BBB+ Baa1
BBB Baa2
BBB- Baa3
BB+ Ba1
BB Ba2
Real Estate. All real property at any time owned or leased (as
lessee or sublessee) by any of the Borrowers or any of their
Subsidiaries.
Record. The grid attached to a Note, or the continuation of
such grid, or any other similar record, including computer
records, maintained by any Bank with respect to any Loan referred to
in such Note.
Reference Bank(s). Collectively, all of FNBB, Bank of America
Illinois and The Chase Manhattan Bank, N.A., and individually, any
of such Persons.
Reimbursement Obligation. The Borrowers' obligation to reimburse the
Issuing Bank and the Banks on account of any drawing under any Letter
of Credit as provided in Sect. 3.2.
S&P. Standard & Poors Ratings Group.
Sellers. Collectively, Donald R. Wood, Jr., Lyle D. Reed, the Ann
L. and Walter A. Drexel Revocable Trust and the Reed Charitable
Remainder Unitrust.
Solvent. See Sect. 5.5.2.
Special Dividend. The dividend in an amount not to exceed
$43,000,000 to be paid by CCP Holdings to IC on the Closing Date.
Stock Purchase Agreement. The Stock Purchase Agreement dated as of
January 17, 1996 among the Sellers, the Phantom Stock Unit Holders,
IC and CCP Holdings, as amended by Amendment No. 1 thereto dated as
of June 13, 1996, in the form delivered to the Administrative
Agent on or prior to the Closing Date.
Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly
or indirectly through a Subsidiary or Subsidiaries at least a majority
(by number of votes) of the outstanding Voting Stock.
Total Commitment. The sum of the Commitments of all of the Banks, each
as in effect from time to time.
Type. As to any Loan its nature as a Base Rate Loan or a Eurodollar
Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500 or any
successor version thereto adopted by the Issuing Bank in the ordinary
course of its business as a letter of credit issuer and in effect
at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for
which the Borrowers have not reimbursed the Issuing Bank and the
Banks.
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as
such holders, to vote for the election of a majority of the
directors (or persons performing similar functions) of the
corporation, association, trust or other business entity involved,
whether or not the right so to vote exists by reason of the happening
of a contingency.
Rules of Interpretation.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this
Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors
and permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they
refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the
Uniform Commercial Code as in effect in the Commonwealth of
Massachusetts, have the meanings assigned to them therein, with
the term "instrument" being that defined under Article 9 of the
Uniform Commercial Code.
(h) Reference to a particular "Sect. " refers to that section of
this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Credit Agreement as a whole and not to
any particular section or subdivision of this Credit Agreement.
THE REVOLVING CREDIT FACILITY.
Commitment to Lend.
Subject to the terms and conditions set forth in this Credit
Agreement, each of the Banks severally agrees to lend to the Borrowers
and the Borrowers may borrow, repay, and reborrow from time to time
on a joint and several basis from the Closing Date to (but not
including) the Maturity Date upon notice by the Borrowers to the
Administrative Agent given in accordance with Sect. 2.6, such sums as
are requested by the Borrowers up to a maximum aggregate amount
outstanding (after giving effect to all amounts requested) at any
one time equal to such Bank's Commitment minus such Bank's
commitment Percentage of the sum of the Maximum Drawing Amount
and all Unpaid Reimbursement Obligations provided that the sum of
the outstanding amount of the Loans (after giving effect to all
amounts requested) plus the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations shall not at any time exceed the
Total Commitment. The Loans shall be made pro rata in accordance
with each Bank's Commitment Percentage. Each request for a Loan
hereunder shall constitute a representation and warranty by the
Borrowers that the conditions set forth in Sect. 9.11 (subject to the
satisfaction of the Administrative Agent as to the matters set
forth therein which expressly require such satisfaction) and Sect.
10.1, in the case of the initial Loans to be made or converted on the
Closing Date, and Sect. 10.1, in the case of all other Loans, have
been satisfied on the date of such request.
Commitment Fees.
The Borrowers agree jointly and severally to pay to the Administrative
Agent for the accounts of the Banks in accordance with their
respective Commitment Percentages a commitment fee at the rate per
annum equal to the Applicable Margin specified for the commitment fee
herein multiplied by the average daily amount during each calendar
quarter or portion thereof from the Closing Date to the Maturity Date
by which the Total Commitment minus the sum of the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceeds the
outstanding amount of Loans during such calendar quarter. The
commitment fee shall be payable quarterly in arrears on the last
day of each calendar quarter for such calendar quarter then ending
commencing on the first such date following the date hereof, with a
final payment on the Maturity Date or any earlier date on which the
Commitments shall terminate.
Reduction of Total Commitment.
(a) The Borrowers shall have the right at any time and from time to
time upon five (5) Business Days prior written notice to the
Administrative Agent to reduce by $1,000,000 or an integral multiple
of $500,000 in excess thereof or terminate entirely the Total
Commitment, whereupon the Commitments of the Banks shall be
reduced pro rata in accordance with their respective Commitment
Percentages of the amount specified in such notice or, as the case may
be,terminated. Promptly after receiving any notice of the
Borrowers delivered pursuant to this Sect. 2.3, the
administrative Agent will notify the Banks of the substance thereof.
Upon the effective date of any such reduction or termination, the
Borrowers shall pay to the Administrative Agent for the respective
accounts of the Banks the full amount of any commitment fee then
accrued on the amount of the reduction. No reduction or
termination of the Commitments may be reinstated.
(b) On or prior to the date which is ten (10) days following the
end of each fiscal quarter of the Borrowers,the Total Commitment
shall be automatically reduced by an amount equal to the aggregate
amount, if any, of Excess Asset Sale Proceeds received by the
Borrowers in connection with all asset dispositions effected by any of
the Borrowers under Sect. 7.5.2(b) or Sect. 7.6 during such fiscal
quarter most recently ended, whereupon the Commitments of the Banks
shall automatically be reduced pro rata in accordance with their
respective Commitment Percentages of the amount of such Excess
Asset Sale Proceeds. Upon the effective date of each such automatic
mandatory reduction of the Total Commitment, the Borrowers shall pay
to the Administrative Agent for the respective accounts of the
Banks the full amount of any commitment fee then accrued on the amount
of the reduction.
No such mandatory reduction pursuant to this Sect. 2.3(b) may be
reinstated. The Borrowers shall promptly provide to the
Administrative Agent all such information as shall be relevant
to computing the correct amount of each such mandatory reduction
pursuant to this Sect. 2.3(b), and such related information as
the Administrative Agent may reasonably request, in any event no
later than ten (10) days following the end of each fiscal quarter
with respect to which any such reduction shall be required.
(c) On or prior to the date which is ten (10) days following the
end of each fiscal quarter of the Borrowers, the Total Commitment
shall also be automatically reduced by an amount equal to the sum of
(i) the aggregate amount, if any, of New Equity Issuances during such
fiscal quarter most recently ended, plus (ii) the aggregate amount,
if any, of additional Indebtedness incurred by the Borrowers and
permitted under Sect. 7.1(k) hereof during such fiscal quarter most
recently ended, whereupon the Commitments of the Banks shall
automatically be reduced pro rata in accordance with their respective
Commitment Percentages of the amount of such sum. Upon the
effective date of each such automatic mandatory reduction of the
Total Commitment, the Borrowers shall pay to the Administrative Agent
for the respective accounts of the Banks the full amount of any
commitment fee then accrued on the amount of the reduction. No
such mandatory reduction pursuant to this Sect. 2.3(c) may be
reinstated. The Borrowers shall promptly provide to the
Administrative Agent all such information as shall be relevant
to computing the correct amount of each such mandatory reduction
pursuant to this Sect. 2.3(c), and such related information as
the Administrative Agent may reasonably request, in any event no
later than ten (10) days following the end of each fiscal quarter
with respect to which any such reduction shall be required.
The Notes.
The Loans shall be evidenced by separate promissory notes of the
Borrowers in substantially the form of Exhibit A hereto (each a
"Note"), dated as of the Closing Date (or other such date on which a
Bank may become a party hereto in accordance with Sect. 17 hereof)
and completed with appropriate insertions. One Note shall be
payable to the order of each Bank in a principal amount equal to
such Bank's Commitment or, if less, the outstanding amount of all Loans
made by such Bank, plus interest accrued thereon, as set forth below.
The Borrowers irrevocably authorize each Bank to make or cause to be
made, at or about the time of the Drawdown Date of any Loan or at
the time of receipt of any payment of principal on such Bank's Note,
an appropriate notation on such Bank's Record reflecting the making of
such Loan or (as the case may be) the receipt of such payment. The
outstanding amount of the Loans set forth on such Bank's Record shall
be prima facie evidence of the principal amount thereof owing and
unpaid to such Bank, but the failure to record, or any error in so
recording, any such amount on such Bank's Record shall not limit
or otherwise affect the obligations of the Borrowers hereunder or
under any Note to make payments of principal of or interest on any
Note when due.
Interest on Loans.
Except as otherwise provided in Sect. 4.11,
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day
of the Interest Period with respect thereto at a rate per annum
equal to the Base Rate plus the Applicable Margin with respect to
Base Rate Loans as in effect from time to time.
(b) Each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the
last day of the Interest Period with respect thereto at a rate per
annum equal to the Eurodollar Rate determined for such Interest
Period plus the Applicable Margin with respect to Eurodollar Rate
Loans as in effect from time to time.
(c) The Borrowers promise to pay interest on each Loan in arrears
on each Interest Payment Date with respect thereto.
Requests for Loans.
The Borrowers shall give to the Administrative Agent written notice
in the form of Exhibit B hereto (or telephonic notice
confirmed in a writing in the form of Exhibit B hereto) of each Loan
requested hereunder (a "Loan Request") (i) no later than 10:00 a.m.,
Boston time, on the proposed Drawdown Date of any Base Rate Loan and
(ii) no later than 11:00 a.m., Boston time, three (3) Eurodollar
Business Days prior to the proposed Drawdown Date of any Eurodollar
Rate Loan. Each such notice shall specify (A) the principal amount
of the Loan requested, (B) the proposed Drawdown Date of such Loan, (C)
the Interest Period for such Loan and (D) the Type of such Loan.
Promptly upon receipt of any such notice, the Administrative Agent
shall notify each of the Banks thereof. Each Loan Request shall
be irrevocable and binding on the Borrowers and shall obligate the
Borrowers to accept the Loan requested from the Banks on the proposed
Drawdown Date. Each Loan Request shall be in a minimum aggregate
amount of $1,000,000 or an integral multiple of $500,000 in excess
thereof.
Conversion Options.
Conversion to Different Type of Loan.
The Borrowers may elect from time to time to convert any
outstanding Loan to a Loan of another Type, provided that (i) with
respect to any such conversion of a Loan to a Base Rate Loan, the
Borrowers shall give the Administrative Agent written notice of
such election no later than 10:00 a.m., Boston time, on the proposed
day of such conversion; (ii) with respect to any such conversion
of a Loan to a Eurodollar Rate Loan, the Borrowers shall give the
Administrative Agent at least three (3) Eurodollar Business Days
prior written notice of such election (no later than 11:00 a.m.,
Boston time, on such day); (iii) with respect to any such conversion
of a Eurodollar Rate Loan at a time other than the end of the
Interest Period applicable thereto, the Borrowers shall pay, upon
demand, any amounts due to the Banks pursuant to Sect. 4.10 hereof;
and (iv) no Base Rate Loan may be converted into a
Eurodollar Rate Loan when any Default or Event of Default has
occurred and is continuing. If the Borrowers fail to give
notice of conversion or continuation of a Loan as required
herein, such Loan shall automatically be converted or continued, as
the case may be, as a Base Rate Loan on the last day of the Interest
Period with respect thereto. On the date on which such conversion is
being made each Bank shall take such action as is necessary to
transfer its Commitment Percentage of such Loans to its Domestic
Lending Office or its Eurodollar Lending Office, as the case may be.
All or any part of outstanding Loans of any Type may be converted
into a Loan of another Type as provided herein, provided that
any partial conversion shall be in an aggregate principal amount of
$1,000,000 or an integral multiple of $500,000 in excess thereof.
Each Conversion Request relating to the conversion of a Loan to
a Eurodollar Rate Loan shall be irrevocable by the Borrowers.
Continuation of Type of Loan.
Any Loan of any Type may be continued as a Loan of the same Type upon
the expiration of an Interest Period with respect thereto by
compliance by the Borrowers with the notice provisions
contained in Sect. 2.7.1; provided that no Eurodollar Rate Loan may
be continued as such when any Default or Event of Default has
occurred and is continuing, but shall be automatically converted to a
Base Rate Loan on the last day of the first Interest Period
relating thereto ending during the continuance of any Default or
Event of Default of which officers of the Administrative Agent active
upon Borrowers' account have actual knowledge. In the event that
the Borrowers fail to provide any such notice with respect to
the continuation of any Eurodollar Rate Loan as such, then such
Eurodollar Rate Loan shall be automatically converted to a Base Rate
Loan on the last day of the first Interest Period relating
thereto. The Administrative Agent shall notify the Banks
promptly when any such automatic conversion contemplated by this
Sect. 2.7 is scheduled to occur.
Eurodollar Rate Loans.
Any conversion to or from Eurodollar Rate Loans shall be in such
amounts and be made pursuant to such elections so that, after giving
effect thereto, the aggregate principal amount of all Eurodollar Rate
Loans having the same Interest Period shall not be less than
$1,000,000 or a whole multiple of $500,000 in excess thereof.
Funds for Loans.
Funding Procedures.
Not later than 1:00 p.m. (Boston time) on the proposed Drawdown
Date of any Loans, each of the Banks will make available to the
Administrative Agent, at the Administrative Agent's Head Office, in
immediately available funds, the amount of such Bank's Commitment
Percentage of the amount of the requested Loans. Upon receipt from
each Bank of such amount, and upon receipt of the documents required
by Sect. Sect. 9 and 10 and the satisfaction of the other
conditions set forth therein, to the extent applicable, the
Administrative Agent will make available to the Borrowers the aggregate
amount of such Loans made available to the Administrative Agent by
the Banks. The failure or refusal of any Bank to make available
to the Administrative Agent at the aforesaid time and place on
any Drawdown Date the amount of its Commitment Percentage of the
requested Loans shall not relieve any other Bank from its
severalobligation hereunder to make available to the
Administrative Agent the amount of such other Bank's Commitment
Percentage of any requested Loans. Advances by Administrative Agent.
The Administrative Agent may, unless notified to the contrary by
any Bank prior to a Drawdown Date, assume that such Bank has
made available to the Administrative Agent on such Drawdown Date
the amount of such Bank's Commitment Percentage of the Loans to be made
on such Drawdown Date, and the Administrative Agent may (but it
shall not be required to), in reliance upon such assumption,
make available to the Borrowers a corresponding amount. If any Bank
makes available to the Administrative Agent such amount on a date
after such Drawdown Date, such Bank shall pay to the Administrative
Agent on demand an amount equal to (i) the average computed for the
period referred to in clause (iii) below, of the Federal Funds
Effective Rate, times (ii) the amount of such Bank's Commitment
Percentage of such Loans, times (iii) a fraction, the numerator of
which is the number of days that elapse from and including such
Drawdown Date to the date on which the amount of such Bank's
Commitment Percentage of such Loans shall become immediately available
to the Administrative Agent, and the denominator of which is 365. A
statement of the Administrative Agent submitted to such Bank with
respect to any amounts owing under this paragraph shall be prima
facie evidence of the amount due and owing to the administrative
Agent by such Bank. If the amount of such Bank's Commitment
Percentage of such Loans is not made available to the Administrative
Agent by such Bank within three (3) Business Days following
such Drawdown Date, the Administrative Agent shall be entitled to
recover such amount from the Borrowers on demand, with interest
thereon (payable to the Administrative Agent in lieu of and not in
addition to any interest thereon payable by the Borrowers to such
Bank) at the rate per annum applicable to the Loans made on such
Drawdown Date. If the Borrowers are required to repay any amounts to
the Administrative Agent pursuant to the foregoing sentence,
then the Borrowers may replace the Bank that so failed to make
available to the Administrative Agent its Commitment Percentage of
such Loans pursuant to Sect. 4.9(b) hereof.
Maturity of Loans.
The Borrowers jointly and severally promise to pay on the Maturity
Date, and there shall become absolutely due and payable on the
Maturity Date, all of the Loans outstanding on such date, together
with any and all accrued and unpaid interest thereon. Mandatory
Repayments of Loans.
If at any time the sum of the outstanding amount of the Loans, the
Maximum Drawing Amount and all Unpaid Reimbursement
Obligations exceeds the Total Commitment, then the Borrowers shall
immediately pay the amount of such excess to the Administrative
Agent for the respective accounts of the Banks for application:
first, to any Unpaid Reimbursement Obligations; second, to the Loans
(first to the principal of the Base Rate Loans outstanding and then to
the principal of Eurodollar Rate Loans outstanding); and third,
to provide to the Administrative Agent cash collateral for
Reimbursement Obligations as contemplated by Sect. 3.2(b) and (c).
Each payment of any Unpaid Reimbursement Obligations or prepayment of
Loans shall be allocated among the Banks, in proportion, as nearly as
practicable, to each Reimbursement Obligation or (as the case
may be) the respective unpaid principal amount of each Bank's Note,
with adjustments to the extent practicable to equalize any prior
payments or repayments not exactly in proportion.
Optional Repayments of Loans.
The Borrowers shall have the right, at their election, to repay the
outstanding amount of the Loans, as a whole or in part, at any time
without penalty or premium, provided that if the Borrowers make any
full or partial prepayment of the outstanding amount of any Eurodollar
Rate Loans pursuant to this Sect. 2.11 on a day which is other than the
last day of the Interest Period relating thereto, the Borrowers
shall also pay, on demand, any amounts due to the Banks pursuant to
Sect. 4.10 hereof. The Borrowers shall give the
Administrative Agent prior written notice, no later than 10:00
a.m., Boston time, on the day of any proposed prepayment
pursuant to this Sect. 2.11 of Base Rate Loans, and no later than 11:00
a.m., Boston time, at least three (3)Eurodollar Business Days
prior to any proposed prepayment pursuant to this Sect. 2.11 of
Eurodollar Rate Loans, in each case specifying the proposed date of
prepayment of Loans and the principal amount to be prepaid. Each
such partial prepayment of the Loans shall be in an integral multiple
of $1,000,000 or an integral multiple of $500,000 in excess
thereof, shall be accompanied by the payment of accrued interest
on the principal prepaid to the date of prepayment and shall be
applied, in the absence of instruction by the Borrowers, first to the
principal of Base Rate Loans and then to the principal of
Eurodollar Rate Loans. Each partial prepayment shall be allocated
among the Banks, in proportion, as nearly as practicable, to the
respective unpaid principal amount of each Bank's Note, with
adjustments to the extent practicable to equalize any prior
repayments not exactly in proportion.
LETTERS OF CREDIT.
Letter of Credit Commitments.
Commitment to Issue Letters of Credit. Subject to the terms and
conditions hereof and the execution and delivery by the Borrowers of a
letter of credit application on the Issuing Bank's customary form (a
"Letter of Credit Application"), the Issuing Bank on behalf of the
Banks and in reliance upon the agreement of the Banks set forth
in Sect. 3.1.4 and upon the representations and warranties of
the Borrowers contained herein, agrees, in its individual capacity,
to issue, extend and renew for the joint and several account of
the Borrowers one or more standby or documentary letters of
credit (individually, a "Letter of Credit"), in such form as may be
requested from time to time by the Borrowers and agreed to by the
Issuing Bank; provided, however, that, after giving effect to such
request, (a) the sum of the aggregate Maximum Drawing Amount
plus all Unpaid Reimbursement Obligations does not exceed
$5,000,000 and (b) the sum of (i) the Maximum Drawing Amount of all
Letters of Credit, (ii) all Unpaid Reimbursement Obligations, and
(iii) the amount of all Loans outstanding shall not exceed the
Total Commitment.
Letter of Credit Applications.
Each Letter of Credit Application shall be completed to the
satisfaction of the Issuing Bank. In the event that any provision
of any Letter of Credit Application shall be inconsistent with any
provision of this Credit Agreement, then the provisions of this
Credit Agreement shall, to the extent of any such inconsistency,
govern.
Terms of Letters of Credit.
Each Letter of Credit issued, extended or renewed hereunder shall,
among other things, (i) provide for the payment of sight drafts for
honor thereunder when presented in accordance with the terms thereof
and when accompanied by the documents described therein, and (ii)
have an expiry date no later than the date which is fourteen (14)
days (or, if the Letter of Credit is confirmed by a confirmer or
otherwise provides for one or more nominated persons to take up
documents thereunder, forty-five (45) days) prior to the Maturity Date.
Each Letter of Credit so issued, extended or renewed shall be
subject to the Uniform Customs.
Reimbursement Obligations of Banks.
Each Bank severally agrees that it shall be absolutely liable,
without regard to the occurrence of any Default or Event of Default or
any other condition precedent whatsoever, to the extent of such
Bank's Commitment Percentage, to reimburse the Issuing Bank on demand
for the amount of each draft paid by the Issuing Bank under each
Letter of Credit to the extent that such amount is not reimbursed by
the Borrowers pursuant to Sect. 3.2 (such agreement for a Bank being
called herein the "Letter of Credit Participation" of such Bank).
Participations of Banks.
Each such payment made by a Bank shall be treated as the purchase
by such Bank of a participating interest in the Borrowers'
Reimbursement Obligation under Sect. 3.2 in an amount equal to such
payment. Each Bank shall share in accordance with its participating
interest in any interest which accrues pursuant to Sect. 3.2.
Reimbursement Obligation of the Borrowers.
In order to induce the Issuing Bank to issue, extend and renew each
Letter of Credit and the Banks to participate therein, the Borrowers
hereby jointly and severally agree to reimburse or pay to the
Administrative Agent, for the account of the Issuing Bank or (as
the case may be) the anks, with respect to each Letter of Credit
issued,extended or renewed by the Issuing Bank hereunder, (a) except
as otherwise expressly provided in Sect. 3.2(b) and (c), no later
than the second Business Day following each date that any draft
presented under such Letter of Credit is honored by the Issuing Bank,
or the Issuing Bank otherwise makes a payment with respect thereto,
(i) the amount paid by the Issuing Bank under or with respect to such
Letter of Credit, (ii) interest thereon at an annual rate equal to the
Base Rate plus the Applicable Margin with respect to Base Rate Loans,
for the account of the Issuing Bank, and (iii) the amount of
any reasonable out-of-pocket costs and expenses whatsoever incurred
by the Issuing Bank or any Bank in connection with any payment made by
the Issuing Bank or any Bank under, or with respect to, such Letter of
Credit,(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an amount
equal to such difference,which amount shall be held by the
Administrative Agent for the benefit of the Issuing Bank, the Banks
and the Administrative Agent as cash collateral for all
reimbursement Obligations, and (c) upon the termination of the Total
Commitment, or the acceleration of the Reimbursement Obligations
with respect to all Letters of Credit in accordance with Sect. 11,
an amount equal to 100% of the then Maximum Drawing Amount on all
Letters of Credit, which amount shall be held by the
Administrative Agent for the benefit of the Issuing Bank, the
Banks and the Administrative Agent as cash collateral for all
Reimbursement Obligations.
Each such payment shall be made to the Administrative Agent at the
Administrative Agent's Head Office in immediately available funds.
Interest on any and all amounts remaining unpaid by the Borrowers
under this Sect. 3.2 at any time from the date such amounts become due
and payable (whether as stated in this Sect. 3.2, by acceleration or
otherwise) until payment in full (whether before or after judgment)
shall be payable to the Administrative Agent on demand at the rate
specified in Sect. 4.11 for overdue principal on the Loans.
Letter of Credit Payments.
If any draft shall be presented or other demand for payment shall
be made under any Letter of Credit, the Issuing Bank shall notify
the Borrowers of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay
such draft or honor such demand for payment. If the Borrowers fail to
reimburse the Issuing Bank as provided in Sect. 3.2 on or before the
second Business Day after the date that such draft is paid or other
payment is made by the Issuing Bank, the Issuing Bank may at any time
thereafter notify the Banks of the amount of any such Unpaid
Reimbursement Obligation. No later than 3:00 p.m. (Boston time)
on the Business Day next following the receipt of such notice, each
Bank shall make available to the Issuing Bank, at the Administrative
Agent's Head Office, in immediately available funds, such Bank's
Commitment Percentage of such Unpaid Reimbursement Obligation, together
with an amount equal to (i) the average, computed for the period
referred to in clause (iii) below, of the Federal Funds Effective
Rate, times (ii) the amount equal to such Bank's Commitment
Percentage of such Unpaid Reimbursement Obligation, times (iii) a
fraction, the numerator of which is the number of days that elapse
from and including the date the Issuing Bank paid the draft
presented for honor or otherwise made payment to the date on which
such Bank's Commitment Percentage of such Unpaid
Reimbursement Obligation shall become immediately available to the
Issuing Bank, and the denominator of which is 360. The
responsibility of the Issuing Bank to the Borrowers and the Banks
shall be only to determine that the documents (including each
draft) delivered under each Letter of Credit in connection with such
presentment shall be in conformity in all material respects with such
Letter of Credit.
Obligations Absolute.
The Borrowers' joint and several obligations under this Sect. 3 shall
be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of
Default or any condition precedent whatsoever or any setoff,
counterclaim or defense to payment which any of the Borrowers may have
or have had against the Issuing Bank, any Bank, the Administrative
Agent or any beneficiary of a Letter of Credit. Each of the
Borrowers further agrees with the Issuing Bank, the Administrative
Agent and the Banks that the Issuing Bank, the
administrative Agent and the Banks shall not be responsible for, and
the Borrowers' joint and several Reimbursement Obligations under
Sect. 3.2 shall not be affected by, among other things, the validity
or genuineness of documents or of any endorsements thereon, even if
such documents should in fact prove to be in any or all respects
invalid, fraudulent or forged, or any dispute between or among
any of the Borrowers, the beneficiary of any Letter of Credit or
any financing institution or other party to which any Letter of Credit
may be transferred or any claims or defenses whatsoever of any
of the Borrowers against the beneficiary of any Letter of Credit or
any such transferee. The Issuing Bank, the Administrative Agent and
the Banks shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any
Letter of Credit. Each of the Borrowers agrees that any action taken
or omitted by the Issuing Bank, the Administrative Agent or any Bank
under or in connection with each Letter of Credit and the related
drafts and documents, if done in good faith, shall be binding upon the
Borrowers and shall not result in any liability on the part of
the Issuing Bank, the Administrative Agent or any Bank to the
Borrowers, in the absence of (i) gross negligence or willful misconduct
by the Issuing Bank or its applicable correspondents or (ii) the
failure by the Issuing Bank to pay under a Letter of Credit after
presentation of a draft and documents strictly complying with
such Letter of Credit.
Reliance by Issuer.
To the extent not inconsistent with Sect. 3.4, the Issuing Bank shall
be entitled to rely, and shall be fully protected in relying upon,
any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex
or teletype message, statement, order or other document 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, independent accountants and other experts selected by the
Issuing Bank or the Administrative Agent.
The Issuing Bank shall be fully justified in failing or refusing
to take any action under this Credit Agreement unless it shall
first have received such advice or concurrence of the Majority
Banks as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Banks against
any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The
Issuing Bank shall in all cases be fully protected in acting,
or in refraining from acting, under this Credit Agreement in
accordance with a request of the Majority Banks, and such
request and any action taken or failure to act pursuant thereto shall
be binding upon the Banks and all future holders of the Notes or
of a Letter of Credit Participation.
Letter of Credit Fee.
The Borrowers jointly and severally promise to pay in arrears, on
the last Business Day of each calendar quarter for the quarter then
ending, a fee (in each case, a "Letter of Credit Fee") to the Issuing
Bank in respect of the Letters of Credit equal to the average
daily aggregate Maximum Drawing Amount for all Letters of Credit
outstanding during such calendar quarter or portion thereof multiplied
by the rate per annum equal to the Applicable Margin with respect to
Eurodollar Rate Loans as in effect from time to time. Such Letter of
Credit Fee shall be for the ratable accounts of the Banks in
accordance with their respective Commitment Percentages. In
addition, the Borrowers jointly and severally promise to pay to the
Issuing Bank for its own account with respect to each Letter of Credit
(i) a fronting fee (the "Fronting Fee") equal to the Maximum Drawing
Amount of each such Letter of Credit multiplied by the rate of
0.125% per annum, such fee to be payable quarterly in arrears
on the last Business Day of each calendar quarter for such calendar
quarter then ending and (ii) standard issuance, extension,
renewal, processing, negotiating, amendment and administration
fees, as determined in accordance with the Issuing Bank's
customary fees and charges for similar facilities.
CERTAIN GENERAL PROVISIONS.
Closing Fee.
The Borrowers jointly and severally promise to pay to the
Administrative Agent for the pro rata accounts of the Banks on the
Closing Date a closing fee in the amount of $50,000.
Agent's Fees.
The Borrowers jointly and severally agree to pay from time to time
to the Administrative Agent such agent's fees (the "Agent's Fees") as
are set forth in, and in accordance with the terms and conditions of,
a letter agreement dated on or prior to the Closing Date (the "Fee
Letter") executed by the Administrative Agent and the Borrowers.
Funds for Payments.
Payments to Administrative Agent.
All payments of principal, interest, Reimbursement Obligations,
commitment fees, Letter of Credit Fees, Fronting Fees, Agent's
Fees and any other amounts due hereunder or under any of the other
Loan Documents shall be made to the Administrative Agent, for the
respective applicable accounts of the Banks, the Issuing Bank
and the Administrative Agent, at the Administrative Agent's Head
Office or at such other location in the Boston, Massachusetts, area
that the Administrative Agent may from time to time designate, in
each case in immediately available funds.
No Offset, etc.
(a) All payments by the Borrowers hereunder and under any of the
other Loan Documents shall be made without setoff or counterclaim and
free and clear of and without deduction for any taxes, levies,
imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or
hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein
(excluding, in the case of each Bank and the Administrative Agent, such
taxes (including income taxes and franchise taxes) as are imposed
on net income by the jurisdictions under the laws of which
such Bank or the Administrative Agent, as the case may be, is
organized, maintains a principal office, or maintains a lending
office for purposes of the Loans under this Credit Agreement (a
"Lending Office") or any subdivision thereof), unless any Borrower
is compelled by law to make such deduction or withholding. If
any such obligation is imposed upon any of the Borrowers with respect
to any amount payable by it hereunder or under any of the other Loan
Documents, such Borrower will pay to the Administrative Agent, for
the account of the Banks, the Issuing Bank or (as the case may be) the
Administrative Agent, on the date on which such amount is due and
payable hereunder or under such other Loan Document, such additional
amount in Dollars as shall be necessary to enable the Banks, the
Issuing Bank or the Administrative Agent to receive the same net
amount which the Banks, the Issuing Bank or the Administrative
Agent would have received on such due date had no such obligation
been imposed upon such Borrower, provided that the Borrowers shall not
be obligated to make such payment for the account of any Bank,
the Issuing Bank or the Administrative Agent, as the case may be,
if (i) such Bank, the Issuing Bank or the Administrative Agent, as the
case may be, has failed to comply with Sect. 4.3.2(b) hereof, or
(ii) such Bank, the Issuing Bank or the Administrative
Agent, as the case may be, is not at any time entitled to exemption
from deduction or withholding of United States Federal income tax
for any reason other than a change in United States law or
regulations or any applicable tax treaty after compliance with Sect.
4.3.2(b) hereof. If any of the Borrowers shall be required by law to
make such deduction or withholding, such Borrower will timely do so
and promptly thereafter deliver to the Administrative Agent tax
receipts or other appropriate evidence of payment.
(b) Each Bank (including the Administrative Agent) that is not
incorporated under the laws of the United States or a state thereof
agrees that (to the extent it has not already done so prior to the
Closing Date) it will deliver to the Borrowers on the Closing Date in
the case of each Bank listed on the signature pages hereof, and
in the case of each other Bank (including the Administrative
Agent) which becomes a party hereto pursuant to Sect. 17 hereof after
the date upon which such Bank becomes a party hereto, two duly
completed and accurate originals of a valid United States Internal
Revenue Service Form 4224 or Form 1001 or any successor form thereto
(or such other forms or similar documentation as may be required from
time to time by any applicable law, treaty, rule or regulation)
indicating that such Bank is entitled to receive all payments under
this Credit Agreement, including fees, without deduction or
withholding of any United States federal income taxes. Subject to
any change in applicable laws or regulations after the Closing Date
in the case of each Bank (including the Administrative Agent) listed
on the signature pages hereof, and in the case of each other
Bank (including the Administrative Agent) which becomes a party
hereto pursuant to Sect. 17 hereof after the date upon which such
Bank becomes a party hereto, such Bank undertakes to deliver to
the Borrower two duly completed and accurate originals of Form
1001 or Form 4224, or successor form (or such other forms or similar
documentation as may be required from time to time by any applicable
law, treaty rule or regulation), on or before the date that any such
form expires or becomes obsolete (including as a result of a
change of a Lending Office or principal office, place of
incorporation or fiscal residence), indicating that such Bank is
entitled to receive all payments under this Credit Agreement
without deduction or withholding of any United States federal income
taxes.
(c) If any of the Borrowers is or will be required to pay
additional amounts to any Bank, the Issuing Bank or the
Administrative Agent pursuant to Sect. 4.3.2(a) hereof, then such
Bank, the Issuing Bank or, as the case may be, the
Administrative Agent shall, upon such Borrower's request, use
reasonable efforts (consistent with applicable legal and regulatory
restrictions) to change its Lending Office so as to reduce or
eliminate any such additional payment which may thereafter accrue
if, in each case, such change, in the sole, good faith judgment of
such Bank, the Issuing Bank or, as the case may be, the
Administrative Agent, can be made so that such Bank, the Issuing
Bank or, as the case may be, the Administrative Agent suffers no
resulting legal, economic, or regulatory burden or disadvantage. (d)
If any of the Borrowers is required to make a deduction or
withholding for the account of a Bank pursuant to Sect. 4.3.2(a)
hereof, such Borrower may replace such Bank in accordance with the
terms of Sect. 4.9(b) hereof.
Computations.
All computations of interest in respect of Base Rate Loans and of
commitment fees, Letter of Credit Fees, Fronting Fees or
other fees shall, unless otherwise expressly provided herein, be
based on a 365/366-day year and paid for the actual number of
days elapsed. All computations of interest in respect of Eurodollar
Rate Loans shall be based on a 360-day year and paid for the actual
number of days elapsed. Except as otherwise provided in the definition
of the term "Interest Period" with respect to Eurodollar Rate Loans,
whenever a payment hereunder or under any of the other Loan Documents
becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day,
and interest shall accrue during such extension. The outstanding
amount of the Loans as reflected on the Records from time to time
shall be considered correct and binding on the Borrowers unless
within five (5) Business Days after receipt of any notice by the
Administrative Agent or any of the Banks of such outstanding amount,
the Administrative Agent or such Bank shall notify the Borrowers to
the contrary.
Inability to Determine Eurodollar Rate.
In the event, after the Closing Date and prior to the commencement
of any Interest Period relating to any Eurodollar Rate Loan,
the Administrative Agent shall determine that (a) by reason of
circumstances affecting the eurodollar interbank market, adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate
that would otherwise determine the rate of interest to be applicable to
any Eurodollar Rate Loan during any Interest Period, or (b) deposits
of Dollars in the relevant amount for the relevant Interest Period are
not available to one or more of the Reference Banks in the
eurodollar interbank market, or (c) the Eurodollar Rate does not or
will not accurately reflect the cost to one or more of the Reference
Banks of obtaining or maintaining the applicable Eurodollar Rate
Loan during any Interest Period, then the Administrative Agent
shall promptly give telephonic, telex or cable notice of such
determination to each of the Borrowers and the Banks (which notice
shall be conclusive and binding upon each of the Borrowers and
the Banks). In such event (i) any Loan Request or Conversion
Request with respect to Eurodollar Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (ii)
each Eurodollar Rate Loan will automatically, on the last day of the
then current Interest Period relating thereto, become a Base Rate Loan,
and (iii) the obligations of the Banks to make Eurodollar Rate
Loans shall be suspended until the Administrative Agent
determines that the circumstances giving rise to such suspension
no longer exist, whereupon the Administrative Agent shall so notify
the Borrowers and the Banks. Before giving any notice to the
Administrative Agent pursuant to this section, a Reference Bank
shall designate a different Lending Office if such designation will
avoid the need for giving such notice and will not, in the judgment of
such Bank, be otherwise disadvantageous to such Bank.
Illegality.
Notwithstanding any other provisions herein, if after the Closing
Date the introduction of, any change in, or any change in the
interpretation of, any law, regulation, treaty or directive or the
interpretation or application thereof shall make it unlawful, or
any central bank or other governmental authority having
jurisdiction thereof shall make it unlawful, for any Bank to
make or maintain Eurodollar Rate Loans, such Bank shall forthwith
give notice of such circumstances to the Borrowers and the other
Banks and thereupon (i) the commitment of such Bank to make
Eurodollar Rate Loans or convert Base Rate Loans to Eurodollar
Rate Loans shall forthwith be suspended and (ii) such Bank's Loans
then outstanding as Eurodollar Rate Loans, if any, shall be converted
automatically to Base Rate Loans on the last day of each Interest
Period applicable to such Eurodollar Rate Loans or within such
earlier period as may be required by law; provided however that, before
giving any such notice to the Borrowers and the other Banks pursuant to
this section, such Bank shall designate a different Lending Office if
such designation will avoid the need for giving such notice and will
not, in the judgment of such Bank, be otherwise disadvantageous to
such Bank.. The Borrowers hereby jointly and severally agree
promptly to pay the Administrative Agent for the account of such
Bank, upon demand by such Bank, any additional amounts necessary
to compensate such Bank for any costs incurred by such Bank in making
any conversion in accordance with this Sect. 4.6, including
any interest or fees payable by such Bank to lenders of funds
obtained by it in order to make or maintain its Eurodollar Rate Loans
hereunder.
Additional Costs, etc.
Anything herein to the contrary notwithstanding and without
duplication of any other amounts payable hereunder, if, after the
Closing Date, any change in any present law or any future applicable
law, which expression, as used herein, includes statutes, rules and
regulations thereunder and interpretations thereof by any competent
court or by any governmental or other regulatory body or official
charged with the administration or the interpretation thereof and
requests, directives, instructions and notices at any time or from
time to time hereafter made upon or otherwise issued to any Bank, the
Issuing Bank or the Administrative Agent by any central bank or
other fiscal, monetary or other authority (whether or not having
the force of law), shall:
(a) materially change the basis of taxation (except for changes
in taxes on income or profits) of payments to any Bank of the
principal of or the interest on any Loans or any other amounts
payable to any Bank, the Issuing Bank or the Administrative Agent
under this Credit Agreement or any of the other Loan Documents, or
(b) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit
Agreement) any special deposit, reserve, assessment, liquidity,
capital adequacy or other similar requirements (whether or not
having the force of law) against assets held by, or deposits in
or for the account of, or loans by, or letters of credit issued
by, or commitments of an office of any Bank, or (c) impose on
any Bank, the Issuing Bank or the Administrative Agent any other
conditions or requirements with respect to this Credit Agreement, the
other Loan Documents, any Letters of Credit, the Loans, such Bank's
Commitment, or any class of loans, letters of credit or commitments of
which any of the Loans or such Bank's Commitment forms a part, and
the result of any of the foregoing is (i) to increase the cost to
any Bank or the Issuing Bank attributable to the making, funding,
issuing, renewing, extending or maintaining of any of the Loans or
such Bank's Commitment or any Letter of Credit, or (ii) to reduce
the amount of principal, interest, Reimbursement Obligation or other
amount payable to such Bank, the Issuing Bank or the
Administrative Agent hereunder on account of such Bank's Commitment,
any Letter of Credit or any of the Loans, or (iii) to require such
Bank, the Issuing Bank or the Administrative Agent to make any payment
or to forego any interest or Reimbursement Obligation or other sum
payable hereunder, the amount of which payment or foregone
interest or Reimbursement Obligation or other sum is
calculated by reference to the gross amount of any sum receivable or
deemed received by such Bank, the Issuing Bank or the Administrative
Agent from the Borrowers hereunder, then, and in each such case, to
the extent such cost or reduction is not reflected in determining
the interest rate applicable to the Loans and is not otherwise provided
for in Sect. 4.8 hereof, the Borrowers will, within thirty (30)
days after demand made by such Bank, the Issuing Bank or (as the
case may be) the Administrative Agent at any time and from time to
time and as often as the occasion therefor may arise, pay to
such Bank, the Issuing Bank or the Administrative Agent such
additional amounts as will be sufficient, in the good faith
opinion of such Bank, the Issuing Bank or the Administrative Agent, to
compensate such Bank, the Issuing Bank or the Administrative Agent for
such additional cost, reduction, payment or foregone interest or
Reimbursement Obligation or other sum; provided, however, that the
Borrowers shall not be liable for any such cost, reduction, payment
or foregone amounts incurred more than ninety (90) days prior to
demand being made as provided herein.
Capital Adequacy.
If after the date hereof any of the Banks, the Issuing Bank or the
Administrative Agent determines that (i) the adoption (after the
Closing Date) of or change (after theClosing Date) in any law,
governmental rule, regulation,policy, guideline or directive
(whether or not having the force of law) regarding capital requirements
for banks or bank holding companies or any change in the
interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (ii) compliance by such
Bank, the Issuing Bank or the Administrative Agent or any
corporation controlling such Bank, the Issuing Bank or the
Administrative Agent with any such law, governmental rule,
regulation, policy, guideline or directive (whether or not having
the force of law) so adopted or changed after the Closing Date of
any such entity regarding capital adequacy, has the effect of reducing
the return on such Bank's, the Issuing Bank's or the Administrative
Agent's commitment with respect to any Loans to a level below that
which such Bank, the Issuing Bank or the Administrative Agent could
have achieved but for such adoption, change or compliance (taking into
consideration such Bank's, the Issuing Bank's or the Administrative
Agent's then existing policies with respect to capital adequacy
and assuming full utilization of such entity's capital) by any amount
deemed by such Bank, the Issuing Bank or (as the case may be)
the Administrative Agent to be material, then such Bank, the Issuing
Bank or the Administrative Agent may notify the Borrowers of such
fact. To the extent that the amount of such reduction in the return
on capital is not reflected in the Base Rate or, as the case may be,
the Eurodollar Rate, the Borrowers and such Bank, the Issuing
Bank or the Administrative Agent shall thereafter attempt to
negotiate in good faith, within thirty (30) days of the day on which
the Borrowers receive such notice, an adjustment payable hereunder
that will adequately compensate such Bank, the Issuing Bank or the
Administrative Agent in light of these circumstances. If the
Borrowers and such Bank, Issuing Bank or (as the case may be) the
Administrative Agent are unable to agree to such adjustment within
thirty (30) days of the date on which the Borrowers receive such
notice, then commencing on the date of such notice (but not earlier
than the effective date of any such increased capital requirement),
the fees payable hereunder shall increase by an amount that will, in
such Bank's, Issuing Bank's or (as the case may be) the
Administrative Agent's reasonable determination, provide adequate
compensation; provided, however, that the Borrowers shall not be liable
for any such costs incurred more than ninety (90) days prior to the
receipt by the Borrowers of notice thereof given as provided
herein. Each Bank shall allocate such cost increases among its
customers in good faith and on an equitable basis.
Certificate; Replacement of Banks; Etc.
(a) A certificate setting forth any additional amounts payable
pursuant to Sect. Sect. 4.7, 4.8 or 4.10 and a brief explanation
of such amounts which are due, submitted by any Bank, the
Issuing Bank or the Administrative Agent to the Borrowers,
shall be conclusive, absent manifest error, that such amounts
are due and owing. Each such certificate shall set forth in
reasonable detail any reasonable averaging or attribution methods used
by such Bank, the Issuing Bank or the Administrative Agent in
connection with the calculation of such additional amount. A claim
by any Bank, the Issuing Bank or the Administrative Agent for all or
any part of any additional amount required to be paid by the Borrower
under Sect. Sect. 4.7, 4.8 or 4.10 hereof may be made at any time and
from time to time as often as the occasion therefor may arise.
(b) Within thirty (30) days after (i) any Bank has demanded
compensation from any of the Borrowers pursuant to either Sect. 4.7
or Sect. 4.8 hereof, or (ii) any of the Borrowers is required to
make a deduction or withholding for the account of any Bank
pursuant to Sect. 4.3.2(a) hereof, or (iii) there shall have occurred
a change in law with respect to any Bank as a consequence of which it
shall have become unlawful for such Bank to make a Loan on the date of
any applicable Borrowing, as described in Sect. 10.2 hereof, or (iv)
any of the Borrowers is required to repay to the Administrative Agent
any amounts which any Bank failed to make available as provided
in Sect. 2.8.2 (any such Bank described in the foregoing clauses
(i), (ii), (iii) or (iv) is hereinafter referred to as an
"Affected Bank"), such Borrower may request in writing that the
Non-Affected Banks acquire all, but not less than all, of the
Affected Bank's outstanding Loans and assume all, but not less than
all, of the Affected Bank's Commitment. If any of the Borrowers so
requests, the Non-Affected Banks may elect to acquire all or any
portion of the Affected Bank's outstanding Loans and to assume all or
any portion of the Affected Bank's Commitment. If the Non-Affected
Banks do not elect to acquire and assume all of the Affected
Bank's outstanding Loans and Commitment, the Borrowers may
designate a replacement bank or banks, which must be satisfactory
to the Administrative Agent, to acquire and assume that portion
of the outstanding Loans and Commitment of the Affected Bank not
being acquired and assumed by the Non-Affected Banks. The provisions
of Sect. 17 hereof shall apply to all reallocations pursuant to this
Sect. 4.9(b), and the Affected Bank and any Non-Affected Banks and/or
replacement banks which are to acquire the Loans and Commitment of
the Affected Bank shall execute and deliver to the Administrative
Agent, in accordance with the provisions of Sect. 17 hereof, such
Assignments and Acceptances and other instruments, including,
without imitation, Notes, as are required pursuant to Sect. 17 to
give effect to such reallocations. Any Non-Affected Banks and/or
replacement banks which are to acquire the Loans and Commitment of
the Affected Bank shall be deemed to be Eligible Assignees for all
purposes of Sect. 17. On the effective date of the
applicable Assignments and Acceptances, the Borrowers shall pay to the
Affected Bank all interest accrued on its Loans up to but excluding
such date, along with any fees payable to such Affected Bank
hereunder up to but excluding such date.
(c) If any Bank has demanded compensation under Sect. 4.7 in
respect of Eurodollar Rate Loans held by it, the Borrowers may, by
giving at least five (5) Business Days' prior notice to such
Bank through the Administrative Agent, elect to convert all
Eurodollar Rate Loans lent by such Bank into Base Rate Loans,
unless and until such Bank notifies the Borrower that such
circumstances no longer apply.
Indemnity.
Each of the Borrowers agrees to indemnify each Bank and to hold each
Bank harmless from and against any loss, cost or expense (including
loss of anticipated profits) that such Bank may sustain or incur as a
consequence of (i) default by the Borrowers in payment of the principal
amount of or any interest on any Eurodollar Rate Loans as and when
due and payable, including any such loss or expense arising from
interest or fees payable by such Bank to lenders of funds obtained
by it in order to maintain its Eurodollar Rate Loans, (ii) default
by the Borrowers in making a borrowing or conversion, or in
continuing a Eurodollar Rate Loan as such, after the Borrowers have
given (or are deemed to have given) a Loan Request or a Conversion
Request relating thereto in accordance with Sect. 2.6 or Sect. 2.7 or
(iii) the making of any payment of a Eurodollar Rate Loan or the
making of any conversion of any such Loan to a Base Rate Loan on a day
that is not the last day of the applicable Interest Period with
respect thereto, including interest or fees payable by such Bank to
lenders of funds obtained by it in order to maintain any such
Loans.
Interest After Default.
Overdue Amounts.
Overdue principal and (to the extent permitted by applicable law)
interest on the Loans and all other overdue amounts payable hereunder
or under any of the other Loan Documents shall bear interest
compounded monthly and payable on demand at a rate per annum equal to
two percent (2%) above the Base Rate until such amount shall be
paid in full (after as well as before judgment).
Amounts Not Overdue.
During the continuance of a Default or an Event of Default the
principal of the Loans not overdue shall, until such Default or Event
of Default has been cured or remedied or such Default or Event of
Default has been waived by the Majority Banks pursuant to Sect. 24,
bear interest at a rate per annum equal to one percent (1%)
above the rate of interest otherwise applicable to such Loans.
Concerning Joint and Several Liability of the Borrowers.
(a) Each of the Borrowers is accepting joint and several liability
hereunder and under the other Loan Documents in consideration
of the financial accommodations to be provided by the Banks, the
IssuingBank and the Administrative Agent under this Credit
Agreement, for the mutual benefit, directly and indirectly, of
each of the Borrowers and in consideration of the
undertakings of each other Borrower to accept joint and several
liability for the Obligations.
(b) Each of the Borrowers, jointly and severally, hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers,
with respect to the payment and performance of all of the bligations
(including, without limitation, any Obligations arising under
this Sect. 4.12), it being the intention of the parties hereto
that all the Obligations shall be the joint and several
obligations of each of the Borrowers without preferences or
distinction among them.
(c) If and to the extent that any of the Borrowers shall
fail to make any payment with respect to any of the Obligations as and
when due or to perform any of the Obligations in accordance with
the terms thereof, then in each such event the other Borrowers
will make such payment with respect to, or perform, such
Obligation.
(d) The Obligations of each of the Borrowers under the
provisions of this Sect. 4.12 constitute the absolute full
recourse Obligations of each of the Borrowers enforceable against
each such Person to the full extent of its properties and assets,
irrespective of the validity, regularity or enforceability of this
Credit Agreement or the other Loan Documents or any other
circumstance whatsoever as to any other Borrower.
(e) Except as otherwise expressly provided herein, each
Borrower hereby waives promptness, diligence, presentment,
demand, protest, notice of acceptance of its joint and several
liability, notice of any and all advances of the Loans made under
this Credit Agreement and the Notes, notice of occurrence of any
Default or Event of Default (except to the extent notice is
expressly required to be given pursuant to the terms of this Credit
Agreement or any of the other Loan Documents), or of any demand for any
payment under this Credit Agreement, notice of any action at any time
taken or omitted by the Administrative Agent, the Issuing Bank or
the Banks under or in respect of any of the Obligations hereunder, any
requirement of diligence and, generally, all demands, notices
and other formalities of every kind in connection with this
Credit Agreement and the other Loan Documents. Each Borrower
hereby waives all defenses which may be available by virtue of
any valuation, stay, moratorium law or other similar law now or
hereafter in effect, any right to require the marshaling of assets
of the Borrowers and any other entity or Person primarily or
secondarily liable with respect to any of the Obligations,
and all suretyship defenses generally (other than full and
actual payment). Except as otherwise expressly provided herein,
each Borrower hereby assents to, and waives notice of, any extension
or postponement of the time for the payment, compromise,
refinancing, consolidation or renewals of any of the Obligations
hereunder, the acceptance of any partial payment thereon, any waiver,
consent or other action or acquiescence by the Administrative Agent,
the Issuing Bank and the Banks at any time or times in respect of
any default by any other Borrower in the performance or
satisfaction of any term, covenant, condition or provision of this
Credit Agreement and the other Loan Documents, any and all other
indulgences whatsoever by the Administrative Agent, the Issuing
Bank and the Banks in respect of any of the Obligations hereunder, and
the taking, addition, substitution or release, in whole or in part,
at any time or times, of any security for any of such
Obligations or the addition, substitution or release, in whole or in
part, of any other Borrower or any other entity or Person
primarily or secondarily liable for any Obligation. Such Borrower
further agrees that its Obligations shall not be released or
discharged, in whole or in part, or otherwise affected by the adequacy
of any rights which the Administrative Agent, the Issuing Bank or any
Bank may have against any collateral security or other means of
obtaining repayment of any of the Obligations, the impairment of any
collateral security securing the Obligations, including, without
limitation, the failure to protect or preserve any rights
which the Administrative Agent, the Issuing Bank or any Bank may have
in such collateral security or the substitution, exchange, surrender,
release, loss or destruction of any such collateral security, any
other act or omission which might in any manner or to any extent
vary the risk of such Borrower, or otherwise operate as a
release or discharge of such Borrower, all of which may be done without
notice to such Borrower except as otherwise expressly provided
herein. If for any reason any of the other Borrowers has no legal
existence or is under no legal obligation to discharge any of
the Obligations, or if any of the Obligations have become
irrecoverable from any of the other Borrowers by reason of such other
Borrower's insolvency, bankruptcy or reorganization or by other
operation of law or for any reason, this Credit Agreement and the
other Loan Documents to which it is a party shall nevertheless be
binding on such Borrower to the same extent as if such Borrower at all
times had been the sole obligor on such Obligations. Without limiting
the generality of the foregoing, each Borrower assents to any other
action or delay in acting or failure to act on the part of the
Administrative Agent, the Issuing Bank and the Banks, including,
without limitation, any failure strictly or diligently to assert any
right or to pursue any remedy or to comply fully with applicable laws
or regulations thereunder which might, but for the provisions of this
Sect. 4.12, afford grounds for terminating, discharging or relieving
such Borrower, in whole or in part, from any of its obligations under
this Sect. 4.12, it being the intention of each Borrower that, so
long as any of the Obligations hereunder remain unsatisfied,
the obligations of such Borrower under this Sect. 4.12 shall not be
discharged except by performance and then only to the extent of
such performance. The Obligations of each Borrower under this Sect.
4.12 shall not be diminished or rendered unenforceable by any
winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any
reconstruction or similar proceeding with respect to any Borrower, or
any of the Banks. The joint and several liability of the
Borrowers hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other
change whatsoever in the name, ownership, membership,
constitution or place of formation of any Borrower or the Banks.
Each of the Borrowers acknowledges and confirms that it has
itself established its own adequate means of obtaining from each
of the other Borrowers on a continuing basis all information desired
by such Borrower concerning the financial condition of each of the
other Borrowers and that each such Borrower will look to each of the
other Borrowers and not to the Administrative Agent, the Issuing Bank
or any Bank in order for such Borrower to keep adequately informed of
changes in each of the other Borrowers' respective financial
conditions.
(f) The provisions of this Sect. 4.12 are made for the benefit of
the Banks, the Issuing Bank and the Administrative Agent and
their respective successors and assigns, and may be enforced by it
or them from time to time against any or all of the Borrowers as
often as occasion therefor may arise and without requirement on
the part of the Banks, the Issuing Bank or the Administrative Agent or
such successor or assign first to marshall any of its or their
claims or to exercise any of its or their rights against any of the
other Borrowers or to exhaust any remedies available to it or them
against any of the other Borrowers or to resort to any other
source or means of obtaining payment of any of the Obligations
hereunder or to elect any other remedy. The provisions of this Sect.
4.12 shall remain in effect until all of the Obligations shall
have been paid in full or otherwise fully satisfied. If at any
time, any payment, or any part thereof, made in respect of any of the
Obligations, is rescinded or must otherwise be restored or returned by
any Bank, the Issuing Bank or the Administrative Agent upon the
insolvency, bankruptcy or reorganization of any of the Borrowers, or
otherwise, the provisions of this Sect. 4.12 will forthwith be
reinstated in effect, as though such payment had not been made.
(g) Each of the Borrowers hereby agrees that it will not enforce
any of its rights of reimbursement, contribution, subrogation or the
like against the other Borrowers with respect to any liability
incurred by it hereunder or under any of the other Loan Documents, any
payments made by it to any of the Banks, the Issuing Bank or the
Administrative Agent with respect to any of the Obligations until
such time as all of the obligations have been irrevocably paid
in full in cash and the Commitments have been terminated. Any claim
which any Borrower may have against any other Borrower with respect to
any payments to any of the Banks, the Issuing Bank or the
Administrative Agent hereunder or under any other Loan Documents
are hereby expressly made subordinate and junior in right of
payment, without limitation as to any increases in the
Obligations arising hereunder or thereunder, to the prior payment
in full in cash of the Obligations and, in the event of any
insolvency, bankruptcy, receivership, liquidation, reorganization
or other similar proceeding under the laws of any jurisdiction
relating to any Borrower, its debts or its assets, whether
voluntary or involuntary, all such Obligations shall be paid in full
in cash and the Commitments must be terminated before any payment or
distribution of any character, whether in cash, securities or
other property, shall be made to any other Borrower therefor.
(h) Each of the Borrowers hereby agrees that the payment of any
amounts due with respect to the indebtedness owing by any
Borrower to any other Borrower is hereby subordinated, at all times
following the occurrence and during the continuance of any Event
of Default, to the prior payment in full in cash of the Obligations.
Each Borrower hereby agrees that after the occurrence and during the
continuance of any Event of Default, such Borrower will not demand,
sue for or otherwise attempt to collect any indebtedness of any
other Borrower owing to such Borrower until the Obligations
shall have been paid in full in cash and the Commitments shall
have been terminated. If, notwithstanding the foregoing sentence,
such Borrower shall collect, enforce or receive any amounts in
respect of such indebtedness, such amounts shall be collected,
enforced and received by such Borrower as trustee for the
Administrative Agent and be paid over to the Administrative Agent for
the applicable pro rata accounts of the Banks, the Issuing Bank
and the Administrative Agent to be applied to repay the
Obligations.
REPRESENTATIONS AND WARRANTIES.
Each of the Borrowers represents and warrants to the Banks, the
Issuing Bank and the Administrative Agent as follows:
Corporate Authority.
Incorporation; Good Standing.
Each of the Borrowers and its Subsidiaries (i) is a corporation or
partnership duly organized, validly existing and in good standing
under the laws of its state of incorporation or organization,
(ii) has all requisite corporate or other power to own its property
and conduct its business as now conducted and as presently
contemplated, and (iii) is in good standing as a foreign corporation
or partnership and is duly authorized to do business in each
jurisdiction where such qualification is necessary except where a
failure to be so qualified would not have a materially adverse effect
on the business or financial condition of the Borrowers and their
Subsidiaries, taken as a whole.
Authorization.
The execution, delivery and performance of this Credit Agreement and
the other Loan Documents to which any of the Borrowers or any of their
Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby (i) are within the corporate or
other authority of such Person, (ii) have been duly authorized by
all necessary corporate proceedings, (iii) do not conflict with
any provision of the corporate charter or bylaws of any of the
Borrowers or any of their Subsidiaries, (iv) do not conflict with or
result in any breach or contravention of any provision of law,
statute, rule or regulation to which any of the Borrowers or any of
their Subsidiaries is subject or any judgment, order, writ,
injunction, license or permit applicable to any of the Borrowers
or any of their Subsidiaries, and (v) do not conflict with any
provision of any agreement or other instrument binding upon any of
the Borrowers or any of their Subsidiaries, where, in the case of
clauses (iv) or (v) above, such conflict, breach or contravention
would reasonably be expected to have a materially adverse effect on
the business or financial condition of the Borrowers and their
Subsidiaries, taken as a whole.
Enforceability.
The execution and delivery of this Credit Agreement and the
other Loan Documents to which any of the Borrowers or any of their
Subsidiaries is or is to become a party will result in valid and
legally binding obligations of such Person enforceable against it in
accordance with the respective terms and provisions thereof and
thereof, except as enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and general
principles of equity, whether in a proceeding at law or in equity,
including that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before
which any proceeding therefor may be brought.
Governmental Approvals.
The execution, delivery and performance by the Borrowers and
any of their Subsidiaries of this Credit Agreement and the other
Loan Documents to which any of the Borrowers or any of their
Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby do not require the approval or
consent of, or filing with, any governmental agency or authority
(including without limitation, the DOT or the Board) other than
those already obtained and other than those which, if not obtained,
would not reasonably be expected to have a materially adverse
effect on the business or financial condition of the Borrowers
and their Subsidiaries, taken as a whole.
Title to Properties; Leases.
Except as indicated on Schedule 5.3 hereto, as of the date of this
Credit Agreement, the Borrowers and their Subsidiaries own all
of the assets reflected in the consolidated balance sheet of
the Borrowers and their Subsidiaries as at the Balance Sheet Date
or acquired since that date (except property and assets sold or
otherwise disposed of in the ordinary course of business since that
date), subject to no Liens or other encumbrances except
Permitted Liens.
Financial Statements and Projections.
Financial Statements.
There has been furnished to each of the Banks a consolidated
balance sheet of the Borrowers and their Subsidiaries as at the
Balance Sheet Date, and a consolidated statement of income of the
Borrowers and their Subsidiaries for the fiscal year then ended,
certified by Arthur Andersen LLP. There has also been furnished to
each of the Banks an unaudited consolidated balance sheet of
the Borrowers and their Subsidiaries as at April 30, 1996, and an
unaudited consolidated statement of income of the Borrowers and
their Subsidiaries for the fiscal period then ended.
Such balance sheets and statements of income have been prepared in
accordance with generally accepted accounting principles and
fairly present in all material respects the financial condition
of the Borrowers as at the close of business on the date
thereof and the results of operations for the fiscal year then
ended in accordance with generally accepted accounting principles
(except as stated therein) and subject, in the case of such
unaudited interim financial statements, to lack of footnotes and to
year end adjustments. There are no contingent liabilities of any of
the Borrowers or any of their Subsidiaries as of such date involving
material amounts, known to the officers of any of the Borrowers,
which were not disclosed in such balance sheet and the notes related
thereto and which were required to be disclosed in accordance with
generally accepted accounting principles. There has also been
furnished to each of the Banks a consolidated pro forma balance sheet
of the Borrowers and their Subsidiaries (based on their balance
sheet as of April 30, 1996) which gives effect to the transactions
contemplated hereby and by the Acquisition Documents (including,
without limitation, the Special Dividend).
Projections.
Copies of the projections of the annual operating budgets of the
Borrowers and their Subsidiaries on a consolidated basis,
projected balance sheets and projected cash flow statements for
the 1996 fiscal year, have been delivered to the Administrative
Agent, and represent good faith estimates as of the date
thereof. As of the date hereof, to the best knowledge of any of the
Borrowers or any of their Subsidiaries, no facts exist that
(individually or in the aggregate) would result in any material
adverse change in any of such projections. The projections are based
upon good faith estimates and assumptions, have been prepared on the
basis of the assumptions stated therein and reflect the good faith
estimates of the Borrowers and their Subsidiaries of the results of
operations and other information projected therein.
No Material Changes, etc.; Solvency.
Changes.
Since the Balance Sheet Date there has occurred no materially adverse
change in the business or financial condition of the Borrowers and
their Subsidiaries as shown on or reflected in the consolidated
balance sheet of the Borrowers and their Subsidiaries, taken as a
whole, other than changes in the ordinary course of business that
have not had any materially adverse effect either individually or
in the aggregate on the business or financial condition of the
Borrowers and their Subsidiaries, taken as a whole. Since the
Closing Date, none of the Borrowers has made any Distribution
with the exception of Distributions made after the date hereof in
accordance with the provisions of Sect. 7.4 hereof.
Solvency.
Both before and after giving effect to the transactions
contemplated by this Credit Agreement, the other Loan Documents and
the Acquisition Documents, including the Special Dividend, all of the
Borrowers on a consolidated basis are, and each separately is,
Solvent. As used herein, "Solvent" shall mean that the Borrowers (i)
have assets having a fair value in excess of their liabilities, (ii)
have assets having a fair value in excess of the amount required
to pay their liabilities on existing debts as such debts become
absolute and matured, and (iii) have, and expect to continue to
have, access to adequate capital for the conduct of their business
and the ability to pay their debts from time to time incurred in
connection with the operation of their business as such debts mature.
Franchises, Patents, Copyrights, etc.
Each of the Borrowers and its Subsidiaries possesses all material
franchises, patents, copyrights, trademarks, trade names, licenses
and permits, and rights in respect of the foregoing, adequate for the
conduct of its business substantially as now conducted without known
conflict with any rights of others except for conflicts which do not
have a materially adverse effect on the business or financial
condition of the Borrower and its Subsidiaries, taken as a whole.
Litigation.
Except as set forth in Schedule 5.7 hereto, there are no actions,
suits, or proceedings or, to the best knowledge of the Borrowers,
investigations of any kind pending or, to the best knowledge of the
Borrowers, threatened against any of the Borrowers or any of their
Subsidiaries before any court, tribunal or administrative agency
or board that is reasonably expected to, individually or in the
aggregate, materially adversely affect the financial condition or
business of the Borrowers and their Subsidiaries, taken as a whole,
or which question the validity of this Credit Agreement or any
of the other Loan Documents, or any action taken or to be taken
pursuant hereto or thereto.
No Materially Adverse Contracts, etc.
None of the Borrowers nor any of their Subsidiaries is subject to
any charter, corporate or other legal restriction, or any
judgment, decree, order, rule or regulation that has or is
expected in the future to have a materially adverse effect on the
business or financial condition of the Borrowers and their
Subsidiaries, taken as a whole, or on the Borrowers' ability to
perform any of their obligations under the Loan Documents. None of
the Borrowers and none of their Subsidiaries is a party to any
contract or agreement that has or is expected, in the judgment
of the Borrowers' officers, to have any materially adverse effect on
the ability of the Borrowers to perform any of their obligations
under the Loan Documents.
Compliance with Other Instruments, Laws, etc.
None of the Borrowers and none of their Subsidiaries is in violation
of any provision of its charter documents, bylaws, or any agreement
or instrument to which it may be subject or by which it or any of its
properties may be bound or any decree, order, judgment, statute,
license, rule or regulation, in any of the foregoing cases in a
manner that could reasonably be expected to have a materially
adverse effect on the financial condition, properties or business of
the Borrowers and their Subsidiaries, taken as a whole.
Tax Status.
As of the date hereof, except as set forth on Schedule 5.10 hereto,
the Borrowers and their Subsidiaries (i) have made, filed or duly
extended all federal and state income and all other material tax
returns, reports and declarations required by any jurisdiction to
which any of them is subject, (ii) have paid all taxes and
other governmental assessments and charges shown or determined to be
due on such returns, reports and declarations and all estimated
taxes in connection with any extensions, except those being contested
in good faith and by appropriate proceedings and (iii) have set
aside on their books provisions reasonably deemed by it to be adequate
for the payment of all taxes for periods subsequent to the periods
to which such returns, reports or declarations apply in accordance
with generally accepted accounting principles. As of the date
hereof, except as set forth on Schedule 5.10 hereto, there are no
unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Borrowers know
of no basis for any such claim.
No Event of Default.
No Default or Event of Default has occurred and is continuing.
Holding Company and Investment Company Acts.
None of the Borrowers and none of their Subsidiaries is a "holding
company", or a "subsidiary company" of a "holding company", or an
affiliate" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal
underwriter" of an "investment company", as such terms are
defined in the Investment Company Act of 1940.
[Intentionally Omitted.]
Certain Transactions.
Except as set forth on Schedule 5.14 hereto and except for arm's
length transactions pursuant to which any of the Borrowers or any of
their Subsidiaries makes payments in the ordinary course of business
upon terms no less favorable than such Borrower or such
Subsidiary could obtain from third parties, none of the
stockholders, officers, directors, or employees or non-Borrower
Affiliates of any of the Borrowers or any of their Subsidiaries is
presently a party to any transaction with any of the Borrowers or any
of their Subsidiaries (other than for services as employees,
officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or
otherwise requiring payments to or from any such stockholder, officer,
director, employee or non-Borrower Affiliates or, to the
knowledge of the Borrowers, any Person in which any stockholder,
officer, director, employee, or non-Borrower Affiliate has a
substantial interest or is an officer, director, trustee or partner.
Employee Benefit Plans.
In General.
Each Employee Benefit Plan has been maintained and operated in
compliance in all material respects with the provisions of ERISA and,
to the extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions. The
Borrowers have heretofore delivered to the Administrative
Agent the most recently completed annual report, Form 5500, with all
required attachments, and actuarial statement required to be
submitted under Sect. 103(d) of ERISA, with respect to each
Guaranteed Pension Plan.
Terminability of Welfare Plans.
Under each Employee Benefit Plan which is an employee welfare
benefit plan within the meaning of Sect. 3(1) or Sect. 3(2)(B) of
ERISA, no benefits are due unless the event giving rise to the benefit
entitlement occurs prior to plan termination (except as required by
Title I, Part 6 of ERISA). Any of the Borrowers or an ERISA
Affiliate, as appropriate, may terminate each such Plan at any time
(or at any time subsequent to the expiration of any applicable
bargaining agreement) in the discretion of such Borrower or such ERISA
Affiliate without liability to any Person.
Guaranteed Pension Plans.
The Borrowers and their ERISA Affiliates have fulfilled their
obligations (if any) under the minimum funding standards of ERISA and
the Code with respect to each Guaranteed Pension Plan, and neither any
Borrower nor any ERISA Affiliate has failed to make any
contribution to any Guaranteed Pension Plan which has resulted or
could reasonably be expected to result in the imposition of a Lien
under Sect. 302(f) of ERISA. No waiver of an accumulated funding
deficiency or extension of amortization periods has been received
with respect to any Guaranteed Pension Plan. No liability to
the PBGC (other than required insurance premiums, all of which
have been paid) has been incurred by any of the Borrowers or any
ERISA Affiliate with respect to any Guaranteed Pension Plan and there
was not been any ERISA Reportable Event, or any other event or
condition which presents a material risk of termination of any
Guaranteed Pension Plan by the PBGC.
Based on the latest valuation of each Guaranteed Pension Plan
(which in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions
employed for that valuation, the aggregate benefit liabilities of
all such Guaranteed Pension Plans within the meaning of Sect. 4001
of ERISA did not exceed the aggregate value of the assets of all such
Guaranteed Pension Plans by more than $5,000,000, disregarding for
this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit
liabilities.
Multiemployer Plans.
None of the Borrowers and no ERISA Affiliate has incurred any
material liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or partial withdrawal
from such Multiemployer Plan under Sect. 4201 of ERISA or as a result
of a sale of assets described in Sect. 4204 of ERISA. None of
the Borrowers and no ERISA Affiliate has been notified that any
Multiemployer Plan is in reorganization or insolvent under and
within the meaning of Sect. 4241 or Sect. 4245 of ERISA or that
any Multiemployer Plan intends to terminate or has been terminated
under Sect. 4041A of ERISA.
Use of Proceeds; Regulations U and X.
The proceeds of the Loans shall be used by the Borrowers
solely to pay the Special Dividend and for working capital and general
corporate purposes. The Borrowers will obtain Letters of Credit
solely for working capital and general corporate purposes. No
portion of any Loan is to be used, and no portion of any Letter of
Credit is to be obtained, for the purpose of purchasing or
carrying any "margin security" or "margin stock" as such terms are
used in Regulations U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R. Parts 221 and 224.
Environmental Compliance.
The Borrowers have taken all reasonable steps
to investigate the past and present condition and usage of the Real
Estate and the operations conducted thereon and, based upon such
reasonable investigation, have determined that:
(a) except as set forth on Schedule 5.17 hereto, none of the
Borrowers, none of their Subsidiaries nor any operator of the Real
Estate or any operations thereon is in violation, or alleged
violation, of any judgment, decree, order, law, license, rule
or regulation pertaining to environmental matters, including
without limitation, those arising under the Resource Conservation
and Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended ("CERCLA"),
the Superfund Amendments and Reauthorization Act of 1986 ("SARA"),
the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to health, safety or the
environment (hereinafter "Environmental Laws"), which violation
would have a material adverse effect on the environment or the business
or financial condition of the Borrowers and their Subsidiaries, taken
as a whole;
(b) except as set forth on Schedule 5.17 hereto, none of the
Borrowers and none of their Subsidiaries has received notice from
any third party including, without limitation, any federal,
state or local governmental authority, (i) that any one of them
has been identified by the United States Environmental Protection
Agency ("EPA") as a potentially responsible party under CERCLA with
respect to a site listed on the National Priorities List, 40 C.F.R.
Part 300 Appendix B; (ii) that any hazardous waste, as defined by
42 U.S.C. Sect. 6903(5), any hazardous substances as defined by 42
U.S.C. Sect. 9601(14), any pollutant or contaminant as defined by
42 U.S.C. Sect. 9601(33) and any toxic substances, oil or
hazardous materials or other chemicals or substances regulated by
any Environmental Laws ("Hazardous Substances") which any one of them
has generated, transported or disposed of has been found at any site at
which a federal, state or local agency or other third party has
conducted or has ordered that any of the Borrowers or any of their
Subsidiaries conduct a remedial investigation, removal or other
response action pursuant to any Environmental Law; or (iii) that it is
or shall be a named party to any claim, action, cause of action,
complaint, or legal or administrative proceeding (in each case,
contingent or otherwise) arising out of any third party's incurrence
of costs, expenses, losses or damages of any kind whatsoever in
connection with the release of Hazardous Substances, which, in any
such case or in the aggregate for all such notices described in
this paragraph (b), would reasonably be expected to have a
materially adverse effect on the business or financial condition of
the Borrowers and their Subsidiaries, taken as a whole;
(c) except as set forth on Schedule 5.17 attached hereto, to the best
knowledge of the Borrowers: (i) no portion of the Real Estate has
been used for the handling, processing, storage or disposal of
Hazardous Substances except in accordance with applicable
Environmental Laws or where non-compliance with applicable
Environmental Laws would not have a materially adverse effect
on the business or financial condition of the Borrowers and their
Subsidiaries, taken as a whole; and no underground tank or other
underground storage receptacle for Hazardous Substances is located on
any portion of the Real Estate; (ii) in the course of any
activities conducted by the Borrowers, their Subsidiaries or
operators of its properties, no Hazardous Substances have been
generated or are being used on the Real Estate except in
accordance with applicable Environmental Laws or where non-compliance
with applicable Environmental Laws would not have a materially adverse
effect on the business or financial condition of the Borrowers
and their Subsidiaries, taken as a whole; (iii) there have been no
releases (i.e. any past or present releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, disposing or dumping) or threatened releases
of Hazardous Substances on, upon, into or from the properties of the
Borrowers or their Subsidiaries, which releases would have a material
adverse effect on the business or financial condition of the
Borrowers and their Subsidiaries, taken as a whole; and (iv) in
addition, any Hazardous Substances that have been generated on the
properties of any of the Borrowers or any of their Subsidiaries have
been transported or disposed of in accordance with applicable laws
and regulations by transporters and to disposal facilities, which, to
the best knowledge of the Borrowers (without independent inquiry),
are operating in compliance in all material respects with applicable
permits and laws; and
(d) none of the Borrowers and none of their Subsidiaries, nor
any of the Real Estate is subject to any applicable environmental
law requiring the performance of Hazardous Substances site
assessments, or the removal or remediation of Hazardous Substances, or
the giving of notice to any governmental agency or the recording or
delivery to other Persons of an environmental disclosure document
or statement, in each case by virtue of the transactions set
forth and contemplated in the Loan Documents or the Acquisition
Documents, or as a condition to the effectiveness of any other
transactions contemplated hereby or thereby.
Subsidiaries, etc.
All of the Borrowers (other than CCP Holdings) are wholly-owned
direct subsidiaries of CCP Holdings. CCP Holdings is a
wholly-owned direct subsidiary of IC. None of the Borrowers has any
other Subsidiaries except as set forth on Schedule 5.18 hereto.
Except as set forth on Schedule 5.18 hereto, none of the
Borrowers and none of their Subsidiaries is engaged in any joint
venture or partnership with any other Person.
Capitalization.
CCP Holdings is the record and beneficial owner of all of issued and
outstanding capital stock of each of the Borrowers other than
CCP Holdings. IC is the record and beneficial owner of all of issued
and outstanding capital stock of CCP Holdings. All of the shares
of the capital stock of each of the Borrowers have been validly issued,
are outstanding, fully paid and nonassessable and no options,
warrants or other rights to subscribe for any additional shares of
the capital stock of any of the Borrowers have been granted or exist.
Fiscal Year.
Each of the Borrowers and their Subsidiaries has a fiscal year
which is twelve calendar months ending on December 31 of each year.
[Intentionally Omitted.]
Agreements with Labor Unions.
As of the date hereof, except as set forth on Schedule 5.22 attached
hereto, or as the Borrowers may notify the Administrative Agent
after the Closing Date, no Borrower is a party to any agreement
(including, but not limited to, collective bargaining agreements)
with any labor union to which any of its employees belong.
[Intentionally Omitted.]
Acquisition Documents.
The Borrowers have heretofore furnished to the Administrative
Agent true, complete and correct copies of the Acquisition Documents
(including schedules, exhibits and annexes thereto). The
Acquisition Documents have not subsequently been amended,
supplemented, or modified (other than the amendments, if any,
delivered to the Administrative Agent on or prior to the Closing Date,
a waiver or amendment relating to the Stock Purchase Agreement with
respect to the substitution of counsel to the Sellers made prior to
the Closing Date, and other amendments that are consented to or
approved on or prior to the Closing Date by the
Administrative Agent, such consent not to be unreasonably withheld)
and constitute the complete understanding among the parties
thereto in respect of the matters and transactions covered
thereby. To the best knowledge of the Borrowers, as of the Closing
Date, the representations and warranties of the Borrowers
contained in the Acquisition Documents were true and correct in all
material respects when made or deemed to be made except as would not
have a materially adverse effect on the business or financial
condition of the Borrowers and their Subsidiaries, taken as a whole,
and the Administrative Agent may rely on such representations and
warranties as if they were incorporated herein on the Closing Date;
provided, that nothing contained herein shall prejudice in any way
any rights of the Borrowers or IC under or in respect of the
Acquisition Documents, all of which are expressly hereby reserved.
The representations and warranties of IC contained in the
Acquisition Documents were true and correct in all material respects
when made or deemed to be made, and the Administrative Agent
may rely on such representations and warranties as if they were
incorporated herein on the Closing Date. The requirements of Sect.
9.11 have been satisfied as of the Closing Date (subject to the
satisfaction of the Administrative Agent as to the matters set forth
therein which expressly require such satisfaction).
AFFIRMATIVE COVENANTS OF THE BORROWERS.
Each of the Borrowers covenants and agrees that, so long as any
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is
outstanding or any Bank has any obligation to make any Loans or the
Issuing Bank has any obligation to issue, extend or renew any Letters
of Credit:
Punctual Payment.
The Borrowers will duly and punctually pay or cause to be paid the
principal and interest on the Loans, all Reimbursement
Obligations, the Letter of Credit Fees, the Fronting Fees, the
commitment fees, the Agent's Fees and all other amounts provided for in
this Credit Agreement and the other Loan Documents to which any of the
Borrowers or any of their Subsidiaries is a party, all in accordance
with the terms of this Credit Agreement and such other Loan
Documents.
Maintenance of Office.
Each of the Borrowers will maintain its chief executive office at the
location set forth beneath such Borrower's name on Schedule 6.2
hereto, or at such other place in the United States of America as
such Borrower shall designate upon written notice to the
Administrative Agent, where notices, presentations and demands to or
upon such Borrower in respect of the Loan Documents to which such
Borrower is a party may be given or made.
Records and Accounts.
Each of the Borrowers will (i) keep, and cause each of their
Subsidiaries to keep, true and accurate records and books of
account in which full, true and correct entries will be made in
accordance with generally accepted accounting principles and
(ii) maintain adequate accounts and reserves for all taxes
(including income taxes), depreciation, depletion, obsolescence
and amortization of its properties and the properties of their
Subsidiaries, contingencies, and other reserves in accordance
with generally accepted accounting principles.
Financial Statements, Certificates and Information.
The Borrowers will deliver to the Administrative Agent for delivery to
each of the Banks:
(a) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Borrowers,
the consolidated balance sheet of CCP Holdings and its Subsidiaries
as at the end of such year, and the related consolidated
statement of income and consolidated statement of cash flow for such
year, each setting forth in comparative form the figures for the
previous fiscal year and all such consolidated statements to be in
reasonable detail and prepared in accordance with generally
accepted accounting principles, and, as to the consolidated
financial statements, certified without qualification by Arthur
Andersen LLP or by other independent certified public
accountants who shall be reasonably satisfactory to the
Administrative Agent, together with a written statement from such
accountants to the effect that they have read a copy of this Credit
Agreement, and that, in making the examination necessary to said
certification, they have obtained no knowledge of any Default or
Event of Default, or, if such accountants shall have obtained
knowledge of any then existing Default or Event of Default they
shall disclose in such statement any such Default or Event of
Default; provided that such accountants shall not be liable to the
Banks for failure to obtain knowledge of any Default or Event of
Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the fiscal quarters of
the Borrowers, copies of the unaudited consolidated balance sheet
of CCP Holdings and its Subsidiaries as at the end of such quarter, and
the related consolidated statement of income and consolidated
statement of cash flow for the portion of the fiscal year then
elapsed, all in reasonable detail and prepared in accordance with
generally accepted accounting principles (subject to lack of footnotes
and year-end adjustments), together with a certification by the
principal financial or accounting officer of the Borrowers that
the information contained in such financial statements fairly
presents in all material respects the financial position of the
Borrowers and their Subsidiaries on the date thereof on a
consolidated basis in accordance with generally accepted
accounting principles (subject to lack offootnotes and year-end
adjustments);
(c) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified
by the principalfinancial or accounting officer of the Borrowers
in substantially the form of Exhibit C hereto (a "Compliance
Certificate") and setting forth in reasonable detail
computations evidencing compliance with the covenants contained in
Sect. 8 and a calculation supporting the Borrower's determination of
the proposed Applicable Margin, each for the applicable fiscal
period most recently ended and, in each case (if applicable),
including reconciliations to reflect changes in generally
accepted accounting principles since the Balance Sheet Date; (d)
contemporaneously with the filing or mailing thereof, copies of all
material of a financial nature filed by any of the Borrowers or
their Subsidiaries with the Securities and Exchange Commission;
(e) no later than January 31 of each fiscal year of the Borrowers,
the proposed operating budgets of CCP Holdings and its Subsidiaries on
a consolidated basis for the current fiscal year in the form
prepared for management; and
(f) from time to time such other financial data and information
(including accountants' management letters) as the Administrative
Agent may reasonably request.
Notices.
Defaults.
The Borrowers will promptly notify the Administrative
Agent and each of the Banks in writing of the occurrence of any
Default or Event of Default of which any executive officer of any of
the Borrowers is aware.
Environmental Events.
The Borrowers will promptly give notice to the Administrative
Agent and each of the Banks (i) of any violation of any Environmental
Law that any of the Borrowers or any of their Subsidiaries
reports in writing or is reportable by such Person in writing (or for
which any written report supplemental to any oral report is made)
to any federal, state or local environmental agency and (ii)
upon becoming aware thereof, of any inquiry, proceeding,
investigation, or other action, including a notice from any agency
of potential environmental liability, of any federal, state or
local environmental agency or board, that would reasonably be
expected to have a materially adverse effect on the financial
condition or operations of the Borrowers and their Subsidiaries,
taken as a whole.
[Intentionally Omitted.]
Notice of Litigation and Judgments.
The Borrowers will, and will cause each of their Subsidiaries to,
give notice to the Administrative Agent and each of the Banks in
writing within fifteen (15) days of becoming aware of any
litigation or proceedings threatened in writing or any pending
litigation and proceedings affecting any of the Borrowers or
any of their Subsidiaries or to which any of the Borrowers or any of
their Subsidiaries is or becomes a party involving an uninsured claim
against any of the Borrowers or any of their Subsidiaries that could
reasonably be expected to have a materially adverse effect on the
Borrowers and their Subsidiaries, taken as a whole, or which
question the validity or enforceability of this Credit Agreement or
the other Loan Documents, and stating the nature and status of such
litigation or proceedings.
Notification of Derailments; Labor Agreements.
The Borrowers will, and will cause each of their Subsidiaries to,
give notice to the Administrative Agent and each of the Banks in
writing promptly upon becoming aware thereof of any derailments
or other types of accidents which could reasonably be expected to
have a materially adverse effect on the business or financial
condition of the Borrowers and their Subsidiaries, taken as a
whole. The Borrowers shall deliver to the Administrative Agent
all reports filed with the FRA regarding any occurrence referred to
in this Sect. 6.5.5. The Borrowers will, and will cause each of
their Subsidiaries to, give notice to the Administrative
Agent prior to entering into any agreement (including, but
not limited to, collective bargaining agreements) with any labor
union to which any of the Borrowers' employees belong other than those
previously disclosed on Schedule 5.22 hereto and which could
reasonably be expected to have a materially adverse effect on the
business or financial condition of the Borrowers and their
Subsidiaries, taken as a whole.
Corporate Existence; Maintenance of Properties.
The Borrowers will do or cause to be done all things necessary to
preserve and keep in full force and effect their corporate
existence, rights and franchises and those of their Subsidiaries,
except where the failure to keep in full force and effect any such
rights or franchises would not have a materially adverse effect on
the business or financial condition of the Borrowers and their
Subsidiaries, taken as a whole, except as permitted pursuant to Sect.
7.5.1 or Sect. 7.5.2 hereof, and except for dissolutions or
liquidations of a direct or indirect wholly-owned Subsidiary of
CCP Holdings, and will not, and will not cause or permit any of their
Subsidiaries to, convert to a limited liability company or a
limited liability partnership. They (i) will cause all of their
material properties and those of their Subsidiaries used or useful in
the conduct of their business or the business of their Subsidiaries to
be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment, normal wear and tear
excepted, and except to the extent as would not have a materially
adverse effect on the business or financial condition of the
Borrowers and their Subsidiaries, taken as a whole, (ii) will cause
to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment
of the Borrowers may be reasonably necessary so that the business
carried on in connection therewith may be properly and
advantageously conducted at all times, and (iii) will, and will cause
each of their Subsidiaries to, continue to engage primarily in the
businesses now conducted by them and in railroad-related businesses;
provided that nothing in this Sect. 6.6 shall prevent the Borrowers
from discontinuing or reducing the level of the operation or
maintenance of any of their properties or any of those of their
Subsidiaries if such discontinuance or reduction is, in the judgment of
the Borrowers, desirable in the conduct of its or their business and
that do not in the aggregate materially adversely affect the
business of the Borrowers and their Subsidiaries taken as a whole.
Insurance.
The Borrowers will, and will cause each of their Subsidiaries
to, maintain with financially sound and reputable insurers,
insurance funds, or underwriters insurance with respect to their
properties and businesses against such casualties and
contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic
areas and in amounts, containing such terms, in such forms and for
such periods as may be reasonable and prudent.
Taxes.
The Borrowers will, and will cause each of their Subsidiaries
to, duly pay and discharge, or cause to be paid and discharged, before
the same shall become overdue, all taxes, assessments and other
governmental charges (other than taxes, assessments and other
governmental charges that in the aggregate are not material to the
business or assets of the Borrowers and their Subsidiaries, taken as
a whole) imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits
therefrom, as well as all claims for labor, materials, or
supplies that if unpaid might by law become a lien or charge upon any
of its property; provided that any such tax, assessment, charge, levy
or claim need not be paid if the validity or amount thereof shall
currently be contested in good faith by appropriate proceedings and
if such Borrower or such Subsidiary shall have set aside on its books
such reasonable reserves with respect thereto as may be required in
accordance with generally accepted accounting principles; and provided
further that the Borrowers and each of their Subsidiaries will pay all
such taxes, assessments, charges, levies or claims forthwith upon the
commencement of proceedings to foreclose any lien that may have
attached as security therefor, except for any Lien which is in
respect of property having a total net book value, when combined
with all other property of the Borrowers and their
Subsidiaries subject to such Liens arising from and after the date
hereof as to which foreclosure proceedings have commenced, that is
not in excess of $1,000,000, taken on an aggregate cumulative basis.
Inspection of Properties and Books, etc.
General.
Each of the Borrowers shall permit the Banks, through the
Administrative Agent or any of the Banks' other designated
representatives, to visit and inspect any of the properties of any of
the Borrowers or any of their Subsidiaries, to examine the books of
account of the Borrowers and their Subsidiaries (and to make
copies thereof and extracts therefrom), and to discuss the affairs,
finances and accounts of the Borrowers and their Subsidiaries with,
and to be advised as to the same by, its and their officers,
upon reasonable notice, and all at such reasonable times and
intervals as the Administrative Agent or the Majority Banks may
reasonably request.
Communications with Accountants.
The Borrowers authorize the Administrative Agent and, if accompanied
by the Administrative Agent, the Banks to communicate directly
with the Borrowers' independent certified public accountants and
authorizes such accountants to disclose to the Administrative
Agent and the Banks any and all financial statements and other
supporting financial documents and schedules including copies of any
management letter with respect to the business, financial condition
and other affairs of any of the Borrowers or any of their
Subsidiaries; provided, that other than during the occurrence of any
Event of Default, the Administrative Agent shall give reasonable
prior notice to the Borrowers of its intention to so
communicate with the Borrowers' independent certified public
accountants. At the request of the Administrative Agent, the
Borrowers shall deliver a letter addressed to such accountants
instructing them to comply with the provisions of this Sect. 6.9.2.
Compliance with Laws, Contracts, Licenses, and Permits.
Each of the Borrowers will, and will cause each of their
Subsidiaries to (a) comply with all provisions of its charter
documents and by-laws and all laws (including all Environmental
Laws), rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it is or becomes subject and
noncompliance with which would have a material adverse effect on
the business or financial condition of the Borrowers and their
Subsidiaries, taken as a whole, or on the ability of the Borrowers to
fulfill any of their obligations under this Credit Agreement or
the other Loan Documents; and (b) promptly obtain, maintain, apply
for renewal, and not allow to lapse, any authorization,
consent, approval, license or order for, and accomplish any filing
or registration with, any court or judicial, administrative or
governmental authority or any other Person which is or becomes
necessary in order that it perform in all material respects all
of its obligations under this Credit Agreement, the other Loan
Documents and in order that the same are valid and binding and
effective in accordance with their terms.
Employee Benefit Plans.
The Borrowers will (i) promptly upon filing the same with the
Department of Labor or Internal Revenue Service upon request of
the Administrative Agent, furnish to the Administrative Agent a
copy of the most recent actuarial statement required to be submitted
under Sect. 103(d) of ERISA and Annual Report, Form 5500, with all
required attachments, in respect of each Guaranteed Pension Plan and
(ii) promptly upon receipt or dispatch, furnish to the
Administrative Agent any notice, report or demand sent or received
in respect of a Guaranteed Pension Plan under Sect. Sect. 302,
4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in
respect of a Multiemployer Plan, under Sect. Sect. 4041A, 4202, 4219,
4242, or 4245 of ERISA.
Use of Proceeds.
The Borrowers will use the proceeds of the Loans and will obtain
Letters of Credit solely for the purposes set forth in Sect. 5.16
hereof.
Further Assurances.
Each of the Borrowers will, and will cause each of their
Subsidiaries to, cooperate with the Banks and the Administrative
Agent and execute such further instruments and documents as the Banks
or the Administrative Agent shall reasonably request to carry out to
their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.
CERTAIN NEGATIVE COVENANTS OF THE BORROWERS.
Each of the Borrowers covenants and agrees that, so long as any
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is
outstanding or any Bank has any obligation to make any Loans or the
Issuing Bank has any obligations to issue, extend or renew any Letters
of Credit:
Restrictions on Indebtedness.
The Borrowers will not, and will not permit any of their
Subsidiaries to, create, incur, assume, guarantee or be or remain
liable, contingently or otherwise, with respect to any Indebtedness
other than:
(a) Indebtedness to the Banks, the Issuing Bank and the
Administrative Agent arising under any of the Loan Documents;
(b) Indebtedness of the Borrowers or such Subsidiary incurred
in the ordinary course of business not incurred through (i) the
borrowing of money, or (ii) the obtaining of credit except for
credit on an open account basis customarily extended and in fact
extended in connection with purchases of goods and services in the
ordinary course of business;
(c) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials and
supplies to the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of Sect. 6.8;
(d) Indebtedness in respect of attachments or similar proceedings,
judgments or awards that have been in force for less than the
applicable period for taking an appeal so long as execution is not
levied thereunder or in respect of which any Borrower or such
Subsidiary shall at the time in good faith be prosecuting an
appeal or proceedings for review and in respect of which a stay
of execution shall have been obtained pending such appeal or
review;
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
(f) [Intentionally Omitted];
(g) Indebtedness of any of the Borrowers to any of the other
Borrowers consisting of rights of reimbursement, contribution,
subrogation and the like in connection with the joint and several
obligations of the Borrowers under the Loan Documents;
(h) purchase money Indebtedness for real or personal property
purchased by the Borrowers or any of their Subsidiaries for use in
the ordinary course of such Person's business, but only to the
extent that such Indebtedness does not exceed 100% of the fair
market value of the property so purchased as at the date of
purchase and only to the extent that the incurrence thereof would
not result in a breach of the covenants contained in Sect. 8 hereof,
and Indebtedness in respect of Capitalized Leases only to the extent
that such Indebtedness is not prohibited by the other covenants
contained herein and only to the extent that the incurrence thereof
would not result in a breach of the covenants contained in Sect. 8
hereof;
(i) Indebtedness existing on the date hereof and listed and
described in reasonable detail on Schedule 7.1 hereto, and any
renewals, extensions or refinancings of such Indebtedness, provided
that such renewals, extensions or refinancings shall not increase (i)
the amount of collateral securing such indebtedness, (ii)
the aggregate amount of such Indebtedness, or (iii) if such
Indebtedness is renewed, extended or refinanced prior to the maturity
thereof, the aggregate annual debt service requirement during the
period prior to the original maturity thereof with respect thereto;
(j) Indebtedness of any of the Borrowers to any of the other
Borrowers; and
(k) Indebtedness in addition to the Indebtedness permitted by
clauses (a) through (j) above, provided that after giving effect
thereto, the Borrowers are not in violation of the covenants contained
in Sect. 8 hereof.
Restrictions on Liens.
The Borrowers will not, and will not permit any of their
Subsidiaries to, create, incur, assume or permit to exist or be
created or incurred any Lien upon any of their property or assets,
other than:
(a) Liens in favor of a Borrower on all or part of the assets
of any other Borrower securing Indebtedness permitted by Sect.
7.1(j) hereof owing by a Borrower to another Borrower (provided
that such Indebtedness itself is not pledged or otherwise subject to
any Lien in favor of any other Person);
(b) Liens to secure taxes, assessments and other government charges
if payment shall not at the time be required to be made in accordance
with Sect. 6.8 hereof, and Liens on properties to secure claims
for labor, material or supplies in respect of obligations not
overdue or not yet required to be paid by Sect. 6.8;
(c) Liens in respect of property or assets of any of the Borrowers
or their Subsidiaries (i) under workers' compensation, unemployment
or other insurance, old age pensions or other Social Security
benefits or other similar laws or similar legislation; (ii) in
connection with surety, appeal and similar bonds incidental to
the conduct of litigation; (iii) in connection with bid,
performance or similar bonds which do not exceed in the aggregate
$2,000,000; mechanics',laborers', materialmen's and similar liens
which are not then delinquent or which are being contested in good
faith by appropriate proceedings; and (iv) other Liens incidental to
the conduct of the business of the Borrowers and their Subsidiaries in
the ordinary course of such business which are not incurred in
connection with the borrowing of money or the obtaining of
advances or credit; all of which Liens permitted by this paragraph
(c) do not in the aggregate materially detract from the value of
such Borrower's and such Subsidiary's property or materially impair
the use thereof in the operation of the business of the
Borrowers and their Subsidiaries;
(d) Liens on properties in respect of judgments or awards, the
Indebtedness with respect to which is permitted by Sect. 7.1(d);
(e) [Intentionally Omitted]
(f) encumbrances on Real Estate consisting of easements, rights
of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which any of the
Borrowers or any of their Subsidiaries is a party, and other minor
liens or encumbrances none of which in the opinion of the Borrowers
interferes materially with the use of the property affected in the
ordinary conduct of the business of the Borrowers and their
Subsidiaries, which defects do not individually or in the aggregate
have a materially adverse effect on the business or financial
condition of the Borrowers and their Subsidiaries taken as a
whole;
(g) Liens existing on the date hereof and listed and described in
reasonable detail on Schedule 7.2 hereto and Liens on the
same property securing renewals, extensions and refinancings
of the Indebtedness described in Sect. 7.1(i) thereof subject to
all the provisos contained therein;
(h) Liens securing the purchase price of property financed pursuant
to purchase money Indebtedness permitted by Sect. 7.1(h) hereof,
provided that such Liens are limited solely to the property so
purchased (and the proceeds thereof), and Liens in respect of
Capitalized Leases, the Indebtedness with respect to which is
permitted by Sect. 7.1(h) hereof, provided that such Liens are
limited solely to the property subject to such Capitalized Leases;
(i) Liens, if any, in favor of the Administrative Agent and the Banks
to secure the Obligations; and
(j) Liens which would not otherwise be permitted by clauses (a)
through (i) hereof securing Indebtedness permitted under Sect. 7.1
(or other obligations not prohibited by this Credit Agreement) of
the Borrowers and their Subsidiaries, provided that after giving
effect thereto the aggregate outstanding principal amount of
all such Indebtedness (and other such obligations) secured by
such Liens permitted by this clause (j) does not exceed $500,000 at any
time.
Restrictions on Investments.
The Borrowers will not, and will not permit any of their
Subsidiaries to, make or permit to exist or to remain outstanding any
Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United States
of America that mature within one (1) year from the date of purchase
by a Borrower;
(b) demand deposits, certificates of deposit, bankers acceptances
and time deposits of any Bank or any United States banks having
total assets in excess of $1,000,000,000, and written agreements
under which any Bank or any other bank described in this Sect.
7.3(b)sells and agrees to repurchase marketable direct
obligations of the United States of America;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of
purchase have been rated and the ratings for which are not less than "P
1"if rated by Moody's and not less than "A 1" if rated by S&P;
(d) Investments existing on the date hereof and listed and
described in reasonable detail on Schedule 7.3 hereto;
(e) Investments with respect to Indebtedness permitted by Sect.
7.1(j) so long as such entities remain Borrowers;
(f) Investments by the Borrowers in IC or any of its Subsidiaries
(other than the Borrowers and their Subsidiaries);
(g) Investments by any of the Borrowers in any of the other
Borrowers consisting of rights of reimbursement, contribution,
subrogation and the like in connection with the joint and several
obligations of the Borrowers under the Loan Documents;
(h) Investments by any of the Borrowers in any of the other Borrowers;
(i) Investments consisting of loans and advances to employees for
moving, entertainment, travel and other similar expenses in the
ordinary course of business not to exceed $500,000 in the aggregate
at any time outstanding;
(j) Investments consisting of trade or accounts receivable or notes
receivable for goods or services rendered in the ordinary course of
business of any of the Borrowers or their Subsidiaries;
(k) so long as no Default or Event of Default shall have
occurred and be continuing, and none would result after giving effect
thereto, Investments by a Borrower in wholly-owned Subsidiaries
organized after the date hereof that are engaged primarily in
the businesses now conducted by the Borrowers and in
railroad-related businesses, provided that the provisions of
Sect. 7.13 are complied with in all respects in connection with
any such Investment in a new Subsidiary; and
(l) so long as no Default or Event of Default shall have occurred
and be continuing, and none would result after giving effect thereto,
Investments other than those referred to above in this Sect. 7.3
which, when combined with the applicable amounts of monetary
purchase consideration in respect of asset acquisitions effected
pursuant to Sect. 7.5.1(z) hereof, do not exceed in the aggregate
$500,000 as determined on a cumulative basis from and after the
Closing Date.
Distributions.
The Borrowers will not make any Distributions (other than
Distributions to CCP Holdings), provided however that so long as
no Default or Event of Default shall have occurred and be
continuing, and so long as none would result after giving effect
thereto (i) CCP Holdings may make the Special Dividend, and
(ii) CCP Holdings may make Distributions to its stockholders.
Merger, Acquisitions and Disposition of Assets.
Mergers and Acquisitions.
The Borrowers will not, and will not permit any of their Subsidiaries
to, become a party to any merger or consolidation other than the
merger or consolidation of (a) a Borrower (other than CCP Holdings)
into any other Borrower, (b) one or more of the Subsidiaries of any of
the Borrowers with and into a Borrower, or (c) two or more
Subsidiaries of the Borrowers. The Borrowers will not, and will not
permit any of their Subsidiaries to, agree to or effect any asset
acquisition except (x) the acquisition of assets in the ordinary
course of business, (y) purchases of materials and supplies from ICR
after the Closing Date subject to the restrictions contained in Sect.
7.12, and (z) so long as no Default or Event of Default shall have
occurred and be continuing,and none would results after giving
effect thereto,asset acquisitions the total monetary purchase
consideration in respect of which, when combined with Investments
made pursuant to Sect. 7.3(1) hereof, do not exceed $500,000 as
determined on a cumulative basis from and after the Closing Date.
Stock acquisitions shall be subject to the applicable provisions of
Sect. 7.3 hereof.
Disposition of Assets.
The Borrowers will not, and will not permit any of their Subsidiaries
to, become a party to or agree to or effect any disposition of
assets, other than (a) the disposition of assets in the ordinary
course of business, consistent with past practices (including the
disposition of obsolete or worn out, or casualtied, equipment) and
(b) provided that no Default or Event of Default exists and none
would result after giving effect thereto, (i) the disposition of
assets other than the capital stock of any Borrower (excluding the
Materials and Supplies Transactions) yielding Net Cash Proceeds to
the Borrowers in an aggregate cumulative amount not to exceed
$5,000,000 for all such asset dispositions from and after the
Closing Date, so long as (A) each such asset disposition is entered
into on arm's length terms for fair market value and (B) the Total
Commitment is automatically reduced, on a quarterly basis, by the
applicable amount (if any) of Excess Asset Sale Proceeds in accordance
with Sect. 2.3(b), and (ii) the disposition of assets pursuant to
the Materials and Supplies Transactions.
Sale and Leaseback.
The Borrowers will not and will not permit any of their Subsidiaries
to, enter into any sale-leaseback transactions as seller-lessee
without the prior written consent of the Majority Banks (which
consent shall not be unreasonably withheld) unless (a) the sale is
permitted under Sect. 7.5.2 hereof, (b) the Indebtedness and Liens
(if any) incurred or created in connection therewith would be
permitted to be incurred or created under Sect. Sect. 7.1 and
7.2 hereof, respectively, and (c) no Default or Event of Default
has occurred and is continuing and none would result therefrom.
Compliance with Environmental Laws.
The Borrowers will not, and will not permit any of their
Subsidiaries to, (i) use any of the Real Estate or any portion thereof
for the handling, processing, storage or disposal of Hazardous
Substances, (ii) cause or permit to be located on any of the Real
Estate any underground tank or other underground storage
receptacle for Hazardous Substances, (iii) generate any Hazardous
Substances on any of the Real Estate, (iv) conduct any activity at
any Real Estate or use any Real Estate in any manner so as to cause a
release (i.e. releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping) or threatened release of Hazardous Substances
on, upon or into the Real Estate or (v) otherwise conduct any
activity at any Real Estate or use any Real Estate in any manner
that would violate any Environmental Law or bring such Real Estate
in violation of any Environmental Law, in each such case, where such
prohibited action would reasonably be expected to have a materially
adverse effect on the business or financial condition of the
Borrowers and their Subsidiaries, taken as a whole.
Employee Benefit Plans.
None of the Borrowers nor any ERISA Affiliate will (a) engage in any
"prohibited transaction" within the meaning of Sect. 406 of ERISA or
Sect. 4975 of the Code which could result in a material liability
for any of the Borrowers or any of their Subsidiaries; or(a) permit
any Guaranteed Pension Plan to incur an "accumulated funding
deficiency", as such term is defined in Sect. 302 of ERISA,
whether or not such deficiency is or may be waived; or (c) fail
to contribute to any Guaranteed Pension Plan to an extent which, or
terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of
any of the Borrowers or any of their Subsidiaries pursuant to
Sect. 302(f) or Sect. 4068 of ERISA; or (d) permit or take any action
which would result in the aggregate benefit liabilities (with the
meaning of Sect. 4001 of ERISA) of all Guaranteed Pension Plans
exceeding the value of the aggregate assets of such Plans,
disregarding for this purpose the benefit liabilities and assets
of any such Plan with assets in excess of benefit liabilities,
by more than $10,000,000.
[Intentionally Omitted.]
Capitalization.
The Borrowers will not, and will not permit any of their
Subsidiaries to, authorize, issue or sell any capital stock, grant
any options, warrants or other rights to purchase any capital
stock or in any way change the capitalization of any of the
Borrowers in such a manner as to cause CCP Holdings to own directly
or indirectly less than one hundred percent of the capital stock of
each of the Borrowers (other than CCP Holdings).
Fiscal Year.
The Borrowers will not, and will not permit their Subsidiaries
to, change the date of the end of their fiscal year from that set
forth in Sect. 5.20 hereof.
Affiliate Transactions.
The Borrowers will not, and will not permit their Subsidiaries
to, enter into any transactions of the type described in Sect. 5.14
except for transactions of the type described in (and permitted
by) Sect. 5.14.
New Subsidiaries.
Each of the Borrowers shall, concurrently with making any Investment
in a Subsidiary organized after the date hereof as contemplated
by Sect. 7.3(k), revise Schedule 5.18 hereto to reflect the formation
or acquisition of each new Subsidiary. Each of the Borrowers
shall cause each new Subsidiary in which a Borrower invests pursuant
to Sect. 7.3(k), immediately upon the making of such Investment, to
execute and deliver to the Administrative Agent for the benefit of
the Banks, an instrument of adherence with respect to this Credit
Agreement, in form and substance satisfactory to the Administrative
Agent, whereby such Person undertakes joint and several liability
for the Obligations as a Borrower hereunder, together with
acceptable legal opinions, new Notes (or allonges to the
existing Notes) and other documents and instruments necessary to
demonstrate the due authorization, execution and delivery by such new
Subsidiary of such instrument of adherence and such other documents,
including (i) the resolutions of the Board of Directors or equivalent
body of such new Subsidiary and the charter and by-laws (or the
equivalent thereof) of such new Subsidiary, certified by an
appropriate officer of such new Subsidiary, (ii) a legal existence and
good standing certificate of such new Subsidiary in its jurisdiction of
incorporation, (iii) a certificate of the Secretary or an Assistant
Secretary of such new Subsidiary certifying the titles, incumbency,
names and true signatures of the officers of such new Subsidiary
authorized to sign such instrument of adherence, such other documents
and any Loan Requests, and (iv) such other documents as the
Administrative Agent may reasonably request. Upon delivery of
the aforementioned documents, such new Subsidiary shall become, and
be treated in all respects as, a Borrower hereunder and shall
comply with and be bound by all of the terms and conditions of the
Loan Documents as a Borrower thereunder.
FINANCIAL COVENANTS OF THE BORROWERS.
Each of the Borrowers covenants and agrees that, so long as any
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is
outstanding or any Bank has any obligation to make any Loans or the
Issuing Bank has any obligation to issue, extend or renew any Letters
of Credit:
Minimum Consolidated Tangible Net Worth.
The Borrowers will not permit Consolidated Tangible Net Worth as of
the end of any fiscal quarter to be less than the sum of (i)
$92,800,000, plus (ii) on a cumulative basis, 50% of positive
Consolidated Net Income for each fiscal quarter beginning with
the fiscal quarter ended September 30, 1996 and ending on the date as
of which the calculation is made (with no deduction for any quarter in
which there is a net loss). For purposes of this Sect. 8.1 only, on
any date of determination Consolidated Tangible Net Worth shall
be computed by subtracting from the amount of Consolidated
Tangible Net Worth as otherwise determined in accordance with the
definition thereof the aggregate amount of Investments made
pursuant to Sect. 7.3(f) hereof outstanding on such date (without
duplication to the extent (if any) such Investments also constitute
Distributions independently reducing Consolidated Tangible Net
Worth pursuant to the definition thereof).
Funded Debt to EBITDA Ratio.
The Borrowers will not permit the Funded Debt to EBITDA Ratio
determined as of any fiscal quarter ending date set forth in the
table below to be greater than the ratio set forth opposite such date
in such table:
Date Ratio
9/30/96 2.75:1.00
12/31/96 2.75:1.00
03/31/97 2.75:1.00
06/30/97 2.75:1.00
09/30/97 2.75:1.00
12/31/97 2.50:1.00
03/31/98 2.50:1.00
06/30/98 2.50:1.00
09/30/98 2.50:1.00
12/31/98 2.00:1.00
03/31/99 2.00:1.00
06/30/99 2.00:1.00
09/30/99 2.00:1.00
12/31/99 1.75:1.00
03/31/00 1.75:1.00
06/30/00 1.75:1.00
09/30/00 1.75:1.00
12/31/00 1.75:1.00
03/31/01 1.75:1.00
06/30/01 1.75:1.00
Interest Coverage Ratio.
The Borrowers will not permit the ratio of Consolidated Adjusted EBIT
determined for any period described in the table set forth below
to Consolidated Interest Charges determined for such period to be
less than the ratio set forth opposite such period in such table:
Period Ratio
07/01/96 - 9/30/96 3.00:1.00
07/01/96 - 12/31/96 3.00:1.00
07/01/96 - 03/31/97 3.00:1.00
07/01/96 - 06/30/97 3.00:1.00
10/01/96 - 09/30/97 3.00:1.00
01/01/97 - 12/31/97 3.50:1.00
04/01/97 - 03/31/98 3.50:1.00
07/01/97 - 06/30/98 3.50:1.00
10/01/97 - 09/30/98 3.50:1.00
01/01/98 - 12/31/98 4.00:1.00
04/01/98 - 03/31/99 4.00:1.00
07/01/98 - 06/30/99 4.00:1.00
10/01/98 - 09/30/99 4.00:1.00
01/01/99 - 12/31/99 4.00:1.00
04/01/99 - 03/31/00 4.00:1.00
07/01/99 - 06/30/00 4.00:1.00
10/01/99 - 09/30/00 4.00:1.00
01/01/00 - 12/31/00 4.00:1.00
04/01/00 - 03/31/01 4.00:1.00
07/01/00 - 06/30/01 4.00:1.00
CLOSING CONDITIONS.
The obligations of the Banks to make the initial Loans and of the
Issuing Bank to issue any initial Letters of Credit shall be subject
to the satisfaction of the following conditions precedent on or prior
to June 14, 1996:
Loan Documents, etc.
Loan Documents.
Each of the Loan Documents shall have been duly executed and
delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each
of the Banks. The Administrative Agent shall have received for
each Bank a fully executed copy of each such document.
Acquisition Documents.
Each of the Acquisition Documents shall have been duly executed and
delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance reasonably satisfactory
to each of the Banks. The Administrative Agent shall have
received a fully executed copy of each such document.
Certified Copies of Charter Documents.
The Administrative Agent shall have received for each of the Banks
from each of the Borrowers a copy, certified by duly authorized
officer of such Person to be true and complete on the Closing Date,
of each of (i) its charter or other incorporation documents as in
effect on such date of certification, and (ii) its by-laws as in
effect on such date.
Corporate Action.
All corporate action necessary for the valid execution, delivery and
performance by each of the Borrowers of this Credit Agreement and
the other Loan Documents to which it is or is to become a party shall
have been duly and effectively taken, and evidence thereof reasonably
satisfactory to the Banks shall have been provided to the
Administrative Agent for each of the Banks.
Incumbency Certificate.
The Administrative Agent shall have received for each of the Banks
from each of the Borrowers an incumbency certificate, dated as of
the Closing Date, signed by a duly authorized officer of such
Borrower, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (i) to sign, in the name and on
behalf of each of such Borrowers, each of the Loan Documents to which
such Borrower is or is to become a party; (ii) to make Loan
Requests and Conversion Requests and to apply for Letters of Credit;
and (iii) to give notices and to take other action on its behalf
under the Loan Documents.
Lien Search Questionnaires and UCC and Board Search Results.
The Administrative Agent shall have received from each of the
Borrowers a completed and fully executed Lien Search Questionnaire
and the results of Uniform Commercial Code ("UCC") and Board
searches with respect to the assets and properties of each such
Person, indicating no Liens other than Permitted Liens and otherwise
in form and substance reasonably satisfactory to the Administrative Agent.
Certificates of Insurance.
The Administrative Agent shall have received (i) a certificate of
insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance
limits, and policy terms, and otherwise describing the insurance
obtained in accordance with the provisions of this Credit
Agreement and (ii) certified copies of all policies evidencing such
insurance (or certificates therefore signed by the insurer or an agent
authorized to bind the insurer).
Opinions of Counsel.
The Administrative Agent shall have received for each of the Banks
(a) a favorable legal opinion addressed to the Banks and the
Administrative Agent, dated as of the Closing Date, in form and
substance satisfactory to the Banks and the Administrative Agent,
from Schiff Hardin & Waite, counsel to the Borrowers and their
Subsidiaries; and (b) copies of each of legal opinions delivered
upon the consummation of the Acquisition by counsel to the respective
parties to the Acquisition Documents, each in form and substance
satisfactory to the Banks and the Administrative Agent.
Payment of Fees.
The Borrowers shall have paid, or shall pay out of the proceeds of
the initial Loan, to the Banks or the Administrative Agent,
as appropriate, all fees and other amounts required to be paid as of
the Closing Date pursuant to the provisions of the Loan Documents,
including without limitation those amounts required to be paid
pursuant to Sect. Sect. 4.1, 4.2, and 14 hereof and pursuant to the
terms of the Fee Letter and the reasonable fees and expenses of
the Administrative Agent's Special Counsel.
Payoff Letters.
The Administrative Agent shall have received a payoff letter, in
form and substance satisfactory to the Administrative Agent,
from each (if any) applicable lender with respect to any Indebtedness
of the Borrowers to be refinanced in connection with the
transactions contemplated hereby, each such letter indicating the
amount of the loan obligations of the Borrowers to be discharged on the
Closing Date and to include an acknowledgment by each such lender
that upon receipt of such funds it will forthwith execute and
deliver to the Administrative Agent for filing all termination
statements, if any, and take all such other actions as may be
necessary to terminate all mortgages, deeds of trust, security
interests or other encumbrances, if any, granted by any of the
Borrowers in favor of such lender.
Disbursement Instructions.
The Administrative Agent shall have received an initial Loan Request
and written disbursement instructions (including instructions
for payment of the amounts referred to in Sect. 9.8 hereof) in
reasonable detail from the Borrowers.
Closing of Acquisition.
The Acquisition shall have been duly consummated on or prior to
the Closing Date in accordance with the terms of the Acquisition
Documents and, after giving effect thereto, IC shall own all of the
issued and outstanding capital stock of CCP Holdings. The
Administrative Agent shall have received evidence reasonably
satisfactory to it, of the completion by the parties to the
Acquisition Documents of all actions to be taken prior to or
concurrently with the closing of the transactions contemplated
thereby pursuant to the terms thereof, including without
limitation, the satisfaction or, to the extent consented to in
writing by the Administrative Agent, waiver, of all conditions to
closing set forth in Article VII of the Stock Purchase Agreement and
the payment by each applicable party thereto of all amounts required
to be paid at closing. Notwithstanding the foregoing the
Administrative Agent hereby consents to the substitution of counsel
for the Sellers. The Administrative Agent shall have received
evidence, reasonably satisfactory to it, that all consents and
approvals necessary to complete the Acquisition shall have been
obtained and such consents and approvals shall be in form and
substance reasonably satisfactory to the Administrative Agent.
Without limiting the foregoing, the Administrative Agent shall have
received evidence, reasonably satisfactory to it, of the satisfaction
by IC of the requirements of Sect. 6.11 of the Stock Purchase
Agreement including the completion of all necessary DOT Filings
(as defined in the Stock Purchase Agreement), the receipt of DOT
Approval (as defined in the Stock Purchase Agreement), and, to the
extent applicable, the satisfaction of all requirements under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the regulations promulgated thereunder. The aggregate
consideration ascribed to the value of the capital stock of CCP
Holdings pursuant to the Acquisition Documents shall not exceed
$143,000,000, as such amount may be adjusted pursuant to the terms of
the Acquisition Documents. In addition, CCP Holdings shall have
paid the Special Dividend concurrently with the making of the first
Loan hereunder.
Proceedings and Documents.
All proceedings in connection with the transactions contemplated
by this Credit Agreement, the other Loan Documents and all other
documents incident thereto shall be reasonably satisfactory in form
and substance to the Banks and to the Administrative Agent and the
Administrative Agent's Special Counsel, and the Banks, the
Administrative Agent and such counsel shall have received all
information and such counterpart originals or certified or other
copies of such documents as the Administrative Agent may reasonably
request.
CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan and of the Issuing
Bank to issue, extend or renew any Letter of Credit, in each case
whether on or after the Closing Date, shall also be subject to the
satisfaction of the following conditions precedent (provided
that such conditions precedent shall not be required to be
satisfied in connection with any conversion or continuation of
any Revolving Credit Loan (not involving the making of any Loan)
pursuant to Sect. 2.7.1 or Sect. 2.7.2 hereof):
Representations True; No Event of Default.
Each of the representations and warranties of any of the Borrowers
and their Subsidiaries contained in this Credit Agreement, the
other Loan Documents or in any document or instrument
delivered pursuant to or in connection with this Credit Agreement
shall be true in all material respects as of the date as of which
they were made and shall also be true in all material respects at and
as of the time of the making of such Loan or the issuance,
extension or renewal of such Letter of Credit, with the same effect as
if made at and as of that time (except to the extent of changes
resulting from transactions contemplated or permitted by this Credit
Agreement and the other Loan Documents and changes occurring in
the ordinary course of business that singly or in the aggregate are
not materially adverse, and to the extent that such representations
and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
No Legal Impediment.
No change shall have occurred in any law or regulations thereunder or
interpretations thereof that in the reasonable opinion of any Bank
would make it illegal for such Bank to make such Loan or to
participate in the issuance, extension or renewal of such Letter
of Credit or in the reasonable opinion of the Issuing Bank would make
it illegal for the Issuing Bank to issue, extend or renew such
Letter of Credit, provided that those Banks to whom such change in law
is not applicable shall continue to be obligated to make Loans or
participate in such issuance, extension or renewal of such Letter of
Credit, as the case may be, hereunder, notwithstanding the fact that
one or more other Banks are affected by such change in law.
Governmental Regulation.
Each Bank shall have received such statements in substance and
form reasonably satisfactory to such Bank as such Bank shall
require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of
Governors of the Federal Reserve System; provided that those Banks
who shall have received such statements in substance and
form reasonably satisfactory to them shall continue to be obligated
to make Loans or participate in such issuance, extension or renewal of
such Letters of Credit, as the case may be, hereunder,
notwithstanding the fact that one or more other Banks are affected
by such failure to receive any such statements.
EVENTS OF DEFAULT; ACCELERATION; ETC.
Events of Default and Acceleration.
If any of the following events ("Events of Default" or, if the giving
of notice or the lapse of time or both is required, then, prior to
such notice or lapse of time, "Defaults") shall occur:
(a) the Borrowers shall fail to pay any principal of the Loans or
any Reimbursement Obligation when the same shall become due and
payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;
(b) the Borrowers or any of their Subsidiaries shall fail to pay
any interest on the Loans, the commitment fee, any Letter of
Credit Fee, the Fronting Fees, the Agent's Fees, or other sums due
hereunder or under any of the other Loan Documents, within three (3)
Business Days of the date when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date
of maturity or at any other date fixed for payment;
(c) any of the Borrowers shall fail to comply with any of the
covenants contained in Sect. Sect. 6 (other than Sect. 6.1, Sect.
6.4, the second sentence of Sect. 6.6, Sect. 6.9 and Sect. 6.10),
7 (other than Sect. 7.7) or 8;
(d) any of the Borrowers or any of their Subsidiaries shall
fail to perform any term, covenant or agreement contained herein or
in any of the other Loan Documents (other than those specified
elsewhere in this Sect. 11.1) for thirty (30) days after written
notice of such failure has been given to the Borrowers by the
Administrative Agent;
(e) IC shall fail to perform any term, covenant or agreement
contained in the Comfort Letter;
(f) any representation or warranty of any of the Borrowers or any of
their Subsidiaries in this Credit Agreement or any of the other Loan
Documents or in any other document or instrument delivered pursuant
to or in connection with this Credit Agreement shall prove to have
been false in any material respect upon the date when made or deemed
to have been made or repeated;
(g) The Borrowers or any of their Subsidiaries shall fail to pay at
maturity, or within any applicable period of grace, Indebtedness in an
aggregate principal amount in excess of $500,000 or shall fail to
observe or perform any material term, covenant or agreement
contained in any agreement by which it is bound, evidencing or
securing Indebtedness in an aggregate principal amount in excess of
$500,000 for such period of time as would permit (assuming the
giving of appropriate notice if required) the holder of holders
thereof or of any obligations issued thereunder to accelerate the
maturity thereof;
(h) IC or any of the IC Material Subsidiaries (other than the
Borrowers or their Subsidiaries) shall fail to pay at maturity,
or within any applicable period of grace, Indebtedness in an aggregate
principal amount in excess of $1,000,000, or IC or any of the IC
Material Subsidiaries (other than the Borrowers or their
Subsidiaries) shall fail to observe or perform any material term,
covenant or agreement contained in any agreement by which it is
bound, evidencing or securing Indebtedness in an aggregate principal
amount in excess of $10,000,000 for such period of time as would
permit (assuming the giving of appropriate notice if required) the
holder or holders thereof or of any obligations issued thereunder
to accelerate the maturity thereof;
(i) any of the Borrowers or its Subsidiaries, or any of IC or the IC
Material Subsidiaries, shall make an assignment for the benefit of
creditors, or admit in writing its inability to pay or generally fail
to pay its debts as they mature or become due, or shall petition
or apply for the appointment of a trustee or other custodian,
liquidator or receiver of any of the Borrowers or its Subsidiaries,
or any of IC or the IC Material Subsidiaries, or of any substantial
part of the assets of any of the Borrowers or its Subsidiaries, or any
of IC or the IC Material Subsidiaries, or shall commence any case or
other proceeding relating to any of the Borrowers or its
Subsidiaries, or any of IC or the IC Material Subsidiaries, under
any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of
any jurisdiction, now or hereafter in effect, or shall take any
action to authorize or in furtherance of any of the foregoing, or
if any such petition or application shall be filed or any such
case or other proceeding shall be commenced against any of the
Borrowers or its Subsidiaries, or any of IC or the IC Material
Subsidiaries, and any of the Borrowers or its Subsidiaries, or any
of IC or the IC Material Subsidiaries, shall indicate its
approval thereof, consent thereto or acquiescence therein or
such petition or application shall not have been dismissed within
forty-five (45) days following the filing thereof;
(j) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any of the
Borrowers or its Subsidiaries, or any of IC or the IC Material
Subsidiaries, bankrupt or insolvent, or approving a petition in any
such case or other proceeding, or a decree or order for relief is
entered in respect of any of the Borrowers or its Subsidiaries,
or any of IC or the IC Material Subsidiaries, in an
involuntary case under federal bankruptcy laws as now or hereafter
constituted;
(k) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty consecutive days, any final
judgment against any of the Borrowers or any of their Subsidiaries
that, with other outstanding final judgments, undischarged, against
the Borrowers or any of their Subsidiaries exceeds in the aggregate
$1,000,000;
(l) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty consecutive days, any final
judgment against IC or any of the IC Material Subsidiaries (other
than the Borrowers and their Subsidiaries) that, with other
outstanding final judgments, undischarged, against IC or any of the
IC Material Subsidiaries (other than the Borrower and their
Subsidiaries) exceeds in the aggregate $3,000,000;
(m) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded, in each case otherwise than in
accordance with the terms thereof or with the express prior
written agreement,consent or approval of the Issuing Bank, in the case
of Letters of Credit, or the requisite Banks provided for herein, or
any action at law, suit or in equity or other legal proceeding to
cancel, revoke or rescind any of the Loan Documents shall be
commenced by or on behalf of any of the Borrowers, IC, or any of
their or its Subsidiaries party thereto, or any court or any other
governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a judgment,
order, decree or ruling to the effect that, any one or more of the
Loan Documents is illegal, invalid or unenforceable in accordance
with the terms thereof;
(n) with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and the Majority Banks shall have
determined in their reasonable discretion that such event
reasonably could be expected to result in liability of any of
the Borrowers or any of their Subsidiaries to the PBGC or such
Guaranteed Pension Plan in an aggregate amount exceeding $500,000
for which such the Borrowers and their Subsidiaries are reasonably
likely to be primarily liable and such event in the
circumstances occurring reasonably could constitute grounds for the
termination of such Guaranteed Pension Plan by the PBGC or for the
appointment by the appropriate United States District Court of a
trustee to administer such Guaranteed Pension Plan; or a trustee
shall have been appointed by the United States District Court to
administer such Plan; or the PBGC shall have instituted proceedings to
terminate such Guaranteed Pension Plan;
(o) [Intentionally Omitted]
(p) there shall occur any material damage to, or loss, theft or
destruction of, any material portion of the assets or properties of
the Borrowers and their Subsidiaries, taken as a whole, which,
after giving effect to the proceeds of any applicable insurance,
would be reasonably expected to have a materially adverse effect
on the business or financial condition of the Borrowers and their
Subsidiaries, taken as a whole; or
(q) (i) IC shall at any time own less than 100% of the shares of the
issued and outstanding capital stock of each of ICR and CCP
Holdings, or (ii) CCP Holdings shall at any time own less than 100%
of the shares of the issued and outstanding capital stock of each of
the other Borrowers;
then, and in any such event, so long as the same may be
continuing, the Administrative Agent may, and upon the request of
the Majority Banks shall (i) by notice in writing to the Borrowers
declare all amounts owing with respect to Credit Agreement, the
Notes and the other Loan documents and all Reimbursement
Obligations to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or
other notice any kind, all of which are hereby expressly waived by the
Borrowers and (ii) require the Borrowers then to provide
collateral in an amount equal to 100% of the then maximum Drawing
Amount of all Letters of Credit as required by Sect. 3.2(c) hereof;
provided that in the event of any Event of Default specified in Sect.
Sect. 11.1(i) or 11.1(j), with respect to any of the Borrowers or
their Subsidiaries, all such amounts shall become immediately
due and payable automatically and without any requirement of notice
from the Administrative Agent or any Bank.
Termination of Commitments.
If any one or more of the Events of Default specified in Sect. Sect.
11.1(i) or 11.1(j), with respect to any of the Borrowers or
their Subsidiaries, shall occur, any unused portion of the
credit hereunder shall forthwith terminate and each of the Banks shall
be relieved of all further obligations to make Loans to the
Borrowers and the Issuing Bank shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. If any
other Event of Default shall have occurred and be continuing,
the Administrative Agent may and, upon the request of the
Majority Banks, shall, by notice to the Borrowers, terminate the
unused portion of the credit hereunder, and upon such notice being
given such unused portion of the credit hereunder shall terminate
immediately and each of the Banks shall be relieved of all further
obligations to make Loans and the Issuing Bank shall be relieved
of all further obligations to issue, extend or renew Letters of Credit.
No termination of the credit hereunder shall relieve the
Borrowers or any of their Subsidiaries of any of the
Obligations.
Remedies.
In case any one or more of the Events of Default shall have occurred
and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to Sect. 11.1, each
Bank, if owed any amount with respect to the Loans or the
Reimbursement Obligations, may, with the consent of the Majority
Banks but not otherwise, proceed to protect and enforce its rights by
suit in equity, action at law or other appropriate proceeding,
whether for the specific performance of any covenant or
agreement contained in this Credit Agreement and the other Loan
Documents or any instrument pursuant to which the
Obligations to such Bank are evidenced, including as permitted
by applicable law the obtaining of the ex parte appointment of a
receiver, and, if such amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right of such Bank. To the extent permitted by applicable
law, no remedy herein conferred upon any Bank or the Administrative
Agent or the holder of any Note or purchaser of any Letter of Credit
Participation is intended to be exclusive of any other remedy and
each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute or any other provision of
law.
Distribution of Proceeds.
In the event that, during the continuance of an Event of Default,
the Administrative Agent or any Bank, as the case may be, receives
any monies in connection with the enforcement of any of the Loan
Documents such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Administrative Agent for or in respect of
all reasonable costs, expenses, disbursements and losses which shall
have been incurred or sustained by the Administrative Agent in
connection with the collection of such monies by the
Administrative Agent, for the exercise, protection or enforcement by
the Administrative Agent of all or any of the rights, remedies,
powers and privileges of the Administrative Agent under this Credit
Agreement or any of the other Loan Documents or in support of
any provision of adequate indemnity to the Administrative Agent
against any taxes or liens which by law shall have, or may have,
priority over the rights of the Administrative Agent to such monies;
(b) Second, to all other Obligations in such order or
preference as the Majority Banks may determine; provided,
however, that distributions in respect of such Obligations shall
be made (i) pari passu among Obligations with respect to the
Agent's Fees, the Fronting Fees, and all other fees owing to the
Administrative Agent, on the one hand, and all other Obligations,
on the other, and (ii) such that payments in respect of Obligations
owing to the Banks with respect to each type of Obligation such
as interest, principal, fees and expenses, shall be made among the
Banks pro rata; and provided, further, that the Administrative Agent
may require the providing of cash collateral referred to in Sect. Sect.
3.2(c) and 11.1 hereof and also in its discretion make proper
allowance to take into account any other Obligations not then due
and payable;
(c) Third, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Banks and the Administrative
Agent of all of the Obligations, to the payment of any
applicable obligations required to be paid pursuant to Sect. 9-
504(1)(c) of the Uniform Commercial Code of the Commonwealth
of Massachusetts (to the extent applicable); and (d) Fourth,
the excess, if any, shall be returned to the Borrowers or to such
other Persons as are entitled thereto.
SETOFF.
Regardless of the adequacy of any collateral, during the continuance
of any Event of Default, any deposits or other sums credited by or
due from any of the Banks to any of the Borrowers and any securities
or other property of any of the Borrowers in the possession of such
Bank may to the fullest extent permitted by law be applied to or set
off by such Bank against the payment of Obligations and any and all
other liabilities, direct, or indirect, absolute or
contingent, then due, of such Borrower to such Bank. Each of the
Banks agrees with each other Bank that (i) if an amount to be set
off is to be applied to Indebtedness of such Borrower to such
Bank, other than Indebtedness evidenced by the Notes held by
such Bank or constituting Reimbursement Obligations owed to such
Bank, such amount shall be applied ratably to such other Indebtedness
and to the Indebtedness evidenced by all such Notes held by such
Bank or constituting Reimbursement Obligations owed to such Bank, and
(ii) if such Bank shall receive from such Borrower, whether by
voluntary payment, exercise of the right of setoff, counterclaim,
cross action, enforcement of the claim evidenced by the Notes held
by, or constituting Reimbursement Obligations owed to, such Bank by
proceedings against such Borrower at law or in equity or by
proof thereof in bankruptcy, reorganization, liquidation,
receivership or similar proceedings, or otherwise, and shall retain and
apply to the payment of the Note or Notes held by, or Reimbursement
Obligations owed to, such Bank any amount in excess of its
ratable portion of the payments received by all of the Banks with
respect to the Notes held by, and Reimbursement Obligations owed to,
all of the Banks, such Bank will make such disposition and
arrangements with the other Banks with respect to such excess, either
by way of distribution, pro tanto assignment of claims, subrogation or
otherwise as shall result in each Bank receiving in respect of the
Notes held by it or Reimbursement Obligations owed it, its
proportionate payment as contemplated by this Credit Agreement;
provided that if all or any part of such excess payment is thereafter
recovered from such Bank, such disposition and arrangements shall be
rescinded and the amount restored to the extent of such recovery,
but without interest. Each Bank will give written notice to
the Borrowers promptly after any exercise of its rights under this
Sect. 12.
THE ADMINISTRATIVE AGENT.
Authorization.
(a) The Administrative Agent is authorized to take such action on
behalf of each of the Banks and to exercise all such powers as are
hereunder and under any of the other Loan Documents and any related
documents delegated to the Administrative Agent, together with such
powers as are reasonably incident thereto, provided that no
duties or responsibilities not expressly assumed herein or therein
shall be implied to have been assumed by the Administrative Agent.
Only the Administrative Agent shall have any rights, duties or
responsibilities as agent for the Banks under this Credit Agreement
and the other Loan Documents. Neither the Co-Agent, nor BA Securities,
Inc. (having acted as syndication agent in connection herewith), shall
have any rights, duties or responsibilities in its capacity as such.
Any reference to an agent for the Banks in, or in connection with,
any Loan Document shall be a reference only to the Administrative Agent.
(b) The relationship between the Administrative Agent and each of
the Banks is that of an independent contractor. The use of the term
"Administrative Agent" is for convenience only and is used to
describe, as a form of convention, the independent contractual
relationship between the Administrative Agent and each of the Banks.
Nothing contained in this Credit Agreement nor the other Loan
Documents shall be construed to create an agency, trust or other
fiduciary relationship between the Administrative Agent and any of
the Banks.
(c) As an independent contractor empowered by the Banks to exercise
certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Administrative
Agent is nevertheless a "representative" of the Banks, as that term
is defined in Article 1 of the Uniform Commercial Code, for purposes
of actions for the benefit of the Banks and the Administrative Agent
with respect to all(if any) collateral security and
guaranties contemplated by or relating to the Loan Documents.
Employees and Agents.
The Administrative Agent may exercise its powers and execute its
duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters
pertaining to its rights and duties under this Credit Agreement and
the other Loan Documents.
The Administrative Agent may utilize the services of such Persons
as the Administrative Agent in its sole discretion may reasonably
determine, and all reasonable fees and expenses of any such
Persons shall be paid by the Borrowers.
No Liability.
Neither the Administrative Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them
in their duties nor any agent or employee thereof, shall be liable
for any waiver, consent or approval given or any action taken, or
omitted to be taken, in good faith by it or them hereunder or under
any of the other Loan Documents, or in connection herewith
or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the
Administrative Agent or such other Person, as the case may be, may be
liable for losses due to its willful misconduct or gross negligence.
No Representations.
The Administrative Agent shall not be responsible for the execution
or validity or enforceability of this Credit Agreement, the Notes,
the Letters of Credit, any of the ther Loan Documents or any
instrument at any time constituting, or intended to constitute,
collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the Notes, or
for any recitals or statements, warranties or representations made
herein or in any of the other Loan Documents or in any
certificate or instrument hereafter furnished to it by or on behalf of
any of the Borrowers or any of their Subsidiaries, or be bound
to ascertain or inquire as to the performance or observance of any
of the terms, conditions, covenants or agreements herein or in any
instrument at any time constituting, or intended to
constitute, collateral security for the Notes or to inspect any of
the properties, books or records of any of the Borrowers or any
of their Subsidiaries. The Administrative Agent shall not be bound
to ascertain whether any notice, consent, waiver or request delivered
to it by the Borrowers or any holder of any of the Notes shall have
been duly authorized or is true, accurate and complete. The
Administrative Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume
any liability to the Banks, with respect to the credit worthiness
or financial conditions of any of the Borrowers or any of
their Subsidiaries. Each Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent or
any other Bank, and based upon such information and documents as
it has deemed appropriate, made its own credit analysis and
decision to enter into this Credit Agreement.
Payments.
Payments to Administrative Agent.
A payment by the Borrowers to the Administrative Agent hereunder or
any of the other Loan Documents for the account of any Bank shall
constitute a payment to such Bank. The Administrative Agent agrees
promptly to distribute to each Bank such Bank's pro rata or other
applicable share of payments received by the Administrative
Agent for the account of the Banks except as otherwise expressly
provided herein or in any of the other Loan Documents.
Distribution by Administrative Agent.
If in the opinion of the Administrative Agent the distribution of
any amount received by it in such capacity hereunder, under the
Notes or under any of the other Loan Documents might involve it in
liability, it may refrain from making distribution until its right to
make distribution shall have been adjudicated by a court of
competent jurisdiction. If a court of competent jurisdiction
shall adjudge that any amount received and distributed by the
Administrative Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to the
Administrative Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and
to such Persons as shall be determined by such court.
Delinquent Banks.
Notwithstanding anything to the contrary contained in this Credit
Agreement or any of the other Loan Documents, any Bank that fails
(i) to make available to the Administrative Agent its applicable pro
rata share (if any) of any Loan or to purchase its applicable pro rata
amount (if any) of any Letter of Credit Participation or (ii)
to comply with the provisions of Sect. 12 with respect to
making dispositions and arrangements with the other Banks, where
such Bank's share of any payment received, whether by setoff or
otherwise, is in excess of its pro rata (based on all applicable
outstanding Loans and Unpaid Reimbursement Obligations) share of such
payments due and payable to all of the Banks, in each case as, when and
to the full extent required by the provisions of this Credit
Agreement, shall be deemed delinquent (a "Delinquent Bank") and
shall be deemed a Delinquent Bank until such time as such delinquency
is satisfied. A Delinquent Bank shall be deemed to have
assigned any and all payments due to it from the Borrowers,
whether on account of the applicable outstanding Loans, Unpaid
Reimbursement Obligations, interest, fees or otherwise, to the
remaining applicable nondelinquent Banks for application to, and
reduction of, their respective applicable pro rata shares of all
then applicable outstanding Loans and Unpaid Reimbursement Obligations
so affected by such delinquency. The Delinquent Bank hereby
authorizes the Administrative Agent to distribute such
payments to the nondelinquent Banks in proportion to their respective
applicable pro rata shares of all such applicable outstanding
Loans and Unpaid Reimbursement Obligations. A Delinquent Bank shall
be deemed to have satisfied in full a delinquency when and if, as a
result of application of the assigned payments to all outstanding
Loans and Unpaid Reimbursement Obligations of the nondelinquent
Banks so affected by such delinquency, the applicable Banks'
respective pro rata shares of all such applicable outstanding
Loans and Unpaid Reimbursement Obligations have returned to those in
effect immediately prior to such delinquency and without giving
effect to the nonpayment causing such delinquency.
Holders of Notes.
The Administrative Agent may deem and treat the payee of any Note
or the purchaser of any Letter of Credit Participation as the
absolute owner or purchaser thereof for all purposes hereof until it
shall have been furnished in writing with a different name by
such payee or by a subsequent holder, assignee or transferee.
Indemnity.
The Banks ratably agree hereby to indemnify and hold harmless the
Administrative Agent from and against any and all claims, actions
and suits (whether groundless or otherwise), losses, damages,
costs, expenses (including any expenses for which the
Administrative Agent has not been reimbursed by the Borrowers as
required by Sect. 14), and liabilities of every nature and
character arising out of or related to this Credit Agreement, the
Notes, or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or the Administrative
Agent's actions taken hereunder or thereunder, except to the extent
that any of the same shall be directly caused by the
Administrative Agent's willful misconduct or gross
negligence.
Administrative Agent as Bank.
In its individual capacity, FNBB shall have the same obligations
and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the
Notes and as the purchaser of any Letter of Credit Participations, as
it would have were it not also the Administrative Agent.
Resignation.
The Administrative Agent may resign at any time by giving sixty
(60) days prior written notice thereof to the Banks and the
Borrowers. Upon any such resignation, the Majority Banks shall have
the right to appoint a successor Administrative Agent. Unless a
Default or Event of Default shall have occurred and be
continuing, such successor Administrative Agent shall be reasonably
acceptable to the Borrowers. If no successor Administrative Agent
shall have been so appointed by the Majority Banks and shall have
accepted such appointment within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Banks, appoint
a successor Administrative Agent, which shall be a financial
institution having a rating of not less than A or its equivalent
by S&P. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of
the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation,
the provisions of this Credit Agreement and the other Loan Documents
shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as
Administrative Agent.
Notification of Defaults and Events of Default.
Each Bank hereby agrees that, upon learning of the existence of a
Default or an Event of Default, it shall promptly notify the
Administrative Agent thereof. The Administrative Agent hereby
agrees that upon receipt of any notice under this Sect. 13.10 it shall
promptly notify the other Banks of the existence of such Default or
Event of Default.
EXPENSES.
Each of the Borrowers jointly and severally agrees to pay (i) the
reasonable out-of-pocket costs of producing and reproducing this
Credit Agreement, the other Loan Documents and the other agreements
and instruments mentioned herein, (ii) any transfer taxes, documentary
taxes, assessments or similar charges payable to any governmental
authority by reason of the execution and delivery of the Loan
Documents (the Borrower hereby agreeing to indemnify the Banks with
respect thereto), (iii) the reasonable fees, expenses and
disbursements of the Administrative Agent's Special Counsel and any
local counsel to the Administrative Agent incurred in connection
with the preparation and negotiation of the Loan Documents and other
instruments mentioned herein, each closing hereunder, any amendments,
modifications, approvals, consents or waivers hereto or hereunder, and
any assignments entered into pursuant to Sect. 4.9(b) hereof, (iv) the
reasonable expenses and disbursements of the Administrative Agent
incurred by the Administrative Agent in connection with the
preparation, negotiation, copying and distribution of the Loan
Documents and other instruments mentioned herein, each cllosing
hereunder, any amendments, modifications, approvals, consents or
waivers hereto or hereunder, and any assignments entered into pursuant
to Sect. 4.9(b) hereof, (v) the reasonable expenses and disbursements
of the Administrative Agent, the Co-Agent, and BA Securities, Inc.,
in its capacity as the syndication agent in connection with the
syndication of the Loan Documents, (vi) all reasonable out-of-pocket
expenses (including without limitation reasonable attorneys' fees and
costs, which attorneys may be employees of any Bank, the
Administrative Agent, the Co-Agent or of BA Securities, Inc., in
its capacity as the syndication agent, and reasonable
consulting, accounting, appraisal, investment banking and similar
professional fees and charges) incurred by any Bank, the
Administrative Agent, the Co-Agent or BA Securities, Inc., in its
capacity as the syndication agent, in connection with (A) the
enforcement of or preservation of rights under any of the Loan
Documents against any of the Borrowers or any of their Subsidiaries or
the administration thereof after the occurrence and during the
continuance of an Event of Default, and (B) any litigation, proceeding
or dispute whether arising hereunder or otherwise, in any way related
to any Bank's, the Administrative Agent's, the Co-Agent's or BA
Securities, Inc.'s (in its capacity as the syndication agent)
relationship with the Borrowers or any of their Subsidiaries, other
than as directly caused by the gross negligence or willful misconduct
of any such Person or their violation of this Credit Agreement, and
(vii) all reasonable expenses and disbursements of the Administrative
Agent incurred in connection with UCC searches and Board searches.
The covenants of this Sect. 14 shall survive payment or satisfaction
of all other Obligations.
INDEMNIFICATION.
Each of the Borrowers jointly and severally agrees to indemnify and
hold harmless the Administrative Agent, the Co-Agent, BA
Securities, Inc., in its capacity as syndication agent, and
the Banks from and against any and all claims, actions and
suits whether groundless or otherwise, and from and against any
and all liabilities, losses, damages and expenses of every nature
and character arising out of this Credit Agreement or any of the
other Loan Documents or the transactions contemplated hereby
including, without limitation, (i) any actual or proposed use by any
of the Borrowers or any of their Subsidiaries of the proceeds of any
of the Loans or Letters of Credit, (ii) any of the Borrowers or any
of their Subsidiaries entering into or performing this Credit
Agreement or any of the other Loan Documents or (iii) with respect
to the Borrowers and their Subsidiaries and their respective
properties and assets, the violation of any Environmental Law,
the presence, disposal, escape, seepage, leakage, spillage,
discharge, emission, release or threatened release of any Hazardous
Substances or any action, suit, proceeding or investigation
brought or threatened with respect to any Hazardous Substances
(including, but not limited to, claims with respect to wrongful death,
personal injury or damage to property), in each case including,
without limitation, the reasonable fees and disbursements of counsel
and allocated costs of internal counsel incurred in connection with
any such investigation, litigation or other proceeding;
provided, however, that the foregoing indemnification shall not apply
to any loss, cost, or expense resulting directly from the gross
negligence or willful misconduct of the Administrative Agent,
the Co-Agent, BA Securities, Inc. or any Bank or their violations of
this Credit Agreement or any other Loan Document. In litigation, or
the preparation therefor, the Banks, the Co-Agent, BA Securities,
Inc., in its capacity as syndication agent, and the Administrative
Agent shall be entitled to select their own counsel (which counsel
shall be reasonably satisfactory to the Borrowers) and to participate
in the defense and the investigation of such claim, action or
proceeding and, in addition to the foregoing indemnity, the
Borrowers agree to pay promptly the reasonable fees and expenses of
such counsel except to the extent that such fees and expenses are
the result of the gross negligence or willful misconduct of the
Administrative Agent, the Co-Agent, BA Securities, Inc. or any of
the Banks. If, and to the extent that the obligations of the
Borrowers under this Sect. 15 are unenforceable for any reason, the
Borrowers hereby agree to make the maximum contribution to the payment
in satisfaction of such obligations which is permissible under
applicable law. The covenants contained in this Sect. 15 shall survive
payment or satisfaction in full of all other Obligations.
SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made
herein, in the Notes, in any of the other Loan Documents or in any
documents or other papers delivered by or on behalf of any of the
Borrowers or any of their Subsidiaries pursuant hereto shall be
deemed to have been relied upon by the Banks and the
Administrative Agent, notwithstanding any investigation heretofore
or hereafter made by any of them, and shall survive the making by
the Banks of any of the Loans and the issuance, extension or
renewal of any Letters of Credit, as herein contemplated, and shall
continue in full force and effect so long as any Letter of Credit
or any amount due under this Credit Agreement or the Notes or
any of the other Loan Documents remains outstanding or any Bank has
any obligation to make any Loans or the Issuing Bank has any
obligation to issue, extend or renew any Letter of Credit, and for
such further time as may be otherwise expressly specified in this
Credit Agreement. All statements contained in any certificate or
other paper delivered to any Bank or the Administrative Agent at
any time by or on behalf of any of the Borrowers or any of their
Subsidiaries pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties
by such Borrower or such Subsidiary hereunder.
ASSIGNMENT AND PARTICIPATION.
Conditions to Assignment by Bank.
Except as provided herein, each Bank may assign to one or more
Eligible Assignees all or a portion of its interests, rights
and obligations under this Credit Agreement (including all or a
portion of its Commitment Percentage and Commitment and the same
portion of the Loans at the time owing to it, the Notes held by
it and its participating interest in the risk relating to any Letters
of Credit); provided that (i) each of the Administrative Agent
and, so long as no Event of Default shall have occurred and be
continuing, the Borrowers, shall have given its prior written consent
to such assignment, which consent, in the case of the Borrowers,
will not be unreasonably withheld, (ii) each such assignment shall
be of a constant, and not a varying, percentage of all the assigning
Bank's rights and obligations under this Credit Agreement, (iii)
each assignment shall be in a minimum amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, and (iv) the
parties to such assignment shall execute and deliver to the
Administrative Agent, for recording in the Register (as
hereinafter defined), an Assignment and Acceptance, substantially
in the form of Exhibit D hereto (an "Assignment and Acceptance"),
together with any Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the
execution thereof, and the payment of the registration fee referred
to in Sect. 17.3, (i) 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 Bank hereunder, provided that such
assignee shall have no greater rights than the assigning Bank under
Sect. Sect. 4.3.2 or 4.7, and (ii) the assigning Bank shall, to the
extent provided in such assignment and upon payment to the
Administrative Agent of the registration fee referred to in Sect.
17.3, be released from its obligations under this Credit Agreement
(other than as to the confidentiality provisions contained in Sect. 26
hereof and other than those obligations, if any, in respect of
breaches of this Credit Agreement, if any, by it as remain
unsatisfied); provided, however, that the assigning Bank shall
retain its rights to be indemnified pursuant to Sect. 15 hereof with
respect to any claims or actions arising prior to the effective date
of such assignment.
Certain Representations and Warranties; Limitations;
Covenants.
By executing and delivering an Assignment and Acceptance, the
parties to the assignment thereunder confirm to and agree with each
other and the other parties hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim, the assigning Bank makes
no representation or warranty, express or implied, and assumes and
shall have no responsibility with respect to any statements,
warranties or representations made in or in connection with this
Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit
Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or the attachment, perfection or
priority of any applicable security interest or mortgage,
(b) the assigning Bank makes no representation or warranty and
assumes and shall have no responsibility with respect to the
financial condition of the Borrowers and their Subsidiaries or any
other Person primarily or secondarily liable in respect of any of
the Obligations, or the performance or observance by the Borrowers
and their Subsidiaries or any other Person primarily or secondarily
liable in respect of any of the Obligations of any of their
obligations under this Credit Agreement or any of the other Loan
Documents or any other instrument or document furnished pursuant hereto
or thereto;
(c) such assignee confirms that it has received a copy of this Credit
Agreement, together with copies of the most recent financial
statements referred to in Sect. 5.4 and Sect. 6.4 and such other
documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and
Acceptance;
(d) such assignee will, independently and without reliance upon the
assigning Bank, the Administrative Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Credit Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such
powers under this Credit Agreement and the other Loan Documents as
are delegated to the Administrative Agent by the terms hereof or
thereof, together with such powers as are reasonably incidental
thereto;
(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Credit
Agreement are required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements with
the assigning Bank satisfactory to such assignee with respect to its
pro rata share of Letter of Credit Fees in respect of outstanding
Letters of Credit.
Register.
The Administrative Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the
"Register") for the recordation of the names and addresses of the
Banks and the Commitment Percentage of, and principal amount of
the Loans owing to and Letter of Credit Participations purchased by,
the Banks from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrowers,
the Administrative Agent and the Banks may treat each Person whose
name is recorded in the Register as a Bank hereunder for all purposes
of this Credit Agreement. The Register shall be available for
inspection by the Borrowers and the Banks at any reasonable time and
from time to time upon reasonable prior notice. Upon each such
recordation, the assigning Bank agrees to pay to the Administrative
Agent a registration fee in the sum of $2,500.
New Notes.
Upon its receipt of an Assignment and Acceptance executed by
the parties to such assignment, together with each Note subject to
such assignment, the Administrative Agent shall (i) record the
information contained therein in the Register, and (ii) give prompt
notice thereof to the Borrowers and the Banks (other than the
assigning Bank). Within five (5) Business Days after receipt of such
notice, the Borrowers, at their own expense, shall execute and
deliver to the Administrative Agent, in exchange for each
surrendered Note, a new Note to the order of such Eligible Assignee
in an amount equal to the amount assumed by such Eligible Assignee
pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note
to the order of the assigning Bank in an amount equal to the amount
retained by it hereunder. Such new Notes shall provide that they
are replacements for the surrendered Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of
the surrendered Notes, shall be dated the effective date of such
in Assignment and Acceptance and shall otherwise be
substantially the form of the assigned Notes. The surrendered
Notes shall be cancelled and returned to the Borrowers.
Participations.
Each Bank may sell participations to one or more banks or other
entities in all or a portion of such Bank's rights and obligations
under this Credit Agreement and the other Loan Documents; provided
that (i) each such participation shall be in an amount of not less
than $5,000,000 or an integral multiple of $1,000,000 in excess
thereof, (ii) any such sale or participation shall not affect the
rights and duties of the selling Bank hereunder to the Borrowers and
(iii) the only rights granted to the participant pursuant to such
participation arrangements with respect to waivers, amendments or
modifications of the Loan Documents shall be the rights to approve
waivers, amendments or modifications that would reduce the principal
of or the interest rate on any Loans, extend the term or increase
the amount of the Commitment of such Bank as it relates to such
participant, reduce the amount of any commitment fees or Letter of
Credit Fees to which such participant is entitled or extend any
regularly scheduled payment date for principal, interest or fees in
which such participant participates.
[Intentionally Omitted]
Assignee or Participant Affiliated with the Borrowers.
If any assignee Bank is an Affiliate of any of the Borrowers, then
any such assignee Bank shall have no right to vote as a Bank
hereunder or under any of the other Loan Documents for purposes of
granting consents or waivers or for purposes of agreeing to
amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Administrative Agent pursuant
to Sect. 11.1 or Sect. 11.2, and the determination of the Majority
Banks shall for all purposes of this Agreement and the other Loan
Documents be made without regard to such assignee Bank's interest
in any of the Loans. If any Bank sells a participating
interest in any of the Loans or Reimbursement Obligations to a
participant, and such participant is a Borrower or an Affiliate of
a Borrower, then such transferor Bank shall promptly notify the
Administrative Agent of the sale of such participation. A transferor
Bank shall have no right to vote as a Bank hereunder or under any of
the other Loan Documents for purposes of granting consents or waivers
or for purposes of agreeing to amendments or modifications to any
of the Loan Documents or for purposes of making requests to the
Administrative Agent pursuant to Sect. 11.1 or Sect. 11.2 to the
extent that such participation is beneficially owned by any Borrower or
any Affiliate of the Borrowers, and the determination of the
Majority Banks shall for all purposes of this Agreement and the
other Loan Documents be made without regard to the interest of such
transferor Bank in the Loans to the extent of such participation.
Miscellaneous Assignment Provisions.
Any assigning Bank shall retain its rights to be indemnified
pursuant to Sect. 14 with respect to any claims or actions arising
prior to the date of such assignment. If any of the Reference Banks
transfers all of its interest, rights and obligations under this
Credit Agreement, the Administrative Agent shall, in consultation
with the Borrowers and with the consent of the Borrowers and the
Majority Banks, appoint another Bank to act as a replacement Reference
Bank hereunder. Anything contained in this Sect. 17 to the contrary
notwithstanding, any Bank may at any time pledge all or any
portion of its interest and rights under this Credit Agreement
(including all or any portion of its Notes) to any of the twelve
Federal Reserve Banks organized under Sect. 4 of the Federal Reserve
Act, 12 U.S.C. Sect. 341. No such pledge or the enforcement
thereof shall release the pledgor Bank from its obligations hereunder
or under any of the other Loan Documents. Upon recordation of
any assignments in the Register pursuant to Sect. 17.3 hereof,
Schedule 1 hereto shall be revised to reflect the name, address
and Commitment of each new Bank hereunder and to reflect each
Bank's new Commitment Percentage (and, if applicable, any change
in its Commitment) after giving effect to such assignment.
Assignment by Borrowers.
The Borrowers shall not assign or transfer any of their rights or
obligations under any of the Loan Documents without the prior
written consent of each of the Banks.
NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given
pursuant to this Credit Agreement or the Notes or any Letter of
Credit Applications shall be in writing and shall be delivered in
hand, mailed by United States registered or certified first class
mail, postage prepaid, sent by overnight courier, or sent by
telegraph, telecopy, facsimile or telex and confirmed by delivery by
hand or via overnight courier or U.S. postal service, addressed
as follows:
(a) if to the Borrowers, at 402 East 4th Street, Waterloo, Iowa
50704, Attention: Shirley Austin, with a copy to Illinois Central
Railroad Company, 455 North Cityfront Plaza Drive, Chicago,
Illinois 60611, Attention: Douglas A. Koman, or at such other
address for notice as the Borrowers shall last have furnished in
writing to the Person giving the notice;
(b) if to the Administrative Agent, at 100 Federal Street,
Transportation Division, Boston, Massachusetts 02110, USA,
Attention: Dexter Freeman, Director, or such other address for
notice as the Administrative Agent shall last have furnished in
writing to the Person giving the notice; and
(c) if to any Bank, at such Bank's address set forth on Schedule 1
hereto, or such other address for notice as such Bank shall have
last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand,
overnight courier or facsimile to a responsible officer of the
party to which it is directed, at the time of the receipt thereof
by such officer or the sending of such facsimile and (ii) if sent by
registered or certified first-class mail, postage prepaid, on the
third Business Day following the mailing thereof.
GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE
CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND
SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE
LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF THE
BORROWERS AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE
COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT
SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING
MADE UPON THE BORROWERS BY MAIL AT THE ADDRESS SPECIFIED IN Sect. 18.
EACH OF THE BORROWERS HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR
THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
HEADINGS.
The captions in this Credit Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart,
each of which when executed and delivered shall be an original,
and all of which together shall constitute one instrument. In
proving this Credit Agreement it shall not be necessary to produce
or account for more than one such counterpart signed by the party
against whom enforcement is sought.
ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated
hereby. Neither this Credit Agreement nor any term hereof may
be changed, waived, discharged or terminated, except as provided in
Sect. 24.
WAIVER OF JURY TRIAL.
Each of the parties hereto hereby waives its right to a jury trial with
respect to any action or claim arising out of any dispute in
connection with this Credit Agreement, the Notes or any of the other
Loan Documents, any rights or obligations hereunder or
thereunder or the performance of such rights and obligations.
CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit
Agreement to be given by all of the Banks may be given, and any
term of this Credit Agreement, the other Loan Documents or any other
instrument related hereto or mentioned herein may be amended,
and the performance or observance by any of the Borrowers or
any of their Subsidiaries of any terms of this Credit Agreement,
the other Loan Documents or such other instrument or the
continuance of any Default or Event of Default may be waived (either
generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the
Borrowers (or, in the case of the Comfort Letter, IC) and the
written consent of the Majority Banks. Notwithstanding the
foregoing, no Borrower may be released from its joint and several
Obligations without the consent of all of the Banks (other than
Borrowers with no material assets, which may be so released with
the consent of the Majority Banks); the rates of interest on the
Notes(other than interest accruing pursuant to Sect. 4.11.2 following
the effective date of any waiver by the Majority Banks of the
Default or Event of Default relating thereto), the amount, term,
and maturity of the Notes, the Maturity Date, the amount and
duration of the respective Commitments and Commitment Percentages of
the Banks (except pursuant to and to the extent of, assignments duly
made pursuant to and in accordance with Sect. 17), the Total
Commitment, the dates and amounts of any required principal or
interest payments, and the payment dates and amount of commitment fees
or Letter of Credit Fees hereunder may not be changed without the
written consent of the Borrowers and the written consent of each of
the Banks; the definition of Majority Banks, this Sect. 24, and any
provisions of the Loan Documents providing for the approval,
consent or direction of the Administrative Agent or of a specified
number, combination, or percentage of the Banks and the Administrative
Agent or holders of a specified percentage of the Total Commitment or
the Obligations in any case with respect to any action or matter
relating to the Loan Documents, may not be amended without the
written consent of each of the Borrowers and all of the Banks; and
the Fee Letter, the amount of the Agent's Fees or any other fees
payable for the Administrative Agent's account and Sect. 13 may not
be amended without the written consent of each of the Borrowers and
the Administrative Agent; and Sect. 3 and the amount of any Letter of
Credit Fees, Fronting Fees or any other fees payable for the Issuing
Bank's account, may not be amended without the written consent
of each of the Borrowers and the Issuing Bank. No waiver shall
extend to or affect any obligation not expressly waived or impair any
right consequent thereon. No course of dealing or delay or omission
on the part of the Administrative Agent or any Bank in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial
thereto. No notice to or demand upon the Borrowers shall entitle the
Borrowers to other or further notice or demand in similar or other
circumstances.
SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such
invalidity or unenforceability shall affect only such clause or
provision, or part thereof, in such jurisdiction, and shall not in
any manner affect such clause or provision in any other jurisdiction,
or any other clause or provision of this Credit Agreement in
any jurisdiction.
CONFIDENTIALITY.
All confidential information and documents concerning the Borrowers
and their Subsidiaries supplied by the Borrowers to the Banks
shall be held in confidence by the Administrative Agent, the
Issuing Bank and each of the Banks, and none of the Administrative
Agent, the Issuing Bank or any of the Banks shall disclose such
information and documents, except each of the Borrowers hereby
authorizes each such Person to disclose any information obtained
pursuant to this Credit Agreement or the other Loan Documents
(a) to assignees or participants and potential assignees and
participants, (b) to legal counsel for the Administrative Agent,
the Issuing Bank or, as the case may be, such Bank, (c) to
consultants of the Administrative Agent, the Issuing Bank or, as the
case may be, such Bank who have agreed to be bound by the
confidentiality provisions of this Credit Agreement, (d) to employees
of and agents for the Administrative Agent, the Issuing Bank or, as the
case may be, such Bank in their ongoing business, (e) to any
independent auditors of the Administrative Agent, the Issuing Bank
or, as the case may be, such Bank, and (f) to all appropriate
governmental regulatory authorities or courts to the extent
requested or subpoenaed, and as otherwise required by law or legal
process, but only in each case to the extent permitted by
applicable laws and regulations, including those applying to
classified material. Upon receipt of a request to disclose any
information to governmental authorities or courts other than
governmental bank examiners and independent auditors of the
Administrative Agent, the Issuing Bank and each of the Banks, the
Administrative Agent, the Issuing Bank, or as the case may be, such
Bank, will notify the Borrowers, to the extent permitted by
applicable law and regulations, of such request and, to the extent
practicable and permitted by applicable laws and regulations,
permit the Borrowers to seek a protective order with respect thereto.
[Remainder of Page Intentionally Left Blank]
-3-
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
CCP HOLDINGS, INC.
By:
Name:
Title:
CHICAGO, CENTRAL & PACIFIC
RAILROAD COMPANY
By:
Name:
Title:
CEDAR RIVER RAILROAD
COMPANY
By:
Name:
Title:
IRON HORSE PROPERTIES, INC.
By:
Name:
Title:
MISSOURI RIVER BRIDGE
COMPANY
By:
Name:
Title:
THE FIRST NATIONAL BANK OF
BOSTON, individually,
as
Administrative Agent, and as
Issuing Bank
By:
Name: Dexter Freeman
Title:Director
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Co-Agent
By:
Name:
Title:
BANK OF AMERICA ILLINOIS
By:
Name:
Title:
THE CHASE MANHATTAN BANK, N.A.
By:
Name:
Title:
TORONTO DOMINION (TEXAS), INC.
By:
Name:
Title:
ILLINOIS CENTRAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF INCOME PER COMMON SHARE
($ in millions, except share data)
Three Months Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
Income before extraordinary
item $ 32.1 $ 29.2 $ 96.6 $ 93.1
Extraordinary item,
net - - - (11.4)
Net income $ 32.1 $ 29.2 $ 96.6 $ 81.7
Calculation of average
number of shares
outstanding:
Primary:
Weighted average
number of common
shares outstanding 61,416,954 62,322,480 61,421,120 62,925,174
Effect of shares
issuable under stock
options 427,018 272,786 396,610 232,505
61,843,972 62,595,266 61,817,730 63,157,679
Fully diluted:
Weighted average number
of common shares
outstanding 61,416,954 62,322,480 61,421,120 62,925,174
Effect of shares
issuable under stock
options (1) 463,606 269,411 463,606 269,411
61,880,560 62,591,891 61,884,726 63,194,585
Income per common share:
Primary:
Before extraordinary
item $ 0.52 $ 0.47 $ 1.56 $ 1.47
Extraordinary item,
net - - - (0.18)
Net income $ 0.52 $ 0.47 $ 1.56 $ 1.29
Fully diluted:
Before extraordinary
item $ 0.52 $ 0.47 $ 1.56 $ 1.47
Extraordinary item,
net - - - (0.18)
Net income $ 0.52 $ 0.47 $ 1.56 $ 1.29
(1) Such items are included in primary calculation. Additional shares
represent difference between average price of common stock for the
period and the end of period price.
price of common stock for the period and the end of period price.
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 22000
<SECURITIES> 0
<RECEIVABLES> 99500
<ALLOWANCES> 1600
<INVENTORY> 18900
<CURRENT-ASSETS> 177700
<PP&E> 1635200
<DEPRECIATION> 48900
<TOTAL-ASSETS> 1793600
<CURRENT-LIABILITIES> 217400
<BONDS> 575000
<COMMON> 0
0
0
<OTHER-SE> 530000
<TOTAL-LIABILITY-AND-EQUITY> 1793600
<SALES> 483900
<TOTAL-REVENUES> 483900
<CGS> 305700
<TOTAL-COSTS> 305700
<OTHER-EXPENSES> 700
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 24400
<INCOME-PRETAX> 154500
<INCOME-TAX> 57900
<INCOME-CONTINUING> 96600
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