Exhibit 10.19





Exhibit
10.19




Execution Copy




 





CREDIT AGREEMENT




DATED AS OF May 18, 2010




AMONG




ROADRUNNER TRANSPORTATION SYSTEMS, INC.,




THE LENDERS,




U.S. BANK NATIONAL ASSOCIATION

AS ADMINISTRATIVE AGENT




AND




U.S. BANK NATIONAL ASSOCIATION

AS LEAD ARRANGER AND SOLE BOOK RUNNER




 




 


 









 





TABLE OF CONTENTS




	 	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II THE CREDITS
	 	 	24	 
	 
	 	 	 	 
	2.1. Commitment
	 	 	24	 
	2.2. Required Payments; Termination
	 	 	24	 
	2.3. Ratable Loans; Types of Advances
	 	 	24	 
	2.4. Commitment Fee
	 	 	24	 
	2.5. Minimum Amount of Each Advance
	 	 	25	 
	2.6. Reductions in Aggregate Commitment; Optional Principal Payments
	 	 	25	 
	2.7. Method of Selecting Types and Interest Periods for New Advances
	 	 	25	 
	2.8. Conversion and Continuation of Outstanding Advances
	 	 	26	 
	2.9. Interest Rates
	 	 	26	 
	2.10. Rates Applicable After Event of Default
	 	 	27	 
	2.11. Method of Payment
	 	 	27	 
	2.12. Evidence of Indebtedness
	 	 	28	 
	2.13. Telephonic Notices
	 	 	28	 
	2.14. Interest Payment Dates; Interest and Fee Basis
	 	 	29	 
	2.15. Notification of Advances, Interest Rates, Prepayments and Commitment Reductions
	 	 	29	 
	2.16. Lending Installations
	 	 	29	 
	2.17. Non-Receipt of Funds by the Administrative Agent
	 	 	29	 
	2.18. Facility LCs
	 	 	30	 
	2.19. Replacement of Lender
	 	 	34	 
	2.20. Limitation of Interest
	 	 	36	 
	2.21. Defaulting Lenders
	 	 	36	 
	2.22. Swing Line Loans
	 	 	39	 
	 
	 	 	 	 
	ARTICLE III YIELD PROTECTION; TAXES
	 	 	41	 
	 
	 	 	 	 
	3.1. Yield Protection
	 	 	41	 
	3.2. Changes in Capital Adequacy Regulations
	 	 	42	 
	3.3. Availability of Types of Advances; Adequacy of Interest Rate
	 	 	42	 
	3.4. Funding Indemnification
	 	 	42	 
	3.5. Taxes
	 	 	42	 
	3.6. Lender Statements; Survival of Indemnity
	 	 	44	 
	 
	 	 	 	 
	ARTICLE IV CONDITIONS PRECEDENT
	 	 	45	 
	 
	 	 	 	 
	4.1. Initial Credit Extension
	 	 	45	 
	4.2. Each Credit Extension
	 	 	48	 
	 
	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES
	 	 	49	 
	 
	 	 	 	 
	5.1. Existence and Standing
	 	 	49	 
	5.2. Authorization and Validity
	 	 	49	 
	5.3. No Conflict; Government Consent
	 	 	49	 
	5.4. Financial Statements
	 	 	49	 






 


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	5.5. Material Adverse Change
	 	 	50	 
	5.6. Taxes
	 	 	50	 
	5.7. Litigation and Contingent Obligations
	 	 	50	 
	5.8. Subsidiaries
	 	 	50	 
	5.9. ERISA
	 	 	50	 
	5.10. Accuracy of Information
	 	 	50	 
	5.11. Regulation U
	 	 	51	 
	5.12. Material Agreements
	 	 	51	 
	5.13. Compliance With Laws
	 	 	51	 
	5.14. Ownership of Properties; Perfection of Liens
	 	 	51	 
	5.15. Plan Assets; Prohibited Transactions
	 	 	51	 
	5.16. Environmental Matters
	 	 	51	 
	5.17. Investment Company Act
	 	 	52	 
	5.18. Insurance
	 	 	52	 
	5.19. Real Property
	 	 	52	 
	5.20. Solvency
	 	 	52	 
	5.21. Intellectual Property
	 	 	53	 
	5.22. Labor Matters
	 	 	53	 
	5.23. No Default
	 	 	53	 
	5.24. Burdensome Restrictions
	 	 	53	 
	5.25. U.S.A. Patriot Act
	 	 	53	 
	5.26. Foreign Assets Control Regulations and Anti-Money Laundering
	 	 	53	 
	 
	 	 	 	 
	ARTICLE VI COVENANTS
	 	 	54	 
	 
	 	 	 	 
	6.1. Financial Reporting
	 	 	54	 
	6.2. Use of Proceeds
	 	 	55	 
	6.3. Notice of Event of Default; ERISA Matters
	 	 	56	 
	6.4. Conduct of Business
	 	 	56	 
	6.5. Formation of Subsidiaries
	 	 	56	 
	6.6. Taxes
	 	 	57	 
	6.7. Insurance
	 	 	57	 
	6.8. Compliance with Laws
	 	 	57	 
	6.9. Maintenance of Properties
	 	 	57	 
	6.10. Inspection
	 	 	57	 
	6.11. Books and Records
	 	 	57	 
	6.12. Compliance with Material Contracts
	 	 	58	 
	6.13. ERISA
	 	 	58	 
	6.14. Environmental Matters; Reporting
	 	 	58	 
	6.15. Reaffirmation of Guaranties
	 	 	58	 
	6.16. Further Assurances; Cash Management and Post Closing Agreements
	 	 	59	 
	6.17. Indebtedness
	 	 	60	 
	6.18. Merger
	 	 	61	 
	6.19. Sale of Assets
	 	 	61	 
	6.20. Investments
	 	 	62	 
	6.21. Acquisitions
	 	 	63	 
	6.22. Liens
	 	 	63	 
	6.23. Transactions with Affiliates
	 	 	64	 






 


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	6.24. Subordinated Indebtedness
	 	 	65	 
	6.25. ERISA Plans
	 	 	65	 
	6.26. Change in Nature of Business
	 	 	65	 
	6.27. Subsidiaries
	 	 	65	 
	6.28. Negative Pledges; Subsidiary Restrictions
	 	 	65	 
	6.29. Restricted Payments
	 	 	66	 
	6.30. Accounting Changes; Organizational Documents
	 	 	66	 
	6.31. Advisory Agreement
	 	 	66	 
	6.32. Financial Covenants
	 	 	67	 
	 
	 	 	 	 
	ARTICLE VII DEFAULTS
	 	 	68	 
	 
	 	 	 	 
	ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
	 	 	70	 
	 
	 	 	 	 
	8.1. Acceleration; Remedies
	 	 	70	 
	8.2. Application of Funds
	 	 	71	 
	8.3. Amendments
	 	 	72	 
	8.4. Preservation of Rights
	 	 	73	 
	 
	 	 	 	 
	ARTICLE IX GENERAL PROVISIONS
	 	 	73	 
	 
	 	 	 	 
	9.1. Survival of Representations
	 	 	73	 
	9.2. Governmental Regulation
	 	 	73	 
	9.3. Headings
	 	 	73	 
	9.4. Entire Agreement
	 	 	73	 
	9.5. Several Obligations; Benefits of this Agreement
	 	 	73	 
	9.6. Expenses; Indemnification
	 	 	74	 
	9.7. Numbers of Documents
	 	 	75	 
	9.8. Accounting
	 	 	75	 
	9.9. Severability of Provisions
	 	 	75	 
	9.10. Nonliability of Lenders
	 	 	75	 
	9.11. Confidentiality
	 	 	75	 
	9.12. Nonreliance
	 	 	76	 
	9.13. Disclosure
	 	 	76	 
	9.14. U.S.A. PATRIOT ACT NOTIFICATION
	 	 	76	 
	 
	 	 	 	 
	ARTICLE X THE ADMINISTRATIVE AGENT
	 	 	76	 
	 
	 	 	 	 
	10.1. Appointment; Nature of Relationship
	 	 	76	 
	10.2. Powers
	 	 	77	 
	10.3. General Immunity
	 	 	77	 
	10.4. No Responsibility for Loans, Recitals, etc
	 	 	77	 
	10.5. Action on Instructions of Lenders
	 	 	77	 
	10.6. Employment of Administrative Agents and Counsel
	 	 	78	 
	10.7. Reliance on Documents; Counsel
	 	 	78	 
	10.8. Administrative Agent’s Reimbursement and Indemnification
	 	 	78	 
	10.9. Notice of Event of Default
	 	 	79	 
	10.10. Rights as a Lender
	 	 	79	 
	10.11. Lender Credit Decision, Legal Representation
	 	 	79	 
	10.12. Successor Administrative Agent
	 	 	80	 






 


iii









 





	 	 	 	 	 
	10.13. Administrative Agent and Arranger Fees
	 	 	80	 
	10.14. Delegation to Affiliates
	 	 	80	 
	10.15. Execution of Collateral Documents
	 	 	80	 
	10.16. Collateral Releases
	 	 	81	 
	 
	 	 	 	 
	ARTICLE XI SETOFF; RATABLE PAYMENTS
	 	 	81	 
	 
	 	 	 	 
	11.1. Setoff
	 	 	81	 
	11.2. Ratable Payments
	 	 	81	 
	 
	 	 	 	 
	ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
	 	 	81	 
	 
	 	 	 	 
	12.1. Successors and Assigns
	 	 	81	 
	12.2. Participations
	 	 	82	 
	12.3. Assignments
	 	 	83	 
	12.4. Dissemination of Information
	 	 	84	 
	12.5. Tax Treatment
	 	 	85	 
	 
	 	 	 	 
	ARTICLE XIII NOTICES
	 	 	85	 
	 
	 	 	 	 
	13.1. Notices; Effectiveness; Electronic Communication
	 	 	85	 
	 
	 	 	 	 
	ARTICLE XIV COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION
	 	 	86	 
	 
	 	 	 	 
	14.1. Counterparts; Effectiveness
	 	 	86	 
	14.2. Electronic Execution of Assignments
	 	 	86	 
	 
	 	 	 	 
	ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
	 	 	87	 
	 
	 	 	 	 
	15.1. CHOICE OF LAW
	 	 	87	 
	15.2. CONSENT TO JURISDICTION
	 	 	87	 
	15.3. WAIVER OF JURY TRIAL
	 	 	87	 







 


iv











 





	 	 	 
	PRICING SCHEDULE

	 	 
	EXHIBIT A — Compliance Certificate
	 	 
	EXHIBIT B — Assignment and Assumption Agreement
	 	 
	EXHIBIT C — Form of Borrowing Notice
	 	 
	EXHIBIT D — Form of Revolving Note
	 	 
	EXHIBIT E — Form of Swing Line Note
	 	 
	EXHIBIT F — Form of Borrowing Base Certificate
	 	 
	SCHEDULE 1 — Commitments
	 	 
	SCHEDULE 1(a) — EBITDA
	 	 
	SCHEDULE 4.1.1(j) — Other Indebtedness
	 	 
	SCHEDULE 4.1.1(n) — Insurance Certificates
	 	 
	SCHEDULE 4.1.2 — Initial Domestic Subsidiaries
	 	 
	SCHEDULE 5.8 — Subsidiaries
	 	 
	SCHEDULE 5.14 — Ownership of Properties
	 	 
	SCHEDULE 5.16 — Environmental Matters
	 	 
	SCHEDULE 5.19 — Real Property
	 	 
	SCHEDULE 5.22 — Labor Matters
	 	 
	SCHEDULE 6.16(b) — Existing Deposit Accounts
	 	 
	SCHEDULE 6.16(c) — Leased Locations
	 	 
	SCHEDULE 6.17 — Indebtedness
	 	 
	SCHEDULE 6.20 — Investments
	 	 
	SCHEDULE 6.22 — Liens
	 	 





 


v









 







CREDIT AGREEMENT




This Credit Agreement (the “Agreement”), dated as of May 18, 2010, is among Roadrunner
Transportation Systems, Inc., a Delaware corporation, the Lenders and U.S. Bank National
Association, a national banking association, as LC Issuer, Swing Line Lender and Administrative
Agent. The parties hereto agree as follows:



ARTICLE I




DEFINITIONS





As used in this Agreement:




“Account Debtor” means the account debtor or obligor with respect to any of the
Receivables.




“Acquisition” means any transaction, or any series of related transactions, consummated
on or after the date of this Agreement, by which the Borrower or any of its Subsidiaries
(i) acquires any going concern or business or all or substantially all of the assets of any
firm, corporation or limited liability company, or division thereof, whether through
purchase of assets, merger or otherwise or (ii) directly or indirectly acquires (in one
transaction or as the most recent transaction in a series of transactions) at least a
majority (in number of votes) of the securities of a corporation that have ordinary voting
power for the election of directors (other than securities having such power only by reason
of the happening of a contingency) or a majority (by percentage or voting power) of the
outstanding ownership interests of a partnership or limited liability company.




“Acquisition Sub” means GTS Transportation Logistics, Inc., a Delaware corporation.




“Administrative Agent” means U.S. Bank in its capacity as contractual representative of
the Lenders pursuant to Article X, and not in its individual capacity as a Lender, and any
successor Administrative Agent appointed pursuant to Article X.




“Advance” means a borrowing hereunder (i) made by some or all of the Lenders on the
same Borrowing Date or (ii) converted or continued by the Lenders on the same date of
conversion or continuation, consisting, in either case, of the aggregate amount of the
several Loans of the same Type and, in the case of Eurocurrency Loans, for the same Interest
Period. The term “Advance” shall include Swing Line Loans unless otherwise expressly
provided.




“Advisor” means Thayer | Hidden Creek Management, L.P., a Delaware limited partnership.




“Advisory Fee Subordination Agreement” means the Advisory Fee Subordination Agreement
of even date herewith between the Advisor and the Administrative Agent





 


 









 






providing for the subordination of Advisory Fees to the Obligations in accordance with
the terms of this Agreement.




“Advisory Fees” means all amounts payable by the Borrower to the Advisor pursuant to
Section 4 of the Advisory Agreement.




“Advisory Agreement” means the Advisory Agreement of even date herewith between the
Advisor and the Borrower and expressly providing that all advisory fees and other payments
thereunder are subject to the terms of this Agreement.




“Affected Lender” is defined in Section 2.19.




“Affiliate” of any Person means any other Person directly or indirectly controlling,
controlled by or under common control with such Person, including, without limitation, such
Person’s Subsidiaries. A Person shall be deemed to control another Person if the
controlling Person owns 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the power to
direct or cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.




“Aggregate Commitment” means the aggregate of the Commitments of all the Lenders, as
reduced from time to time pursuant to the terms hereof. As of the date of this Agreement,
the Aggregate Commitment is $55,000,000.




“Aggregate Outstanding Credit Exposure” means, at any time, the aggregate of the
Outstanding Credit Exposure of all the Lenders.




“Agreement” means this credit agreement, as it may be amended or modified and in effect
from time to time.




“Applicable Fee Rate” means, at any time, the percentage rate per annum at which
Commitment Fees are accruing on the unused portion of the Aggregate Commitment at such time
as set forth in the Pricing Schedule.




“Applicable Margin” means, with respect to Advances of any Type at any time, the
percentage rate per annum that is applicable at such time with respect to Advances of such
Type as set forth in the Pricing Schedule.




“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.




“Arranger” means U.S. Bank, and its successors, in its capacity as Lead Arranger and
Sole Book Runner.




“Article” means an article of this Agreement unless another document is specifically
referenced.


 


2









 






“Authorized Officer” means any of the chief executive officer, the chief financial
officer, the chief operating officer or the treasurer of the Borrower or, if applicable its
Subsidiaries, in each case, acting singly.




“Available Aggregate Commitment” means, at any time, the Aggregate Commitment then in
effect minus the Aggregate Outstanding Credit Exposure at such time.




“Base Rate” means with respect to a Base Rate Advance, as of any date of determination,
the sum of (i) the greater of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus
1.50%, and (c) the Eurocurrency Rate in effect for a one month interest period on such day
(or if such day is not a Business Day the immediately preceding Business Day) and reset each
Business Day plus 2.00% and (ii) the Applicable Margin.




“Base Rate Advance” means an Advance that, except as otherwise provided in
Section 2.10, bears interest at the Base Rate, in each case as the Base Rate changes from
time to time.




“Base Rate Loan” means a Loan that, except as otherwise provided in Section 2.10, bears
interest at the Base Rate.




“Borrower” means Roadrunner Transportation Systems, Inc., a Delaware corporation, and
its successors and assigns.




“Borrower Preferred Stock” means the Series A Redeemable Preferred Stock of the
Borrower.




“Borrower Preferred Stock Permitted Payments” means dividend payments to be made by the
Borrower to the Sellers (Sargent) pursuant to the terms of the Borrower Preferred Stock in
effect on the date hereof in an amount not to exceed $200,000 in the aggregate per calendar
year.




“Borrower Redeemable Common Stock” means shares of common stock of the Borrower issued
on or prior to the date hereof that are subject to redemption by the Borrower in the event
of death or disability of the holders thereof.




“Borrower Redeemable Stock Permitted Payments” means payments to be made by the
Borrower to the holders of the Borrower Redeemable Common Stock pursuant to the terms of the
Borrower Redeemable Common Stock in effect on the date hereof in an amount not to exceed
$1,000,000 in the aggregate per calendar year.




“Borrowing Base” means, as of any date of calculation, an amount, as set forth on the
most current Borrowing Base Certificate delivered to the Administrative Agent, equal to 85%
of Eligible Receivables as of such date.




“Borrowing Base Certificate” means a certificate executed by an Authorized Officer, in
the form attached hereto as Exhibit E (with such modifications to such form as


 


3









 






the Administrative Agent or the Required Lenders may reasonably request from time to
time), setting forth the Borrowing Base and the component calculations in respect of the
foregoing.




“Borrowing Date” means a date on which an Advance is made or a Facility LC is issued
hereunder.




“Borrowing Notice” is defined in Section 2.7.




“Business Day” means (i) with respect to any borrowing, payment or rate selection of
Eurocurrency Advances, a day (other than a Saturday or Sunday) on which banks generally are
open in Minneapolis, Minnesota for the conduct of substantially all of their commercial
lending activities, interbank wire transfers can be made on the Fedwire system and dealings
in United States dollars are carried on in the London interbank market and (ii) for all
other purposes, a day (other than a Saturday or Sunday) on which banks generally are open in
New York City for the conduct of substantially all of their commercial lending activities
and interbank wire transfers can be made on the Fedwire system.




“Capital Expenditures” means, for any period, all expenditures for property, plant or
equipment that, in accordance with GAAP, would be required to be capitalized and shown on
the consolidated balance sheet of the Borrower and its Subsidiaries, excluding expenditures
in respect of Capitalized Leases, and expenditures made in connection with the replacement,
substitution or restoration of assets to the extent financed (a) from insurance proceeds (or
other similar recoveries) paid on account of the loss of or damage to the assets being
replaced or restored, (b) with awards of compensation arising from the taking by eminent
domain or condemnation of the assets being replaced or (c) with proceeds reinvested on
dispositions of assets allowed under this Agreement.




“Capitalized Lease” of a Person means any lease of Property by such Person as lessee
that would be capitalized on a balance sheet of such Person prepared in accordance with
GAAP.




“Capitalized Lease Obligations” of a Person means the amount of the obligations of such
Person under Capitalized Leases that would be shown as a liability on a balance sheet of
such Person prepared in accordance with GAAP.




“Cash Equivalent Investments” means, at any time, (a) any evidence of Indebtedness,
maturing not more than one year after such time, issued or guaranteed by the United States
Government or any agency thereof, (b) commercial paper, maturing not more than one year from
the date of issue, or corporate demand notes, in each case (unless issued by a Lender or its
holding company) rated at least A-l by S&P’s or P-l by Moody’s, (c) any certificate of
deposit, time deposit or banker’s acceptance, maturing not more than one year after such
time, or any overnight Federal funds transaction that is issued or sold by any Lender or its
holding company (or by a commercial banking institution that is a member of the Federal
Reserve System and has a combined capital and surplus and undivided profits of not less than
$500,000,000), (d) any repurchase


 


4









 






agreement entered into with any Lender (or commercial banking institution of the nature
referred to in clause (c)) that (i) is secured by a fully perfected security interest in any
obligation of the type described in any of clauses (a) through (c) above and (ii) has a
market value at the time such repurchase agreement is entered into of not less than 100% of
the repurchase obligation of such Lender (or other commercial banking institution)
thereunder, (e) money market accounts or mutual funds that invest exclusively in assets
satisfying the foregoing requirements and (f) other short term liquid investments approved
in writing by the Administrative Agent.




“Cash Management Services” means any banking services provided to the Borrower or any
Subsidiary by the Administrative Agent or any of its Affiliates (other than pursuant to this
Agreement), including without limitation (a) credit cards, (b) credit card processing
services, (c) debit cards, (d) purchase cards, (e) stored value cards, (f) automated
clearing house or wire transfer services or (g) treasury management, including controlled
disbursement, consolidated account, lockbox, overdraft, return items, sweep and interstate
depository network services.




“Cash Management Services Agreement” means any agreement entered into by the Borrower
or any Subsidiary in connection with Cash Management Services.




“Change in Control” means (i) the acquisition by any Person (other than Thayer | Hidden
Creek Partners L.L.C. or its Affiliates), or two or more Persons acting in concert (other
than Thayer | Hidden Creek Partners L.L.C. or its Affiliates), of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 35% or more of the outstanding shares of voting stock of
the Borrower; (ii) occupation of a majority of the seats (other than vacant seats) on the
board of directors of the Borrower by Persons who were neither (x) nominated by the board of
directors of the Borrower nor (y) appointed by directors so nominated.




“Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise
modified from time to time.




“Collateral” has the meaning given in the Collateral Documents.




“Collateral Documents” means, collectively, the Security Agreement, any Control
Agreements, any collateral assignments of intellectual property, and any other pledge
agreement, security agreement, mortgage, deed of trust, or other similar instrument or
document, each as amended, restated, supplemented or otherwise modified from time to time.




“Collateral Shortfall Amount” is defined in Section 8.1.




“Commitment” means, for each Lender, the obligation of such Lender to make Revolving
Loans to, and participate in Facility LCs issued upon the application of, the Borrower in an
aggregate amount not exceeding the amount set forth on Schedule 1, as it


 


5









 






may be modified as a result of any assignment that has become effective pursuant to
Section 12.3.2 or as otherwise modified from time to time pursuant to the terms hereof.




“Consolidated Indebtedness” means at any time the Indebtedness of the Borrower and its
Subsidiaries calculated on a consolidated basis as of such time.




“Consolidated Net Income” means, with respect to the Borrower and its Subsidiaries for
any period, the aggregate of all amounts that, in accordance with GAAP, would be included as
net income (or net loss) of the Borrower and its Subsidiaries for such period,
excluding any gains and/or losses from dispositions of any assets allowed under this
Agreement, any extraordinary gains, any extraordinary losses and any gains and/or losses
from discontinued operations.




“Contingent Obligation” of a Person means any agreement, undertaking or arrangement by
which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide
funds for the payment of or otherwise becomes or is contingently liable upon the obligation
or liability of any other Person, agrees to maintain the net worth, working capital or other
financial condition of any other Person or otherwise assures any creditor of such other
Person against loss, including, without limitation, any comfort letter, operating agreement,
take-or-pay contract or the obligations of any such Person as general partner of a
partnership with respect to the liabilities of the partnership.




“Control Agreement” means a control agreement for deposit accounts, sweep accounts,
securities accounts or other investment accounts, granting the Administrative Agent control
over such accounts in each case in form and substance reasonably satisfactory to the
Administrative Agent.




“Controlled Group” means all members of a controlled group of corporations or other
business entities and all trades or businesses (whether or not incorporated) under common
control that, together with the Borrower or any of its Subsidiaries, are treated as a single
employer under § 414 of the Code.




“Conversion/Continuation Notice” is defined in Section 2.8.




“Credit Extension” means the making of an Advance or the issuance of a Facility LC
hereunder.




“Deemed Dividend Problem” means, with respect to any Foreign Subsidiary, any portion of
such Foreign Subsidiary’s accumulated and undistributed earnings and profits being deemed to
be repatriated to the Borrower or the applicable parent Domestic Subsidiary for U.S. federal
income tax purposes and the effect of such repatriation causing adverse tax consequences to
the Borrower or such parent Domestic Subsidiary, in each case as determined by the Borrower
in its commercially reasonable judgment acting in good faith and in consultation with its
legal and tax advisors.




“Default” means an event that but for the lapse of time or the giving of notice, or
both, would constitute a Event of Default.


 


6









 






“Defaulting Lender” means any Lender, as reasonably determined by the Administrative
Agent, that has (a) failed to fund any portion of its Loans or participations in Facility
LCs or Swing Line Loans within one Business Day of the date required in the determination of
the Administrative Agent to be funded by it hereunder, (b) notified the Borrower, the
Administrative Agent, the LC Issuer, the Swing Line Lender or any Lender in writing that it
does not intend to comply with any of its funding obligations under this Agreement or has
made a public statement to the effect that it does not intend to comply with its funding
obligations (i) under this Agreement or (ii) under other agreements in which it is obligated
to extend credit unless, in the case of this clause (ii), such obligation is the subject of
a good faith dispute, (c) failed, within one Business Day after request by the
Administrative Agent, to confirm that it will comply with the terms of this Agreement
relating to its obligations to fund prospective Loans and participations in then outstanding
Facility LCs and Swing Line Loans, (d) otherwise failed to pay over to the Administrative
Agent or any other Lender any other amount required to be paid by it hereunder within one
Business Day of the date when due, unless the subject of a good faith dispute, or (e) (i)
become or is insolvent or has a parent company that has become or is insolvent or (ii) (A)
become the subject of a bankruptcy or insolvency proceeding, (B) had a receiver,
conservator, trustee, administrator, assignee for the benefit of creditors or similar Person
charged with reorganization or liquidation of its business or custodian or appointed for it,
(C) taken any action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment, (D) a parent company that has become the
subject of a bankruptcy or insolvency proceeding, (E) had a receiver, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or custodian appointed for it, or (F) taken
any action in furtherance of, or indicating its consent to, approval of or acquiescence in
any such proceeding or appointment; provided, that a Lender shall not become a Defaulting
Lender solely as the result of (x) the acquisition or maintenance of an ownership interest
in such Lender or a Person controlling such Lender or (y) the exercise of control over a
Lender or a Person controlling such Lender, in each case, by a governmental authority or an
instrumentality thereof.




“Dollar” and “$” means the lawful currency of the United States of America.




“Domestic Subsidiary” means a Subsidiary of the Borrower incorporated or organized
under the laws of the United States of America, any State thereof or the District of
Columbia.




“EBITDA” means, for any period, Consolidated Net Income for such period plus,
to the extent deducted in determining such Consolidated Net Income, each of the following,
without duplication, for such period (a) Interest Expense, (b) income tax expense, (c)
depreciation, (d) amortization, (e) transaction expenses during such period attributable to
the Merger and the RRTS IPO, including prepayment penalties and make-whole payments,
unaccreted discounts and non-cash write-offs related to the prepayment of subordinated
Indebtedness, termination fees and other related fees and expenses, in an amount not to
exceed $20,000,000 in the aggregate, (f) reasonable and documented transaction expenses
related to Permitted Acquisitions in an amount not to exceed $1,000,000 in the aggregate in
any fiscal year, (g) other noncash charges required by


 


7









 






GAAP (including, without limitation, those resulting from purchase accounting and the
grant by Borrower of stock options and other equity-related incentives) and (h) Advisory
Fees paid to the Advisor during such period so long as such Advisory Fees are subject to
subordination to the Obligations pursuant to the Advisory Fee Subordination Agreement and
minus any and all management fees, advisory fees paid to any Person that is not an
Affiliate of the Borrower (excluding the Advisory Fees). Notwithstanding the foregoing,
EBITDA for (i) the fiscal quarters ending September 30, 2009, December 31, 2009, and March
31, 2010, shall be as set forth on Schedule 1(a) and (ii) the fiscal quarter ending June 30,
2010, shall be the actual EBITDA for such quarter, calculated in accordance with the
definition of “EBITDA” set forth herein.




“Eligible Assignee” means (a) a Lender; (b) an Approved Fund; (c) a commercial bank
organized under the laws of the United States, or any state thereof, and having total assets
in excess of $3,000,000,000, calculated in accordance with the accounting principles
prescribed by the regulatory authority applicable to such bank in its jurisdiction of
organization; (d) a commercial bank organized under the laws of any other country that is a
member of the OECD, or a political subdivision of any such country, having total assets in
excess of $3,000,000,000, calculated in accordance with the accounting principles prescribed
by the regulatory authority applicable to such bank in its jurisdiction of organization, so
long as such bank is acting through a branch or agency located in the country in which it is
organized or another country that is described in this clause (d); or (e) the central bank
of any country that is a member of the OECD; provided, however, that neither the Borrower
nor an Affiliate of the Borrower shall qualify as an Eligible Assignee.




“Eligible Receivables” means a Receivable owing to the Borrower that meets each of the
following requirements:




(a) it arises from the rendering of services that the Borrower has fully
performed;




(b) it (i) is subject to a perfected, first priority Lien in favor of the
Administrative Agent and (ii) is not subject to any other assignment, claim or Lien;




(c) it is a valid, legally enforceable and unconditional obligation of the
Account Debtor with respect thereto, and is not subject to the fulfillment of any
condition whatsoever;




(d) to the extent it is not subject to any counterclaim, credit, allowance,
discount, rebate or adjustment by the Account Debtor with respect thereto, or to any
claim by such Account Debtor denying liability thereunder, and to the extent the
Account Debtor has not refused to accept any of the services that are the subject of
such Receivable;




(e) there is no bankruptcy, insolvency or liquidation proceeding pending by or
against the Account Debtor with respect thereto;


 


8









 






(f) the Account Debtor with respect thereto is a resident or citizen of, and is
located within, the United States or Canada (excluding Quebec, the Northwest
Territories and Nunavit), unless the sale of goods or services giving rise to such
Receivable is on letter of credit, banker’s acceptance or other credit support terms
reasonably satisfactory to the Administrative Agent;




(g) it arises in the ordinary course of the Borrower’s business;




(h) if the Account Debtor is the United States or any department, agency or
instrumentality thereof, the Borrower has assigned its right to payment of such
Receivable to the Administrative Agent pursuant to the Assignment of Claims Act of
1940, and evidence (satisfactory to the Administrative Agent) of such assignment has
been delivered to the Administrative Agent;




(i) if the Receivable is evidenced by chattel paper or an instrument, the
originals of such chattel paper or instrument have been endorsed and/or assigned and
delivered to the Administrative Agent or, in the case of electronic chattel paper,
are in the control of the Administrative Agent, in each case in a manner
satisfactory to the Administrative Agent;




(j) such Receivable is evidenced by an invoice delivered to the related Account
Debtor and is not more than (i) 60 days past the due date thereof or (ii) 90 days
past the original invoice date thereof (increased to 120 days with respect to
Receivables containing 60-day terms), in each case in all material respects
according to the original terms of sale;




(k) the Account Debtor with respect thereto is not an Affiliate of the
Borrower;




(l) it is not owed by an Account Debtor with respect to which 25% or more of
the aggregate amount of outstanding Receivables owed at such time by such Account
Debtor is classified as ineligible under clause (k) of this definition; and




(m) if the aggregate amount of all Receivables owed by the Account Debtor
thereon exceeds 25% of the aggregate amount of all Receivables at such time, then
all Receivables owed by such Account Debtor in excess of such amount shall be deemed
ineligible.




A Receivable that is at any time an Eligible Receivable, but that subsequently fails to meet
any of the foregoing requirements, shall forthwith cease to be an Eligible Receivable.




“Environmental Claims” means all claims, however asserted, by any governmental,
regulatory or judicial authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury to the
environment.


 


9









 






“Environmental Laws” means any and all federal, state, local and foreign statutes,
laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans,
injunctions, permits, concessions, grants, franchises, licenses, agreements and other
governmental restrictions relating to (a) the protection of the environment, (b) the effect
of the environment on human health, (c) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water or land or (d)
the manufacture, processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, hazardous substances or wastes or the clean-up or
other remediation thereof.




“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time
to time, and any rule or regulation issued thereunder.




“ERISA Affiliate” means any trade or business (whether or not incorporated) that,
together with the Borrower, is treated as a single employer under § 414(b) or (c) of the
Code or, solely for purposes of § 302 of ERISA and § 412 of the Code, is treated as a single
employer under § 414 of the Code.




“ERISA Event” means (a) any Reportable Event; (b) the existence with respect to any
Plan of an “accumulated funding deficiency” (as defined in § 412 of the Code or § 302 of
ERISA), whether or not waived; (c) the filing pursuant to § 412(d) of the Code or § 303(d)
of ERISA of an application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability
under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the
Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating
to an intention to terminate any Plan or Plans or to appoint a trustee to administer any
Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal of the Borrower or any of its ERISA
Affiliates from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or
any ERISA Affiliate of any notice, concerning the imposition upon the Borrower or any of its
ERISA Affiliates of Withdrawal Liability or a determination that a Multiemployer Plan is, or
is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.




“Eurocurrency Advance” means an Advance that, except as otherwise provided in Section
2.10, bears interest at the applicable Eurocurrency Rate.




“Eurocurrency Base Rate” means, with respect to a Eurocurrency Advance for the relevant
Interest Period, the applicable British Bankers’ Association Interest Settlement Rate for
deposits in Dollar LIBOR appearing on the applicable Reuters Screen as of 11:00 a.m. (London
time) on the Quotation Date for such Interest Period, and having a maturity equal to such
Interest Period, provided that, (i) if the applicable Reuters Screen for Dollars is not
available to the Administrative Agent for any reason, the applicable Eurocurrency Base Rate
for the relevant Interest Period shall instead be the applicable British Bankers’
Association Interest Settlement Rate for deposits in Dollars as reported by any other
generally recognized financial information service selected by the


 


10









 






Administrative Agent as of 11:00 a.m. (London time) on the Quotation Date for such
Interest Period, and having a maturity equal to such Interest Period, provided that, if no
such British Bankers’ Association Interest Settlement Rate is available to the
Administrative Agent, the applicable Eurocurrency Base Rate for the relevant Interest Period
shall instead be the rate reasonably determined by the Administrative Agent to be the rate
at which U.S. Bank or one of its Affiliate banks offers to place deposits in Dollars with
first-class banks in the interbank market at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, in the approximate amount of
U.S. Bank’s relevant Eurocurrency Loan and having a maturity equal to such Interest Period.




“Eurocurrency Loan” means a Loan that, except as otherwise provided in Section 2.10,
bears interest at the applicable Eurocurrency Rate.




“Eurocurrency Rate” means, with respect to a Eurocurrency Advance for the relevant
Interest Period, the sum of (i) the quotient of (a) the Eurocurrency Base Rate applicable to
such Interest Period, divided by (b) one minus the Reserve Requirement (expressed as a
decimal) applicable to such Interest Period, plus (ii) the Applicable Margin.




“Event of Default” is defined in Article VII.




“Excluded Controlled Account” means each Existing Deposit Account of the Borrower and
its Subsidiaries listed on Part II of Schedule 6.16(b) for which the Borrower has delivered
a duly executed and effective Control Agreement to the Administrative Agent within 90 days
after the date hereof and for so long as the same are subject to a Control Agreement
thereafter.




“Excluded Local Operating Accounts” means the deposit accounts of the Borrower and its
Subsidiaries used primarily for local receipts and disbursements and other general operating
purposes, provided that no such deposit account shall have more than $150,000 on deposit for
a period of more than five Business Days.




“Excluded Payroll Accounts” means the deposit accounts of the Borrower and its
Subsidiaries used solely for the payment of payroll and other benefit obligations of its
employees.




“Excluded Taxes” means, in the case of each Lender or applicable Lending Installation
and the Administrative Agent, taxes imposed on its overall net income, and franchise taxes
imposed on it.




“Exhibit” refers to an exhibit to this Agreement, unless another document is
specifically referenced.




“Existing Deposit Accounts” means the deposit accounts of the Borrower and its
Subsidiaries in existence on the date hereof and identified on Part I of Schedule 6.16(b).


 


11









 






“Existing GTS LCs” means (a) that certain letter of credit No. SLCMMSP05776 issued by
U.S. Bank National Association on behalf of Group Transportation for the benefit of Ohio
Farmers Insurance Co. in the amount of $10,000 with an expiration date of January 5, 2011
and (b) that certain letter of credit No. SLCMMSP05775 issued by U.S. Bank National
Association on behalf of GTS Direct, LLC for the benefit of Ohio Farmers Insurance Co. in
the amount of $10,000 with an expiration date of December 10, 2010.




“Facility LC” is defined in Section 2.18.1.




“Facility LC Application” is defined in Section 2.18.3.




“Facility LC Collateral Account” is defined in Section 2.18.11.




“Facility Termination Date” means May 18, 2015, or any earlier date on which the
Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the terms
hereof.




“Federal Funds Effective Rate” means, for any day, an interest 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 on such day, as published for
such day (or, if such day is not a Business Day, for the immediately preceding Business Day)
by the Federal Reserve 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 at approximately 10:00 a.m.
(Minneapolis time) on such day on such transactions received by the Administrative Agent
from three Federal funds brokers of recognized standing selected by the Administrative Agent
in its sole discretion.




“Financial Contract” of a Person means (i) any exchange-traded or over-the-counter
futures, forward, swap or option contract or other financial instrument with similar
characteristics or (ii) any Rate Management Transaction.




“Fixed Charge Coverage Ratio” means, for any period of determination, the ratio of




(a) the sum, without duplication, of EBITDA for the four fiscal quarters ending
on the last day of the period plus rent and operating lease expense,
minus Capital Expenditures paid in cash minus taxes paid in cash by
the Borrower and its Subsidiaries minus payments made in cash with respect
to the Permitted GTS Earn-Out Payments,




to




(b) the sum, without duplication, of Interest Expense paid in cash for such
period plus all required scheduled principal payments with respect to
Consolidated Indebtedness (including without limitation all payments with respect to
Capitalized Lease Obligations of the Borrower and its Subsidiaries), as such
required payments may be reduced by the application of voluntary or mandatory


 


12









 






prepayments, plus rent and operating lease expenses, plus
payment of the Borrower Preferred Stock Permitted Payments.




in each case determined for said period on a consolidated basis in accordance with GAAP.
Notwithstanding the foregoing, (a) for purposes of determining the components of the Fixed
Charge Coverage Ratio (other than EBITDA, Capital Expenditures, rent and operating lease
expenses and Capitalized Lease Obligations) for the periods ending June 30, 2010, September
30, 2010, December 31, 2010 and March 31, 2011, all such components of the Fixed Charge
Coverage Ratio shall be the amount of such components for such period since the date hereof
multiplied by a fraction, the numerator of which is 365 and the denominator of which is the
number of days in such period since the date hereof, (b) for the purpose of determining the
Fixed Charge Coverage Ratio, Capital Expenditures shall be $339,000, $403,000 and $289,000
for the fiscal quarters ending September 30, 2009, December 31, 2009 and March 31, 2010
respectively, (c) for the purpose of determining the Fixed Charge Coverage Ratio, rent and
operating lease expenses shall be $1,793,000, $1,720,000 and $1,779,000 for the fiscal
quarters ending September 30, 2009, December 31, 2009 and March 31, 2010 respectively and
(d) for the purpose of determining the Fixed Charge Coverage Ratio, Capitalized Lease
Obligations shall be $82,000, $83,000 and $85,000 for the fiscal quarters ending September
30, 2009, December 31, 2009 and March 31, 2010 respectively.




“Foreign Subsidiary” means any Subsidiary organized under the laws of a jurisdiction
not located in the United States of America.




“Fund” means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.




“GAAP” means generally accepted accounting principles as in effect from time to time in
the United States, applied in a manner consistent with that used in preparing the financial
statements referred to in Section 5.4.




“Great Northern Acquisition Agreement” means that certain Stock Purchase Agreement,
dated as of December 7, 2009, by and among the Sellers (Great Northern), Great Northern
Transportation Services, Inc. and GTS Acquisition Sub, Inc.




“GTS Acquisition Agreement” means that certain Stock Purchase Agreement dated as of
February 29, 2008, by and among the Sellers (GTS), GTS Direct, LLC, Group Transportation
Services, Inc. and GTS Acquisition Sub, Inc.




“Guarantors” means all Domestic Subsidiaries.




“Guaranty” means, collectively, one or more guaranties of each Guarantor, in the form
or forms prescribed by the Administrative Agent, in favor of the Administrative Agent, for
the ratable benefit of the Lenders, as amended or modified and in effect from time to time.


 


13









 






“Hazardous Substances” means (i) any petroleum or petroleum products, radioactive
materials, asbestos in any form that is or could become friable, urea formaldehyde foam
insulation, dielectric fluid containing levels of polychlorinated biphenyls, radon gas and
mold; (ii) any chemicals, materials, pollutant or substances defined as or included in the
definition of “hazardous substances,” “hazardous waste,” “hazardous materials,” “extremely
hazardous substances,” “restricted hazardous waste,” “toxic substances,” “toxic pollutants,”
“contaminants,” “pollutants” or words of similar import, under any applicable Environmental
Law; and (iii) any other chemical, material or substance, the exposure to or release of
which is prohibited, limited or regulated by any governmental authority or for which any
duty or standard of care is imposed pursuant to any Environmental Law.




“Highest Lawful Rate” means, on any day, the maximum non-usurious rate of interest
permitted for that day by applicable federal or state law stated as a rate per annum.




“Indebtedness” of a Person means such Person’s (i) obligations for borrowed money,
(ii) obligations representing the deferred purchase price of Property or services (other
than accounts payable arising in the ordinary course of such Person’s business payable on
terms customary in the trade), (iii) obligations, whether or not assumed, secured by Liens
or payable out of the proceeds or production from Property now or hereafter owned or
acquired by such Person, (iv) obligations that are evidenced by notes, acceptances or other
instruments, (v) any capital securities or other equity instrument, whether or not
mandatorily redeemable, that under GAAP is characterized as debt, whether pursuant to
financial accounting standards board issuance No. 150 or otherwise, (vi) Capitalized Lease
Obligations, (vii) obligations of such Person as an account party with respect to standby
and commercial Letters of Credit, (viii) Contingent Obligations of such Person, (ix) Net
Mark to Market Exposure under Financial Contracts and (x) any other obligation for borrowed
money or other financial accommodation that in accordance with GAAP would be shown as a
liability on the consolidated balance sheet of such Person. Notwithstanding anything herein
to the contrary, Borrower Preferred Stock and Borrower Redeemable Common Stock shall not
constitute Indebtedness hereunder.




“Interest Expense” means, for any period of determination, the aggregate consolidated
amount, without duplication, of interest paid, accrued or scheduled to be paid in respect of
any Indebtedness of the Borrower and its Subsidiaries, including (a) all but the principal
component of payments in respect of conditional sale contracts, Capitalized Leases and other
title retention agreements, (b) commissions, discounts and other fees and charges with
respect to letters of credit and bankers’ acceptance financings, (c) net costs under Rate
Management Transactions, in each case determined in accordance with GAAP and (d) the
amortization of debt issuance costs.




“Interest Period” means, with respect to a Eurocurrency Advance, a period of one, two,
three or six months commencing on a Business Day selected by the Borrower pursuant to this
Agreement. Such Interest Period shall end on the day that corresponds numerically to such
date one, two, three or six months thereafter, provided, however, that


 


14









 






if there is no such numerically corresponding day in such next, second, third or sixth
succeeding month, such Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month. If an Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall end on the next succeeding Business
Day, provided, however, that if said next succeeding Business Day falls in a new calendar
month, such Interest Period shall end on the immediately preceding Business Day.




“Inventory” means any and all goods, including, without limitation, goods in transit,
wheresoever located, whether now owned or hereafter acquired by the Borrower, that are held
for sale or lease, furnished under any contract of service or held as raw materials, work in
process or supplies, and all materials used or consumed in the business of the Borrower, and
shall include all right, title and interest of the Borrower in any property the sale or
other disposition of which has given rise to Receivables and that has been returned to or
repossessed or stopped in transit by the Borrower.




“Investment” of a Person means any loan, advance (other than commission, travel and
similar advances to officers and employees made in the ordinary course of business),
extension of credit (other than accounts receivable arising in the ordinary course of
business on terms customary in the trade) or contribution of capital by such Person; stocks,
bonds, mutual funds, partnership interests, notes, debentures or other securities (including
warrants or options to purchase securities) owned by such Person; any deposit accounts and
certificates of deposit owned by such Person; and structured notes, derivative financial
instruments and other similar instruments or contracts (other than those arising in
connection with Rate Management Transactions) owned by such Person.




“LC Fee” is defined in Section 2.18.4.




“LC Issuer” means U.S. Bank (or any subsidiary or affiliate of U.S. Bank designated by
U.S. Bank) in its capacity as issuer of Facility LCs hereunder.




“LC Obligations” means, at any time, the sum, without duplication, of (i) the aggregate
undrawn stated amount under all Facility LCs outstanding at such time plus (ii) the
aggregate unpaid amount at such time of all Reimbursement Obligations.




“LC Payment Date” is defined in Section 2.18.5.




“Lenders” means the lending institutions listed on the signature pages of this
Agreement and their respective successors and assigns. Unless otherwise specified, the term
“Lenders” includes U.S. Bank in its capacity as Swing Line Lender.




“Lending Installation” means, with respect to a Lender or the Administrative Agent, the
office, branch, subsidiary or affiliate of such Lender or the Administrative Agent listed on
the signature pages hereof (in the case of the Administrative Agent) or on its
administrative questionnaire (in the case of a Lender) or otherwise selected by such Lender
or the Administrative Agent pursuant to Section 2.16.


 


15









 






“Letter of Credit” of a Person means a letter of credit or similar instrument that is
issued upon the application of such Person, upon which such Person is an account party or
for which such Person is in any way liable.




“Lien” means any lien (statutory or other), mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, priority or other security agreement or
similar arrangement of any kind or nature whatsoever (including, without limitation, the
interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title
retention agreement).




“Loan” means a Revolving Loan or a Swing Line Loan.




“Loan Documents” means this Agreement, the Facility LC Applications, the Collateral
Documents, the Guaranty, the Advisory Fee Subordination Agreement, any note or notes
executed by the Borrower in connection with this Agreement and payable to a Lender, and any
other material agreement, now or in the future, executed by the Borrower for the benefit of
the Administrative Agent or any Lender in connection with this Agreement.




“Material Adverse Effect” means a material adverse effect on (i) the business,
Property, financial condition or results of operations of the Borrower and its Subsidiaries
taken as a whole, (ii) the ability of any of the Borrower or any of its Subsidiaries to
perform its respective material obligations under the Loan Documents to which it is a party,
or (iii) any substantial portion of the Collateral under the Collateral Documents or on the
validity or enforceability of any of the Loan Documents or the rights or remedies of the
Administrative Agent, the LC Issuer or the Lenders thereunder.




“Material Collateral Documents” is defined in Section 7.15.




“Material Indebtedness” means Indebtedness in an outstanding principal amount of
$1,000,000 or more in the aggregate (or the equivalent thereof in any currency other than
Dollars).




“Material Indebtedness Agreement” means any agreement under which any Material
Indebtedness was created or is governed or that provides for the incurrence of Indebtedness
in an amount that would constitute Material Indebtedness (whether or not an amount of
Indebtedness constituting Material Indebtedness is outstanding thereunder).




“Merger” means the merger of Target and the Acquisition Sub, with the Target as the
surviving company.




“MESCA Acquisition Agreement” means that certain Membership Interest Purchase
Agreement, dated as of September 15, 2009, by and among the Sellers (MESCA), and MESCA
Freight Services, LLC and GTS Acquisition Sub, Inc. as amended.




“Midwest Transit” means Midwest Transit, Inc., a corporation organized under the terms
of New Brunswick, Canada (and a Wholly-Owned Subsidiary of the Borrower).


 


16









 






“Modify” and “Modification” are defined in Section 2.18.1.




“Moody’s” means Moody’s Investors Service, Inc.




“Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining
agreement or any other arrangement to which the Borrower or any member of the Controlled
Group is a party to which more than one employer is obligated to make contributions.




“Net Mark-to-Market Exposure” of a Person means, as of any date of determination, the
excess (if any) of all unrealized losses over all unrealized profits of such Person arising
from Rate Management Transactions. “Unrealized losses” means the fair market value of the
cost to such Person of replacing such Rate Management Transaction as of the date of
determination (assuming the Rate Management Transaction were to be terminated as of that
date), and “unrealized profits” means the fair market value of the gain to such Person of
replacing such Rate Management Transaction as of the date of determination (assuming such
Rate Management Transaction were to be terminated as of that date).




“Non-U.S. Lender” is defined in Section 3.5(d).




“Note” is defined in Section 2.12.




“Obligations” means all unpaid principal of and accrued and unpaid interest on the
Loans, all LC Obligations, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Borrower to the Lenders or to any Lender, the
Administrative Agent, the LC Issuer or any indemnified party arising under the Loan
Documents, any Financial Contract between the Borrower or a Subsidiary and a Lender and
approved by the Administrative Agent pursuant to Section 6.17 and any Cash Management
Services Agreement between the Borrower or a Subsidiary and a Lender.




“Operating Lease” of a Person means any lease of Property (other than a Capitalized
Lease) by such Person as lessee that has an original term (including any required renewals
and any renewals effective at the option of the lessor) of one year or more.




“Operating Lease Obligations” means, as at any date of determination, the amount
obtained by aggregating the present values, determined in the case of each particular
Operating Lease by applying a discount rate (which discount rate shall equal the discount
rate that would be applied under GAAP if such Operating Lease were a Capitalized Lease) from
the date on which each fixed lease payment is due under such Operating Lease to such date of
determination, of all fixed lease payments due under all Operating Leases of the Borrower
and its Subsidiaries.




“Other Taxes” is defined in Section 3.5(b).


 


17









 






“Outstanding Credit Exposure” means, as to any Lender at any time, the sum of (i) the
aggregate principal Dollar amount of its Revolving Loans outstanding at such time, plus (ii)
an amount equal to its Pro Rata Share of the aggregate principal amount of Swing Line Loans
outstanding at such time, plus (iii) an amount equal to its Pro Rata Share of the LC
Obligations at such time.




“Participants” is defined in Section 12.2.1.




“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.




“Permitted Acquisition” means any Acquisition made by the Borrower or any of its
Subsidiaries, provided that, (a) as of the date of the consummation of such Acquisition, no
Default or Event of Default shall have occurred and be continuing or would result from such
Acquisition, and the representation and warranty in Section 5.11 shall be true both before
and after giving effect to such Acquisition, (b) such Acquisition is consummated on a
non-hostile basis pursuant to a negotiated acquisition agreement approved by the board of
directors or other applicable governing body of the seller or entity to be acquired, and no
material challenge to such Acquisition (excluding the exercise of appraisal rights) shall be
pending or threatened by any shareholder or director of the seller or entity to be acquired,
(c) the business to be acquired in such Acquisition is in the same line of business as the
Borrower’s, (d) as of the date of the consummation of such Acquisition, all material
approvals required in connection therewith shall have been obtained, (e) the Borrower shall
have furnished to the Administrative Agent a certificate demonstrating in reasonable detail
(i) pro forma compliance with the financial covenants in Sections 6.32.2 and 6.32.1 for such
period, in each case calculated as if such Acquisition, including the consideration
therefor, had been consummated on the first day of the applicable period and (ii) that the
Borrower has at least $15,000,000 of availability for Loans immediately after giving effect
to any such Acquisition and (f) no one such Acquisition shall exceed $20,000,000, the
aggregate of all such Acquisitions in any fiscal year shall not exceed $20,000,000 and the
aggregate of all such Acquisitions during the term of this Agreement shall not exceed
$50,000,000, in each case after giving effect to all hold-backs, earn-outs, indemnity
obligations and other similar payment obligations of the acquirer.




“Permitted GTS Earn-Out Payments” means, as applicable, payments required to be made
subsequent to the date hereof (a) to the Sellers (GTS) pursuant to the GTS Acquisition
Agreement, (b) to the Sellers (Great Northern) pursuant to the Great Northern Acquisition
Agreement, or (c) to the Sellers (MESCA) pursuant to the MESCA Acquisition Agreement, in
each case subject to the terms of Section 6.29 and in each case as such agreements are in
effect on the date hereof.




“Permitted Sargent Earn-Out Payments” means “Contingent Payments” under and as defined
in the Sargent Purchase Agreement in an amount not to exceed $800,000 in the aggregate.


 


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“Person” means any natural person, corporation, firm, joint venture, partnership,
limited liability company, association, enterprise, trust or other entity or organization or
government or political subdivision or any agency, department or instrumentality thereof.




“Plan” means an employee pension benefit plan that is covered by Title IV of ERISA or
subject to the minimum funding standards under § 412 of the Code as to which the Borrower or
any member of the Controlled Group may have any liability.




“Pricing Schedule” means the Schedule attached hereto identified as such.




“Primary Cash Management Accounts” is defined in Section 6.16(b).




“Prime Rate” means a rate per annum equal to the prime rate of interest announced from
time to time by U.S. Bank or its parent (which is not necessarily the lowest rate charged to
any customer), changing when and as said prime rate changes.




“Prohibited Transaction” has the meanings give in § 4975 of the Code and § 406 of
ERISA.




“Pro Rata Share” means, with respect to a Lender, a portion equal to a fraction the
numerator of which is such Lender’s Commitment and the denominator of which is the Aggregate
Commitment, provided, however, if all of the Commitments are terminated pursuant to the
terms of this Agreement, the “Pro Rata Share” means the percentage obtained by dividing (a)
such Lender’s Outstanding Credit Exposure at such time by (b) the Aggregate Outstanding
Credit Exposure at such time; and provided, further, that when a Defaulting Lender exists,
“Pro Rata Share” shall mean the percentage of the Aggregate Commitment (disregarding any
Defaulting Lender’s Commitment) represented by such Lender’s Commitment. If the Commitments
have terminated or expired, the Pro Rata Shares shall be determined based upon the
Commitments most recently in effect, giving effect to any assignments.




“Property” of a Person means any and all property, whether real, personal, tangible,
intangible or mixed, of such Person, or other assets owned, leased or operated by such
Person.




“Purchasers” is defined in Section 12.3.1.




“Quotation Date” means, in relation to any Interest Period for which an interest rate
is to be determined, two Business Days before the first day of that period.




“Rate Management Obligations” of a Person means any and all obligations of such Person,
whether absolute or contingent and howsoever and whensoever created, arising, evidenced or
acquired (including all renewals, extensions and modifications thereof and substitutions
therefor), under (i) any and all Rate Management Transactions, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any Rate Management
Transactions.


 


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“Rate Management Transaction” means any transaction (including an agreement with
respect thereto) now existing or hereafter entered by the Borrower or any Subsidiary that is
a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity
or equity index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap transaction,
currency option or any other similar transaction (including any option with respect to any
of these transactions) or any combination thereof, whether linked to one or more interest
rates, foreign currencies, commodity prices, equity prices or other financial measures.




“Receivables” means all accounts receivable (including, without limitation, all rights
to payment created by or arising from sales of goods, leases of goods or the rendition of
services rendered no matter how evidenced whether or not earned by performance).




“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve
System as from time to time in effect and any successor thereto or other regulation or
official interpretation of said Board of Governors relating to reserve requirements
applicable to member banks of the Federal Reserve System.




“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve
System as from time to time in effect and any successor or other regulation or official
interpretation of said Board of Governors relating to the extension of credit by banks for
the purpose of purchasing or carrying margin stock applicable to member banks of the Federal
Reserve System.




“Reimbursement Obligations” means, at any time, the aggregate of all obligations of the
Borrower then outstanding under Section 2.18 to reimburse the LC Issuer for amounts paid by
the LC Issuer in respect of any one or more drawings under Facility LCs.




“Reportable Event” means a reportable event as defined in § 4043 of ERISA and the
regulations issued under such section, with respect to a Plan, excluding, however, such
events as to which the PBGC has, as of the date hereof, by regulation waived the requirement
of §4043(a) of ERISA that it be notified within 30 days of the occurrence of such event,
provided, however, that a failure to meet the minimum funding standard of § 412 of the Code
and of § 302 of ERISA shall be a Reportable Event regardless of the issuance of any such
waiver of the notice requirement in accordance with either § 4043(a) of ERISA or § 412(d) of
the Code.




“Reports” is defined in Section 9.6.




“Required Lenders” means Lenders in the aggregate having greater than 50% of the
Aggregate Commitment or, if the Aggregate Commitment has been terminated, Lenders in the
aggregate holding greater than 50% of the Aggregate Outstanding Credit Exposure.


 


20









 






“Reserve Requirement” means, with respect to an Interest Period, the maximum aggregate
reserve requirement (including all basic, supplemental, marginal and other reserves) that is
imposed under Regulation D on Eurocurrency liabilities.




“Restricted Payment” means (a) any dividend or other distribution (whether in cash,
securities or other property) with respect to any equity interest in the Borrower or any
Subsidiary, or any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such equity interests in the Borrower or any
Subsidiary thereof or any option, warrant or other right to acquire any such equity interest
in the Borrower or any Subsidiary thereof, (b) any amount paid on account of any
Indebtedness, promissory notes, intercompany Indebtedness or other liabilities or
obligations owed by the Borrower to any holder of equity interests in the Borrower other
than the Lenders or (c) any amount prepaid directly or indirectly on account of any
Indebtedness other than (i) any prepayment on the Obligations, (ii) any regularly scheduled
payments, or (iii) voluntary prepayments of Indebtedness other than the Obligations not to
exceed $750,000 in the aggregate for all such prepayments under this clause (iii).




“Revolving Loan” means, with respect to a Lender, such Lender’s loan made pursuant to
its commitment to lend set forth in Section 2.1 (or any conversion or continuation thereof).




“RRTS IPO” means the initial public offering of the Borrower made pursuant to and in
accordance with the RRTS IPO Documents.




“RRTS IPO Documents” means the Borrower’s registration statement on Form S-1 (No.
333-152504).




“S&P” means Standard and Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.




“Sale and Leaseback Transaction” means any sale or other transfer of Property by any
Person with the intent to lease such Property as lessee.




“Sargent Purchase Agreement” means that certain Stock Purchase Agreement, dated as of
October 4, 2006, by and among Sargent Trucking, Inc., a Maine corporation, Big Rock
Transportation, Inc., an Indiana corporation, Midwest Carriers, Inc., an Indiana
corporation, Smith Truck Brokers, Inc., a Maine corporation, B&T Transportation, Inc., a
Maine corporation, Sargent Holdings Corp., Bruce Sargent and Michael Tweedie.




“Schedule” refers to a specific schedule to this Agreement, unless another document is
specifically referenced.




“Section” means a numbered section of this Agreement, unless another document is
specifically referenced.


 


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“Secured Obligations” means, collectively, (i) the Obligations and (ii) all Cash
Management Obligations and Rate Management Obligations owing to one or more Lenders or their
Affiliates.




“Security Agreement” means the Pledge and Security Agreement of even date herewith
between the Borrower and each Domestic Subsidiary and the Administrative Agent, as amended,
restated or otherwise modified from time to time.




“Sellers (Great Northern)” means Mark J. Hagopian in his capacity as the “Seller” under
the Great Northern Acquisition Agreement.




“Sellers (GTS)” means Michael P. Valentine in his capacity as the “Seller” under the
GTS Acquisition Agreement.




“Sellers (MESCA)” means George Wilmot, John Heckman, Marvin Littel and Dennis Reed in
their capacities as “Sellers” under the MESCA Acquisition Agreement.




“Sellers (Sargent)” means Bruce Sargent and Michael Tweedie in their capacities as
“Sellers” under the Sargent Purchase Agreement.




“Single Employer Plan” means a Plan maintained by the Borrower or any member of the
Controlled Group for employees of the Borrower or any member of the Controlled Group.




“Specified Events of Default” means any Event of Default of the type described in
Section 7.2, 7.3 (solely with respect to Section 6.32.1), 7.6 or 7.7




“Stated Rate” is defined in Section 2.21.




“Subordinated Indebtedness” of a Person means any Indebtedness of such Person the
payment of which is subordinated to payment of the Obligations to the written satisfaction
of the Required Lenders, in their sole discretion, and none of the principal of which is
payable until at least 180 days after the Facility Termination Date.




“Subsidiary” of a Person means (i) any corporation more than 50% of the outstanding
securities having ordinary voting power of which shall at the time be owned or controlled,
directly or indirectly, by such Person or by one or more of its Subsidiaries, or (ii) any
partnership, limited liability company, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting power of which
shall at the time be so owned or controlled. Unless otherwise expressly provided, all
references herein to a “Subsidiary” shall mean a Subsidiary of the Borrower.




“Substantial Portion” means, with respect to the Property of the Borrower and its
Subsidiaries, Property that represents more than 5% of the consolidated assets of the
Borrower and its Subsidiaries as would be shown in the consolidated financial statements of
the Borrower and its Subsidiaries as at the beginning of the twelve-month period ending with
the month in which such determination is made (or if financial statements have not been
delivered hereunder for the month that begins the twelve-month period,


 


22









 






then the financial statements delivered hereunder for the quarter ending immediately
prior to that month).




“Swing Line Borrowing Notice” is defined in Section 2.22(b).




“Swing Line Exposure” is defined in Section 2.21.




“Swing Line Lender” means U.S. Bank or any other Lender that succeeds to U.S. Bank’s
rights and obligations as Swing Line Lender pursuant to the terms of this Agreement.




“Swing Line Loan” means a Loan made available to the Borrower by the Swing Line Lender
pursuant to Section 2.22.




“Swing Line Sublimit” means the maximum principal amount of Swing Line Loans the Swing
Line Lender may have outstanding to the Borrower at any one time, which, as of the date
hereof, is $5,000,000.




“Target” means Group Transportation Services Holdings, Inc., a Delaware corporation.




“Taxes” means any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and any and all liabilities with respect to the foregoing, but
excluding Excluded Taxes and Other Taxes.




“Total Cash Flow Leverage Ratio” means, for any period of determination, the ratio of
(a) Total Funded Debt to (b) EBITDA.




“Total Funded Debt” means, for any period of determination, without duplication, the
sum of (a) outstanding borrowings under this Agreement, plus (b) the undrawn face amount of
issued and outstanding Facility LCs and all other LC Obligations, in each case that are
outstanding on such date (less any amounts deposited by the Borrower to cash collateralize
such LC Obligations), plus, (c) the aggregate outstanding principal balance of all other
interest-bearing Consolidated Indebtedness including Capitalized Leases and Subordinated
Debt, plus (d) Contingent Obligations covering any of the indebtedness listed in clauses
(a), (b) or (c) of this definition (without duplication). Clause (a) of this definition
shall be calculated based on the average daily Aggregate Outstanding Credit Exposure with
respect to Loans for the immediately preceding fiscal quarter.




“Transferee” is defined in Section 12.4.




“Type” means, with respect to any Advance, its nature as a Base Rate Advance or a
Eurocurrency Advance and with respect to any Loan, its nature as a Base Rate Loan or a
Eurocurrency Loan.




“U.S. Bank” means U.S. Bank National Association, a national banking association, in
its individual capacity, and its successors.


 


23









 






“U.S.A. Patriot Act” means the U.S.A. Patriot Act of 2001, 31 U.S.C. § 5318, Title III
of Pub. L. 107-56 (signed into law October 26, 2001), as amended.




“Unfunded Liabilities” means the amount (if any) by which the present value of all
vested and unvested accrued benefits under all Single Employer Plans exceeds the fair market
value of all such Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plans using PBGC actuarial assumptions for single employer
plan terminations.




“Wholly-Owned Subsidiary” of a Person means (i) any Subsidiary of which 100% of the
beneficial ownership interests are at the time owned or controlled, directly or indirectly,
by such Person or one or more Wholly-Owned Subsidiaries of such Person, or (ii) any
partnership, limited liability company, association, joint venture or similar business
organization of which 100% of the beneficial ownership interests are at the time so owned or
controlled.



The foregoing definitions shall be equally applicable to both the singular and plural forms of
the defined terms.



ARTICLE II




THE CREDITS




2.1. Commitment. From and including the date of this Agreement and prior to the
Facility Termination Date, each Lender severally agrees, on the terms and conditions set forth in
this Agreement, to make Loans to the Borrower in Dollars and participate in Facility LCs issued
upon the request of the Borrower, provided that, after giving effect to the making of each such
Loan and the issuance of each such Facility LC, the Dollar amount of such Lender’s Outstanding
Credit Exposure shall not exceed its Commitment or its Pro Rata Share of the Borrowing Base.
Subject to the terms of this Agreement, the Borrower may borrow, repay and reborrow at any time
prior to the Facility Termination Date. The Commitments to extend credit hereunder shall expire on
the Facility Termination Date. The LC Issuer will issue Facility LCs hereunder on the terms and
conditions set forth in Section 2.18.



2.2. Required Payments; Termination. If at any time the Dollar amount of the
Aggregate Outstanding Credit Exposure exceeds the lesser of the Aggregate Commitment or the
Borrowing Base, the Borrower shall immediately make a payment on the Obligations sufficient to
eliminate such excess. The Aggregate Outstanding Credit Exposure and all other unpaid Obligations
shall be paid in full by the Borrower on the Facility Termination Date.



2.3. Ratable Loans; Types of Advances. Each Advance hereunder (other than any Swing
Line Loan) shall consist of Revolving Loans made from the several Lenders ratably according to
their Pro Rata Shares. The Advances
may be Base Rate Advances or Eurocurrency Advances, or a combination thereof, selected by the
Borrower in accordance with Sections 2.8 and 2.9, or Swing Line Loans selected by the Borrower in
accordance with Section 2.22.



2.4. Commitment Fee. The Borrower agrees to pay to the Administrative Agent for the
account of each Lender according to its Pro Rata Share a commitment fee at a per annum rate



 


24









 






equal
to the Applicable Fee Rate on the average daily Available Aggregate Commitment from the date hereof
to and including the Facility Termination Date, payable on the last day of each fiscal quarter and
on the Facility Termination Date. Swing Line Loans shall not count as usage of the Aggregate
Commitment for the purpose of calculating the commitment fee due hereunder.



2.5. Minimum Amount of Each Advance. Each Eurocurrency Advance shall be in the
minimum amount of $500,000, or if more, in integral multiples of $100,000 above $500,000 and each
Base Rate Advance (other than an Advance to repay Swing Line Loans) shall be in the minimum amount
of $500,000, or if more, in integral multiples of $100,000 above $500,000, provided, however, that
any Base Rate Advance may be in the amount of the Available Aggregate Commitment or, if less, the
unused portion of the Borrowing Base.



2.6. Reductions in Aggregate Commitment; Optional Principal Payments. The Borrower
may permanently reduce the Aggregate Commitment in whole, or in part ratably among the Lenders in
the minimum amount of $500,000, upon at least three Business Days’ written notice to the
Administrative Agent, which notice shall specify the amount of any such reduction, provided,
however, that the amount of the Aggregate Commitment may not be reduced below the Aggregate
Outstanding Credit Exposure. All accrued commitment fees shall be payable on the effective date of
any termination of the obligations of the Lenders to make Credit Extensions hereunder. The
Borrower may from time to time pay, without penalty or premium, all outstanding Base Rate Advances
(other than Swing Line Loans), or, in a minimum aggregate amount of $500,000, or if more, in
integral multiples of $100,000 above $500,000, any portion of the outstanding Base Rate Advances
(other than Swing Line Loans) upon same day notice to the Administrative Agent. The Borrower may
at any time pay, without penalty or premium, all outstanding Swing Line Loans, or any portion of
the outstanding Swing Line Loans, with notice to the Administrative Agent and the Swing Line Lender
by 11:00 a.m. (Minneapolis time) on the date of repayment. The Borrower may from time to time pay,
subject to the payment of any funding indemnification amounts required by Section 3.4 but without
penalty or premium, all outstanding Eurocurrency Advances, or, in a minimum aggregate amount of
$500,000 or if more, in integral multiples of $100,000 above $500,000, any portion of the
outstanding Eurocurrency Advances upon three Business Days’ prior notice to the Administrative
Agent.



2.7. Method of Selecting Types and Interest Periods for New Advances. The Borrower
shall select the Type of Advance and, in the case of each Eurocurrency Advance, the Interest Period
applicable thereto from time to time. The Borrower shall give the
Administrative Agent irrevocable notice in the form of Exhibit C (a “Borrowing Notice”) not
later than 12:00 p.m. (Minneapolis time) on the Borrowing Date of each Base Rate Advance (other
than a Swing Line Loan) and three Business Days before the Borrowing Date for each Eurocurrency
Advance, specifying:




(a) the Borrowing Date, which shall be a Business Day, of such Advance,




(b) the aggregate amount of such Advance,




(c) the Type of Advance selected, and


 


25









 






(d) in the case of each Eurocurrency Advance, the Interest Period applicable thereto;



Not later than 2:00 p.m. (Minneapolis time) on each Borrowing Date, each Lender shall make
available its Loan or Loans in funds immediately available to the Administrative Agent at its
address specified pursuant to Article XIII. The Administrative Agent will make the funds so
received from the Lenders available to the Borrower pursuant to the Borrowing Notice.



2.8. Conversion and Continuation of Outstanding Advances. Base Rate Advances (other
than Swing Line Loans) shall continue as Base Rate Advances unless and until such Base Rate
Advances are converted into Eurocurrency Advances pursuant to this Section or are repaid in
accordance with Section 2.6. Each Eurocurrency Advance denominated in Dollars shall continue as a
Eurocurrency Advance until the end of the then applicable Interest Period therefor, at which time
such Eurocurrency Advance shall be automatically converted into a Base Rate Advance unless (x) such
Eurocurrency Advance is or was repaid in accordance with Section 2.6 or (y) the Borrower has given
the Administrative Agent a Conversion/Continuation Notice (as defined below) requesting that, at
the end of such Interest Period, such Eurocurrency Advance continue as a Eurocurrency Advance for
the same or another Interest Period. Subject to the terms of Section 2.5, the Borrower may elect
from time to time to convert all or any part of a Base Rate Advance (other than a Swing Line Loan)
into a Eurocurrency Advance. The Borrower shall give the Administrative Agent irrevocable notice
(a “Conversion/Continuation Notice”) of each conversion of a Base Rate Advance into a Eurocurrency
Advance, conversion of a Eurocurrency Advance to a Base Rate Advance, or continuation of a
Eurocurrency Advance not later than 12:00 p.m. (Minneapolis time) at least three Business Days
prior to the date of the requested conversion or continuation, specifying:




(a) the requested date, which shall be a Business Day, of such conversion or
continuation,




(b) the amount and Type of the Advance that is to be converted or continued, and




(c) the amount of such Advance that is to be converted into or continued as a
Eurocurrency Advance and the duration of the Interest Period applicable thereto.



2.9. Interest Rates. Each Base Rate Advance (other than a Swing Line Loan) shall bear interest on the
outstanding principal amount thereof, for each day from and including the date such Advance is made
or is automatically converted from a Eurocurrency Advance into a Base Rate Advance pursuant to
Section 2.8, to but excluding the date it becomes due or is converted into a Eurocurrency Advance
pursuant to Section 2.8, at a rate per annum equal to the Base Rate for such day. Changes in the
rate of interest on the portion of any Advance maintained as a Base Rate Advance will take effect
simultaneously with each change in the Base Rate. Each Swing Line Loan shall bear interest on the
outstanding principal amount thereof, for each day from and including the day such Swing Line Loan
is made to but excluding the date it is paid, at a rate per annum equal to the Base Rate for such
day or another rate if agreed to by the Borrower and the Swing Line Lender. Each Eurocurrency
Advance shall bear interest on the outstanding principal amount thereof from and including the
first day of the Interest Period



 


26









 






applicable thereto to (but not including) the last day of such
Interest Period at the interest rate reasonably determined by the Administrative Agent as
applicable to such Eurocurrency Advance based upon the Borrower’s selections under Sections 2.7 and
2.8 and otherwise in accordance with the terms hereof. No Interest Period may end after the
Facility Termination Date. Notwithstanding anything to the contrary in this Agreement, without the
prior written consent of the Required Lenders, the Borrower shall not maintain more than six
Eurocurrency Advances at any time.



2.10. Rates Applicable After Event of Default. Notwithstanding anything to the
contrary in Section 2.7, 2.8, or 2.9, during the continuance of a Default or Event of Default the
Required Lenders may, at their option, by notice to the Borrower (which notice may be revoked at
the option of the Required Lenders notwithstanding any provision of Section 8.2 requiring unanimous
consent of the Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a Eurocurrency Advance. During the continuance of an Event of
Default the Administrative Agent may, at its option, by notice to the Borrower (which notice may be
revoked at the option of the Administrative Agent notwithstanding any provision of Section 8.2
requiring unanimous consent of the Lenders to changes in interest rates), declare that (i) each
Eurocurrency Advance shall bear interest for the remainder of the applicable Interest Period at the
rate otherwise applicable to such Interest Period plus 2% per annum, (ii) each Base Rate Advance
shall bear interest at a rate per annum equal to the Base Rate in effect from time to time plus 2%
per annum, and (iii) the LC Fee shall be increased by 2% per annum, provided that, during the
continuance of a Event of Default under Section 7.6 or 7.7, the interest rates set forth in clauses
(i) and (ii) above and the increase in the LC Fee set forth in clause (iii) above shall be
applicable to all Credit Extensions without any election or action on the part of the
Administrative Agent or any Lender. After an Event of Default has been cured or waived, the
interest rate applicable to advances and the LC Fee shall revert to the rates applicable prior to
the occurrence of an Event of Default.



2.11. Method of Payment. Each Advance shall be repaid and each payment of interest
thereon shall be paid in Dollars. All payments of the Obligations hereunder shall be made, without
setoff, deduction or counterclaim, in immediately available funds to the Administrative Agent at
the Administrative Agent’s address specified pursuant to Article XIII, or at any other Lending
Installation of the Administrative Agent specified in writing by the Administrative Agent to the Borrower (which
written notice shall be delivered to Borrower at least one Business Day prior to the due date of
the applicable payment) by 12:00 p.m. (Minneapolis time) on the date when due and shall (except (i)
with respect to payments of Swing Line Loans, (ii) in the case of Reimbursement Obligations for
which the LC Issuer has not been fully indemnified by the Lenders or (iii) as otherwise
specifically required hereunder) be applied ratably by the Administrative Agent among the Lenders.
Each payment delivered to the Administrative Agent for the account of any Lender shall be delivered
promptly by the Administrative Agent to such Lender in the same type of funds that the
Administrative Agent received at its address specified pursuant to Article XIII or at any Lending
Installation specified in a notice received by the Administrative Agent from such Lender. The
Administrative Agent is hereby authorized to charge the account of the Borrower maintained with
U.S. Bank for each payment of principal, interest, Reimbursement Obligations and fees as it becomes
due hereunder. Each reference to the Administrative Agent in this Section shall also be deemed to
refer, and shall apply equally, to



 


27









 






the LC Issuer, in the case of payments required to be made by
the Borrower to the LC Issuer pursuant to Section 2.18.6.




2.12. Evidence of Indebtedness.




(a) Each Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan
made by such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.




(b) The Administrative Agent shall also maintain accounts in which it will record (i)
the amount of each Loan made hereunder, the Type thereof and the Interest Period with
respect thereto, (ii) the amount of any principal or interest due and payable or to become
due and payable from the Borrower to each Lender hereunder, (iii) the original stated amount
of each Facility LC and the amount of LC Obligations outstanding at any time and (iv) the
amount of any sum received by the Administrative Agent hereunder from the Borrower and each
Lender’s share thereof.




(c) The entries in the accounts maintained pursuant to paragraphs (a) and (b) above
shall be prima facie evidence of the existence and amounts of the Obligations therein
recorded; provided, however, that the failure of the Administrative Agent or any Lender to
maintain such accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Obligations in accordance with their terms.




(d) Any Lender may request that its Loans be evidenced by a promissory note
substantially in the form of Exhibit D, or, in the case of the Swing Line Lender, a
promissory note substantially in the form Exhibit E (each a “Note”). In such event, the
Borrower shall prepare, execute and deliver to such Lender such Note Notes payable to the
order of such Lender. Thereafter, the Loans evidenced by such Note and interest thereon
shall at all times (prior to any assignment pursuant to Section 12.3) be represented by one
or more Notes payable to the order of the payee named therein, except to the extent that any
such Lender subsequently returns any such Note for cancellation
and requests that such Loans once again be evidenced as described in clauses (b)(i) and
(ii) above.



2.13. Telephonic Notices. The Borrower hereby authorizes the Lenders and the
Administrative Agent to extend, convert or continue Advances, effect selections of Types of
Advances and transfer funds based on telephonic notices made by any person or persons the
Administrative Agent or any Lender in good faith believes to be acting on behalf of the Borrower,
it being understood that the foregoing authorization is specifically intended to allow Borrowing
Notices and Conversion/Continuation Notices to be given telephonically. The Borrower agrees to
deliver promptly to the Administrative Agent a written confirmation (which may be an e-mail
confirmation) of each telephonic notice authenticated by an Authorized Officer. If the written
confirmation differs in any material respect from the action taken by the Administrative Agent and
the Lenders, the records of the Administrative Agent and the Lenders shall govern absent manifest
error.


 


28









 





2.14. Interest Payment Dates; Interest and Fee Basis. Interest accrued on each Base
Rate Advance shall be payable in arrears on the first Business Day of each month, commencing with
the first such date to occur after the date hereof, and at maturity. Interest accrued on each
Eurocurrency Advance shall be payable on the last day of its applicable Interest Period, on any
date on which the Eurocurrency Advance is prepaid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Eurocurrency Advance having an Interest Period longer than
three months shall also be payable on the last day of each three-month interval during such
Interest Period. Interest accrued on Base Rate Advances shall be calculated based on the actual
number of days elapsed on the basis of a 365/366-day year. Interest on Eurocurrency Advances and
fees shall be calculated for actual days elapsed on the basis of a 360-day year. Interest shall be
payable for the day an Advance is made but not for the day of any payment on the amount paid if
payment is received prior to noon (local time) at the place of payment. If any payment of
principal of or interest on an Advance becomes due on a day that is not a Business Day, such
payment shall be made on the next succeeding Business Day; provided that if the next succeeding
Business Day is in the next calendar month, such payment shall be made on the immediately preceding
Business Day.



2.15. Notification of Advances, Interest Rates, Prepayments and Commitment Reductions.
Promptly after receipt thereof, the Administrative Agent will notify each Lender of the contents
of each Aggregate Commitment reduction notice, Borrowing Notice, Swing Line Borrowing Notice,
Conversion/Continuation Notice and repayment notice. Promptly after notice from the LC Issuer, the
Administrative Agent will notify each Lender of the contents of each request for issuance of a
Facility LC hereunder. The Administrative Agent will notify each Lender of the interest rate
applicable to each Eurocurrency Advance promptly upon determination of such interest rate and will
give each Lender prompt notice of each change in the Base Rate.



2.16. Lending Installations. Each Lender may book its Advances and its participation in any LC Obligations, and the LC
Issuer may book the Facility LCs, at any Lending Installation selected by such Lender or the LC
Issuer, as the case may be, and any Lender or the LC Issuer may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending Installation, and
the Loans, Facility LCs, participations in LC Obligations and any Notes issued hereunder shall be
deemed held by each Lender or the LC Issuer, as the case may be, for the benefit of any such
Lending Installation. Each Lender and the LC Issuer may, by written notice to the Administrative
Agent and the Borrower in accordance with Article XIII, designate replacement or additional Lending
Installations through which it will make Loans or issue Facility LCs and for whose account Loan
payments or payments with respect to Facility LCs are to be made.



2.17. Non-Receipt of Funds by the Administrative Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Administrative Agent, prior to the date on which it is
scheduled to make payment to the Administrative Agent of (i) in the case of a Lender, the proceeds
of a Loan or (ii) in the case of the Borrower, a payment of principal, interest or fees to the
Administrative Agent for the account of the Lenders, that it does not intend to make such payment,
the Administrative Agent may assume that such payment has been made. The Administrative Agent may,
but shall not be obligated to, make the amount of such payment available to the intended recipient
in reliance upon such assumption. If such Lender or the



 


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Borrower, as the case may be, has not in
fact made such payment to the Administrative Agent, the recipient of such payment shall, on demand
by the Administrative Agent, repay to the Administrative Agent the amount so made available
together with interest thereon in respect of each day during the period from and including the date
such amount was so made available by the Administrative Agent until the date the Administrative
Agent recovers such amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three days and, thereafter, the interest
rate applicable to the relevant Loan or (y) in the case of payment by the Borrower, the interest
rate applicable to the relevant Loan.




2.18. Facility LCs.




2.18.1. Issuance. The LC Issuer hereby agrees, on the terms and conditions set
forth in this Agreement, to issue standby and commercial Letters of Credit denominated in
Dollars (each, a “Facility LC”) and to renew, extend, increase, decrease or otherwise modify
each Facility LC (“Modify,” and each such action a “Modification”), from time to time from
and including the date of this Agreement and prior to the Facility Termination Date upon the
request of the Borrower; provided that immediately after each such Facility LC is issued or
Modified, (i) the aggregate Dollar amount of the outstanding LC Obligations shall not exceed
$8,000,000 and (ii) the Aggregate Outstanding Credit Exposure shall not exceed the lesser of
the Aggregate Commitment and the Borrowing Base. No Facility LC shall have an expiry date
later than the earlier of (x) the fifth Business Day prior to the Facility Termination Date
and (y) one year after its issuance; provided, however, that the expiry date of a Facility
LC may be up to one year later than the fifth Business Day prior to the Facility Termination
Date if the Borrower has posted on or before the fifth Business Day prior to the Facility
Termination Date cash collateral in the Facility LC Collateral Account on terms satisfactory to the Administrative Agent
in an amount equal to 105% of the LC Obligations with respect to such Facility LC. The
Borrower and the LC Issuer each hereby agree and acknowledge that the Existing GTS LCs shall
be deemed to be Letters of Credit issued under, and subject to the terms and conditions of
this Agreement.




2.18.2. Participations. Upon the issuance or Modification by the LC Issuer of
a Facility LC in accordance with this Section, the LC Issuer shall be deemed, without
further action by any party hereto, to have unconditionally and irrevocably sold to each
Lender, and each Lender shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably purchased from the LC Issuer, a participation in such
Facility LC (and each Modification thereof) and the related LC Obligations in proportion to
its Pro Rata Share.




2.18.3. Notice. Subject to Section 2.18.1, the Borrower shall give the
Administrative Agent notice prior to 12:00 p.m. (Minneapolis time) at least three Business
Days prior to the proposed date of issuance or Modification of each Facility LC, specifying
the beneficiary, the proposed date of issuance (or Modification) and the expiry date of such
Facility LC, and describing the proposed terms of such Facility LC and the nature of the
transactions proposed to be supported thereby. Upon receipt of such notice, the
Administrative Agent shall promptly notify the LC Issuer and each Lender of the contents
thereof and of the amount of such Lender’s participation in such proposed



 


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Facility LC. The
issuance or Modification by the LC Issuer of any Facility LC shall, in addition to the
conditions precedent set forth in Article IV, be subject to the conditions precedent that
such Facility LC shall be satisfactory to the LC Issuer and that the Borrower shall have
executed and delivered such application agreement and/or such other instruments and
agreements relating to such Facility LC as the LC Issuer shall have reasonably requested
(each, a “Facility LC Application”). The LC Issuer shall have no independent duty to
ascertain whether the conditions set forth in Article IV have been satisfied; provided,
however, that the LC Issuer shall not issue a Facility LC if, on or before the proposed date
of issuance, the LC Issuer has received notice from the Administrative Agent or the Required
Lenders that any such condition has not been satisfied or waived. In the event of any
conflict between the terms of this Agreement and the terms of any Facility LC Application,
the terms of this Agreement shall control.




2.18.4. LC Fees. The Borrower shall pay to the Administrative Agent, for the
account of the Lenders ratably in accordance with their respective Pro Rata Shares, with
respect to each Facility LC, a letter of credit fee at a per annum rate equal to the
Applicable Margin for Eurocurrency Loans in effect from time to time on the original face
amount of the Facility LC for the period from the date of issuance to the scheduled
expiration date of such Facility LC, such fee to be payable in arrears on the last day of
each fiscal quarter (the “LC Fee”). The Borrower shall also pay to the LC Issuer for its
own account on demand all amendment, drawing and other fees regularly charged by the LC
Issuer to its letter of credit customers and all out-of-pocket expenses reasonably incurred
by the LC Issuer in connection with the issuance, Modification, administration or payment of
any Facility LC.




2.18.5. Administration; Reimbursement by Lenders. Upon receipt from the
beneficiary of any Facility LC of any demand for payment under such Facility LC, the LC
Issuer shall notify the Administrative Agent and the Administrative Agent shall promptly
notify the Borrower and each other Lender as to the amount to be paid by the LC Issuer as a
result of such demand and the proposed payment date (the “LC Payment Date”). The
responsibility of the LC Issuer to the Borrower and each Lender shall be only to determine
that the documents (including each demand for payment) delivered under each Facility LC in
connection with such presentment are in conformity in all material respects with such
Facility LC. The LC Issuer shall endeavor to exercise the same care in the issuance and
administration of the Facility LCs as it does with respect to letters of credit in which no
participations are granted, it being understood that in the absence of any gross negligence
or willful misconduct by the LC Issuer, each Lender shall be unconditionally and irrevocably
liable, without regard to any Event of Default or any condition precedent whatsoever, to
reimburse the LC Issuer on demand for (i) such Lender’s Pro Rata Share of the amount of each
payment made by the LC Issuer under each Facility LC to the extent such amount is not
reimbursed by the Borrower pursuant to Section 2.18.6 below and there are not funds
available in the Facility LC Collateral Account to cover the same, plus (ii) interest on the
foregoing amount to be reimbursed by such Lender, for each day from the date of the LC
Issuer’s demand for such reimbursement (or, if such demand is made after 12:00 p.m.
(Minneapolis time) on such date, from the next succeeding Business Day) to the date on which
such Lender pays the amount to be reimbursed by it, at a rate of interest per annum equal to
the Federal Funds



 


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Effective Rate for the first three days and, thereafter, at a rate of
interest equal to the rate applicable to Base Rate Advances.




2.18.6. Reimbursement by Borrower. The Borrower shall be irrevocably and
unconditionally obligated to reimburse the LC Issuer on or before the applicable LC Payment
Date for any amounts required to be paid by the LC Issuer upon any drawing under any
Facility LC, without presentment, demand, protest or other formalities of any kind; provided
that neither the Borrower nor any Lender shall hereby be precluded from asserting any claim
for direct (but not consequential) damages suffered by the Borrower or such Lender to the
extent, but only to the extent, caused by (i) the willful misconduct or gross negligence of
the LC Issuer in determining whether a request presented under any Facility LC complied with
the terms of such Facility LC or (ii) the LC Issuer’s failure to pay under any Facility LC
issued by it after the presentation to it of a request complying with the terms and
conditions of such Facility LC. All such amounts paid by the LC Issuer and remaining unpaid
by the Borrower shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to (x) the rate applicable to Base Rate Advances for such day if such day
falls on or before the applicable LC Payment Date and (y) the sum of 2% plus the rate
applicable to Base Rate Advances for such day if such day falls after such LC Payment Date.
The LC Issuer will pay to each Lender ratably in accordance with its Pro Rata Share all
amounts received by it from the Borrower for application in payment, in whole or in part, of
the Reimbursement Obligation in respect of any Facility LC issued by the LC Issuer, but only
to the extent such Lender has made payment to the LC Issuer in respect of such Facility LC
pursuant to Section 2.18.5. Subject to the terms and conditions of this Agreement
(including without limitation the submission of a Borrowing Notice in compliance with
Section 2.7 and the satisfaction of the applicable conditions precedent set forth in Article IV),
the Borrower may request an Advance hereunder for the purpose of satisfying any
Reimbursement Obligation.




2.18.7. Obligations Absolute. The Borrower’s obligations under this Section
shall be absolute and unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment that the Borrower may have or have had against
the LC Issuer, any Lender or any beneficiary of a Facility LC. The Borrower further agrees
with the LC Issuer and the Lenders that the LC Issuer and the Lenders shall not be
responsible for, and the Borrower’s Reimbursement Obligation in respect of any Facility LC
shall not be affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even if such documents in fact prove to be in any or all respects
invalid, fraudulent or forged, or any dispute between or among the Borrower, any of its
Affiliates, the beneficiary of any Facility LC or any financing institution or other party
to whom any Facility LC may be transferred or any claims or defenses whatsoever of the
Borrower or of any of its Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuer 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 Facility LC except to the extent determined in a final
non-appealable judgment by a court of competent jurisdiction to be attributable to the
gross negligence or willful misconduct of the LC Issuer. The Borrower agrees that any
action taken or omitted by the LC Issuer or any Lender under or



 


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in connection with each
Facility LC and the related drafts and documents, if done without gross negligence or
willful misconduct, shall be binding upon the Borrower and shall not put the LC Issuer or
any Lender under any liability to the Borrower. Nothing in this Section is intended to
limit the right of the Borrower to make a claim against the LC Issuer for damages as
contemplated by the proviso to the first sentence of Section 2.18.6.




2.18.8. Actions of LC Issuer. The LC Issuer shall be entitled to rely, and
shall be fully protected in relying, upon any Facility LC, draft, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex,
teletype or electronic mail message, statement, order or other document it reasonably
believes 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 LC Issuer. The LC Issuer shall be fully justified in
failing or refusing to take any action under this Agreement unless it first receives such
advice or concurrence of the Required Lenders as it reasonably deems appropriate or it is
first indemnified to its reasonable satisfaction by the Lenders against any and all
liability and expense that may be incurred by it by reason of taking or continuing to take
any such action. Notwithstanding any other provision of this Section, the LC Issuer shall in
all cases be fully protected by the Lenders in acting, or in refraining from acting, under
this Agreement in accordance with a request of the Required Lenders, and such request and
any action taken or failure to act pursuant thereto shall be binding upon the Lenders and
any future holders of a participation in any Facility LC.




2.18.9. Indemnification. The Borrower hereby agrees to indemnify and hold
harmless each Lender, the LC Issuer and the Administrative Agent, and their respective directors, officers, agents and employees, from and against any and all claims and
damages, losses, liabilities, costs or expenses that such Lender, the LC Issuer or the
Administrative Agent may incur (or that may be claimed against such Lender, the LC Issuer or
the Administrative Agent by any Person whatsoever) by reason of or in connection with the
issuance, execution and delivery or transfer of or payment or failure to pay under any
Facility LC or any actual or proposed use of any Facility LC, including, without limitation,
any claims, damages, losses, liabilities, costs or expenses that the LC Issuer may incur by
reason of or in connection with (i) the failure of any other Lender to fulfill or comply
with its obligations to the LC Issuer hereunder (but nothing herein shall affect any rights
the Borrower may have against any defaulting Lender) or (ii) by reason of or on account of
the LC Issuer issuing any Facility LC that specifies that the term “Beneficiary” included
therein includes any successor by operation of law of the named Beneficiary, but which
Facility LC does not require that any drawing by any such successor Beneficiary be
accompanied by a copy of a legal document, satisfactory to the LC Issuer, evidencing the
appointment of such successor Beneficiary; provided that the Borrower shall not be required
to indemnify any Lender, the LC Issuer or the Administrative Agent for any claims, damages,
losses, liabilities, costs or expenses to the extent, but only to the extent, caused by (x)
the willful misconduct or gross negligence of the LC Issuer in determining whether a request
presented under any Facility LC complied with the terms of such Facility LC or (y) the LC
Issuer’s failure to pay under any Facility LC after the presentation to it of a request
complying with the terms and conditions of



 


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such Facility LC. Nothing in this Section is
intended to limit the obligations of the Borrower under any other provision of this
Agreement.




2.18.10. Lenders’ Indemnification. Each Lender shall, in accordance with its
Pro Rata Share, indemnify the LC Issuer, its affiliates and their respective directors,
officers, agents and employees (to the extent not reimbursed by the Borrower) against any
cost, expense (including reasonable counsel fees and disbursements), claim, demand, action,
loss or liability (except such as result from such indemnitees’ gross negligence or willful
misconduct or the LC Issuer’s failure to pay under any Facility LC after the presentation to
it of a request complying with the terms and conditions of the Facility LC) that such
indemnitees may suffer or incur in connection with this Section or any action taken or
omitted by such indemnitees hereunder.




2.18.11. Facility LC Collateral Account. Following the occurrence of any of
the events described in Sections 2.18.1, 2.21 or 8.1 with respect to a requirement of a
Person to post cash collateral, the Borrower will, upon the request of the Administrative
Agent or the Required Lenders and until the final expiration date of any Facility LC and
thereafter as long as any amount is payable to the LC Issuer or the Lenders in respect of
any Facility LC, maintain a special collateral account pursuant to arrangements satisfactory
to the Administrative Agent (the “Facility LC Collateral Account”) in the name of such
Borrower but under the sole dominion and control of the Administrative Agent, for the
benefit of the Lenders in which such Borrower shall have no interest other than as set forth
in Section 8.1. The Borrower hereby pledges, assigns and grants to the Administrative
Agent, on behalf of and for the ratable benefit of the Lenders and the LC Issuer, a security
interest in all of the Borrower’s right, title and interest in and to all funds that are
from time to time on deposit in the Facility LC Collateral Account to secure the prompt and complete payment and performance of the Obligations. The
Administrative Agent will invest any funds on deposit from time to time in the Facility LC
Collateral Account in certificates of deposit of U.S. Bank having a maturity not exceeding
30 days. Nothing in this Section shall either obligate the Administrative Agent to require
the Borrower to deposit any funds in the Facility LC Collateral Account or limit the right
of the Administrative Agent to release any funds held in the Facility LC Collateral Account
in each case other than as required by Section 8.1.




2.18.12. Rights as a Lender. In its capacity as a Lender, the LC Issuer shall
have the same rights and obligations as any other Lender.



2.19. Replacement of Lender. If the Borrower is required pursuant to Section 3.1, 3.2
or 3.5 to make any additional payment to any Lender, if any Lender’s obligation to make or
continue, or to convert Base Rate Advances into, Eurocurrency Advances is suspended pursuant to
Section 3.3, or if any Lender defaults in its obligation to make a Loan, reimburse the LC Issuer
pursuant to Section 2.18.5 or the Swing Line Lender pursuant to Section 2.22(d), declines to
approve an amendment or waiver recommended by the Administrative Agent, or otherwise becomes a
Defaulting Lender (any Lender so affected an “Affected Lender”), the Borrower may elect, upon such
default or declination or if such amounts continue to be charged or such suspension is still
effective, to replace such Affected Lender as a Lender party to this Agreement, provided that no
Default or Event of Default shall have occurred and be continuing at the time of



 


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such replacement,
and provided further that, concurrently with such replacement, (i) another bank or other entity
that is reasonably satisfactory to the Borrower and the Administrative Agent shall agree, as of
such date, to purchase for cash the Advances and other Obligations due to the Affected Lender
pursuant to an assignment substantially in the form of Exhibit B, to become a Lender for all
purposes under this Agreement, to assume all obligations of the Affected Lender to be terminated as
of such date and to comply with the requirements of Section 12.3 applicable to assignments, and
(ii) the Borrower shall pay to such Affected Lender in same day funds on the day of such
replacement (A) all interest, fees and other amounts then accrued but unpaid to such Affected
Lender by the Borrower hereunder to and including the date of termination, including without
limitation payments due to such Affected Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount,
if any, equal to the payment that would have been due to such Lender on the day of such replacement
under Section 3.4 had the Loans of such Affected Lender been prepaid on such date rather than sold
to the replacement Lender.


 


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2.20. Limitation of Interest. The Borrower, the Administrative Agent and the Lenders
intend to strictly comply with all applicable laws, including applicable usury laws. Accordingly,
the provisions of this Section shall govern and control over every other provision of this
Agreement or any other Loan Document that conflicts or is inconsistent with this Section, even if
such provision declares that it controls. As used in this Section, the term “interest” includes
the aggregate of all charges, fees, benefits or other compensation that constitute interest under
applicable law, provided that, to the maximum extent permitted by applicable law, (a) any
non-principal payment shall be characterized as an expense or as compensation for something other
than the use, forbearance or detention of money and not as interest, and (b) all interest at any time contracted for,
reserved, charged or received shall be amortized, prorated, allocated and spread, in equal parts
during the full term of the Obligations. In no event shall the Borrower or any other Person be
obligated to pay, or any Lender have any right or privilege to reserve, receive or retain, (x) any
interest in excess of the maximum amount of nonusurious interest permitted under the applicable
laws (if any) of the United States or of any applicable state, or (y) total interest in excess of
the amount such Lender could lawfully have contracted for, reserved, received, retained or charged
had the interest been calculated for the full term of the Obligations at the Highest Lawful Rate.
On each day, if any, that the interest rate (the “Stated Rate”) called for under this Agreement or
any other Loan Document exceeds the Highest Lawful Rate, the rate at which interest shall accrue
shall automatically be fixed by operation of this sentence at the Highest Lawful Rate for that day,
and shall remain fixed at the Highest Lawful Rate for each day thereafter until the total amount of
interest accrued equals the total amount of interest that would have accrued if there were no such
ceiling rate as is imposed by this sentence. Thereafter, interest shall accrue at the Stated Rate
unless and until the Stated Rate again exceeds the Highest Lawful Rate, at which time the
provisions of the immediately preceding sentence shall again automatically operate to limit the
interest accrual rate. The daily interest rates to be used in calculating interest at the Highest
Lawful Rate shall be determined by dividing the applicable Highest Lawful Rate per annum by the
number of days in the calendar year for which such calculation is being made. None of the terms
and provisions of this Agreement or any other Loan Document that directly or indirectly relate to
interest shall ever be construed without reference to this Section, or be construed to create a
contract to pay for the use, forbearance or detention of money at an interest rate in excess of the
Highest Lawful Rate. If the term of any Obligation is shortened by reason of acceleration of
maturity as a result of any Event of Default or by any other cause, or by reason of any required or
permitted prepayment, and if for that (or any other) reason any Lender at any time, including but
not limited to the stated maturity, is owed or receives (and/or has received) interest in excess of
interest calculated at the Highest Lawful Rate, then and in any such event all of any such excess
interest shall be canceled automatically as of the date of such acceleration, prepayment or other
event, and, if such excess interest has been paid to such Lender, it shall be credited pro tanto
against the then-outstanding principal balance of the Borrower’s obligations to such Lender,
effective as of the date or dates when the event occurs that causes it to be excess interest, until
such excess is exhausted or all of such principal has been fully paid and satisfied, whichever
occurs first, and any remaining balance of such excess shall be promptly refunded to its payor.



2.21. Defaulting Lenders. Notwithstanding any provision of this Agreement to the
contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for
so long as such Lender is a Defaulting Lender:


 


36









 






(a) fees shall cease to accrue on the unfunded portion of the Commitment of such
Defaulting Lender pursuant to Section 2.4;




(b) the Commitment and Outstanding Credit Exposure of such Defaulting Lender shall not
be included in determining whether all Lenders or the Required Lenders have taken or may
take any action hereunder (including any consent to any amendment or waiver pursuant to Section 8.2), provided that any waiver, amendment or modification
requiring the consent of all Lenders or each affected Lender that affects such Defaulting
Lender differently than other affected Lenders shall require the consent of such Defaulting
Lender;




(c) if any Swing Line Loans are outstanding or LC Obligations exist at the time a
Lender becomes a Defaulting Lender then:




(i) such Defaulting Lender shall, within one Business Day following notice by
the Administrative Agent, cash collateralize such Defaulting Lender’s Pro Rata Share
of the LC Obligations by depositing cash collateral in an amount equal to such
Defaulting Lender’s Pro Rata Share of the LC Obligations in the Facility LC
Collateral Account. Such amounts shall be held in the Facility LC Collateral
Account until the earliest of (x) the time the Defaulting Lender is no longer a
Defaulting Lender as reasonably determined by the Administrative Agent, upon which
such amounts shall be transferred to such Defaulting Lender (without interest),
(y) the expiration of the applicable LC Obligations by the terms of the applicable
Letter of Credit, upon which such amounts shall be transferred to such Defaulting
Lender (without interest), and (z) the failure of the Borrower to reimburse the LC
Issuer on or before the applicable LC Payment Date, upon which such amounts shall be
paid to the Administrative Agent and applied to such Defaulting Lender’s
reimbursement obligations to the LC Issuer.




(ii) if such Defaulting Lender fails to deposit cash collateral in the amounts
required pursuant to clause (i) above, then all or any part of the unfunded
participations in and commitments with respect to such Swing Line Loans or LC
Obligations shall be reallocated among the non-Defaulting Lenders in accordance with
their respective Pro Rata Shares but only to the extent (x) the sum of all
non-Defaulting Lenders’ Outstanding Credit Exposure plus such Defaulting Lender’s
Loans and participations in and commitments with respect to Loans and Facility LCs
does not exceed the total of all non-Defaulting Lender’s Commitments and (y) the
conditions set forth in Article IV are satisfied at such time;
provided, that the LC Fees payable to the Lenders shall be determined taking
into account of such reallocation.




(iii) if such Defaulting Lender has not cash collateralized its Pro Rata Share
of the outstanding LC Obligations and if the reallocation described in clause (ii)
above cannot, or can only partially, be effected, the Borrower shall, within one
Business Day following notice by the Administrative Agent, (x) first, prepay a
portion of such outstanding Swing Line Loans in an amount equal to such Defaulting
Lender’s Swing Line Exposure and (y) second, cash collateralize



 


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such Defaulting
Lender’s Pro Rata Share of the LC Obligations in accordance with the procedures set
forth in Section 8.1 for so long as such Facility LC Exposure is outstanding;




(iv) if the Borrower cash collateralizes any portion of such Defaulting
Lender’s Facility LC Exposure pursuant to clause (iii) above, the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section
2.18.4 with respect to such Defaulting Lender’s Facility LC Exposure during the
period such Defaulting Lender’s Facility LC Exposure is cash collateralized by the
Borrower; and




(v) if any Defaulting Lender’s Facility LC Exposure is not cash collateralized
pursuant to clause (i) or (iii) above, then, without prejudice to any rights or
remedies of the LC Issuer or any Lender hereunder, all letter of credit fees payable
under Section 2.18.4 with respect to such Defaulting Lender’s Facility LC Exposure
shall be payable to the LC Issuer until such Facility LC Exposure is cash
collateralized;




(d) so long as any Lender is a Defaulting Lender, the LC Issuer shall not be required
to issue or Modify any Facility LC, unless it is satisfied that the related exposure will be
100% covered by cash collateral provided by the Defaulting Lender or the Borrower in
accordance with Section 2.21(c); and




(e) any amount payable to such Defaulting Lender hereunder (whether on account of
principal, interest, fees or otherwise and including any amount that would otherwise be
payable to such Defaulting Lender pursuant to Section 11.2 but excluding Section 2.19)
shall, in lieu of being distributed to such Defaulting Lender, be retained by the
Administrative Agent in a segregated account and, subject to any applicable requirements of
law, be applied at such time or times as are determined by the Administrative Agent (i)
first, to the payment of any amounts owing by such Defaulting Lender to the Administrative
Agent hereunder, (ii) second, pro rata, to the payment of any amounts owing by such
Defaulting Lender to the LC Issuer or Swing Line Lender hereunder, (iii) third, to the
funding of any Revolving Loan or the funding or cash collateralization of any participating
interest in any Swing Line Loan or Facility LC in respect of which such Defaulting Lender
has failed to fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent, (iv) fourth, if so determined by the Administrative Agent and the
Borrower, held in such account as cash collateral for future funding obligations of the
Defaulting Lender under this Agreement, (v) fifth, pro rata, to the payment of any amounts
owing to the Borrower or the Lenders as a result of any judgment of a court of competent
jurisdiction obtained by the Borrower or any Lender against such Defaulting Lender as a
result of such Defaulting Lender’s breach of its obligations under this Agreement, (vi)
sixth, if so determined by the Administrative Agent, distributed to the Lenders other than
the Defaulting Lender until the ratio of the Outstanding Credit Exposure of such Lenders to
the Aggregate Outstanding Exposure equals such ratio immediately prior to the Defaulting
Lender’s failure to fund any portion of any Loans or participations in Facility LCs or Swing
Line Loans and (vii) seventh, to such Defaulting Lender or as otherwise directed by a court
of



 


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competent jurisdiction; provided, that if such payment is (x) a prepayment of the
principal amount of any Loans or Reimbursement Obligations in respect of draws under
Facility LCs with respect to which the LC Issuer has funded its participation obligations
and (y) made at a time when the conditions set forth in Section 4.2 are satisfied, such
payment shall be applied solely to prepay the Loans of, and Reimbursement Obligations owed
to, all Lenders that are not Defaulting Lenders pro rata prior to being applied to the prepayment of any Loans, or Reimbursement Obligations owed to, any Defaulting Lender.



In the event that the Administrative Agent, the Borrower, the LC Issuer and the Swing Line
Lender each agree that a Defaulting Lender has adequately remedied all matters that caused it to be
a Defaulting Lender, then the Swing Line Exposure and Facility LC Exposure of the Lenders shall be
readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall
purchase at par such of the Loans of the other Lenders as the Administrative Agent determines
necessary for such Lender to hold the Revolving Loans in accordance with its Pro Rata Share. For
purposes of this Section, (x) “Swing Line Exposure” means, with respect to any Defaulting Lender at
any time, such Defaulting Lender’s Pro Rata Share of the aggregate principal amount of all Swing
Line Loans outstanding at such time and (y) “Facility LC Exposure” means with respect to any
Defaulting Lender at any time, such Defaulting Lender’s Pro Rata Share of the LC Obligations at
such time.



Nothing in the foregoing shall be deemed to constitute a waiver by the Borrower of any of its
rights or remedies (whether in equity or law) against any Lender that fails to fund any of its
Loans hereunder at the time or in the amount required to be funded under the terms of this
Agreement.




2.22. Swing Line Loans.




(a) Amount of Swing Line Loans. Upon the satisfaction of the conditions
precedent set forth in Section 4.2 and, if such Swing Line Loan is to be made on the date of
the initial Advance hereunder, the satisfaction of the conditions precedent set forth in
Section 4.1, from and including the date of this Agreement and prior to the Facility
Termination Date, the Swing Line Lender may, at its option and in its sole discretion, on
the terms and conditions set forth in this Agreement, make Swing Line Loans in Dollars to
the Borrower from time to time in an aggregate principal amount not to exceed the Swing Line
Sublimit, provided that the Aggregate Outstanding Credit Exposure shall not at any time
exceed the Aggregate Commitment, and provided further that at no time shall the sum of (i)
the Swing Line Loans, plus (ii) the outstanding Revolving Loans made by the Swing
Line Lender pursuant to Section 2.1, plus (iii) the Swing Line Lender’s Pro Rata
Share of the LC Obligations, exceed the Swing Line Lender’s Commitment at such time.
Subject to the terms of this Agreement (including without limitation the discretion of the
Swing Line Lender), the Borrower may borrow, repay and reborrow Swing Line Loans at any time
prior to the Facility Termination Date.




(b) Borrowing Notice. The Borrower shall deliver to the Administrative Agent
and the Swing Line Lender irrevocable notice (a “Swing Line Borrowing Notice”) not later
than noon (Minneapolis time) on the Borrowing Date of each Swing Line Loan



 


39









 






specifying (i)
the applicable Borrowing Date (which shall be a Business Day) and (ii) the aggregate amount
of the requested Swing Line Loan, which shall not be less than $100,000. The Swing Line
Loans shall bear interest at the Base Rate or another rate if agreed to by the Borrower and
the Swing Line Lender.




(c) Making of Swing Line Loans; Participations. Not later than 2:00 p.m.
(Minneapolis time) on the applicable Borrowing Date, the Swing Line Lender shall make
available the Swing Line Loan, in funds immediately available, to the Administrative Agent
at its address specified pursuant to Article XIII. The Administrative Agent will promptly
make such funds available to the Borrower on the Borrowing Date at such address. Each time
the Swing Line Lender makes a Swing Line Loan pursuant to this Section, the Swing Line
Lender shall be deemed, without further action by any party hereto, to have unconditionally
and irrevocably sold to each Lender and each Lender shall be deemed, without further action
by any party hereto, to have unconditionally and irrevocably purchased from the Swing Line
Lender a participation in such Swing Line Loan in proportion to its Pro Rata Share.




(d) Repayment of Swing Line Loans. The Borrower shall pay each Swing Line Loan
in full on the date selected by the Administrative Agent. In addition, the Swing Line
Lender may at any time in its sole discretion with respect to any outstanding Swing Line
Loan require each Lender to fund the participation acquired by such Lender pursuant to
Section 2.22(c) or require each Lender (including the Swing Line Lender) to make a Revolving
Loan in the amount of such Lender’s Pro Rata Share of such Swing Line Loan (including,
without limitation, any interest accrued and unpaid thereon) for the purpose of repaying
such Swing Line Loan. Not later than noon (Minneapolis time) on the date of any notice
received pursuant to this Section, each Lender shall make available its required Revolving
Loan, in funds immediately available to the Administrative Agent at its address specified
pursuant to Article XIII. Revolving Loans made pursuant to this Section shall initially be
Base Rate Loans and thereafter may be continued as Base Rate Loans or converted into
Eurocurrency Loans in the manner provided in Section 2.8 and subject to the other conditions
and limitations set forth in this Article II. Unless a Lender notifies the Swing Line
Lender, prior to its making any Swing Line Loan, that any applicable condition precedent set
forth in Section 4.1 or 4.2 has not been satisfied, such Lender’s obligation to make
Revolving Loans pursuant to this Section to repay Swing Line Loans or to fund the
participation acquired pursuant to Section 2.22(c) shall be unconditional, continuing,
irrevocable and absolute and shall not be affected by any circumstances, including, without
limitation, (a) any set-off, counterclaim, recoupment, defense or other right that such
Lender may have against the Borrower, the Administrative Agent, the Swing Line Lender or any
other Person, (b) the occurrence or continuance of a Default or Event of Default, (c) any
adverse change in the condition (financial or otherwise) of the Borrower, or (d) any other
circumstances, happening or event whatsoever. In the event that any Lender fails to make
payment to the Administrative Agent of any amount due under this Section, interest shall
accrue thereon at the Federal Funds Effective Rate for each day during the period commencing
on the date of demand and ending on the date such amount is received, and the Administrative
Agent shall be entitled to receive, retain and apply against such obligation the principal
and interest otherwise payable to such Lender hereunder until the Administrative Agent



 


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receives such payment from such Lender or such obligation is otherwise fully satisfied. On
the Facility Termination Date, the Borrower shall repay in full the outstanding principal
balance of the Swing Line Loans.



ARTICLE III




YIELD PROTECTION; TAXES




3.1. Yield Protection. If, on or after the date of this Agreement, the adoption of
any law or any governmental or quasi-governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law), any change in the interpretation or administration
thereof by any governmental or quasi-governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof or compliance by any Lender or applicable
Lending Installation or the LC Issuer with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency related to such new
adoption, interpretation or decision:




(a) subjects any Lender or applicable Lending Installation or the LC Issuer to any
Taxes, or changes the basis of taxation of payments (other than with respect to Excluded
Taxes) to any Lender or the LC Issuer in respect of its Eurocurrency Loans, Facility LCs or
participations therein,




(b) imposes, increases or deems applicable any reserve, assessment, insurance charge,
special deposit or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender or applicable Lending Installation or the LC Issuer
(other than reserves and assessments taken into account in determining the interest rate
applicable to Eurocurrency Advances), or




(c) imposes any other condition the result of which is to increase the cost to any
Lender or applicable Lending Installation or the LC Issuer of making, funding or maintaining
its Eurocurrency Loans, or of issuing or participating in Facility LCs, reduces any amount
receivable by any Lender or applicable Lending Installation or the LC Issuer in connection
with its Eurocurrency Loans, Facility LCs or participations therein, or requires any Lender
or applicable Lending Installation or the LC Issuer to make any payment calculated by
reference to the amount of Eurocurrency Loans, Facility LCs or participations therein held
or interest or LC Fees received by it, by an amount deemed material by such Lender or the LC
Issuer as the case may be,



and the result of any of the foregoing is to increase the cost to such Lender or applicable Lending
Installation or the LC Issuer, as the case may be, of making or maintaining its Eurocurrency Loans
or Commitment or of issuing or participating in Facility LCs or to reduce the return received by
such Lender or applicable Lending Installation or the LC Issuer, as the case may be, in connection
with such Eurocurrency Loans or Commitment, Facility LCs or participations therein, then, within 15
days of demand by such Lender or the LC Issuer, as the case may be, the Borrower shall pay such
Lender or the LC Issuer, as the case may be, such additional amounts as will compensate such Lender
or the LC Issuer, as the case may be, for such increased cost or reduction in amount received.


 


41









 





3.2. Changes in Capital Adequacy Regulations. If any Lender or the LC Issuer reasonably determines the amount of capital required or
expected to be maintained by such Lender or the LC Issuer, any Lending Installation of such Lender
or the LC Issuer or any corporation controlling such Lender or the LC Issuer is increased as a
result of a Change, then, within 15 days of demand by such Lender or the LC Issuer, the Borrower
shall pay such Lender or the LC Issuer the amount necessary to compensate for any shortfall in the
rate of return on the portion of such increased capital that such Lender or the LC Issuer
determines is attributable to this Agreement, its Outstanding Credit Exposure or its Commitment to
make Loans and issue or participate in Facility LCs, as the case may be, hereunder (after taking
into account such Lender’s or the LC Issuer’s policies as to capital adequacy). “Change” means (i)
any change after the date of this Agreement in the Risk-Based Capital Guidelines or (ii) any
adoption of or change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation or directive (whether or not having the force of law) after the
date of this Agreement that affects the amount of capital required or expected to be maintained by
any Lender, the LC Issuer, any Lending Installation or any corporation controlling any Lender or
the LC Issuer. “Risk-Based Capital Guidelines” means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition rules, and (ii) the
corresponding capital regulations promulgated by regulatory authorities outside the United States,
including transition rules, and any amendments to such regulations adopted prior to the date of
this Agreement.



3.3. Availability of Types of Advances; Adequacy of Interest Rate. If the
Administrative Agent or the Required Lenders reasonably determine that deposits of a type and
maturity appropriate to match fund Eurocurrency Advances are not available to such Lenders in the
relevant market or the Administrative Agent, in consultation with the Lenders, reasonably
determines that the interest rate applicable to Eurocurrency Advances is not ascertainable or does
not adequately and fairly reflect the cost of making or maintaining Eurocurrency Advances, then the
Administrative Agent shall suspend the availability of Eurocurrency Advances and require any
affected Eurocurrency Advances to be repaid or converted to Base Rate Advances, subject to the
payment of any funding indemnification amounts required by Section 3.4.



3.4. Funding Indemnification. If any payment of a Eurocurrency Advance occurs on a
date that is not the last day of the applicable Interest Period, whether because of acceleration,
prepayment or otherwise, or a Eurocurrency Advance is not made on the date specified by the
Borrower for any reason other than default by the Lenders, the Borrower will indemnify each Lender
for such Lender’s reasonable costs, expenses and Interest Differential (as reasonably determined by
such Lender) incurred as a result of such prepayment. “Interest Differential” means the greater of
zero and the financial loss incurred by the Lender resulting from prepayment, calculated as the
difference between the amount of interest such Lender would have earned (from the investments in
money markets as of the Borrowing Date of such Advance) had prepayment not occurred and the
interest such Lender will actually earn (from like investments in money markets as of the date of
prepayment) as a result of the redeployment of funds from the prepayment. Because of the
short-term nature of this facility, Borrower agrees that Interest Differential shall not be
discounted to its present value.




3.5. Taxes.


 


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(a) All payments by the Borrower to or for the account of any Lender, the LC Issuer or
the Administrative Agent hereunder or under any Note or Facility LC Application shall be
made free and clear of and without deduction for any and all Taxes. If the Borrower is
required by law to deduct any Taxes from or in respect of any sum payable hereunder to any
Lender, the LC Issuer or the Administrative Agent, (a) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section) such Lender, the LC Issuer or the Administrative
Agent (as the case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (b) the Borrower shall make such deductions, (c) the Borrower
shall pay the full amount deducted to the relevant authority in accordance with applicable
law and (d) the Borrower shall furnish to the Administrative Agent the original copy of a
receipt evidencing payment thereof within 30 days after such payment is made.




(b) In addition, the Borrower hereby agrees to pay any present or future stamp or
documentary taxes and any other excise or property taxes, charges or similar levies that
arise from any payment made hereunder or under any Note or Facility LC Application or from
the execution or delivery of, or otherwise with respect to, this Agreement or any Note or
Facility LC Application (“Other Taxes”).




(c) The Borrower hereby agrees to indemnify the Administrative Agent, the LC Issuer and
each Lender for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed on amounts payable under this Section) paid by the
Administrative Agent, the LC Issuer or such Lender as a result of its Commitment or any
Loans made by it hereunder or otherwise in connection with its participation in this
Agreement and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto. Payments due under this indemnification shall be made within 30
days after the Administrative Agent, the LC Issuer or such Lender makes demand therefor
pursuant to Section 3.6.




(d) Each Lender that is not incorporated under the laws of the United States of America
or a state thereof (each a “Non-U.S. Lender”) agrees that it will, not more than ten
Business Days after the date of this Agreement (or within ten Business Days of any Person
becoming a Lender pursuant to Section 12.3), (i) deliver to the Administrative Agent (and
upon request, the Borrower) two duly completed copies of United States Internal Revenue
Service Form W-8BEN or W-8ECI, certifying in either case that such Lender is entitled to
receive payments under this Agreement without deduction or withholding of any United States
federal income taxes, and (ii) deliver to the Administrative Agent a United States Internal
Revenue Form W-8 or W-9, as the case may be, and certify that it is entitled to an exemption
from United States backup withholding tax. Each Non-U.S. Lender further undertakes to
deliver to each of the Borrower and the Administrative Agent (x) renewals or additional
copies of such form (or any successor form) on or before the date that such form expires or
becomes obsolete, and (y) after any event requiring a change in the most recent forms so delivered by it,
such additional forms or amendments thereto as may be reasonably requested by the Borrower
or the Administrative Agent. All forms or amendments described in the preceding sentence
shall certify that such Lender is entitled to receive payments under



 


43









 






this Agreement without
deduction or withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has occurred prior to
the date on which any such delivery would otherwise be required that renders all such forms
inapplicable or that would prevent such Lender from duly completing and delivering any such
form or amendment with respect to it and such Lender advises the Borrower and the
Administrative Agent that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.




(e) For any period during which a Non-U.S. Lender has failed to provide the Borrower
with an appropriate form pursuant to clause (d) above (unless such failure is due to a
change in treaty, law or regulation, or any change in the interpretation or administration
thereof by any governmental authority, occurring subsequent to the date on which a form
originally was required to be provided), such Non-U.S. Lender shall not be entitled to
indemnification under this Section with respect to Taxes imposed by the United States;
provided that, should a Non-U.S. Lender that is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure to deliver a
form required under clause (d), above, the Borrower shall take such steps as such Non-U.S.
Lender reasonably requests to assist such Non-U.S. Lender to recover such Taxes.




(f) Any Lender that is entitled to an exemption from or reduction of withholding tax
with respect to payments under this Agreement or any Note pursuant to the law of any
relevant jurisdiction or any treaty shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law such properly
completed and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate.




(g) If the U.S. Internal Revenue Service or any other governmental authority of the
United States or any other country or any political subdivision thereof asserts a claim that
the Administrative Agent did not properly withhold tax from amounts paid to or for the
account of any Lender (because the appropriate form was not delivered or properly completed,
because such Lender failed to notify the Administrative Agent of a change in circumstances
that rendered its exemption from withholding ineffective or for any other reason), such
Lender shall indemnify the Administrative Agent fully for all amounts paid, directly or
indirectly, by the Administrative Agent as tax, withholding therefor or otherwise, including
penalties and interest, and including taxes imposed by any jurisdiction on amounts payable
to the Administrative Agent under this subsection (vii), together with all costs and
expenses related thereto (including attorneys’ fees and time charges of attorneys for the
Administrative Agent, which attorneys may be employees of the Administrative Agent). The
obligations of the Lenders under this Section shall survive the payment of the Obligations
and termination of this Agreement.



3.6. Lender Statements; Survival of Indemnity. To the extent reasonably possible,
each Lender shall designate an alternate Lending Installation with respect to its Eurocurrency
Loans to reduce any liability of the Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to
avoid the unavailability of Eurocurrency Advances under Section 3.3, so long as such




 


44












 




designation is not, in the reasonable judgment of such Lender, disadvantageous to such Lender.
Each Lender shall deliver a written statement of such Lender to the Borrower (with a copy to the
Administrative Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the calculations upon which such Lender
determined such amount and shall be final, conclusive and binding on the Borrower in the absence of
manifest error. Determination of amounts payable under such Sections in connection with a
Eurocurrency Loan shall be calculated as though each Lender funded its Eurocurrency Loan through
the purchase of a deposit of the type and maturity corresponding to the deposit used as a reference
in determining the Eurocurrency Rate applicable to such Loan, whether in fact that is the case or
not. Unless otherwise provided herein, the amount specified in the written statement of any Lender
shall be payable on demand after receipt by the Borrower of such written statement. The
obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the
Obligations and termination of this Agreement.



ARTICLE IV




CONDITIONS PRECEDENT




4.1. Initial Credit Extension. The making of the initial Loans, and if applicable the
issuance of the initial Letter of Credit, shall be subject to the prior or simultaneous fulfillment
of the following conditions:




4.1.1. Documents. The Administrative Agent shall have received the following
in sufficient counterparts (except for the Notes) for each Lender:




(a) This Agreement, duly executed by the Borrower.




(b) A Note drawn to the order of each Lender that has requested a Note,
executed by an Authorized Officer of the Borrower and dated the date hereof.




(c) The Guaranty, duly executed by the initial Guarantors.




(d) The Collateral Documents, including without limitation the Security
Agreement and a collateral assignment of intellectual property from the Borrower and
each Domestic Subsidiary that owns federally registered intellectual property, duly
executed by the Borrower and each Domestic Subsidiary, together with completed UCC,
tax lien, and judgment searches for the Borrower and the Domestic Subsidiaries
satisfactory to the Agent; and




(e) [Reserved.]




(f) The Advisory Fee Subordination Agreement, duly executed by the Advisor.




(g) A certificate of the Secretary or Assistant Secretary (or other appropriate
officer) of the Borrower and each Domestic Subsidiary dated as of the date hereof
and certifying as to the following:


 


45









 






(i) A true and accurate copy of the resolutions or unanimous written
consent of the Borrower or such Subsidiary, as applicable, authorizing the
execution, delivery, and performance of the Loan Documents to which it is a
party;




(ii) The incumbency, names, titles, and signatures of the officers of
such Person authorized to execute the Loan Documents to which such Person is
a party and, as to the Borrower, to request Loans and the issuance of
Letters of Credit;




(iii) A true and accurate copy of the articles of incorporation,
certificate of formation, certificate of partnership or other equivalent
documents of such Person with all amendments thereto, certified by the
appropriate governmental official of the jurisdiction of its organization as
of a recent date; and




(iv) A true and accurate copy of the bylaws, operating agreement or
partnership agreement of such Person.




(h) Certificates of current status or good standing for the Borrower and each
Domestic Subsidiary in its respective jurisdiction of organization and a certificate
of good standing or qualification in each state in which each such Person is
qualified to carry on its business as presently conducted, in each case as of a
recent date.




(i) Payoff letters in form and substance reasonably acceptable to the
Administrative Agent from (i) all existing revolving and term lenders of the Target
and its Subsidiaries and (ii) all existing revolving and term lenders of the
Borrower.




(j) Evidence satisfactory to the Administrative Agent that all other
Indebtedness of the Borrower, the Subsidiaries and the Target (other than
Indebtedness permitted to remain outstanding after the date of this Agreement),
including without limitation all Indebtedness set forth on Schedule 4.1.1(j), has
been repaid or will be repaid with the proceeds of the Loans and the RRTS IPO.




(k) A certificate dated the date hereof of an officer of the Borrower
certifying that:




(i) All conditions to the closing of the RRTS IPO and the Merger have
been satisfied or waived, the Borrower has received net proceeds of at least
$115,000,000 from the RRTS IPO (after giving effect to the payment of all
fees and expenses in connection with the RRTS IPO) and the Merger shall be
completed;




(ii) The pro forma consolidated EBITDA of the Borrower, its
Subsidiaries and the Target and its Subsidiaries for the 12 months ended
March 31, 2010, was not less than $30,000,000;


 


46









 






(iii) The aggregate secured Indebtedness of the Borrower and its
Subsidiaries (including the Target and its Subsidiaries) immediately
following the effectiveness of this Agreement and the consummation of the
RRTS IPO is no more than $40,000,000;




(iv) True and correct copies of the RRTS IPO Documents, and any other
material documents related to the RRTS IPO and the Merger have been
delivered to the Administrative Agent and all such documents are in full
force and effect and have not been amended, supplemented or otherwise
modified and copies of resolutions of board of directors, and if applicable,
the shareholders of the Borrower approving the RRTS IPO and resolutions of
the board of directors, and if applicable, the shareholders of the Borrower,
the Acquisition Sub and the Target, approving the acquisition of the Target
by the Acquisition Sub via the consummation of the Merger, have been
delivered to the Administrative Agent; and




(v) All Indebtedness of the Borrower and its Subsidiaries as set forth
on Schedule 4.1.1(j) has been, or substantially simultaneously with the
consummation of the RRTS IPO, will be, repaid in full.




(l) A certificate of even date herewith of an Authorized Officer of the
Borrower certifying as to the matters set forth in Section 4.2(a) and (b).




(m) An initial Borrowing Base Certificate evidencing availability of not less
than $10,000,000 for Loans immediately following the closing of the RRTS IPO and the
Merger and the application of all Loans made in connection therewith.




(n) Insurance certificates, as applicable, in form and substance acceptable to
the Administrative Agent and listing the Administrative Agent as lenders loss payee
thereon with respect to hazard insurance (other than with respect to the
Subsidiaries identified on Part I of Schedule 4.1.1(n)) and as an additional insured
with respect to liability insurance (other than with respect to the Subsidiaries
identified on Part II of Schedule 4.1.1(n)), indicating that the Borrower and its
Subsidiaries have obtained insurance of the types set forth in Section 6.7.




(o) An executed copy of an application for a Letter of Credit to support the
letters of credit issued by Bank of America, N.A. and listed on Schedule 6.17 that
will remain outstanding after the date hereof, in form and substance reasonably
acceptable to the Administrative Agent.




(p) Projections and unaudited consolidated financial statements of the
Borrower, its Subsidiaries and the Target, each giving pro forma effect to the
Merger and the RRTS IPO, demonstrating, to the Agent’s reasonable satisfaction, the
solvency of the Borrower and its Subsidiaries (including the Target) and compliance
with this Agreement.


 


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(q) Copies of any environmental surveys or reports held or possessed by the
Borrower or any of the Subsidiaries relating to the real property owned or leased by
the Borrower as deemed reasonably necessary or prudent by the Administrative Agent
in scope and results reasonably acceptable to the Administrative Agent.




4.1.2. The Borrower shall have requested its counsel to prepare written opinions,
addressed to the Lenders and dated the date hereof, in form and substance reasonably
acceptable to the Administrative Agent with respect to the Borrower and the Subsidiaries
identified on Schedule 4.1.2, and such opinions shall have been delivered to the
Administrative Agent in sufficient counterparts for each Lender.




4.1.3. Compliance. The Borrower shall have performed and complied with all
agreements, terms and conditions in this Agreement required to be performed or complied with
by the Borrower prior to or simultaneously with the closing of the transactions contemplated
hereby.




4.1.4. Other Matters. All corporate and legal proceedings relating to the
Borrower and its Subsidiaries and all instruments and agreements in connection with the
transactions contemplated by this Agreement shall be reasonably satisfactory in scope, form
and substance to the Administrative Agent, the Lenders and the Administrative Agent’s
special counsel, and the Administrative Agent shall have received all information and copies
of all documents, including records of corporate proceedings, that any Lender or such
special counsel has reasonably requested in connection therewith, such documents where
appropriate to be certified by proper corporate or governmental authorities.




4.1.5. Fees and Expenses. The Administrative Agent shall have received for
itself and for the account of the Lenders all reasonably documented fees and other amounts
due and payable by the Borrower on or prior to the date hereof, including the reasonable
fees and expenses of counsel to the Administrative Agent payable pursuant to Section 9.6.



4.2. Each Credit Extension. The Lenders shall not (except as otherwise set forth in
Section 2.22(d) with respect to Revolving Loans for the purpose of repaying Swing Line Loans) be
required to make any Credit Extension unless on the applicable Borrowing Date:




(a) There exists no Default or Event of Default.




(b) The representations and warranties in Article V are true and correct as of such
Borrowing Date except to the extent any such representation or warranty is stated to relate
solely to an earlier date, in which case such representation or warranty shall have been
true and correct on and as of such earlier date.



Each Borrowing Notice, Swing Line Borrowing Notice and request for issuance of a Facility LC
with respect to each such Credit Extension shall constitute a representation and warranty by the
Borrower that the conditions in Sections 4.2(a) and (b) have been satisfied.


 


48









 





ARTICLE V




REPRESENTATIONS AND WARRANTIES





The Borrower represents and warrants to the Lenders that:



5.1. Existence and Standing. Each of the Borrower and its Subsidiaries is a
corporation, partnership (in the case of Subsidiaries only) or limited liability company duly and
properly incorporated or organized, as the case may be, validly existing and (to the extent such
concept applies to such entity) in good standing under the laws of its jurisdiction of
incorporation or organization and has all requisite authority to conduct its business in each
jurisdiction in which it conducts its business.



5.2. Authorization and Validity. The Borrower has the power and authority and legal
right to execute and deliver the Loan Documents to which it is a party and to perform its
obligations thereunder. The execution and delivery by the Borrower of the Loan Documents to which
it is a party and the performance of its obligations thereunder have been duly authorized by proper
corporate proceedings, and the Loan Documents to which the Borrower is a party constitute legal,
valid and binding obligations of the Borrower enforceable against the Borrower in accordance with
their terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors’ rights generally.



5.3. No Conflict; Government Consent. Neither the execution and delivery by the
Borrower of the Loan Documents to which it is a party, nor the consummation of the transactions
therein contemplated, nor compliance with the provisions thereof will violate (i) any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on the Borrower or any of
its Subsidiaries, (ii) the Borrower’s or any Subsidiary’s articles or certificate of incorporation,
partnership agreement, certificate of partnership, articles or certificate of organization, bylaws
or operating or other management agreement, as the case may be or (iii) the provisions of any
indenture, instrument or agreement to which the Borrower or any of its Subsidiaries is a party or
is subject, or by which it, or its Property, is bound, or conflict with or constitute a default
thereunder (other than to the extent that such conflict or default could not reasonably be expected
to have a Material Adverse Effect), or result in, or require, the creation or imposition of any
Lien in, of or on the Property of the Borrower or a Subsidiary pursuant to the terms of any such
indenture, instrument or agreement. No order, consent, adjudication, approval, license,
authorization or validation of, filing, recording or registration with, exemption by or other
action in respect of any governmental or public body or authority, or any subdivision thereof, that
has not been obtained by the Borrower or any of its Subsidiaries is required to be obtained by the
Borrower or any of its Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under this Agreement, the payment and performance by the Borrower of the
Obligations or the legality, validity, binding effect or enforceability of any of the Loan
Documents.



5.4. Financial Statements. The December 31, 2009, December 31, 2008 and December 31,
2007 audited consolidated financial statements and March 31, 2010 unaudited financial statements of
(a) the Borrower and its Subsidiaries (other than the Target and its Subsidiaries) and (b) of the
Target and its Subsidiaries, each heretofore delivered to the Lenders,



 


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were prepared in accordance
with GAAP in effect on the date such
statements were prepared and fairly present in all material respects the consolidated
financial condition and operations of the Borrower and its Subsidiaries at such dates and the
consolidated results of their operations for the periods then ended. The financial projections
delivered pursuant to Section 4.1.1(p) were prepared in good faith and are based on reasonable
assumptions as to the Borrower and its Subsidiaries after giving effect to the RRTS IPO and the
consummation of this Agreement and the transactions contemplated herein.



5.5. Material Adverse Change. Since December 31, 2009, there has been no change in
the business, Property, financial condition or results of operations of the Borrower and its
Subsidiaries that could reasonably be expected to have a Material Adverse Effect.



5.6. Taxes. The Borrower and its Subsidiaries have filed all United States federal
tax returns and all other material tax returns that are required to be filed and have paid all
taxes due pursuant to said returns or pursuant to any assessment received by the Borrower or any of
its Subsidiaries, except such taxes, if any, as are being contested in good faith, as to which
adequate reserves have been provided in accordance with GAAP and as to which no Lien exists. No
tax liens have been filed and no claims are being asserted with respect to any such taxes. The
charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of any
taxes or other governmental charges are adequate. Neither the Borrower nor any Subsidiary has
participated in any transaction that relates to a year of the taxpayer (which is still open under
the applicable statute of limitations) that is a “reportable transaction” within the meaning of
Treasury Regulation § 1.6011-4(b)(2) (irrespective of the date when the transaction was entered
into).



5.7. Litigation and Contingent Obligations. There is no litigation, arbitration,
governmental investigation, proceeding or inquiry pending or, to the knowledge of any of their
officers, threatened against or affecting the Borrower or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect or that seeks to prevent, enjoin or delay
the making of any Credit Extensions. Other than any liability incident to any litigation,
arbitration or proceeding that could not reasonably be expected to have a Material Adverse Effect,
the Borrower has no material contingent obligations not provided for or disclosed in the financial
statements referred to in Section 5.4.



5.8. Subsidiaries. Schedule 5.8 contains an accurate list of all Subsidiaries of the
Borrower as of the date of this Agreement after giving effect to the RRTS IPO and the Merger,
setting forth their respective jurisdictions of organization and the percentage of their respective
capital stock or other ownership interests owned by the Borrower or other Subsidiaries. All of the
issued and outstanding shares of capital stock or other ownership interests of such Subsidiaries
have been (to the extent such concepts are relevant with respect to such ownership interests) duly
authorized and issued and are fully paid and non-assessable.



5.9. ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when
taken together with all other such ERISA Events for which liability is reasonably expected to
occur, could reasonably be expected to result in a Material Adverse Effect.



5.10. Accuracy of Information. No information, exhibit or report furnished by the
Borrower or any of its Subsidiaries to the Administrative Agent or to any Lender in connection



 


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with
the negotiation of, or compliance with, the Loan Documents, including without limitation the
financial statements delivered pursuant to Section 5.4, contained any material misstatement of fact
or omitted to state a material fact or any fact necessary to make the statements therein not
misleading in light of the circumstances when made.



5.11. Regulation U. Margin stock (as defined in Regulation U) constitutes less than
25% of the value of those assets of the Borrower and its Subsidiaries that are subject to any
limitation on sale, pledge or other restriction hereunder. Neither the Borrower nor any Subsidiary
is engaged principally, or as one of its important activities, in the business of extending credit
for the purpose of carrying Margin Stock.



5.12. Material Agreements. Neither the Borrower nor any Subsidiary is a party to any
agreement or instrument or subject to any charter or other corporate, limited liability company or
partnership restriction that could reasonably be expected to have a Material Adverse Effect.
Neither the Borrower nor any Subsidiary is in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions in any agreement to which it is a party
(including any agreement or instrument evidencing or governing indebtedness), which default could
reasonably be expected to have a Material Adverse Effect.



5.13. Compliance With Laws. The Borrower and its Subsidiaries have complied in all
material respects with all applicable statutes, rules, regulations, orders and restrictions of any
domestic or foreign government or any instrumentality or agency thereof having jurisdiction over
the conduct of their respective businesses or the ownership of their respective Property.



5.14. Ownership of Properties; Perfection of Liens. Except as set forth on Schedule
5.14, on the date of this Agreement, the Borrower and its Subsidiaries will have good, and in the
case of real property, marketable title, free and clear of all Liens other than those permitted by
Section 6.22, to all of the Property and assets reflected in the Borrower’s most recent
consolidated financial statements provided to the Administrative Agent as owned by the Borrower and
its Subsidiaries. The Obligations are secured by valid, perfected, first-priority Liens (subject
to Liens permitted pursuant to Section 6.22) in favor of the Administrative Agent for the benefit
of the Lenders, covering and encumbering all Collateral granted or purported to be granted by the
Collateral Documents, to the extent perfection has occurred by the filing of a UCC financing
statement or by continued possession or control (other than with respect to Liens on Collateral
represented by a certificate of title). Neither the Borrower nor any Subsidiary has subordinated
any of its rights under any Obligation owing to it to the rights of another Person.



5.15. Plan Assets; Prohibited Transactions. The Borrower is not an entity deemed to
hold “plan assets” within the meaning of 29 C.F.R. § 2510.3-101 of an employee benefit plan (as
defined in § 3(3) of ERISA) that is subject to Title I of ERISA or any plan (within the meaning of
§ 4975 of the Code), and neither the execution of this Agreement nor the making of Credit
Extensions hereunder gives rise to a Prohibited Transaction.



5.16. Environmental Matters. The ongoing operations of the Borrower and each of its
Subsidiaries comply in all respects with all Environmental Laws, except such non-compliance as
could not (if enforced in accordance with applicable law) reasonably be expected to result, either
individually or in the aggregate, in a Material Adverse Effect. Each of the Borrower and its



 


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Subsidiaries has obtained, and maintained in good standing, all licenses, permits, authorizations,
registrations and other approvals required under any Environmental Law and required for its
ordinary course operations, and for its reasonably anticipated future operations, and each of the
Borrower and its Subsidiaries is in compliance with all terms and conditions thereof, except where
the failure to so comply could not reasonably be expected to result in material liability to any
such Person and could not reasonably be expected to result, either individually or in the
aggregate, in a Material Adverse Effect. Except as set forth on Schedule 5.16, none of the
Borrower and its Subsidiaries or any of their properties or operations is subject to, or reasonably
anticipates the issuance of, any written order from or agreement with any Federal, state or local
governmental authority, nor subject to any judicial or docketed administrative or other proceeding,
respecting any Environmental Law, Environmental Claim or Hazardous Substance. There are no
Hazardous Substances or other conditions or circumstances existing with respect to any property,
arising from operations prior to the date hereof, or relating to any waste disposal, of any of the
Borrower and its Subsidiaries that would reasonably be expected to result, either individually or
in the aggregate, in a Material Adverse Effect. Except as set forth on Schedule 5.16, neither the
Borrower nor any of its Subsidiaries has any underground storage tanks that are not properly
registered or permitted under applicable Environmental Laws or that at any time have released,
leaked, disposed of or otherwise discharged Hazardous Substances.



5.17. Investment Company Act. Neither the Borrower nor any Subsidiary is an
“investment company” or a company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.



5.18. Insurance. The Borrower maintains, and has caused each Subsidiary to maintain,
with financially sound and reputable insurance companies insurance on all their Property in such
amounts, subject to such deductibles and self-insurance retentions and covering such properties and
risks as are consistent with sound business practice and as are customarily carried by companies
engaged in similar business and owning similar properties in localities where the Borrower and its
Subsidiaries operate.



5.19. Real Property. Schedule 5.19 sets forth a complete and accurate list, as of the
date hereof, of (i) the address of all real property leased by the Borrower or any Subsidiary and
(ii) the address and a legal description of any real property owned by the Borrower or any
Subsidiary.




5.20. Solvency.




(a) Immediately after the consummation of the transactions to occur on the date hereof,
immediately following the making of each Credit Extension, if any, made on the date hereof
and after giving effect to the application of the proceeds of such Credit Extensions, (i)
the fair value of the assets of the Borrower and its Subsidiaries on a consolidated basis
will exceed
the debts and liabilities, subordinated, contingent or otherwise, of the Borrower and
its Subsidiaries on a consolidated basis; (ii) the present fair saleable value of the
Property of the Borrower and its Subsidiaries on a consolidated basis will be greater than
the amount that would be required to pay the probable liability of the Borrower and its
Subsidiaries on a consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities



 


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become absolute and matured;
(iii) the Borrower and its Subsidiaries on a consolidated basis will be able to pay their
debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities
become absolute and matured; and (iv) the Borrower and its Subsidiaries on a consolidated
basis will not have unreasonably small capital with which to conduct the businesses in which
they are engaged as such businesses are now conducted and are proposed to be conducted after
the date hereof.




(b) The Borrower does not intend to, or to permit any of its Subsidiaries to, and does
not believe that it or any of its Subsidiaries will, incur debts beyond its ability to pay
such debts as they mature, taking into account the timing of and amounts of cash to be
received by it or any such Subsidiary and the timing of the amounts of cash to be payable on
or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.



5.21. Intellectual Property. The Borrower and each Subsidiary owns and possesses or
has a license or other right to use all patents, patent rights, trademarks, trademark rights, trade
names, trade name rights, service marks, service mark rights and copyrights that are necessary for
the conduct of such Person’s businesses, without any infringement upon rights of others that could
reasonably be expected to have a Material Adverse Effect.



5.22. Labor Matters. Except as set forth on Schedule 5.22, neither the Borrower nor
any Subsidiary is subject to any labor or collective bargaining agreement. There are no existing
or threatened strikes, lockouts or other labor disputes involving the Borrower or any Subsidiary
that singly or in the aggregate could reasonably be expected to have a Material Adverse Effect.
Hours worked by and payment made to employees of the Borrower and the Subsidiaries are in material
compliance with the Fair Labor Standards Act and any other applicable laws, rules or regulations
dealing with such matters.



5.23. No Default. No Event of Default exists or would result from the incurrence by
the Borrower or any Subsidiary of any Indebtedness hereunder or under any other Loan Document.



5.24. Burdensome Restrictions. Neither the Borrower nor any of its Subsidiaries is a
party to or otherwise bound by any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter, corporate, limited liability company or
partnership restriction action which could reasonably be expected to have a Material Adverse
Effect.



5.25. U.S.A. Patriot Act. The Borrower and each Subsidiary are in compliance, in all
material respects, with the U.S.A. Patriot Act. No part of the proceeds of the Advances will be
used, directly or indirectly, for any payments to any governmental official or employee, political
party, official of a political party or candidate for
political office, or anyone else acting in an official capacity, to obtain, retain or direct
business or obtain any improper advantage in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended.



5.26. Foreign Assets Control Regulations and Anti-Money Laundering. Neither the
Borrower nor any of its Subsidiaries (i) is a Person whose property or interest in property is
blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23,



 


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2001
Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) to the knowledge of any Authorized Officer
engages in any dealings or transactions prohibited by Section 2 of such executive order, or is
otherwise, to the knowledge of an Authorized Officer, associated with any such person in any manner
violating Section 2, or (iii) is a person on the list of Specially Designated Nationals and Blocked
Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s
Office of Foreign Assets Control regulation or executive order.



ARTICLE VI




COVENANTS





During the term of this Agreement, unless the Required Lenders otherwise consent in writing:



6.1. Financial Reporting. The Borrower will maintain, for itself and each Subsidiary,
a system of accounting established and administered in accordance with GAAP, and furnish to the
Administrative Agent and the Lenders:




(a) Within 90 days after the close of each of its fiscal years, an unqualified (except
for qualifications relating to changes in accounting principles or practices reflecting
changes in GAAP) audit report, with no going concern modifier, certified by Borrower’s
current independent public accountants or other independent certified public accountants of
national reputation and standing reasonably acceptable to the Lenders, prepared in
accordance with GAAP on a consolidated basis for itself and its Subsidiaries, including a
balance sheet as of the end of such period and related statements of operations,
stockholders’ investment, and cash flows, accompanied by (i) any management letter prepared
by said accountants (provided that if such management letter is not available at such time,
Borrower shall deliver same promptly following receipt thereof) and (ii) a certificate of
said accountants that, in the course of their examination necessary for their certification
of the foregoing, they have obtained no knowledge of any Default or Event of Default, or if,
in the opinion of such accountants, any Default or Event of Default exists, stating the
nature and status thereof.




(b) Within 60 days after the close of each month from the date of this Agreement
through the last month of the fourth complete fiscal quarter after the date of this
Agreement, for itself and its Subsidiaries, including a balance sheet as of the end of such
period and related statements of operations, stockholders’ investment, and cash flows for
the period from the beginning of such fiscal year to the end of such quarter, all certified
by its chief financial officer.




(c) Within 45 days after the close of each of the first three quarterly periods of each
of its fiscal years, for itself and its Subsidiaries, including a balance sheet as of the
end of such period and related statements of operations, stockholders’ investment, and cash
flows for the
period from the beginning of such fiscal year to the end of such quarter, all certified
by its chief financial officer.


 


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(d) As soon as available, but in any event within 30 days after the end of each month,
a Borrowing Base Certificate certified to be true and correct by an Authorized Officer of
the Borrower.




(e) As soon as available, but in any event within 60 days after the first day of each
fiscal year of the Borrower, a copy of the plan and forecast (including a projected
consolidated and consolidating balance sheet, income statement and cash flow statement) of
the Borrower for such fiscal year.




(f) Together with the financial statements required under Sections 6.1(a) and (c), a
compliance certificate in substantially the form of Exhibit A signed by the Borrower’s chief
financial officer showing the calculations necessary to determine compliance with this
Agreement and stating that no Default or Event of Default exists, or if any Default or Event
of Default exists, stating the nature and status thereof.




(g) Promptly upon the furnishing thereof to the shareholders of the Borrower, copies of
all financial statements, reports and proxy statements so furnished.




(h) Promptly upon the filing thereof, copies of all registration statements and annual,
quarterly, monthly or other regular reports that the Borrower or any of its Subsidiaries
files with the Securities and Exchange Commission.




(i) As soon as practicable and in any event within 30 days after the end of each
calendar month, an accounts receivable aging report as of the end of such month.




(j) Such other information (including non-financial information) as the Administrative
Agent or any Lender may from time to time reasonably request.



If any information that is required to be furnished to the Lenders under this Section is
required by law or regulation to be filed by the Borrower with a government body on an earlier
date, then the information required hereunder shall be furnished to the Lenders at such earlier
date. Any financial statement required to be furnished pursuant to Section 6.1(a) or Section
6.1(c) shall be deemed to have been furnished on the date on which the Borrower has filed such
financial statement with the Securities and Exchange Commission and such financial statement is
available on the EDGAR website at www.sec.gov or any successor government website that is freely
and readily available to the Administrative Agent and the Lenders without charge. Notwithstanding
the foregoing, if the Administrative Agent requests the Borrower to furnish paper copies of any
such financial statement, the Borrower shall deliver such paper copies to the Administrative Agent
until the Administrative Agent gives written notice to cease delivering such paper copies.



6.2. Use of Proceeds. The Borrower will, and will cause each Subsidiary to, use the
proceeds of the Credit Extensions (i) to pay off certain existing Indebtedness of the Borrower, the
Target and their respective Subsidiaries; (ii) to make the Permitted GTS Earn-Out Payments, the
Permitted Sargent Earn-Out Payments or the Borrower Preferred Stock Permitted Payments to the
extent not prohibited pursuant to Section 6.29; (iii) for working capital, Capital Expenditures and
other general corporate purposes; and (iv) to pay related
transaction fees and



 


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expenses. The Borrower will not, nor will it permit any Subsidiary to,
use any of the proceeds of the Advances to purchase or carry any “margin stock” (as defined in
Regulation U).



6.3. Notice of Event of Default; ERISA Matters. The Borrower will give notice in
writing to the Lenders, promptly and in any event within 10 days after an officer of the Borrower
obtains knowledge thereof, of the occurrence of any Default or Event of Default and of any other
development, financial or otherwise, that could reasonably be expected to have a Material Adverse
Effect. Promptly upon, but in no event later than 10 days after, any officer of the Borrower
becoming aware of the occurrence of (i) any non-exempt Prohibited Transaction with respect to any
Plan or any Controlled Group Plan, or (ii) except as could not reasonably be expected to result in
a Material Adverse Effect, any Reportable Event with respect to any Plan or any Controlled Group
Plan, the Borrower will give notice in writing to the Lenders specifying the nature thereof and
what action the Borrower proposes to take with respect thereto. In addition, when received, the
Borrower and any Subsidiary shall provide to the Lenders copies of any notice from the PBGC of its
intention to terminate or have a trustee appointed for any Plan or, except as could not result in a
Material Adverse Effect, any Controlled Group Plan.



6.4. Conduct of Business. The Borrower will, and will cause each Subsidiary to, carry
on and conduct its business in substantially the same manner and in substantially the same fields
of enterprise as such business is presently conducted and do all things necessary to remain duly
incorporated or organized, validly existing and (to the extent such concept applies to such entity)
in good standing as a domestic corporation, partnership or limited liability company in its
jurisdiction of incorporation or organization, as the case may be, and maintain all requisite
authority to conduct its business in each jurisdiction in which its business is conducted; provided
that nothing herein shall limit any merger permitted by Section 6.18.



6.5. Formation of Subsidiaries. Within 30 days after the formation of any Subsidiary
of the Borrower after the date of this Agreement or, if earlier, within 10 Business Days after any
request by the Administrative Agent, with respect to any Subsidiary of the Borrower, (a)(i) the
voting securities (or other ownership interests) of each such Subsidiary that is a Domestic
Subsidiary shall be pledged to the Administrative Agent for the benefit of the Lenders, (ii) 65% of
the voting securities (or other ownership interests) of each such Subsidiary that is a Foreign
Subsidiary to the extent directly owned by the Borrower or a Domestic Subsidiary shall be pledged
to the Administrative Agent for the benefit of the Lenders, and (iii) each such Domestic Subsidiary
shall become obligated to repay the Loans and other amounts payable under the Loan Documents and
shall grant the Administrative Agent for the benefit of the Lenders a security interest in its
Property; and (b) the Borrower and the applicable Subsidiary shall, at the Borrower’s cost and
expense, execute and deliver to the Administrative Agent such documents and instruments as the
Agent reasonably deems necessary to effect the matters specified in subclause (a) as specified in
such request (which documents may include documents and opinions prepared by applicable foreign
counsel in the case of any such matters with respect to any Subsidiaries that are Foreign
Subsidiaries to the extent the Administrative Agent reasonably requests). Notwithstanding the
foregoing, the Borrower shall not be required to furnish any such pledges, guaranties, security
interests or related documents or instruments with respect to a Foreign Subsidiary to the extent
that such actions would (x) violate the laws of the jurisdiction of formation of such Foreign
Subsidiary or (y) create or result in a Deemed Dividend Problem.


 


56









 





6.6. Taxes. The Borrower will, and will cause each Subsidiary to, timely file complete and correct
United States federal and applicable foreign, state and local tax returns required by law and pay
when due all taxes, assessments and governmental charges and levies upon it or its income, profits
or Property, except those that are being contested in good faith by appropriate proceedings with
respect to which adequate reserves have been set aside in accordance with GAAP and that could not
reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.



6.7. Insurance. The Borrower will, and will cause each Subsidiary to, maintain with
financially sound and reputable insurance companies insurance on all their Property in such amounts
and covering such risks as are consistent with sound business practice and as are customarily
carried by companies engaged in similar business and owning similar properties in localities where
the Borrower and its Subsidiaries operate, and the Borrower will furnish to the Administrative
Agent upon request full information as to the insurance carried and evidence that the endorsements
and certificates furnished pursuant to Section 4.1.1(n) are in full force and effect.



6.8. Compliance with Laws. The Borrower will, and will cause each Subsidiary to,
comply in all material respects with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject including, without limitation, all
Environmental Laws except where failure to comply could not reasonably be expected to have a
Material Adverse Effect.



6.9. Maintenance of Properties. The Borrower will, and will cause each Subsidiary to,
do all things necessary to maintain, preserve, protect and keep its Property in good repair,
working order and condition (ordinary wear and tear excepted), and make all necessary and proper
repairs, renewals and replacements so that its business carried on in connection therewith may be
properly conducted at all times.



6.10. Inspection. The Borrower will, and will cause each Subsidiary to, permit the
Administrative Agent and its respective representatives and agents, to inspect any of the Property,
books and financial records of the Borrower and each Subsidiary, to examine and make copies of the
books of accounts and other financial records of the Borrower and each Subsidiary and to discuss
the affairs, finances and accounts of the Borrower and each Subsidiary with, and to be advised as
to the same by, their respective officers at such reasonable times and intervals as the
Administrative Agent may designate (a) one time per fiscal year, including without limitation a
collateral audit to be completed within 90 days after the date hereof, and (b) following the
occurrence and during the continuance of any Default or Event of Default, from time to time, as
determined by the Administrative Agent in its sole discretion. The Borrower shall pay the expenses
of the Administrative Agent for all visits, inspections and examinations that (x) are made while
any Event of Default is continuing or (y) constitute the Administrative Agent’s annual collateral
audit.



6.11. Books and Records. Each of the Borrower and its Subsidiaries shall keep
adequate and proper records and books of account in which full and correct entries shall be made of
its dealings, business and affairs.


 


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6.12. Compliance with Material Contracts. Each of the Borrower and its Subsidiaries shall make all payments and otherwise perform all
obligations in respect of all material contracts to which it is a party except as could not
reasonably be expected to result in a Material Adverse Effect; provided, that such payment or
performance will not be required to the extent such payment or performance is being contested in
good faith by appropriate proceedings, so long as such Person’s title to its property is not
materially adversely affected, its use of such property in the ordinary course of its business is
not materially interfered with and adequate reserves with respect thereto have been set aside on
the Borrower’s books in accordance with GAAP.



6.13. ERISA. The Borrower and each of its Subsidiaries shall maintain each Plan in
compliance with all applicable requirements of ERISA and of the Code and with all applicable
regulations issued under the provisions of ERISA and of the Code except where failure to comply
could not be reasonably expected to cause a Material Adverse Effect. Neither the Borrower nor any
of its Subsidiaries shall engage in any non-exempt Prohibited Transaction in connection with which
it would be subject to either a civil penalty assessed pursuant to § 502(i) of ERISA or a tax
imposed by § 4975 of the Code, in either case in an amount exceeding $250,000. Except as could not
reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any of its
Subsidiaries shall fail to make full payment when due of all amounts each is required to pay under
any Plan. Neither the Borrower, any of its Subsidiaries, nor any ERISA Affiliate shall permit to
exist any accumulated funding deficiency (as such term is defined in § 302 of ERISA and § 412 of
the Code), whether or not waived, with respect to any Plan in an aggregate amount exceeding
$250,000. Neither the Borrower nor any of its Subsidiaries, nor, except as could not reasonably be
expected to result in a Material Adverse Effect, any ERISA Affiliate, shall fail to make any
payments in an aggregate amount exceeding $250,000 to any Controlled Group Plan that may be
required to be made under any agreement relating to such Controlled Group Plan or any law
pertaining thereto.



6.14. Environmental Matters; Reporting. If any release or threatened release or other
disposal of Hazardous Substances occurs or has occurred on any real property or any other assets of
the Borrower or any Subsidiary, the Borrower shall, or shall cause the applicable Subsidiary to,
cause the prompt containment and removal of such Hazardous Substances and the remediation of such
real property or other assets as necessary to comply in all material respects with all
Environmental Laws and to preserve the value of such real property or other assets. Without
limiting the generality of the foregoing, the Borrower shall, and shall cause each Subsidiary to,
comply in all material respects with any Federal or state judicial or administrative order
requiring the performance at any real property of the Borrower or any Subsidiary of activities in
response to the release or threatened release of a Hazardous Substance. To the extent that the
transportation of Hazardous Substances is permitted by this Agreement, the Borrower shall, and
shall cause its Subsidiaries to, dispose of such Hazardous Substances, or of any other wastes, only
at licensed disposal facilities operating in all material respects in compliance with Environmental
Laws.



6.15. Reaffirmation of Guaranties. When the Administrative Agent so requests from
time to time, the Borrower shall cause each Guarantor and any other Person who hereafter
guarantees, or who agrees for the benefit of the Borrower to make capital contributions to the
Borrower for the purpose of supporting the Obligations or any part thereof, to promptly execute



 


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and deliver to the Administrative Agent reaffirmations of their respective Guaranties in such form as
the Administrative Agent reasonably requires.



6.16. Further Assurances; Cash Management and Post Closing Agreements.




(a) The Borrower shall promptly correct any defect or error that is discovered in any
Loan Document or in the execution, acknowledgment or recordation thereof. Promptly upon
request by the Administrative Agent or the Required Lenders, the Borrower also shall (and
shall cause its Subsidiaries to) do, execute, acknowledge, deliver, record, re-record, file,
re-file, register and re-register any and all deeds, conveyances, mortgages, deeds of trust,
trust deeds, assignments, landlord consents, estoppel certificates, financing statements and
continuations thereof, notices of assignment, transfers, certificates, assurances and other
instruments as the Administrative Agent or the Required Lenders reasonably require from time
to time (a) to carry out more effectively the purposes of the Loan Documents; (b) to perfect
and maintain the validity, effectiveness and priority of any security interests intended to
be created by the Loan Documents, including, without limitation, obtaining delivery of
landlord’s waivers and estoppels reasonably required by the Administrative Agent or the
Required Lenders; and (c) to better assure, convey, grant, assign, transfer, preserve,
protect and confirm unto the Lenders the rights granted now or hereafter intended to be
granted to the Lenders under any Loan Document or under any other instrument executed in
connection with any Loan Document or that the Borrower may be or become bound to convey,
mortgage or assign to the Agent for the benefit of the Lenders to carry out the intention or
facilitate the performance of the provisions of any Loan Document. The Borrower shall
furnish to the Lenders evidence reasonably satisfactory to the Required Lenders of every
such recording, filing, or registration.




(b) Cash Management. The Borrower and each Subsidiary shall use commercially
reasonable efforts to open deposit accounts with U.S. Bank as promptly as possible after the
date hereof, and in any event, within 30 Business Days after the date hereof. Upon
formation, each Domestic Subsidiary shall open deposit accounts with U.S. Bank (the “Primary
Cash Management Accounts”), and the Borrower and each Domestic Subsidiary shall use
commercially reasonable efforts to direct all customers and any other Persons making
payments to the Borrower or such Subsidiary to transfer all payments to such Primary Cash
Management Accounts promptly upon the opening of each such Primary Cash Management Account.
Notwithstanding anything to the contrary in the forgoing sentence, within 120 days after the
date hereof, the Borrowers and each Domestic Subsidiary shall maintain their principal cash
management accounts with U.S. Bank and shall have closed all Existing Deposit Accounts;
provided, however, that the foregoing requirement shall not apply to any
Excluded Payroll Accounts, any Excluded Local Operating Accounts, or any Excluded Controlled
Accounts, subject in all respects to the limits on deposits set forth in the definition of
“Excluded Local Operating Accounts” with respect to each Excluded Local Operating Account
and the maintenance, in full force and effect, of Control Agreements with respect to each
Excluded Controlled Account. The Primary Cash Management Accounts shall not be subject to
deduction, set-off banker’s lien or any other right in favor of any Person other than the
Administrative Agent.


 


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(c) Post Closing Obligations. In addition to the further assurances, covenants
and agreements set forth in clause (a) above, the Borrower shall, and shall cause its
Subsidiaries to, (i) deliver opinions of local counsel, in form and substance reasonably
satisfactory to the Administrative Agent, within 30 days after the date hereof for any
Subsidiary of the Borrower that did not deliver an opinion on the date hereof, (ii) use
commercially reasonable efforts to deliver written landlord waivers (or subordinations) and
estoppels in form and substance reasonably satisfactory to the Administrative Agent for each
of the leased locations identified on Schedule 6.16(c) within 60 days after the date hereof,
(iii) deliver endorsements to the property and general liability insurance policies
reasonably necessary to evidence that the Administrative
Agent is named on the underlying policy as a lenders loss payee or an additional
insured, as applicable, each in form and substance reasonably acceptable to the
Administrative Agent within 45 days after the date hereof and (iv) deliver insurance
certificates, in form and substance acceptable to the Administrative Agent and listing the
Administrative Agent as lenders loss payee thereon with respect to hazard insurance for each
of the Subsidiaries identified on Part I of Schedule 4.1.1(n) and as an additional insured
thereon with respect to general liability insurance for each of the Subsidiaries identified
on Part II of Schedule 4.1.1(n) within 45 days after the date hereof.



6.17. Indebtedness. The Borrower will not, nor will it permit any Subsidiary to,
create, incur or suffer to exist any Indebtedness, except:




(a) The Loans and any other Obligations.




(b) Indebtedness existing on the date hereof and described in Schedule 6.17 and any
renewal or extension of such Indebtedness that does not increase the principal amount
thereof.




(c) Indebtedness incurred in connection with the Permitted GTS Earn-Out Payments or the
Permitted Sargent Earn-Out Payments.




(d) Indebtedness secured by Liens permitted by Section 6.22(h) and extensions, renewals
and refinancings thereof; provided that the aggregate amount of all such Debt at any time
outstanding shall not exceed $2,500,000.




(e) Subordinated Indebtedness.




(f) Indebtedness arising under Rate Management Transactions or other Financial
Contracts approved and consented to by the Administrative Agent and incurred in favor of a
Lender or an Affiliate thereof for bona fide hedging purposes and not for speculation.




(g) Contingent Obligations arising with respect to customary indemnification
obligations in favor of purchasers in connection with dispositions permitted under Section
6.19(c) and (d).


 


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(h) Indebtedness incurred in respect of netting services and ordinary course of
business overdraft protection in connection with deposit accounts permitted under the Loan
Documents.




(i) Indebtedness incurred in connection with the financing of insurance premiums in the
ordinary course of business.




(j) Endorsements for collection or deposit and standard contractual indemnities entered
into in the ordinary course of business.




(k) Contingent Obligations incurred in the ordinary course of business with respect to
surety and appeal bonds, performance bonds and other similar obligations.




(l) Contingent Obligations arising under indemnity agreements to title insurers to
cause such title insurers to issue to the Administrative Agent title insurance policies.




(m) Contingent Obligations arising with respect to customary indemnification
obligations in favor of sellers in connection with Permitted Acquisitions.




(n) Intercompany Indebtedness owing (i) from a Domestic Subsidiary that is a Guarantor
to the Borrower, (ii) from a Domestic Subsidiary that is a Guarantor to another Domestic
Subsidiary that is a Guarantor or (iii) from a Foreign Subsidiary (including Midwest
Transit) to Borrower or any Domestic Subsidiary that is a Guarantor in an amount not to
exceed $1,500,000 at any one time outstanding for all such intercompany Indebtedness
described in this clause (iii).




(o) Other Indebtedness (excluding any intercompany Indebtedness owing from a Foreign
Subsidiary), provided that the aggregate amount of such other Indebtedness does not exceed
$1,000,000 at any time outstanding.



6.18. Merger. The Borrower will not, nor will it permit any Subsidiary to, (a) merge,
consolidate with or enter into any analogous reorganization or transaction with any other Person,
except for (i) the Merger and (ii) any other merger of a Subsidiary into the Borrower or a
Wholly-Owned Subsidiary of the Borrower or any Guarantor or (b) liquidate, wind up or dissolve
itself (or suffer any liquidation, wind up or dissolution.



6.19. Sale of Assets. The Borrower will not, nor will it permit any Subsidiary to,
directly or indirectly, lease, sell, assign, convey, transfer or otherwise dispose of its Property
to any other Person or enter into an agreement to do any of the foregoing, except:




(a) sales of inventory, or used, worn-out or surplus equipment, all in the ordinary
course of business;




(b) the sale of equipment to the extent that such equipment is exchanged for credit
against the purchase price of similar replacement equipment, or the proceeds of such sale
are applied with reasonable promptness to the purchase price of such replacement equipment;
and


 


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(c) sales and dispositions of assets (including the capital securities and other equity
interests of Subsidiaries) for at least fair market value (as determined by the Board of
Directors of the Borrower) so long as the net book value of all assets sold or otherwise
disposed of in any fiscal year by the Borrower and its Subsidiaries, in the aggregate, does
not constitute a Substantial Portion of the Property of the Borrower and its Subsidiaries or
otherwise exceed 5% of the net book value of the consolidated assets of the Borrower and its
Subsidiaries as of the last day of the preceding fiscal year.



6.20. Investments. The Borrower will not, nor will it permit any Subsidiary to, make
or suffer to exist any Investments (including, without limitation, loans and advances to, and other
Investments in, Subsidiaries), or commitments therefor, create any Subsidiary or become or remain a
partner in any partnership or joint venture, except:




(a) Cash Equivalent Investments.




(b) (i) Existing Investments in Domestic Subsidiaries in existence on the date hereof,
(ii) existing Investments in Foreign Subsidiaries in the amounts and in existence on the
date hereof, and (iii) other Investments in existence on the date hereof and described in
Schedule 20.




(c) Investments (i) constituting Permitted Acquisitions, (ii) in Domestic Subsidiaries
permitted by and subject to Section 6.27, and (iii) in any Foreign Subsidiaries (including
Midwest Transit) permitted by and subject to Section 6.27 to the extent Investments in
Foreign Subsidiaries do not exceed $1,500,000 in the aggregate for all such Investments
described in this clause (iii).




(d) Investments constituting Indebtedness permitted pursuant to Section 6.17.




(e) Subject to the terms and conditions of Section 6.16(b), bank deposits in the
ordinary course of business, provided that the aggregate amount of all such deposits
(excluding amounts in payroll accounts or for accounts payable, in each case to the extent
that checks have been issued to third parties) that are maintained with any bank other than
a Lender, following the transfer of principal deposit accounts to Administrative Agent (as
contemplated by Section 6.16(b)), shall not at any time exceed $200,000 and shall not exceed
$100,000 in any one account for a period of more than three consecutive Business Days.




(f) Investments in securities of Account Debtors received pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such Account
Debtors.




(g) (i) Travel and similar advances to employees or independent contractors in the
ordinary course of business and (ii) other loans to independent contractors and other
service providers in the ordinary course of business, in the case of clause (ii) not to
exceed $500,000 in the aggregate at any time outstanding.


 


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(h) Deposits made in the ordinary course of business securing obligations or
performance under contracts, such as in connection with real estate or personal property
leases.




(i) Promissory notes and other similar non-cash consideration received by Borrowers in
connection with dispositions permitted under Section 6.19(c) and (d).




(j) Other Investments (excluding any Investment in a Foreign Subsidiary) not to exceed
$1,000,000 in the aggregate at any one time.



provided that (x) any Investment that when made complies with the requirements of the definition of
the term “Cash Equivalent Investment” may continue to be held notwithstanding that such Investment
if made thereafter would not comply with such requirements and (y) no Investment otherwise
permitted by clause (b) or (c) shall be permitted to be made if, immediately before or after giving
effect thereto, any Event of Default exists.



6.21. Acquisitions. The Borrower will not, nor will it permit any Subsidiary, to make
any Acquisition other than a Permitted Acquisition.



6.22. Liens. The Borrower will not, nor will it permit any Subsidiary to, create,
incur, assume or suffer to exist any Lien in, of or on the Property of the Borrower or any of its
Subsidiaries now owned or hereafter acquired, or enter into or make any commitment to enter into
any arrangement for the acquisition of property through conditioned sale, lease, purchase or other
title retention agreement, except:




(a) Liens for taxes, assessments or governmental charges or levies on its Property if
the same are not at the time delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings and for which adequate reserves
in accordance with GAAP have been set aside on its books.




(b) Liens imposed by law, such as landlord, carriers’, warehousemen’s and mechanics’
liens and other similar liens arising in the ordinary course of business that secure payment
of obligations not more than 60 days past due or that are being contested in good faith by
appropriate proceedings and for which adequate reserves have been set aside on its books.




(c) Liens arising out of pledges or deposits under worker’s compensation laws,
unemployment insurance, old age pensions, other social security or retirement benefits or
similar legislation.




(d) Utility easements, building restrictions and such other encumbrances or charges
against real property as are of a nature generally existing with respect to properties of a
similar character that do not in any material way affect the marketability of the same or
interfere in any material respect with the use thereof in the business of the Borrower or
its Subsidiaries.




(e) Liens arising solely by virtue of any statutory or common law provision relating to
bankers’ liens, rights of set-off or similar rights and remedies as to deposit



 


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accounts or
other funds maintained with a creditor depository institution; provided that such deposit
account (i) is not a dedicated cash collateral account and is not subject to restriction
against access by Borrower or a Subsidiary in excess of those set forth by regulations
promulgated by the Board of Governors of the Federal Reserve, and (ii) is not intended by
the Borrower or any Subsidiary to provide collateral to the depository institution.




(f) Liens existing on the date hereof and described in Schedule 6.22.




(g) Liens on Property acquired in a Permitted Acquisition, provided that such Liens
extend only to the Property so acquired and were not created in contemplation of such
acquisition.




(h) Subject to the limitation set forth in Section 6.17(d), (i) Liens arising in
connection with Capital Leases (and attaching only to the property being leased) and
(ii) Liens that constitute purchase money security interests on any property securing debt
incurred for the purpose of financing all or any part of the cost of acquiring such
property, provided that any such Lien attaches to such property within 20 days of
the acquisition thereof and attaches solely to the property so acquired.




(i) Attachments, appeal bonds, judgments and other similar Liens, for sums not
exceeding $1,000,000 arising in connection with court proceedings, provided the execution or
other enforcement of such Liens is effectively stayed and the claims secured thereby are
being actively contested in good faith and by appropriate proceedings.




(j) Informational UCC financing statements filed with respect to operating leases.




(k) Any interest or title of a lessor, sublessor, licensor or sublicensor under any
operating lease or non-exclusive license permitted by this Agreement.




(l) Liens on insurance policies and the proceeds thereof incurred in connection with
the financing of insurance premiums in the ordinary course of business.




(m) Licenses, sublicenses, leases or subleases of real property or intellectual
property granted by the Borrower or any Subsidiary (as lessor or licensor) to third Persons
in the ordinary course of business consistent with past practices.




(n) Liens in favor of customs and revenue authorities which secure payment of customs
duties in connection with the importation of goods.




(o) Liens in favor of the Administrative Agent, for the benefit of the Lenders, granted
pursuant to any Collateral Document.



6.23. Transactions with Affiliates. Neither the Borrower nor any of its Subsidiaries
shall enter into any transaction with any of its Affiliates, except upon fair and reasonable terms
no less favorable than those it would obtain in a comparable arm’s-length transaction with a Person
not an Affiliate; provided, that this Section shall not prohibit or restrict (a) the payment of



 


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the
Advisory Fees in accordance with Section 6.31(b), (b) transactions between the Borrower and any of
its Subsidiaries to the extent not prohibited by this Agreement or (c) subject to the terms and
conditions of Section 6.29, each of the Permitted GTS Earn-out Payments, the Permitted Sargent
Earn-out Payments, the Borrower Preferred Stock Permitted Payments and the Borrower Redeemable
Stock Permitted Payments.



6.24. Subordinated Indebtedness. Except as permitted in the applicable subordination
agreement, the Borrower will not, and will not permit any Subsidiary to, make any amendment or
modification to the indenture, note or other agreement evidencing or governing any Subordinated
Indebtedness, or directly or indirectly voluntarily prepay, defease or in substance defease,
purchase, redeem, retire or otherwise acquire, any Subordinated Indebtedness or take any other
actions in contravention or violation of any subordination agreement related to such Subordinated
Indebtedness.



6.25. ERISA Plans. Neither the Borrower nor any of its Subsidiaries shall permit (a)
any event to occur or condition to exist that would permit any Plan or any Controlled Group Plan to
terminate under any circumstances that would cause the Lien provided for in § 4068 of ERISA to
attach to any assets of the Borrower or any of its Subsidiaries, (b) a Plan subject to Title IV of
ERISA to be less than 70% funded as measured on the last day of the applicable Plan year based on
the certification prepared by the Plan’s actuary regarding funding (referred to as the AFTAP
certification) and (c) a failure to make a minimum funding contribution to a Plan required under §
302 of ERISA and § 412 of the Code.



6.26. Change in Nature of Business. Neither the Borrower nor any of its Subsidiaries shall make any material change in the
nature of its business as carried on at the date hereof, businesses reasonably related thereto and
logical extensions thereof, without the prior consent of the Required Lenders.



6.27. Subsidiaries. After the date of this Agreement, neither the Borrower nor any of
its Subsidiaries shall form or acquire any corporation, limited liability company or other entity
that would thereby become a Subsidiary of the Borrower, except for (a) corporations, partnerships
or limited liability companies formed or acquired by the Borrower or any Subsidiary in connection
with Permitted Acquisitions, and (b) any Subsidiaries for which the applicable documents required
by Section 6.5 have been executed and delivered to the Administrative Agent in accordance with the
terms of such Section.



6.28. Negative Pledges; Subsidiary Restrictions. Neither the Borrower nor any of its
Subsidiaries shall enter into any agreement, bond, note or other instrument with or for the benefit
of any Person other than the Lenders that would (a) prohibit the Borrower or any Subsidiary from
granting, or otherwise limit the ability of the Borrower or any Subsidiary to grant, to the Lenders
any Lien on any of the assets or properties of the Borrower or any Subsidiary other than such
agreement, bond note or other instrument that prohibits the assignment of, or granting of a Lien in
favor of the Administrative Agent on, such agreement, bond, note or other instrument; provided that
the Borrower and its Subsidiaries shall use commercially reasonable efforts to permit the
assignment of, and granting a Lien in favor of the Administrative Agent on, any such agreement,
bond, note or other instrument, or (b) require the Borrower or any Subsidiary to grant a Lien to
any other Person if the Borrower or any Subsidiary grants any Lien to the Lenders, in



 


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each case
except for any such agreement, bond, note or other instrument interest with respect to the property
subject to purchase money financings and Capital Lease agreements permitted hereby. Neither the
Borrower nor any of its Subsidiaries shall place or allow any restriction, directly or indirectly,
on the ability of any such Subsidiary to (x) pay dividends or any distributions on or with respect
to such Subsidiary’s equity interests or (y) make loans or other cash payments to the Borrower, in
each case except for restrictions placed or allowed by any Person with respect to the property
subject to purchase money financings and Capital Lease agreements permitted hereunder.



6.29. Restricted Payments. The Borrower shall not, nor shall it permit any of its
Subsidiaries to, pay or commit themselves to pay any Restricted Payments at any time; provided,
however, that:




(a) any Subsidiary may pay or commit itself to pay a dividend at any time to the
Borrower or a Subsidiary that is a Guarantor;




(b) so long as no Specified Event of Default then exists or would exist as a result
thereof, the Borrower and its applicable Subsidiaries shall be permitted to make the
Permitted GTS Earn-Out Payments and the Borrower Redeemable Stock Permitted Payments;




(c) the Borrower shall be permitted to make the Permitted Sargent Earn-Out Payments;




(d) the Borrower shall be permitted to make the Borrower Preferred Stock Permitted
Payments; and




(e) so long as no Default or Event of Default then exists or would exist as a result
thereof, the Borrower shall be permitted to make repurchases of capital stock of the
Borrower issued to officers or other management employees, in an amount not exceeding (i)
$500,000 during any consecutive 12-month period, and (ii) $1,000,000 in the aggregate for
all such repurchases.



6.30. Accounting Changes; Organizational Documents. Neither the Borrower nor any of
its Subsidiaries shall (a) make any significant change in accounting treatment or reporting
practices, except as permitted by GAAP (or, as to Foreign Subsidiaries, as required by generally
accepted accounting principles of the jurisdiction of organization of such Foreign Subsidiary)
without the prior consent of the Administrative Agent, which consent shall not be unreasonably
withheld or change its fiscal year or the fiscal year of any of its Subsidiaries, or (b) amend,
modify or change any of its organizational or constituent documents in any manner materially
adverse in any respect to the rights or interests of the Lenders, other than as specifically
permitted in the Collateral Documents.




6.31. Advisory Agreement.




(a) Neither the Borrower nor any of its Subsidiaries shall amend or modify the Advisory
Agreement in any manner materially adverse in any respect to the rights or interests of the
Lenders (it being understood that any increase in the amount of any fee or



 


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the imposition of
any additional fees or compensation, other than in accordance with the terms of the Advisory
Agreement as in effect on the date hereof, shall be materially adverse for the Lenders).




(b) Neither the Borrower nor any of its Subsidiaries shall pay or commit itself to pay
any management fee, advisory fee or other similar fee, costs or expenses to any Affiliate
(other than compensation to officers and directors in the ordinary course of business)
during any of its fiscal years; provided, however, that the Borrower may (i) reimburse the
Advisor and its Affiliates for out-of-pocket costs and expenses incurred in good faith in
connection with the management of the Borrower and its Subsidiaries and consistent with the
terms of the Advisory Agreement as in effect on the date hereof, and (ii) pay the Advisory
Fees as set forth in Section 4 of the Advisory Agreement in effect on the date hereof;
provided, however, that the payment of any Advisory Fees shall be subject to the terms and
conditions of the Advisory Fee Subordination Agreement; and provided, further, that upon and
during the continuance of any Event of Default described in Article VII such Advisory Fees
may continue to accrue but shall not be payable currently in cash until the Borrower has
cured such Event of Default or the Required Lenders have waived such Event of Default in
writing, at which time the Borrower may pay the Advisory Fees so long as (x) no Default or
Event of Default exists at the time of such payment, and (y) no Default or Event of Default
shall exist after taking into effect such payment.




6.32. Financial Covenants.




6.32.1. Fixed Charge Coverage Ratio. The Borrower will not permit the Fixed
Charge Coverage Ratio, as of the last day of any fiscal quarter for the four fiscal quarters
ending on that date, to be less than 1.50 to 1.0.




6.32.2. Total Cash Flow Leverage Ratio. The Borrower will not permit the Total
Cash Flow Leverage Ratio, as of the last day of any fiscal quarter for the four consecutive
fiscal quarters ending on that date, to be more than 2.25 to 1.0.




6.32.3. Capital Expenditures. Capital Expenditures. The Borrower will not,
nor will it permit any Subsidiary to, expend, or be committed to expend, in excess of
$7,000,000 for Capital Expenditures during any one fiscal year on a non-cumulative basis in
the aggregate for the Borrower and its Subsidiaries. Notwithstanding the foregoing, in the
event the Borrower and its Subsidiaries do not expend the entire capital expenditure
limitation in a given fiscal year, the Borrower may carry forward to the immediately
succeeding fiscal year up to 50% of the unutilized portion; provided that for the avoidance
of doubt any such amounts carried over can only be used in the immediately succeeding fiscal
year, after which time such amounts shall cease to be carried over. All Capital
Expenditures shall be applied first to reduce the applicable capital expenditure limitation
for the period during which such Capital Expenditures are made, and then to reduce the
carry-forward from the previous fiscal year, if any.


 


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ARTICLE VII




DEFAULTS





The occurrence of any one or more of the following events shall constitute a Event of Default:



7.1 Any representation or warranty made or deemed made by or on behalf of the Borrower or any
of its Subsidiaries to the Lenders or the Administrative Agent under or in connection with this
Agreement, any Credit Extension or any certificate or information delivered in connection with this
Agreement or any other Loan Document being false or misleading in any material respect on the date
as of which made.



7.2 Nonpayment of principal of any Loan when due, or nonpayment of any Reimbursement
Obligation within one Business Day after the same becomes due, or nonpayment of interest upon any
Loan or of any commitment fee, LC Fee or other obligations under any of the Loan Documents within
five days after the same becomes due.



7.3 The breach by the Borrower of any of the terms or provisions of Section 6.2, 6.3, 6.7,
6.17, 6.18, 6.19, 6.20, 6.21, 6.22, 6.23, 6.24, 6.25, 6.26, 6.27, 6.28, 6.29, 6.30, 6.31 and 6.32.



7.4 The breach by the Borrower (other than a breach that constitutes a Event of Default under
another Section of this Article VII) of any of the terms or provisions of this Agreement which
breach is not remedied within 30 days after the earlier of (a) the Borrower becomes aware thereof
or (b) the Borrower receives notice of the same from Administrative Agent; provided, however, that
if such breach cannot reasonably be cured within such 30-day period, as determined by the
Administrative Agent, in its reasonable discretion, and the Borrower is diligently pursuing a
remedy of such breach, the Borrower shall have a reasonable period to remedy such breach beyond
such 30-day period, which shall not exceed 90 days.



7.5 Failure of the Borrower or any of its Subsidiaries to pay when due any Material
Indebtedness, the default by the Borrower or any of its Subsidiaries in the performance (beyond the
applicable grace period with respect thereto, if any) of any term, provision or condition in any
Material Indebtedness Agreement, or any other event or condition, the effect of which default,
event or condition is to cause, or to permit the holder(s) of such Material Indebtedness or the
lender(s) under any Material Indebtedness Agreement to cause, such Material Indebtedness to become
due prior to its stated maturity
or any commitment to lend under any Material Indebtedness Agreement to be terminated prior to
its stated expiration date; any Material Indebtedness of the Borrower or any of its Subsidiaries
being declared to be due and payable or required to be prepaid or repurchased (other than by a
regularly scheduled payment) prior to the stated maturity thereof; or the Borrower or any of its
Subsidiaries failure to pay, or admit in writing its inability to pay, its debts generally as they
become due.



7.6 The Borrower or any of its Subsidiaries (i) has an order for relief entered with respect
to it under the federal bankruptcy laws as now or hereafter in effect, (ii) makes an assignment for
the benefit of creditors, (iii) applies for, seeks, consents to or acquiesces in the appointment of
a receiver, custodian, trustee, examiner, liquidator or similar official for it or any



 


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Substantial
Portion of its Property, (iv) institutes any proceeding seeking an order for relief under the
federal bankruptcy laws as now or hereafter in effect, seeking to adjudicate it a bankrupt or
insolvent or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment
or composition of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fails to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (v) takes any corporate or
partnership action to authorize or effect any of the foregoing actions set forth in this Section or
(vi) fails to contest in good faith any appointment or proceeding described in Section 7.7.



7.7 Without the application, approval or consent of the Borrower or any of its Subsidiaries, a
receiver, trustee, examiner, liquidator or similar official is appointed for the Borrower or any of
its Subsidiaries or any Substantial Portion of its Property, or a proceeding described in Section
7.6(iv) is instituted against the Borrower or any of its Subsidiaries, and such appointment
continues undischarged or such proceeding continues undismissed or unstayed for a period of 60
consecutive days.



7.8 Any court, government or governmental agency condemns, seizes or otherwise appropriates or
takes custody or control of all or any portion of the Property of the Borrower and its Subsidiaries
that, when taken together with all other Property of the Borrower and its Subsidiaries so
condemned, seized, appropriated or taken custody or control of, during the twelve-month period
ending with the month in which any such action occurs, constitutes a Substantial Portion.



7.9 The Borrower or any of its Subsidiaries fails within 30 days to pay, bond or otherwise
discharge one or more (i) judgments or orders for the payment of money in excess of $1,000,000 (or
the equivalent thereof in currencies other than Dollars) in the aggregate, or (ii) nonmonetary
judgments or orders that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, which judgment(s), in any such case, is/are not stayed on appeal or
otherwise being appropriately contested in good faith.



7.10 An ERISA Event occurs that, in the opinion of the Required Lenders, when taken together
with all other ERISA Events that have occurred, could reasonably be expected to result in a
Material Adverse Effect.



7.11 Nonpayment by the Borrower or any Subsidiary of any material Rate Management Obligation
when due or the breach by the Borrower or any Subsidiary of any term, provision or condition in any
material Rate Management Transaction or any transaction of the type described in the definition of
“Rate Management Transactions,” whether or not any Lender or Affiliate of a Lender is a party
thereto.




7.12 Any Change in Control.



7.13 The occurrence of any “default,” as defined in any Loan Document (other than this
Agreement) or the breach of any of the terms or provisions of any Loan Document (other than this
Agreement), which default or breach continues beyond any notice, grace or cure period therein
provided.


 


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7.14 The Guaranty fails to remain in full force or effect, any action is taken to discontinue
or to assert the invalidity or unenforceability of the Guaranty as to any Guarantor, any Guarantor
fails to comply with any of the terms or provisions of the Guaranty, or any Guarantor denies that
it has any further liability under the Guaranty or gives notice to such effect.



7.15 Any Collateral Document necessary to create or grant a security interest in the
Collateral or to perfect a security interest in the Collateral (the “Material Collateral
Documents”) for any reason fails to create a valid and perfected first-priority security interest
in any substantial portion of the Collateral or any material Collateral purported to be covered
thereby, except as permitted by the terms of such Material Collateral Documents, fails to remain in
full force or effect, any action is taken to discontinue or to assert the invalidity or
unenforceability of any Material Collateral Document, or the Borrower or any Domestic Subsidiary
fails to comply in any material way with any of the terms or provisions of any Material Collateral
Document to which it is a party (subject to any applicable notice, grace or cure periods therein
provided).



ARTICLE VIII




ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES





8.1. Acceleration; Remedies.




(a) If any Event of Default described in Section 7.6 or 7.7 occurs, the obligations of
the Lenders to make Loans hereunder and the obligation and power of the LC Issuer to issue
Facility LCs shall automatically terminate and the Obligations shall immediately become due
and payable without any election or action on the part of the Administrative Agent, the LC
Issuer or any Lender and the Borrower will be and become thereby unconditionally obligated,
without any further notice, act or demand, to pay to the Administrative Agent an amount in
immediately available funds, which funds shall be held in the Facility LC Collateral
Account, equal to the difference of (x) the amount of LC Obligations at such time, less (y)
the amount on deposit in the Facility LC Collateral Account at such time that is free and
clear of all rights and claims of third parties and has not been applied against the
Obligations (such difference, the “Collateral Shortfall Amount”). If any other Event of
Default occurs, the Required Lenders (or the Administrative Agent with the consent of the
Required Lenders) may (a) terminate or suspend the obligations of the Lenders to make Loans
hereunder and the obligation and power of the LC Issuer to issue Facility LCs, or declare
the Obligations to be due and payable, or both, whereupon the Obligations shall become
immediately due and payable, without presentment, demand, protest or notice of any kind, all
of which the Borrower hereby expressly waives, and (b) upon notice to the Borrower and in
addition to the continuing right to demand payment of all amounts payable under this
Agreement, make demand on the Borrower to pay, and the Borrower will, forthwith upon such
demand and without any further notice or act, pay to the Administrative Agent, the
Collateral Shortfall Amount, which shall be deposited in the Facility LC Collateral Account.




(b) If at any time while any Event of Default is continuing, the Administrative Agent
determines that the Collateral Shortfall Amount at such time is greater than zero,



 


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the Administrative Agent may make demand on the Borrower to pay, and the Borrower will,
forthwith upon such demand and without any further notice or act, pay to the Administrative
Agent, the Collateral Shortfall Amount, which shall be deposited in the Facility LC
Collateral Account.




(c) The Administrative Agent may at any time or from time to time after funds are
deposited in the Facility LC Collateral Account apply such funds to the payment of the
Obligations and any other amounts as have become due and payable by the Borrower to the
Lenders or the LC Issuer under the Loan Documents, as provided in Section 8.2.




(d) At any time while any Event of Default is continuing, neither the Borrower nor any
Person claiming on behalf of or through the Borrower shall have any right to withdraw any of
the funds held in the Facility LC Collateral Account. After all of the Obligations have
been indefeasibly paid in full and the Aggregate Commitment has been terminated, any funds
remaining in the Facility LC Collateral Account shall be returned by the Administrative
Agent to the Borrower or paid to whomever may be legally entitled thereto at such time.




(e) If, within 90 days after acceleration of the maturity of the Obligations or
termination of the obligations of the Lenders to make Loans and the obligation and power of
the LC Issuer to issue Facility LCs hereunder as a result of any Event of Default (other
than any Event of Default as described in Section 7.6 or 7.7) and before any judgment or
decree for the payment of the Obligations due has been obtained or entered, the Required
Lenders (in their sole discretion) so direct, the Administrative Agent shall, by notice to
the Borrower, rescind and annul such acceleration and/or termination.




(f) Upon and during the continuation of any Event of Default, the Administrative Agent
may, subject to the direction of the Required Lenders, exercise all rights and remedies
under the Loan Documents and enforce all other rights and remedies under applicable law.



8.2. Application of Funds. After the exercise of remedies provided for in Section 8.1
(or after the Obligations have automatically become immediately due and payable as set forth in the
first sentence of Section 8.1(i)), the Administrative Agent shall apply any amounts it receives on
account of the Obligations in the following order:




8.2.1. First, to payment of fees, indemnities, expenses and other amounts (including
fees, charges and disbursements of counsel to the Administrative Agent and amounts payable
under Article III) payable to the Administrative Agent in its capacity as such;




8.2.2. Second, to payment of fees, indemnities and other amounts (other than principal,
interest, LC Fees and Commitment Fees) payable to the Lenders and the LC Issuer (including
fees, charges and disbursements of counsel to the respective Lenders and the LC Issuer as
required by Section 9.6 and amounts payable under Article III);


 


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8.2.3. Third, to payment of accrued and unpaid LC Fees, Commitment Fees and interest on
the Loans and Reimbursement Obligations, ratably among the Lenders and the LC Issuer in
proportion to the respective amounts described in this Section payable to them;




8.2.4. Fourth, to payment of the unpaid principal of the Loans and Reimbursement
Obligations, ratably among the Lenders in proportion to their Pro Rata Shares;




8.2.5. Fifth, to payment of all other Secured Obligations ratably among the Lenders;




8.2.6. Sixth, to the Administrative Agent for deposit to the Facility LC Collateral
Account; and




8.2.7. Last, the balance, if any, to the Borrower or as otherwise required by law.



8.3. Amendments. Subject to the provisions of this Section, the Required Lenders (or
the Administrative Agent with the consent in writing of the Required Lenders) and the Borrower may
enter into agreements supplemental hereto for the purpose of adding or modifying any provisions to
the Loan Documents, changing in any manner the rights of the Lenders or the Borrower hereunder or
waiving any Event of Default hereunder; provided, however, that no such supplemental agreement
shall:




(a) without the consent of each Lender directly affected thereby, extend the final
maturity of any Loan, extend the expiry date of any Facility LC to a date after the Facility
Termination Date, postpone any regularly scheduled payment of principal of any Loan, forgive
all or any portion of the principal amount thereof or any Reimbursement Obligation related
thereto, reduce the rate or extend the time of payment of interest or fees thereon or
Reimbursement Obligations related thereto or increase the amount of the Commitment of any
Lender hereunder;




(b) without the consent of all of the Lenders, reduce the percentage specified in the
definition of Required Lenders;




(c) without the consent of all of the Lenders, extend the Facility Termination Date, or
permit the Borrower to assign its rights under this Agreement;




(d) without the consent of all of the Lenders, amend this Section; or




(e) without the consent of all of the Lenders, release any guarantor of any Advance or,
except as provided in the Collateral Documents, release all or substantially all of any
Collateral.



No amendment of any provision of this Agreement relating to the Administrative Agent shall be
effective without the written consent of the Administrative Agent, and no amendment of any
provision relating to the LC Issuer shall be effective without the written consent of the LC
Issuer.



 


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No amendment to any provision of this Agreement relating to the Swing Line Lender or any
Swing Line Loans shall be effective without the written consent of the Swing Line Lender.



8.4. Preservation of Rights. No delay or omission of the Lenders, the LC Issuer or
the Administrative Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Event of Default or an acquiescence therein, and the making of a
Credit Extension notwithstanding the existence of a Event of Default or the inability of the
Borrower to satisfy the conditions precedent to such Credit Extension shall not constitute any
waiver or acquiescence. Any single or partial exercise of any such right shall not preclude other
or further exercise thereof or the exercise of any other right, and no waiver, amendment or other
variation of the terms, conditions or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Lenders required pursuant to Section 8.2, and then only to the
extent specifically set forth in such writing. All remedies in the Loan Documents or afforded by
law shall be cumulative and shall be available to the Administrative Agent, the LC Issuer and the
Lenders until the Obligations have been paid in full.



ARTICLE IX




GENERAL PROVISIONS




9.1. Survival of Representations. All representations and warranties of the Borrower
in this Agreement shall survive the making of the Credit Extensions herein contemplated.



9.2. Governmental Regulation. Anything in this Agreement to the contrary
notwithstanding, neither the LC Issuer nor any Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any applicable statute or
regulation.



9.3. Headings. Section headings in the Loan Documents are for convenience of
reference only and shall not govern the interpretation of any of the provisions of the Loan
Documents.



9.4. Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Administrative Agent, the LC Issuer and the Lenders and
supersede all prior agreements and understandings among the Borrower, the Administrative Agent, the
LC Issuer and the Lenders relating to the subject matter thereof other than those contained in the
fee letter described in Section 10.13.



9.5. Several Obligations; Benefits of this Agreement. The respective obligations of
the Lenders hereunder are several and not joint, and no Lender shall be the partner or agent of any
other (except to the extent to which the Administrative Agent is authorized to act as such). The
failure of any Lender to perform any of its obligations hereunder shall not relieve any other
Lender from any of its obligations hereunder. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this Agreement and their
respective successors and assigns, provided, however, that the parties hereto expressly agree that
the Arranger shall enjoy the benefits of the provisions of Sections 9.6, 9.10 and 10.11 to the



 


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extent specifically set forth therein and shall have the right to enforce such provisions on its
own behalf and in its own name to the same extent as if it were a party to this Agreement.




9.6. Expenses; Indemnification.




(a) The Borrower shall reimburse the Administrative Agent and the Arranger upon demand
for all reasonable out-of-pocket expenses paid or incurred by the Administrative Agent or
the Arranger, including, without limitation, filing and recording costs and fees, costs of
any environmental review (including the costs of internal review of a third party
environmental review), charges and disbursements of outside counsel to the Administrative
Agent and the
Arranger (determined on the basis of such counsel’s generally applicable rates, which
may be higher than the rates such counsel charges the Administrative Agent and the Arranger
in certain matters) and/or following the occurrence of an Event of Default the allocated
costs of in-house counsel incurred from time to time, in connection with the preparation,
negotiation, execution, delivery, syndication, distribution (including, without limitation,
via the internet), review, amendment, modification and administration of the Loan Documents.
The Borrower also agrees to reimburse the Administrative Agent, the Arranger, the LC Issuer
and the Lenders for any reasonable costs, internal charges and out-of-pocket expenses,
including charges and disbursements of outside counsel to the Administrative Agent, the
Arranger, the LC Issuer and the Lenders (determined on the basis of such counsel’s generally
applicable rates, which may be higher than the rates such counsel charges such parties in
certain matters) and/or the allocated costs of in-house counsel incurred from time to time,
paid or incurred by the Administrative Agent, the Arranger, the LC Issuer or any Lender in
connection with the collection and enforcement of the Loan Documents. Expenses being
reimbursed by the Borrower under this Section include, without limitation, reasonable costs
and expenses incurred in connection with the Reports described in the following sentence.
The Borrower acknowledges that from time to time U.S. Bank may prepare and may distribute to
the Lenders (but shall have no obligation or duty to prepare or to distribute to the
Lenders) certain audit reports (the “Reports”) pertaining to the Borrower’s assets for
internal use by U.S. Bank from information furnished to it by or on behalf of the Borrower,
after U.S. Bank has exercised its rights of inspection pursuant to this Agreement.




(b) The Borrower hereby further agrees to indemnify the Administrative Agent, the
Arranger, the LC Issuer, each Lender, their respective affiliates and each of their
directors, officers and employees against all losses, claims, damages, penalties, judgments,
liabilities and expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Administrative Agent, the Arranger, the LC Issuer,
any Lender or any affiliate is a party thereto) that any of them may pay or incur arising
out of or relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or proposed application of the
proceeds of any Credit Extension hereunder except to the extent that they are determined in
a final non-appealable judgment by a court of competent jurisdiction to have resulted from
the gross negligence or willful misconduct of the party seeking indemnification. The
obligations of the Borrower under this Section shall survive the termination of this
Agreement.


 


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9.7. Numbers of Documents. All statements, notices, closing documents and requests
hereunder shall be furnished to the Administrative Agent with sufficient counterparts so that the
Administrative Agent may furnish one to each of the Lenders.



9.8. Accounting. Except as provided to the contrary herein, all accounting terms used
herein shall be interpreted and all accounting determinations hereunder shall be made in accordance
with GAAP in a manner consistent with that used in preparing the financial statements referred to
in Section 5.4. If at any time any change in GAAP would affect in any material respect the
computation of any financial ratio or requirement set forth in any Loan Document, and the Borrower,
the Administrative Agent or the Required Lenders so request, the Administrative Agent, the Lenders
and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval of the Required
Lenders), provided that, until so amended, such ratio or requirement shall continue to be computed
in accordance with GAAP prior to such change therein and the
Borrower shall provide to the Administrative Agent and the Lenders reconciliation statements
showing the difference in such calculation, together with the delivery of monthly, quarterly and
annual financial statements required hereunder.



9.9. Severability of Provisions. Any provision in any Loan Document that is held to
be inoperative, unenforceable or invalid in any jurisdiction shall, as to that jurisdiction, be
inoperative, unenforceable or invalid without affecting the remaining provisions in that
jurisdiction or the operation, enforceability or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable.



9.10. Nonliability of Lenders. The relationship between the Borrower on the one hand
and the Lenders, the LC Issuer and the Administrative Agent on the other hand shall be solely that
of borrower and lender. Neither the Administrative Agent, the Arranger, the LC Issuer nor any
Lender shall have any fiduciary responsibilities to the Borrower. Neither the Administrative
Agent, the Arranger, the LC Issuer nor any Lender undertakes any responsibility to the Borrower to
review or inform the Borrower of any matter in connection with any phase of the Borrower’s business
or operations. The Borrower agrees that neither the Administrative Agent, the Arranger, the LC
Issuer nor any Lender shall have liability to the Borrower (whether sounding in tort, contract or
otherwise) for losses suffered by the Borrower in connection with, arising out of or in any way
related to the transactions contemplated and the relationship established by the Loan Documents, or
any act, omission or event occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses resulted from the
gross negligence or willful misconduct of the party from which recovery is sought. Neither the
Administrative Agent, the Arranger, the LC Issuer nor any Lender shall have any liability with
respect to, and the Borrower hereby waives, releases and agrees not to sue for, any special,
indirect, consequential or punitive damages suffered by the Borrower in connection with, arising
out of or in any way related to the Loan Documents or the transactions contemplated thereby.



9.11. Confidentiality. The Administrative Agent and each Lender agrees to hold any
confidential information that it receives from the Borrower or any Subsidiary in connection with
this Agreement in confidence, except for disclosure (i) to its Affiliates and to the Administrative
Agent and any other Lender and their respective Affiliates, (ii) to its legal counsel, accountants,



 


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and other professional advisors or to a Transferee, (iii) to regulatory officials, (iv) to any
Person as requested pursuant to or as required by law, regulation or legal process, (v) to any
Person in connection with any legal proceeding to which it is a party, (vi) to its direct or
indirect contractual counterparties in swap agreements or to legal counsel, accountants and other
professional advisors to such counterparties, and (vii) permitted by Section 12.4. Without
limiting Section 9.4, the Borrower agrees that the terms of this Section shall set forth the entire
agreement between the Borrower and the Administrative Agent and each Lender with respect to any
confidential information previously or hereafter received by the Administrative Agent or such
Lender in connection with this Agreement, and this Section shall supersede any and all prior
confidentiality agreements entered into by the Administrative Agent or any Lender with respect to
such confidential information.



9.12. Nonreliance. Each Lender hereby represents that it is not relying on or looking to any margin stock (as
defined in Regulation U of the Board of Governors of the Federal Reserve System) for the repayment
of the Credit Extensions provided for herein.



9.13. Disclosure. The Borrower and each Lender hereby acknowledge and agree that U.S.
Bank and/or its Affiliates from time to time may hold investments in, make other loans to or have
other relationships with the Borrower and its Affiliates.



9.14. U.S.A. PATRIOT ACT NOTIFICATION. The following notification is provided to
Borrower pursuant to Section 326 of the U.S.A. Patriot Act:




Each Lender that is subject to the requirements of the U.S.A. Patriot Act hereby
notifies the Borrower and each Subsidiary that pursuant to the requirements of the U.S.A.
Patriot Act, such Lender is required to obtain, verify and record information that
identifies such Borrower or Subsidiary, which information includes the name and address of
such Person and other information that will allow such Lender to identify such Person in
accordance with the U.S.A. Patriot Act.



ARTICLE X




THE ADMINISTRATIVE AGENT




10.1. Appointment; Nature of Relationship. Each Lender hereby appoints U.S. Bank as
its contractual representative (herein referred to as the “Administrative Agent”) hereunder and
under each other Loan Document, and each of the Lenders irrevocably authorizes the Administrative
Agent to act as the contractual representative of such Lender with the rights and duties expressly
set forth herein and in the other Loan Documents. The Administrative Agent agrees to act as such
contractual representative upon the express conditions in this Article X. Notwithstanding the use
of the defined term “Administrative Agent,” it is expressly understood and agreed that the
Administrative Agent shall not have any fiduciary responsibilities to any Lender by reason of this
Agreement or any other Loan Document and that the Administrative Agent is merely acting as the
contractual representative of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders’ contractual
representative, the Administrative Agent (i) does not hereby assume any fiduciary duties to any of
the Lenders, (ii) is a “representative” of the Lenders within the



 


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meaning of the term “secured
party” as defined in the New York Uniform Commercial Code and (iii) is acting as an independent
contractor, the rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders hereby agrees to assert no claim
against the Administrative Agent on any agency theory or any other theory of liability for breach
of fiduciary duty, all of which claims each Lender hereby waives.



10.2. Powers. The Administrative Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto. The Administrative Agent shall
have no implied duties to the
Lenders and no obligation to the Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Administrative Agent.



10.3. General Immunity. Neither the Administrative Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower or any Lender for any action taken or
omitted to be taken hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross negligence or willful
misconduct of the Administrative Agent or any its directors, officers, agents or employees, as the
case may be.



10.4. No Responsibility for Loans, Recitals, etc. Neither the Administrative Agent
nor any of its directors, officers, agents or employees shall be responsible for or have any duty
to ascertain, inquire into or verify (a) any statement, warranty or representation made in
connection with any Loan Document or any borrowing hereunder; (b) the performance or observance of
any of the covenants or agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each Lender; (c) the
satisfaction of any condition specified in Article IV, except receipt of items required to be
delivered solely to the Administrative Agent; (d) the existence or possible existence of any
Default or Event of Default; (e) the validity, enforceability, effectiveness, sufficiency or
genuineness of any Loan Document or any other instrument or writing furnished in connection
therewith; (f) the value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of the Borrower or any guarantor of any of the
Obligations or of any of the Borrower’s or any such guarantor’s respective Subsidiaries.



10.5. Action on Instructions of Lenders. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and under any other Loan
Document in accordance with written instructions signed by the Required Lenders, and such
instructions and any action taken or failure to act pursuant thereto shall be binding on all of the
Lenders. The Lenders hereby acknowledge that the Administrative Agent shall be under no duty to
take any discretionary action permitted to be taken by it pursuant to the provisions of this
Agreement or any other Loan Document unless the Required Lenders request in writing that it take
such action. The Administrative Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it is first indemnified to its
satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may
incur by reason of taking or continuing to take any such action.


 


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10.6. Employment of Administrative Agents and Counsel. The Administrative Agent may
execute any of its duties as Administrative Agent hereunder and under any other Loan Document by or
through employees, agents and attorneys-in-fact and shall not be answerable to the Lenders, except
as to money or securities received by it or its authorized agents, for the default or misconduct of
any employees, agents or attorneys-in-fact selected by it with reasonable care. The Administrative
Agent shall be entitled to advice of counsel concerning the contractual arrangement between the
Administrative Agent and the Lenders and all matters pertaining to the Administrative Agent’s
duties hereunder and under any other Loan Document.



10.7. Reliance on Documents; Counsel. The Administrative Agent shall be entitled to rely upon any Note, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex, electronic mail message, statement,
paper or document it believes to be genuine and correct and to have been signed or sent by the
proper person or persons, and, in respect to legal matters, upon the opinion of counsel selected by
the Administrative Agent, which counsel may be employees of the Administrative Agent. For purposes
of determining compliance with the conditions specified in Sections 4.1 and 4.2, each Lender that
has signed this Agreement shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Administrative Agent has received notice from
such Lender prior to the applicable date specifying its objection thereto.



10.8. Administrative Agent’s Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Administrative Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their Commitments
immediately prior to such termination) (i) for any amounts not reimbursed by the Borrower for which
the Administrative Agent is entitled to reimbursement by the Borrower under the Loan Documents,
(ii) for any other expenses incurred by the Administrative Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and enforcement of the Loan
Documents (including, without limitation, for any expenses incurred by the Administrative Agent in
connection with any dispute between the Administrative Agent and any Lender or between two or more
of the Lenders) and (iii) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against the Administrative Agent in any way relating to or
arising out of the Loan Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including, without limitation, for any such amounts incurred by
or asserted against the Administrative Agent in connection with any dispute between the
Administrative Agent and any Lender or between two or more of the Lenders), or the enforcement of
any of the terms of the Loan Documents or of any such other documents, provided that (i) no Lender
shall be liable for any of the foregoing to the extent any of the foregoing is found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the Administrative Agent and (ii) any indemnification required
pursuant to Section 3.5(vii) shall, notwithstanding the provisions of this Section, be paid by the
relevant Lender in accordance with the provisions thereof. The obligations of the Lenders under
this Section shall survive payment of the Obligations and termination of this Agreement.


 


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10.9. Notice of Event of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received written notice from a Lender or the Borrower referring to this
Agreement describing such Default or Event of Default and stating that such notice is a “notice of
default.” In the event that the Administrative Agent receives such a notice, the Administrative
Agent shall give prompt notice thereof to the Lenders; provided that, except as expressly set forth
in the Loan Documents, the Administrative Agent shall have no duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or any of its
Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity.



10.10. Rights as a Lender. In the event the Administrative Agent is a Lender, the Administrative Agent shall have the
same rights and powers hereunder and under any other Loan Document with respect to its Commitment
and its Loans as any Lender and may exercise the same as though it were not the Administrative
Agent, and the term “Lender” or “Lenders” shall, at any time when the Administrative Agent is a
Lender, unless the context otherwise requires, include the Administrative Agent in its individual
capacity. The Administrative Agent and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Borrower or any of its
Subsidiaries in which the Borrower or such Subsidiary is not restricted hereby from engaging with
any other Person.




10.11. Lender Credit Decision, Legal Representation.




(a) Each Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent, the Arranger or any other Lender and based on the financial statements
prepared by the Borrower and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this Agreement and the
other Loan Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent, the Arranger or any other Lender and based on such
documents and information as it deems appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the other Loan
Documents. Except for any notice, report, document or other information expressly required
to be furnished to the Lenders by the Administrative Agent or Arranger hereunder, neither
the Administrative Agent nor the Arranger shall have any duty or responsibility (either
initially or on a continuing basis) to provide any Lender with any notice, report, document,
credit information or other information concerning the affairs, financial condition or
business of the Borrower or any of its Affiliates that may come into the possession of the
Administrative Agent or Arranger (whether or not in their respective capacity as
Administrative Agent or Arranger) or any of their Affiliates.




(b) Each Lender further acknowledges that it has had the opportunity to be represented
by legal counsel in connection with its execution of this Agreement and the other Loan
Documents, that it has made its own evaluation of all applicable laws and regulations
relating to the transactions contemplated hereby and that the counsel to the



 


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Administrative
Agent represents only the Administrative Agent and not the Lenders in connection with this
Agreement and the transactions contemplated hereby.



10.12. Successor Administrative Agent. The Administrative Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Administrative Agent or, if no successor
Administrative Agent has been appointed, forty-five days after the retiring Administrative Agent
gives notice of its intention to resign. Upon any such resignation or removal, the Required
Lenders shall have the right to appoint, on behalf of the Borrower and the Lenders, a successor
Administrative Agent. If no successor Administrative Agent is so appointed by the Required Lenders
within thirty days after the resigning Administrative Agent’s giving notice of its intention to
resign, then the resigning Administrative Agent may appoint, on behalf of the Borrower and the
Lenders, a successor Administrative Agent. Notwithstanding the previous sentence, the
Administrative Agent may at any time without the consent of the Borrower or any Lender appoint any
of its Affiliates that is a commercial bank as a successor Administrative Agent hereunder. If the
Administrative Agent has resigned or been removed and no successor Administrative Agent has been
appointed, the Lenders may
perform all the duties of the Administrative Agent hereunder and the Borrower shall make all
payments in respect of the Obligations to the applicable Lender and for all other purposes shall
deal directly with the Lenders. No successor Administrative Agent shall be deemed to be appointed
hereunder until such successor Administrative Agent has accepted the appointment. Any such
successor Administrative Agent shall be a commercial bank having capital and retained earnings of
at least $100,000,000. 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 resigning or removed
Administrative Agent. Upon the effectiveness of the resignation of the Administrative Agent, the
resigning Administrative Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation of an Administrative Agent,
the provisions of this Article X shall continue in effect for the benefit of such Administrative
Agent in respect of any actions taken or omitted to be taken by it while it was acting as the
Administrative Agent hereunder and under the other Loan Documents.



10.13. Administrative Agent and Arranger Fees. The Borrower agrees to pay to the
Administrative Agent and the Arranger, for their respective accounts, the fees agreed to by the
Borrower, the Administrative Agent and the Arranger pursuant to that certain letter agreement dated
April 5, 2010, or as otherwise agreed from time to time.



10.14. Delegation to Affiliates. The Borrower and the Lenders agree that the
Administrative Agent may delegate any of its duties under this Agreement to any of its Affiliates.
Any such Affiliate (and such Affiliate’s directors, officers, agents and employees) that performs
duties in connection with this Agreement shall be entitled to the same benefits of the
indemnification, waiver and other protective provisions to which the Administrative Agent is
entitled under Articles IX and X.



10.15. Execution of Collateral Documents. The Lenders hereby empower and authorize
the Administrative Agent to execute and deliver to the Borrower on their behalf the Collateral
Documents, all related financing statements and any financing statements, agreements,



 


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documents or
instruments that are necessary or appropriate to effect the purposes of the Collateral Documents.



10.16. Collateral Releases. The Lenders hereby empower and authorize the
Administrative Agent to execute and deliver to the Borrower on their behalf any agreements,
documents or instruments that are necessary or appropriate to effect any releases of Collateral
that that the Required Lenders have approved in writing by the terms hereof or of any other Loan
Document or otherwise.



ARTICLE XI




SETOFF; RATABLE PAYMENTS




11.1. Setoff. The Borrower hereby grants each Lender a security interest in all
deposits, credits and deposit accounts (including all account balances, whether provisional or
final and whether or not collected or available) of the Borrower with such Lender or any Affiliate
of such Lender (the “Deposits”). In addition
to, and without limitation of, any rights of the Lenders under applicable law, if the Borrower
becomes insolvent, however evidenced or defined, or any Event of Default occurs, the Borrower
authorizes each Lender to offset and apply all such Deposits toward the payment of the Obligations
owing to such Lender, whether or not the Obligations, or any part thereof, are then due and
regardless of the existence or adequacy of any collateral, guaranty or any other security, right or
remedy available to any Lender.



11.2. Ratable Payments. If any Lender, whether by setoff or otherwise, has payment
made to it upon its Outstanding Credit Exposure (other than payments received pursuant to Section
3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any other Lender, such Lender
agrees, promptly upon demand, to purchase a portion of the Aggregate Outstanding Credit Exposure
held by the other Lenders so that after such purchase each Lender will hold its Pro Rata Share of
the Aggregate Outstanding Credit Exposure. If any Lender, whether in connection with setoff or
amounts that might be subject to setoff or otherwise, receives collateral or other protection for
its Obligations or such amounts that may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in the benefits of such
collateral ratably in proportion to their respective Pro Rata Shares of the Aggregate Outstanding
Credit Exposure. In case any such payment is disturbed by legal process, or otherwise, the Lenders
agree to make appropriate further adjustments.



ARTICLE XII




BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS




12.1. Successors and Assigns. The terms and provisions of the Loan Documents shall be
binding upon and inure to the benefit of the Borrower and the Lenders and their respective
successors and assigns permitted hereby, except that (i) the Borrower shall not have the right to
assign its rights or obligations under the Loan Documents without the prior written consent of each
Lender, (ii) any assignment by any Lender must be made in compliance with Section 12.3, and (iii)
any transfer by Participation must be made in compliance with Section 12.2. Any attempted
assignment or transfer by any party not made in compliance with this Section shall be



 


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null and
void, unless such attempted assignment or transfer is treated as a participation in accordance with
Section 12.3.2. The parties to this Agreement acknowledge that clause (ii) of this Section relates
only to absolute assignments and this Section does not prohibit assignments creating security
interests, including, without limitation, (x) any pledge or assignment by any Lender of all or any
portion of its rights under this Agreement and any Note to a Federal Reserve Bank or (y) in the
case of a Lender that is a Fund, any pledge or assignment of all or any portion of its rights under
this Agreement and any Note to its trustee in support of its obligations to its trustee; provided,
however, that no such pledge or assignment creating a security interest shall release the
transferor Lender from its obligations hereunder unless and until the parties thereto have complied
with the provisions of Section 12.3. The Administrative Agent may treat the Person that made any
Loan or that holds any Note as the owner thereof for all purposes hereof unless and until such
Person complies with Section 12.3; provided, however, that the Administrative Agent may in its
discretion (but shall not be required to) follow instructions from the Person that made any Loan or
that holds any Note to direct payments relating to such Loan or Note to another Person. Any
assignee of the rights to any Loan or any Note agrees by acceptance of such assignment to be bound
by all the terms and provisions of the Loan Documents. Any request, authority or consent of any
Person that at the time of making such request or giving such authority or consent is the owner of
the rights to any Loan (whether or not a Note has been issued in evidence thereof) shall be
conclusive and binding on any subsequent holder or assignee of the rights to such Loan.




12.2. Participations.




12.2.1. Permitted Participants; Effect. Any Lender may at any time sell to one
or more banks or other entities (“Participants”) participating interests in any Outstanding
Credit Exposure owing to such Lender, any Note held by such Lender, any Commitment of such
Lender or any other interest of such Lender under the Loan Documents; provided, however,
that, if no Event of Default is continuing, such sale shall be subject to the consent of the
Borrower, which consent shall not be unreasonably withheld or delayed. In the event of any
such sale by a Lender of participating interests to a Participant, such Lender’s obligations
under the Loan Documents shall remain unchanged, such Lender shall remain solely responsible
to the other parties hereto for the performance of such obligations, such Lender shall
remain the owner of its Outstanding Credit Exposure and the holder of any Note issued to it
in evidence thereof for all purposes under the Loan Documents, all amounts payable by the
Borrower under this Agreement shall be determined as if such Lender had not sold such
participating interests and the Borrower and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and obligations
under the Loan Documents.




12.2.2. Voting Rights. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of any
provision of the Loan Documents other than any amendment, modification or waiver with
respect to any Outstanding Credit Exposure or Commitment in which such Participant has an
interest that would require consent of all of the Lenders pursuant to the terms of Section
8.2 or of any other Loan Document.


 


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12.2.3. Benefit of Certain Provisions. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in Section 11.1 in respect
of its participating interest in amounts owing under the Loan Documents to the same extent
as if the amount of its participating interest were owing directly to it as a Lender under
the Loan Documents, provided that each Lender shall retain the right of setoff provided in
Section 11.1 with respect to the amount of participating interests sold to each Participant.
The Lenders agree to share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each Lender, any amount
received pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 11.2 as if each Participant were a Lender. The Borrower further
agrees that each Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4,
3.5, 9.6 and 9.10 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section 12.3, provided that (i) a Participant shall not be entitled
to receive any greater payment under Section 3.1, 3.2 or 3.5 than the Lender who sold the
participating interest to such Participant would have received had it retained such interest
for its own account, unless the sale of such interest to such Participant is made with the
prior written consent of the Borrower, and (ii) any Participant not incorporated under the
laws of the United States of America or any State thereof agrees to comply with the
provisions of Section 3.5 to the same extent as if it were a Lender.




12.3. Assignments.




12.3.1. Permitted Assignments. Any Lender may at any time assign to one or
more Eligible Assignees (“Purchasers”) all or any part of its rights and obligations under
the Loan Documents. Such assignment shall be substantially in the form of Exhibit B or in
such other form reasonably acceptable to the Administrative Agent as agreed to by the
parties thereto. Each
assignment to a Purchaser that is not a Lender, an Affiliate of a Lender or an Approved
Fund shall either be in an amount equal to the entire applicable Commitment and Outstanding
Credit Exposure of the assigning Lender or (unless each of the Borrower and the
Administrative Agent otherwise consents) be in an aggregate amount not less than $5,000,000.
The amount of the assignment shall be based on the Commitment or Outstanding Credit
Exposure (if the Commitment has been terminated) subject to the assignment, determined as of
the date of such assignment or as of the “Trade Date,” if the “Trade Date” is specified in
the assignment.




12.3.2. Consents. The consent of the Borrower shall be required prior to an
assignment becoming effective unless the Purchaser is a Lender, an Affiliate of a Lender or
an Approved Fund, provided that the consent of the Borrower shall not be required if a Event
of Default has occurred and is continuing. The consent of the Administrative Agent shall be
required prior to an assignment becoming effective unless the Purchaser is a Lender, an
Affiliate of a Lender or an Approved Fund. The consent of the LC Issuer shall be required
prior to an assignment of a Commitment becoming effective unless the Purchaser is a Lender
with a Commitment. Any consent required under this Section shall not be unreasonably
withheld or delayed.


 


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12.3.3. Effect; Effective Date. Upon (i) delivery to the Administrative Agent
of an assignment, together with any consents required by Sections 12.3.1 and 12.3.2, and
(ii) payment of a $3,500 fee to the Administrative Agent for processing such assignment
(unless the Administrative Agent waives such fee), such assignment shall become effective on
the effective date specified in such assignment. The assignment shall contain a
representation by the Purchaser to the effect that none of the consideration used to make
the purchase of the Commitment and Outstanding Credit Exposure under the applicable
assignment agreement constitutes “plan assets” as defined under ERISA and that the rights
and interests of the Purchaser in and under the Loan Documents will not be “plan assets”
under ERISA. On and after the effective date of such assignment, such Purchaser shall for
all purposes be a Lender party to this Agreement and any other Loan Document executed by or
on behalf of the Lenders and shall have all the rights and obligations of a Lender under the
Loan Documents, to the same extent as if it were an original party thereto, and the
transferor Lender shall be released with respect to the Commitment and Outstanding Credit
Exposure assigned to such Purchaser without any further consent or action by the Borrower,
the Lenders or the Administrative Agent. In the case of an assignment covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a Lender hereunder but shall continue to be entitled to the benefits of, and subject to,
those provisions of this Agreement and the other Loan Documents that survive payment of the
Obligations and termination of the applicable agreement. Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with this Section
shall be treated for purposes of this Agreement as a sale by such Lender of a participation
in such rights and obligations in accordance with Section 12.2. Upon the consummation of
any assignment to a Purchaser pursuant to this Section, the transferor Lender, the
Administrative Agent and the Borrower shall, if the transferor Lender or the Purchaser
desires that its Loans be evidenced by Notes, make appropriate arrangements so that new
Notes or, as appropriate, replacement Notes are issued to such transferor Lender and new
Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their respective Commitments, as adjusted pursuant to such
assignment.




12.3.4. Register. The Administrative Agent, acting solely for this purpose as
an agent of the Borrower, shall maintain at one of its offices in the United States of
America a copy of each assignment agreement delivered to it and a register for the
recordation of the names and addresses of the Lenders, the Commitments of and principal
amounts of the Loans owing to each
Lender, and participations of each Lender in Facility LCs, pursuant to the terms hereof
from time to time (the “Register”). The entries in the Register shall be conclusive, and
the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be available
for inspection by the Borrower at any reasonable time and from time to time upon reasonable
prior notice.



12.4. Dissemination of Information. The Borrower authorizes each Lender to disclose
to any Participant, Purchaser, other Person acquiring an interest in the Loan Documents by
operation of law (each a “Transferee”) and prospective Transferee any and all information in such
Lender’s possession concerning the creditworthiness of the Borrower and its Subsidiaries,



 


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including
without limitation any information contained in any Reports; provided that each Transferee and
prospective Transferee agrees to be bound by Section 9.11 of this Agreement.



12.5. Tax Treatment. If any interest in any Loan Document is transferred to any
Transferee that is not incorporated under the laws of the United States or any State thereof, the
transferor Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 3.5(iv).



ARTICLE XIII




NOTICES





13.1. Notices; Effectiveness; Electronic Communication.




(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in paragraph (b)
below), all notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or registered
mail or sent by telecopier as follows:




(i) if to the Borrower, at its address or telecopier number set forth on its
signature page hereof;




(ii) if to the Administrative Agent, at its address or telecopier number set
forth on its signature page hereof;




(iii) if to the LC Issuer, at its address or telecopier number set forth on its
signature page hereof;




(iv) if to a Lender, at its address or telecopier number set forth in its
Administrative Questionnaire.




Notices sent by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received; notices sent by telecopier shall be
deemed to have been given when sent (or, if not given during normal business hours for the
recipient, at the opening of business on the next Business Day for the recipient). Notices
delivered through electronic communications to the extent provided in paragraph (b)
below shall be effective as provided in said paragraph (b).




(b) Electronic Communications. Notices and other communications to the Lenders
and the LC Issuer hereunder may be delivered or furnished by electronic communication
(including e-mail and internet or intranet websites) pursuant to procedures approved by the
Administrative Agent or as otherwise determined by the Administrative Agent, provided that
the foregoing shall not apply to notices to any Lender or the LC Issuer pursuant to Article
II if such Lender or the LC Issuer, as applicable, has notified the Administrative Agent
that it is incapable of receiving notices under such Article by electronic communication.
The Administrative Agent or the Borrower may, in its respective discretion, agree to accept
notices and other



 


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communications to it hereunder by electronic communications pursuant to
procedures approved by it or as it otherwise determines, provided that such determination or
approval may be limited to particular notices or communications.




Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the sender’s receipt
of an acknowledgement from the intended recipient (such as by the “return receipt requested”
function, as available, return e-mail or other written acknowledgement), provided
that if such notice or other communication is not given during the normal business hours of
the recipient, such notice or communication shall be deemed to have been given at the
opening of business on the next Business Day for the recipient, and (ii) notices or
communications posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that such notice or communication is available and identifying
the website address therefor.




(c) Change of Address, etc. Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to the other
parties hereto.



ARTICLE XIV




COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION




14.1. Counterparts; Effectiveness. This Agreement may be executed in counterparts
(and by different parties hereto in different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single contract. Except as
provided in Article IV, this Agreement shall become effective when the Administrative Agent has
executed this Agreement and received counterparts hereof that, when taken together, bear the
signatures of each of the parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.



14.2. Electronic Execution of Assignments. The words “execution,” “signed” and
“signature” and words of like import in any assignment and assumption agreement shall be deemed to
include electronic signatures or the keeping of records in electronic form, each of which shall be
of the same legal effect, validity or enforceability as a manually executed signature or the use of
a paper-based recordkeeping system, as the case may be, to the extent and
as provided for in any applicable law, including the Federal Electronic Signatures in Global
and National Commerce Act or any other state laws based on the Uniform Electronic Transactions Act.


 


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ARTICLE XV




CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL




15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY
EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT
REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL
LAWS APPLICABLE TO NATIONAL BANKS.



15.2. CONSENT TO JURISDICTION. THE BORROWER AND ADMINISTRATIVE AGENT AND EACH LENDER
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE
COURT SITTING IN MINNEAPOLIS, MINNESOTA IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
ANY LOAN DOCUMENTS, IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR
THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
ADMINISTRATIVE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE
ADMINISTRATIVE AGENT, THE LC ISSUER OR ANY LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT, THE
LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF,
RELATED TO OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN MINNEAPOLIS,
MINNESOTA.



15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT, THE LC ISSUER AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO OR
CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.



[Signature Pages Follow]




 


87









 







IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer and the Administrative Agent have
executed this Agreement as of the date first above written.



	 	 	 	 	 
	 	ROADRUNNER TRANSPORTATION SYSTEMS, INC.

 	 
	 	By:  	/s/ Judith A. Vijums
 	 
	 	 	Name:  	Judith A. Vijums 	 
	 	 	Title:  	Vice President

4900 Pennsylvania Avenue

P.O. Box 8903

Cudahy, WI 53110-890 	 



	 	 	 	 	 
	 

	 	Attention:
	 	Peter Armbruster
	 

	 	Telephone:
	 	(414) 615-1648
	 

	 	FAX:
	 	(414) 486-0093






With copies to:




Thayer | Hidden Creek Management

80 South 8th Street

Suite 4508

Minneapolis, MN 55402




Attention: Judy Vijums

Telephone: (612) 766-9133

Fax: (612) 332-2012



Greenberg Traurig, LLP

2375 E. Camelback Road

Suite 700

Phoenix, AZ 85016




Attention: Bruce E. Macdonough

Telephone: (602) 445-8305

Fax: (602) 445-8618




 


[Signature Page 1 to Credit Agreement]



 


 









 







	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION,

as a Lender, as LC Issuer and as Administrative Agent

 	 
	 	By:  	/s/ Richard A. Clemmerson
 	 
	 	 	Name:  	Richard A. Clemmerson 	 
	 	 	Title:  	Vice President

800 Nicollet Mall

Minneapolis, MN 55402 	 



	 	 	 	 	 
	 

	 	Attention:
	 	Richard A. Clemmerson
	 

	 	Telephone:
	 	(612) 303-4163
	 

	 	FAX:
	 	(612) 303-2257






[Signature Page 2 to Credit Agreement]