Document:

Exhibit 10.1

 

EXECUTION COPY

 

	
 
    

Deal CUSIP 04079AAC9

Term Loan CUSIP 04079AAD7

 

CREDIT AGREEMENT

 

DATED AS OF JUNE 15, 2012

 

 

AMONG

 

 

ARKANSAS BEST CORPORATION AND CERTAIN OF ITS SUBSIDIARIES FROM TIME TO TIME PARTY HERETO,

AS BORROWERS,

 

 

THE LENDERS FROM TIME TO TIME PARTY HERETO,

 

 

U.S. BANK NATIONAL ASSOCIATION,
 AS ADMINISTRATIVE AGENT,

 

 

BRANCH BANKING AND TRUST COMPANY AND PNC BANK, NATIONAL ASSOCIATION,

AS SYNDICATION AGENTS

 

 

AND

 

 

U.S. BANK NATIONAL ASSOCIATION,
 AS SOLE LEAD ARRANGER AND SOLE BOOK RUNNER

 

	
 
    

 

 

Table of Contents

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I   DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II   THE CREDITS
    	
22
    
	
 
    	
 
    	
 
    
	
2.1.
    	
Commitment
    	
22
    
	
2.2.
    	
Termination
    	
22
    
	
2.3.
    	
Ratable Loans; Types of Advances
    	
22
    
	
2.4.
    	
Termination and Reduction of Commitments; Optional   Principal Payments; Mandatory Prepayments
    	
22
    
	
2.5.
    	
Method of Selecting Types and Interest Periods for Advances
    	
23
    
	
2.6.
    	
Conversion and Continuation of Outstanding Advances;   Maximum Number of Interest Periods
    	
24
    
	
2.7.
    	
Interest Rates
    	
24
    
	
2.8.
    	
Rates Applicable After Event of Default
    	
25
    
	
2.9.
    	
Method of Payment; Repayment of Loans
    	
25
    
	
2.10.
    	
Noteless Agreement; Evidence of Indebtedness
    	
26
    
	
2.11.
    	
Telephonic Notices
    	
26
    
	
2.12.
    	
Interest Payment Dates; Interest and Fee Basis
    	
27
    
	
2.13.
    	
Notification of Advances, Interest Rates, Prepayments   and Commitment Reductions
    	
27
    
	
2.14.
    	
Lending Installations
    	
27
    
	
2.15.
    	
Non-Receipt of Funds by the Administrative Agent
    	
27
    
	
2.16.
    	
Replacement of Lender
    	
28
    
	
2.17.
    	
Limitation of Interest
    	
28
    
	
2.18.
    	
Defaulting Lenders
    	
29
    
	
2.19.
    	
Designation of Borrowing Subsidiaries
    	
30
    
	
2.20.
    	
Increase Option
    	
31
    
	
 
    	
 
    	
 
    
	
ARTICLE III   YIELD PROTECTION; TAXES
    	
32
    
	
 
    	
 
    	
 
    
	
3.1.
    	
Yield Protection
    	
32
    
	
3.2.
    	
Changes in Capital Adequacy Regulations
    	
33
    
	
3.3.
    	
Availability of Types of Advances; Adequacy of Interest   Rate
    	
33
    
	
3.4.
    	
Funding Indemnification
    	
34
    
	
3.5.
    	
Taxes
    	
34
    
	
3.6.
    	
Selection of Lending Installation; Mitigation Obligations;   Lender Statements; Survival of Indemnity
    	
38
    
	
 
    	
 
    	
 
    
	
ARTICLE IV   CONDITIONS PRECEDENT
    	
38
    
	
 
    	
 
    	
 
    
	
4.1.
    	
Effective Date
    	
38
    
	
4.2.
    	
Each Credit Extension
    	
41
    

 

i

 

	
4.3.
    	
Designation of a Borrowing Subsidiary
    	
41
    
	
 
    	
 
    	
 
    
	
ARTICLE V   REPRESENTATIONS AND WARRANTIES
    	
42
    
	
 
    	
 
    	
 
    
	
5.1.
    	
Existence and Standing
    	
42
    
	
5.2.
    	
Authorization and Validity
    	
42
    
	
5.3.
    	
No Conflict; Government Consent
    	
42
    
	
5.4.
    	
Financial Statements
    	
43
    
	
5.5.
    	
Material Adverse Change
    	
43
    
	
5.6.
    	
Taxes
    	
43
    
	
5.7.
    	
Litigation and Contingent Obligations
    	
43
    
	
5.8.
    	
Subsidiaries
    	
44
    
	
5.9.
    	
ERISA
    	
44
    
	
5.10.
    	
Accuracy of Information
    	
44
    
	
5.11.
    	
Regulation U
    	
44
    
	
5.12.
    	
Material Agreements
    	
44
    
	
5.13.
    	
Compliance With Laws
    	
44
    
	
5.14.
    	
Ownership of Properties
    	
44
    
	
5.15.
    	
Plan Assets; Prohibited Transactions
    	
45
    
	
5.16.
    	
Environmental Matters
    	
45
    
	
5.17.
    	
Investment Company Act
    	
45
    
	
5.18.
    	
Insurance
    	
45
    
	
5.19.
    	
Subordinated Indebtedness
    	
45
    
	
5.20.
    	
Solvency
    	
45
    
	
5.21.
    	
No Default
    	
45
    
	
 
    	
 
    	
 
    
	
ARTICLE VI   COVENANTS
    	
46
    
	
 
    	
 
    	
 
    
	
6.1.
    	
Financial Reporting
    	
46
    
	
6.2.
    	
Use of Proceeds
    	
47
    
	
6.3.
    	
Notice of Material Events
    	
47
    
	
6.4.
    	
Conduct of Business
    	
48
    
	
6.5.
    	
Taxes
    	
48
    
	
6.6.
    	
Insurance
    	
48
    
	
6.7.
    	
Compliance with Laws and Material Contractual Obligations
    	
49
    
	
6.8.
    	
Maintenance of Properties
    	
49
    
	
6.9.
    	
Books and Records; Inspection
    	
49
    
	
6.10.
    	
Payment of Obligations
    	
49
    
	
6.11.
    	
Indebtedness
    	
49
    
	
6.12.
    	
Merger
    	
50
    
	
6.13.
    	
Sale of Assets
    	
51
    
	
6.14.
    	
Investments
    	
51
    
	
6.15.
    	
Acquisitions
    	
52
    
	
6.16.
    	
Liens
    	
52
    
	
6.17.
    	
Net Capital Expenditures
    	
53
    
	
6.18.
    	
Affiliates
    	
53
    
	
6.19.
    	
Subordinated Indebtedness
    	
53
    
	
6.20.
    	
Sale of Accounts
    	
54
    

 

ii

 

	
6.21.
    	
[Intentionally Omitted]
    	
54
    
	
6.22.
    	
Restricted Payments
    	
54
    
	
6.23.
    	
Financial Covenants
    	
54
    
	
6.24.
    	
Further Assurances
    	
54
    
	
6.25.
    	
Post-Closing Covenant
    	
56
    
	
 
    	
 
    	
 
    
	
ARTICLE VII   DEFAULTS
    	
56
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII   ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
    	
58
    
	
 
    	
 
    	
 
    
	
8.1.
    	
Acceleration; Remedies
    	
58
    
	
8.2.
    	
Application of Funds
    	
59
    
	
8.3.
    	
Amendments
    	
59
    
	
8.4.
    	
Preservation of Rights
    	
60
    
	
8.5.
    	
Secured Rate Management Transactions and Secured Cash   Management Services
    	
60
    
	
 
    	
 
    	
 
    
	
ARTICLE IX   GENERAL PROVISIONS
    	
61
    
	
 
    	
 
    	
 
    
	
9.1.
    	
Survival of Representations
    	
61
    
	
9.2.
    	
Governmental Regulation
    	
61
    
	
9.3.
    	
Headings
    	
61
    
	
9.4.
    	
Entire Agreement
    	
61
    
	
9.5.
    	
Several Obligations; Benefits of this Agreement
    	
61
    
	
9.6.
    	
Expenses; Indemnification
    	
61
    
	
9.7.
    	
Numbers of Documents
    	
62
    
	
9.8.
    	
Accounting
    	
62
    
	
9.9.
    	
Severability of Provisions
    	
63
    
	
9.10.
    	
Nonliability of Lenders
    	
63
    
	
9.11.
    	
Confidentiality
    	
64
    
	
9.12.
    	
Nonreliance
    	
64
    
	
9.13.
    	
Disclosure
    	
64
    
	
9.14.
    	
USA PATRIOT ACT NOTIFICATION
    	
64
    
	
9.15.
    	
Bankruptcy Petition
    	
64
    
	
 
    	
 
    	
 
    
	
ARTICLE X   THE ADMINISTRATIVE AGENT
    	
65
    
	
 
    	
 
    	
 
    
	
10.1.
    	
Appointment; Nature of Relationship
    	
65
    
	
10.2.
    	
Powers
    	
65
    
	
10.3.
    	
General Immunity
    	
65
    
	
10.4.
    	
No Responsibility for Loans, Recitals, etc
    	
65
    
	
10.5.
    	
Action on Instructions of Lenders
    	
66
    
	
10.6.
    	
Employment of Administrative Agents and Counsel
    	
66
    
	
10.7.
    	
Reliance on Documents; Counsel
    	
66
    
	
10.8.
    	
Administrative Agent’s Reimbursement and Indemnification
    	
66
    
	
10.9.
    	
Notice of Event of Default
    	
67
    
	
10.10.
    	
Rights as a Lender
    	
67
    

 

iii

 

	
10.11.
    	
Lender Credit Decision, Legal Representation
    	
68
    
	
10.12.
    	
Successor Administrative Agent
    	
68
    
	
10.13.
    	
Administrative Agent and Arranger Fees
    	
69
    
	
10.14.
    	
Delegation to Affiliates
    	
69
    
	
10.15.
    	
Execution of Collateral Documents
    	
69
    
	
10.16.
    	
Collateral Releases
    	
69
    
	
10.17.
    	
Syndication Agents, etc.
    	
70
    
	
10.18.
    	
No Advisory or Fiduciary Responsibility
    	
70
    
	
 
    	
 
    	
 
    
	
ARTICLE XI   SETOFF; RATABLE PAYMENTS
    	
70
    
	
 
    	
 
    	
 
    
	
11.1.
    	
Setoff
    	
70
    
	
11.2.
    	
Ratable Payments
    	
71
    
	
 
    	
 
    	
 
    
	
ARTICLE XII   BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
    	
71
    
	
 
    	
 
    	
 
    
	
12.1.
    	
Successors and Assigns
    	
71
    
	
12.2.
    	
Participations
    	
72
    
	
12.3.
    	
Assignments
    	
73
    
	
 
    	
 
    	
 
    
	
ARTICLE XIII   NOTICES
    	
75
    
	
 
    	
 
    	
 
    
	
13.1.
    	
Notices; Effectiveness; Electronic Communication
    	
75
    
	
 
    	
 
    	
 
    
	
ARTICLE XIV   COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION
    	
76
    
	
 
    	
 
    	
 
    
	
14.1.
    	
Counterparts; Effectiveness
    	
76
    
	
14.2.
    	
Electronic Execution of Assignments
    	
76
    
	
 
    	
 
    	
 
    
	
ARTICLE XV   CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
    	
76
    
	
 
    	
 
    	
 
    
	
15.1.
    	
CHOICE OF LAW
    	
76
    
	
15.2.
    	
CONSENT TO JURISDICTION
    	
76
    
	
15.3.
    	
WAIVER OF JURY TRIAL
    	
77
    

 

iv

 

	
SCHEDULES
    
	
 
    
	
PRICING   SCHEDULE
    
	
 
    
	
SCHEDULE   1 – Commitments
    
	
 
    
	
SCHEDULE   5.8 - Subsidiaries
    
	
 
    
	
SCHEDULE   5.14 – Properties
    
	
 
    
	
SCHEDULE   6.11 – Indebtedness
    
	
 
    
	
SCHEDULE   6.14 – Investments
    
	
 
    
	
SCHEDULE   6.16 – Liens
    
	
 
    
	
EXHIBITS
    
	
 
    
	
EXHIBIT A   – Reserved
    
	
 
    
	
EXHIBIT B   – Form of Compliance Certificate
    
	
 
    
	
EXHIBIT C   – Form of Assignment and Assumption Agreement
    
	
 
    
	
EXHIBIT D   – Form of Borrowing Notice
    
	
 
    
	
EXHIBIT E   – Form of Note
    
	
 
    
	
EXHIBIT F   – Form of Increasing Lender Supplement
    
	
 
    
	
EXHIBIT G   – Form of Augmenting Lender Supplement
    
	
 
    
	
EXHIBIT H   – Reserved
    
	
 
    
	
EXHIBIT I-1   – Form of Borrowing Subsidiary Agreement
    
	
 
    
	
EXHIBIT I-2   – Form of Borrowing Subsidiary Termination
    

 

v

 

CREDIT AGREEMENT

 

This Credit Agreement (this “Agreement”), dated as of June 15, 2012, is among Arkansas Best Corporation and each of its direct or indirect Subsidiaries that joins this Agreement from time to time as a Borrowing Subsidiary, the Lenders and U.S. Bank National Association, a national banking association, as Administrative Agent.  The parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

As used in this Agreement:

 

“Acquisition” means any transaction, or any series of related transactions, consummated after the date of this Agreement, by which any Borrower or any Subsidiary (i) acquires any going 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 which 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.

 

“Active Subsidiary” means each Subsidiary which, as of the most recent fiscal quarter of the Parent, for the period of four (4) consecutive fiscal quarters then ended for which financial statements have been delivered pursuant to Section 6.1, contributed greater than 2% of the Parent’s Consolidated EBITDA for such period or greater than 2% of the Parent’s total assets as of the end of such period.

 

“Additional Commitment” is defined in Section 2.20.

 

“Additional Commitment Amendment” is defined in Section 2.20.

 

“Adjusted Leverage Ratio” is defined in Section 6.23(b).

 

“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.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“Advance” means a borrowing hereunder of Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.

 

“Affected Lender” is defined in Section 2.16.

 

1

 

“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 the same may be increased from time to time pursuant to Section 2.20 or reduced from time to time pursuant to Section 2.4 or 2.9.    As of the date of this Agreement, the Aggregate Commitment is $100,000,000.

 

“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.

 

“Alternate Base Rate” means, for any day, a rate of interest per annum equal to the highest of (i) the Prime Rate for such day, (ii) the sum of the Federal Funds Effective Rate for such day plus 0.50% per annum and (iii) the Eurodollar Rate (without giving effect to the Applicable Margin) for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) for Dollars plus 1.25%, provided that, for the avoidance of doubt, the Eurodollar Rate for any day shall be based on the rate reported by the applicable financial information service at approximately 11:00 a.m. London time on such day.

 

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

 

“Applicable Pledge Percentage” means, in the case of a pledge of equity interests of a First Tier Foreign Subsidiary, 65%.

 

“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 Sole Lead Arranger and Sole Book Runner.

 

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

 

“Augmenting Lender” is defined in Section 2.20.

 

“Authorized Officer” means any of the chief financial officer, treasurer, assistant treasurer or corporate secretary of any Borrower, acting singly.

 

2

 

“Base Rate” means, for any day, a rate per annum equal to (i) the Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case changing when and as the Alternate Base Rate changes.

 

“Base Rate Advance” means an Advance which, except as otherwise provided in Section 2.7, bears interest at the Base Rate.

 

“Base Rate Loan” means a Loan which, except as otherwise provided in Section 2.7, bears interest at the Base Rate.

 

“Borrowers” means, collectively, the Parent and each Material Domestic Subsidiary of the Parent that becomes a Borrowing Subsidiary hereunder pursuant to Section 2.19.

 

“Borrowing Date” means a date on which an Advance is made hereunder.

 

“Borrowing Notice” is defined in Section 2.5.

 

“Borrowing Subsidiary” means, at any time, each Material Domestic Subsidiary designated as a Borrowing Subsidiary by the Parent pursuant to Section 2.19, in each case until such Person has ceased to be a Borrowing Subsidiary pursuant to Section 2.19.

 

“Borrowing Subsidiary Agreement” means a Borrowing Subsidiary Agreement substantially in the form of Exhibit I-1.

 

“Borrowing Subsidiary Termination” means a Borrowing Subsidiary Termination substantially in the form of Exhibit I-2.

 

“Business Day” means (i) with respect to any borrowing, payment or rate selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on which banks generally are open in New York City, New York, Minneapolis, Minnesota and London, England for the conduct of substantially all of their commercial lending activities, interbank wire transfers can be made on the Fedwire system and dealings in 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, New York 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, without duplication, any expenditures for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of the Parent and its Subsidiaries prepared in accordance with GAAP.

 

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

 

“Capitalized Lease Obligations” of a Person means the principal amount of the obligations of such Person under Capitalized Leases which would be required to be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP.

 

3

 

 

“Cash Equivalent Investments” means (i) short-term obligations of, or fully guaranteed by, the United States of America, (ii) commercial paper rated A-1 or better by S&P or P-1 or better by Moody’s, (iii) demand deposit accounts maintained in the ordinary course of business, (iv) variable denomination floating rate demand notes issued by companies with a parent credit rating of at least A- by S&P or the equivalent rating by Moody’s, (v) certificates of deposit issued by and time deposits (A) with (1) Lenders or (2) commercial banks (whether domestic or foreign) having assets in excess of $500,000,000 or (B) which are FDIC insured (up to the amount covered by such FDIC insurance); provided in each case that the same provides for payment of both principal and interest (and not principal alone or interest alone) and is not subject to any contingency regarding the payment of principal or interest, (vi) shares of money market mutual funds that are rated at least “AAAm” or “AAAG” by S&P or “P-1” or better by Moody’s and (vii) other Investments consented to by the Required Lenders.

 

“Cash Management Services” means any banking services that are provided to any Borrower or any Subsidiary by the Administrative Agent or any of its Affiliates (other than pursuant to this Agreement) or any other Lender or any of its Affiliates, 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.

 

“Change in Control” means (i) the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934) of 40% or more of the outstanding shares of voting stock of the Parent; (ii) within any twelve-month period, occupation of a majority of the seats (other than vacant seats) on the board of directors of the Parent by Persons who were neither (x) nominated by the board of directors of the Parent nor (y) appointed by directors so nominated; or (iii) the Parent shall cease to own, directly or indirectly through one or more Wholly-Owned Subsidiaries, free and clear of all Liens (other than Liens permitted under Section 6.16), 100% of the outstanding voting equity interests of any other Borrower and the Guarantors; provided that any of the foregoing shall not constitute a “Change of Control” to the extent the relevant Loan Party has been released from its Obligations pursuant to transactions permitted under and releases contemplated by the Loan Documents to which it is a party.

 

“Change in Law” is defined in Section 3.1.

 

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

 

“Collateral” means any and all property owned, leased or operated by a Person covered by the Collateral Documents in which a security interest or Lien is or is required to be granted thereunder and any and all other property of any Loan Party, now existing or hereafter acquired, that may be or become subject to a security interest or Lien in favor of the Administrative Agent, on behalf of itself and the Lenders, to secure the Secured Obligations.

 

“Collateral Documents” means, collectively, the Security Agreement, the Mortgages, and all other agreements, instruments and documents that are intended to create, perfect or evidence

 

4

 

Liens upon the Collateral as security for payment of the Secured Obligations, including, without limitation, all other security agreements, pledge agreements, UCC financing statements, mortgages, assignments and deeds of trust whether heretofore, now, or hereafter executed by the Loan Parties or any of their Subsidiaries and delivered to the Administrative Agent.

 

“Commitment” means, as to any Lender, the aggregate commitment of such Lender to make Loans as set forth in Schedule 1, as it may be modified as a result of any assignment that has become effective pursuant to Section 12.3(c) or as otherwise modified from time to time pursuant to the terms hereof.  After advancing the Loans, each reference to a Lender’s Commitment shall refer to that Lender’s Pro Rata Share of the Loans.

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

 

“Consolidated Adjusted Funded Indebtedness” means, at any time, the sum of (a) Indebtedness of the Parent and its Subsidiaries of the types described in clauses (i), (ii), (iv), (vi), (vii) and (x) of the definition of Indebtedness, calculated on a consolidated basis as of such time (provided ̧ that solely the issued, non-cash collateralized obligations with respect to standby and commercial Letters of Credit shall be included in such calculation), plus (b) the product of Consolidated Rentals for the immediately preceding twelve month period, determined as of the end of such period, multiplied by six (6), minus (c) the amount of Unrestricted Cash at such time in excess of $25,000,000 in the aggregate.

 

“Consolidated EBITDA” means Consolidated Net Income plus, to the extent deducted from revenues in determining Consolidated Net Income and without duplication, (i) Consolidated Interest Expense, (ii) expense for taxes paid in cash or accrued, (iii) depreciation, (iv) amortization (including, without limitation, amortization of net actuarial losses), (v) extraordinary non-cash expenses, charges or losses incurred other than in the ordinary course of business and (vi) non-cash expenses related to stock based compensation, minus, to the extent included in Consolidated Net Income, (1) extraordinary income or gains realized other than in the ordinary course of business, (2) income tax credits and refunds (to the extent not netted from tax expense), (3) any cash payments made during such period in respect of items described in clauses (v) or (vi) above subsequent to the fiscal quarter in which the relevant non-cash expenses, charges or losses were incurred, all calculated for the Parent and its Subsidiaries on a consolidated basis.  For the purposes of calculating Consolidated EBITDA for any period of four (4) consecutive fiscal quarters (each, a “Reference Period”), (i) if at any time during such Reference Period any Borrower or any Subsidiary shall have made any Material Disposition, the Consolidated EBITDA for such Reference Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such Reference Period, and (ii) if during such Reference Period any Borrower or any Subsidiary shall have made a Material Acquisition, Consolidated EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto on a basis consistent with the calculation of Consolidated EBITDA hereunder as if such Material Acquisition occurred on the first day of such Reference Period;

 

5

 

provided that such pro forma adjustments shall not be made in calculating the Fixed Charge Coverage Ratio.

 

“Consolidated EBITDAR” means the sum of (a) Consolidated EBITDA plus (b) Consolidated Rentals for the applicable Reference Period plus (c) fees and expenses arising directly in respect of the FastCat Acquisition or any other Permitted Acquisition (including, without limitation, fees and expenses directly associated with the financing of such Acquisition) plus (d) fees and expenses arising directly from failed Acquisitions and divestitures, net of any gains from such failed Acquisitions and divestitures, in each case of clauses (c) and (d), reasonably acceptable to the Administrative Agent.

 

“Consolidated Interest Expense” means, with reference to any period, the interest expense of the Parent and its Subsidiaries calculated on a consolidated basis for such period.

 

“Consolidated Net Income” means, with reference to any period, the net income (or loss) of the Parent and its Subsidiaries calculated on a consolidated basis for such period.

 

“Consolidated Rentals” means, with reference to any period, the Rentals of the Parent and its Subsidiaries calculated on a consolidated basis for such period.

 

“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, or agrees to maintain the net worth or 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.

 

“Conversion/Continuation Notice” is defined in Section 2.6.

 

“Credit Extension” means the making of an Advance hereunder.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.

 

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

 

“Defaulting Lender” means, subject to Section 2.18(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrowers in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied or waived, or (ii) pay to the Administrative Agent or any other Lender any other amount required to

 

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be paid by it hereunder within two (2) Business Days of the date when due, (b) has notified the Borrowers or the Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the Borrowers, to confirm in writing to the Administrative Agent and the Borrowers that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrowers), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets (other than an Undisclosed Administration), including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.18(b)) upon delivery of written notice of such determination to the Borrowers and each Lender.

 

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

 

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

 

“Effective Date” means the date on which the conditions specified in Section 4.1 are satisfied.

 

“Eligible Assignee” means (i) a Lender; (ii) an Approved Fund; (iii) 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; (iv) 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, 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, 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 (iv); or (v) the central bank of any country that is a member of the OECD.

 

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“Environmental Laws” means any and all federal, state, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, injunctions, permits, concessions, grants, franchises, licenses and other governmental restrictions relating to (i) the protection of the environment, (ii) personal injury or property damage relating to the release or discharge of Hazardous Materials, (iii) emissions, discharges or releases of pollutants, contaminants, hazardous substances or wastes into surface water, ground water or land, or (iv) 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 any Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the failure with respect to any Plan to satisfy the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 303(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by any 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 any 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 any Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal of any Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan; or (g) the receipt by any Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Borrower or any ERISA Affiliate of any notice, concerning the imposition upon any Borrower or any of its ERISA Affiliates of withdrawal liability under Section 4201 of ERISA 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.

 

“Eurodollar Advance” means an Advance which, except as otherwise provided in Section 2.7, bears interest at the applicable Eurodollar Rate.

 

“Eurodollar Base Rate” means, with respect to a Eurodollar Advance for the relevant Interest Period, the applicable British Bankers’ Association Interest Settlement Rate for deposits in Dollars 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 is not available to the Administrative Agent for any reason, the applicable Eurodollar 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

 

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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 Eurodollar Base Rate for the relevant Interest Period shall instead be the rate 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 (2) Business Days prior to the first day of such Interest Period, in the approximate amount of U.S. Bank’s relevant Eurodollar Loan and having a maturity equal to such Interest Period.

 

“Eurodollar Loan” means a Loan which, except as otherwise provided in Section 2.7, bears interest at the applicable Eurodollar Rate.

 

“Eurodollar Rate” means, with respect to a Eurodollar Advance for the relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar 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 Taxes” means, in the case of each Lender or applicable Lending Installation and the Administrative Agent, (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case (a) imposed by the respective jurisdiction (or political subdivision thereof) under the laws of which such Lender or the Administrative Agent is incorporated or is organized or in which its principal executive office is located or, in the case of a Lender, in which such Lender’s applicable Lending Installation is located, or (b) that are Other Connection Taxes, (ii) in the case of a Lender, any U.S. federal withholding tax that is imposed on amounts payable to such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (a) such Lender acquires such interest in the Loan or Commitment or (b) such Lender changes its Lending Installation, except in each case to the extent that, pursuant to Section 3.5(a), amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Installation, (iii) Taxes attributable to the failure by any Lender, applicable Lending Installation or Administrative Agent to comply with Section 3.5(f), and (iv) any U.S. federal withholding taxes imposed under FATCA.

 

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

 

“Facility Termination Date” means June 15, 2017 or any earlier date on which the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof.

 

“FastCat” means, collectively, Panther, Panther Global Premium Logistics, Inc., an Ohio corporation, Panther II, Inc., an Ohio corporation, Panther II Transportation, Inc., an Ohio corporation, Elite Transportation Services, LLC, an Oregon limited liability company, Integres

 

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Global Logistics, Inc., a Delaware corporation and Key Transportation Services, Inc., a Texas corporation.

 

“FastCat Acquisition” means the acquisition by the Parent of FastCat, pursuant to the Purchase Agreement.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), and any current or future regulations or official interpretations thereof.

 

“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 which is a Business Day, the average of the quotations at approximately 10:00 a.m. (Central time) on such day on such transactions received by the Administrative Agent from three (3) Federal funds brokers of recognized standing selected by the Administrative Agent in its sole discretion.

 

“Fee Letter” is defined in Section 10.13.

 

“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.

 

“First Tier Foreign Subsidiary” means any Foreign Subsidiary that is directly owned by a Loan Party.

 

“Fixed Charge Coverage Ratio” is defined in Section 6.23(a).

 

“Foreign Subsidiary” means any Subsidiary of a Loan Party 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 as of the date of any assignment thereto pursuant to Section 12.3 hereof) 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, subject at all times to Section 9.8.

 

“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including, without limitation, any supra-national bodies such as the

 

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European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervisory Practices or any successor or similar authority to any of the foregoing).

 

“Guarantor” means each Material Domestic Subsidiary of the Parent that is a party to the Guaranty, either on the date hereof or pursuant to the terms of Section 2.19 or Section 6.24(a), and each such Person’s successors and assigns.

 

“Guaranty” means that certain Guaranty dated as of the date hereof executed by each of the Guarantors in favor of the Administrative Agent, for the ratable benefit of the Lenders, as amended, restated, supplemented or otherwise modified, renewed or replaced from time to time subject to the terms hereof and thereof.

 

“Hazardous Materials” means any explosive or radioactive substances or wastes, any hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and any other substances or wastes of any nature regulated 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.

 

“Increasing Lender” is defined in Section 2.20.

 

“Indebtedness” of a Person means, without duplication, such Person’s (i) obligations for borrowed money (including the Obligations hereunder), (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 which are evidenced by notes, acceptances, or other instruments, (v) obligations of such Person to purchase securities or other Property arising out of or in connection with the sale of the same or substantially similar securities or Property, (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 Rate Management Transactions and other Financial Contracts, (x) Receivables Transaction Attributed Indebtedness, and (xi) any other obligation for borrowed money or other financial accommodation which in accordance with GAAP would be shown as a liability on the consolidated balance sheet of such Person; provided that no compensation payments made to, or compensation accrued but unpaid as of the measurement date relating to, any employee of any Person acquired through the FastCat Acquisition or any other Permitted Acquisition shall be deemed Indebtedness for so long as (i) the requirement to pay such compensation arises under the agreements, documents and instruments evidencing the applicable Acquisition and (ii) such compensation is not evidenced by a promissory note, instrument or other similar agreement; provided, further, that surety bonds shall not be deemed Indebtedness.

 

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“Indemnified Taxes” means Taxes imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document, other than Excluded Taxes and Other Taxes.

 

“Interest Period” means, with respect to a Eurodollar Advance, a period of one (1), two (2), three (3), six (6), or if available to all Lenders, nine (9) or twelve (12) months, or such shorter period as the Borrowers may request in order to correspond with the scheduled dates set forth in Section 2.9(b) and the Administrative Agent may agree in its reasonable discretion (an “Alternate Period”), in each case commencing on a Business Day selected by a Borrower pursuant to this Agreement.  Such Interest Period shall end on the day which corresponds numerically to such date one (1), two (2), three (3), six (6), nine (9) or twelve (12) months thereafter or on the final day of the number of days of such Alternate Period, provided, however, that for all Interest Periods other than the Alternate Period, if there is no such numerically corresponding day in such next, second, third, sixth, ninth or twelfth succeeding month, such Interest Period shall end on the last Business Day of such next, second, third, sixth, ninth or twelfth succeeding month.  If an Interest Period would otherwise end on a day which 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.  The Interest Period to be used in the calculation of the Eurodollar Base Rate for any Alternate Period of thirty (30) days or less in duration shall be one (1) month.

 

“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 certificates of deposit owned by such Person; and structured notes, derivative financial instruments and other similar instruments or contracts owned by such Person.

 

“Lenders” means the lending institutions listed on the signature pages of this Agreement and their respective successors and assigns.

 

“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.

 

“Letter of Credit” of a Person means a letter of credit or similar instrument which is issued upon the application of such Person or 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 or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the

 

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interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement).

 

“List of Closing Documents” means the List of Closing Documents, dated as of June 15, 2012, agreed to among the Borrowers and the Administrative Agent, identifying the agreements, documents and instruments required to be delivered on the Effective Date or within an agreed period of time thereafter, as applicable.

 

“Loan” means any Loan extended by the Lenders to the Borrowers pursuant to Section 2.1.

 

“Loan Documents” means this Agreement, the Collateral Documents, the Guaranty, any Note or Notes, the Fee Letter, each Borrowing Subsidiary Agreement and all related agreements delivered pursuant to Sections 2.19 or 4.3, each Increasing Lender Supplement and Augmenting Lender Supplement and all related agreements delivered pursuant to Section 2.20 and each Assignment and Assumption Agreement, and any amendment, restatement, supplement or other modification of any of the foregoing, now or in the future, executed by any Borrower for the benefit of the Administrative Agent or any Lender in connection with this Agreement.

 

“Loan Party” or “Loan Parties” means, individually or collectively, the Borrowers and the Guarantors.

 

“Maintenance Capital Expenditures” means, for any period, 50% of depreciation expense as reported in accordance with GAAP on the Parent’s consolidated statement of cash flows for such period.

 

“Mandatory Indebtedness Retirement Obligations” means, at any time, without duplication, the sum of (i) the quotient of (A) the sum of (1) Capitalized Lease Obligations plus (2) Notes Payable, divided by (B) three (3), plus (ii) principal Indebtedness maturing during the then most-recently ended four (4) fiscal quarters.

 

“Material Acquisition” means any Permitted Acquisition that involves the payment of consideration by a Borrower or Subsidiary in excess of $5,000,000.

 

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

 

“Material Disposition” means any sale, transfer or disposition of property or series of related sales, transfers, or dispositions of property (other than inventory in the ordinary course of business) that yields gross proceeds to a Borrower or Subsidiary in excess of $5,000,000.

 

“Material Domestic Subsidiary” means each Domestic Subsidiary of the Parent (i) which, as of the most recent fiscal quarter of the Parent, for the period of four (4) consecutive fiscal quarters then ended for which financial statements have been delivered pursuant to Section 6.1, contributed greater than 5% of the Parent’s Consolidated EBITDA for such period or (ii) which

 

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contributed greater than 5% of the Parent’s total assets as of such date; provided that, if at any time the aggregate amount of the Consolidated EBITDA or consolidated total assets of all Subsidiaries that are not Material Domestic Subsidiaries exceeds 15% of the Parent’s Consolidated EBITDA for any such period or 15% of the Parent’s total assets as of the end of any such fiscal quarter, the Parent (or, in the event the Parent has failed to do so within twenty (20) days, the Administrative Agent) shall designate sufficient Subsidiaries of the Parent as “Material Domestic Subsidiaries” to eliminate such excess, and such designated Subsidiaries shall for all purposes of this Agreement constitute Material Domestic Subsidiaries.

 

“Material Indebtedness” means Indebtedness of any Borrower or any Subsidiary in an outstanding principal amount of $10,000,000 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 which provides for the incurrence of Indebtedness in an amount which would constitute Material Indebtedness (whether or not an amount of Indebtedness constituting Material Indebtedness is outstanding thereunder).

 

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

 

“Mortgage” means each mortgage, deed of trust or other agreement which conveys or evidences a Lien in favor of the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, on real property of a Loan Party, including any amendment, restatement, modification or supplement thereto pursuant to the terms thereof and hereof.

 

“Mortgage Instruments” means such title reports, ALTA title insurance policies (with endorsements), title commitments, evidence of zoning compliance, property insurance, flood certifications and flood insurance (and, if applicable FEMA form acknowledgements of insurance), opinions of counsel, ALTA surveys, other surveys, appraisals, environmental assessments and reports, environmental insurance, mortgage tax affidavits and declarations and other similar information and related certifications as are requested by, and in form and substance reasonably acceptable to, the Administrative Agent from time to time; provided, that solely with respect to the real property for which Mortgages are being delivered as of the Effective Date or promptly thereafter pursuant to Section 6.25, the only Mortgage Instruments that will be required are those described in the section entitled “Mortgage and Other Real Property-Related Deliveries” in the List of Closing Documents.

 

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“Net Capital Expenditures” means Capital Expenditures net of proceeds of asset sales or dispositions permitted under this Agreement (including pursuant to a casualty or a condemnation or similar proceeding) that are reinvested in accordance with Section 2.4(c).

 

“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

 

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(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).

 

“Net Proceeds” means, with respect to any event, (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and when received, (ii)  any insurance proceeds and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third parties (in the case of fees, other than to Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a casualty or a condemnation or similar proceeding), the amount of all payments required to be made as a result of such event to repay Indebtedness (other than Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event and (iii) the amount of all taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the next succeeding year and that are directly attributable to such event (as determined reasonably and in good faith by an Authorized Officer).

 

“Non-U.S. Lender” means a Lender that is not a United States person as defined in Section 7701(a)(30) of the Code.

 

“Note” is defined in Section 2.10(d).

 

“Notes Payable” means all interest-bearing Indebtedness, excluding (i) the Obligations hereunder, (ii) Capitalized Lease Obligations, (iii) Subordinated Indebtedness and (iv) Receivables Transaction Attributed Indebtedness.

 

“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans and all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Borrowers or any Borrower to the Lenders or to any Lender, the Administrative Agent or any indemnified party arising under the Loan Documents.

 

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

 

“Other Connection Taxes” means, with respect to any recipient, Taxes imposed as a result of a present or former connection between such recipient and the jurisdiction imposing such Tax (other than connections arising from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

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“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.

 

“Outstanding Credit Exposure” means, as to any Lender at any time, the principal amount of its Loans outstanding at such time.

 

“Panther” means Panther Expedited Services, Inc., a Delaware corporation.

 

“Parent” means Arkansas Best Corporation, a Delaware corporation.

 

“Participant” is defined in Section 12.2(a).

 

“Participant Register” is defined in Section 12.2(c).

 

“Patriot Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), as amended from time to time.

 

“Payment Date” means the last day of each calendar quarter, provided, that if such day is not a Business Day, the Payment Date shall be the immediately preceding Business Day.

 

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

 

“Permitted Acquisition” means (i) the FastCat Acquisition and (ii) any other Acquisition made by any Borrower or any Subsidiary, 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 contained 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 that has been (if required by the governing documents of the seller or entity to be acquired) approved by the board of directors or other applicable governing body of the seller or entity to be acquired, (c) the business to be acquired in such Acquisition is in the same or a related line of business as any Borrower or Subsidiary or a line of business incidental thereto, (d) as of the date of the consummation of such Acquisition, all material approvals required in connection therewith shall have been obtained, (e) the Parent shall have (i) a pro forma Adjusted Leverage Ratio of less than or equal to 2.75 to 1.0 for the four (4) fiscal quarter period most recently ended prior to the date of such Acquisition and (ii) pro forma compliance with the financial covenants contained in Section 6.23 for such period, in each case, calculated as if such Acquisition, including the consideration therefor, had been consummated on the first day of such period; provided, that if the total consideration for such Acquisition exceeds $5,000,000, the Parent shall have furnished to the Administrative Agent, prior to the consummation of the applicable Permitted Acquisition, a certificate demonstrating compliance with clauses (i) and (ii) of this clause (e) in reasonable detail; provided, further, that if the aggregate consideration for all Acquisitions with purchase prices less than $5,000,000 in any fiscal year exceeds $10,000,000, then the Parent shall be required to make the deliveries required by this clause (e) for all remaining Acquisitions consummated during such fiscal year, irrespective of the purchase price therefor, and (f) the total

 

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consideration paid (i) for any single Permitted Acquisition shall not exceed $50,000,000, and (ii) all Permitted Acquisitions shall not exceed $100,000,000 in the aggregate in any fiscal year.

 

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

 

“Plan” means an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code as to which any Borrower or any ERISA Affiliate may have any liability.

 

“Prepayment Event” means (i) any sale, transfer or other disposition of any property or asset of any Borrower or any Subsidiary (other than dispositions permitted under Sections 6.13(a), (b) or (d)) which, when taken in the aggregate with any event set forth in clause (ii) of this definition, exceeds $15,000,000 in the aggregate in any fiscal year; or (ii) any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of any Borrower or any Subsidiary which, when taken in the aggregate with any event set forth in clause (i) of this definition, exceeds $15,000,000 in the aggregate in any fiscal year; or (iii) the incurrence by any Borrower or any Subsidiary of any Subordinated Indebtedness other than in conjunction with up to $10,000,000 of Permitted Acquisitions or other Acquisitions consented to by the Lenders during the term of this Agreement; provided, that an Authorized Officer of the applicable Person shall deliver a certificate certifying that such Subordinated Indebtedness was incurred to fund a Permitted Acquisition or other Acquisition consented to by the Lenders prior to the consummation of such Acquisition; or (iv) any Sale and Leaseback Transaction that involves consideration payable to the Borrowers or their Subsidiaries in connection with the applicable sale which in the aggregate with all other consideration for Sale and Leaseback Transactions, exceeds $15,000,000 at any time outstanding.

 

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

 

“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 by them to any customer), changing when and as said prime rate changes.

 

“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.

 

“Pro Rata Share” means, with respect to a Lender, a portion equal to a fraction the numerator of which is such Lender’s outstanding principal amount of Loans and the denominator of which is the aggregate outstanding principal amount of the Loans of all Lenders; provided, that when a Defaulting Lender shall exist, “Pro Rata Share” shall mean the percentage of the outstanding principal amount of the Loans of all Lenders (disregarding the Loans of any Defaulting Lender) represented by such Lender’s outstanding principal amount of Loans.

 

“Purchase Agreement” means that certain Stock Purchase Agreement dated as of June 15, 2012 by and among the Parent, Panther, the Sellers under and as defined therein, and Fenway Panther Holdings, LLC, as amended, restated, supplemented or otherwise modified from time to

 

17

 

time in a manner reasonably satisfactory to the Administrative Agent, or if such amendment, restatement, supplement or modification is adverse to the Lenders, with the written consent of the Lenders (not to be unreasonably withheld, conditioned or delayed).

 

“Purchasers” is defined in Section 12.3(a).

 

“Qualified Receivables Transaction” means any transaction or series of transactions that may be entered into by any Borrower or any other Subsidiary of the Parent pursuant to which any Borrower or any other Subsidiary of the Parent may sell, convey or otherwise transfer to a newly-formed Subsidiary or other special-purpose entity, or any other Person, any accounts or notes receivable and rights related thereto, provided that (i) all of the terms and conditions of such transaction or series of transactions, including without limitation the amount and type of any recourse to any Borrower or any other Subsidiary with respect to the assets transferred are no more restrictive or onerous on the relevant Borrowers or Subsidiaries than the terms and conditions hereunder and under the other Loan Documents, (ii) any Indebtedness incurred in connection with such transaction or series of transactions is incurred at a market rate of interest, (iii) any security given by such Person or Persons to secure such Indebtedness is limited to (A) the accounts receivable of such Person or Persons, the goods and inventory the sale of which gave rise to such accounts receivable, the liens, security interests, instruments and agreements arising under the contracts evidencing such accounts receivable and securing payment therefor, the contracts, records, and rights and payments directly corresponding to such accounts receivable, and the proceeds of any of the foregoing, in each case, sold to any special-purpose entity formed pursuant to any such Qualified Receivables Transaction and pledged thereunder, (B) all Deposit Accounts, Securities Accounts, other deposits (general or special, time or demand, provisional or final) with any bank or financial institution, cash collections, and other cash proceeds, and all proceeds of any of the foregoing, in each case related to any such Qualified Receivables Transaction, and (C) all assets of such special-purpose entity, and (iv) the Receivables Transaction Attributed Indebtedness incurred in such transaction or series of transactions does not exceed the principal amount of $100,000,000.

 

“Quotation Date” means, in relation to any Interest Period for which an interest rate is to be determined, two (2) 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.

 

“Rate Management Transaction” means any transaction (including an agreement with respect thereto) now existing or hereafter entered by any Borrower or any Subsidiary which 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

 

18

 

combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures.

 

“Receivables Transaction Attributed Indebtedness” means the amount of obligations outstanding under the legal documents entered into as part of any Qualified Receivables Transaction on any date of determination.

 

“Register” is defined in Section 12.3(d).

 

“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 stocks applicable to member banks of the Federal Reserve System.

 

“Rentals” of a Person means the aggregate fixed amounts payable by such Person under any Operating Lease.

 

“Reports” is defined in Section 9.6(a).

 

“Required Lenders” means at least two (2) Lenders in the aggregate having greater than 66 2/3% of the Aggregate Outstanding Credit Exposure.  The Commitments and Outstanding Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.

 

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

 

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any equity interest in any 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 any Borrower or any Subsidiary thereof or any option, warrant or other right to acquire any such equity interest in any Borrower or any Subsidiary thereof.

 

“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, in each case, any amendments to such regulations.

 

19

 

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business.

 

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

 

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

 

“SEC” means the U.S. Securities and Exchange Commission.

 

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

 

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

 

“Security Agreement” means that certain Pledge and Security Agreement dated as of the date hereof by and among the Loan Parties and the Administrative Agent, as amended, restated, supplemented or otherwise modified, renewed or replaced from time to time pursuant to the terms hereof and thereof.

 

“Solvent” means, with respect to any Person, (a) the fair value of the assets of such Person and its Subsidiaries on a consolidated basis, at a fair valuation, will exceed the debts and liabilities, subordinated, contingent or otherwise, of such Person and its Subsidiaries on a consolidated basis; (b) the present fair saleable value of the Property of such Person and its Subsidiaries on a consolidated basis will be greater than the amount that will be required to pay the probable liability of such Person and its Subsidiaries on a consolidated basis on their debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) such Person 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 (d) such Person 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.

 

“Stated Rate” is defined in Section 2.17.

 

“Subordinated Indebtedness” of a Person means any Indebtedness of such Person the payment of which is subordinated to payment of the Secured Obligations to the written satisfaction of the Required Lenders and the Administrative Agent 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 by such Person and one or more of its Subsidiaries, or (ii) any partnership, limited liability company, association,

 

20

 

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 a Borrower.

 

“Substantial Portion” means, with respect to the Property of the Parent and its Subsidiaries, Property which represents more than 10% of the consolidated assets of the Parent and its Subsidiaries taken as a whole or Property which is responsible for more than 10% of the Consolidated Net Income of the Parent and its Subsidiaries taken as a whole, in each case, as would be shown in the consolidated financial statements of the Parent 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 that month which begins the twelve-month period, then the financial statements delivered hereunder for the quarter ending immediately prior to that month).

 

“Syndication Agents” means each of Branch Banking and Trust Company and PNC Bank, National Association.

 

“Taxes” means any and all present or future taxes, duties, levies, imposts, deductions, fees, assessments, charges or withholdings (including backup withholding) imposed by any Governmental Authority, including interest, additions to tax and penalties applicable thereto.

 

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

 

“Undisclosed Administration” means in relation to a Lender the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator under or based on the law in the country where such Lender is subject to home jurisdiction supervision if applicable law requires that such appointment is not to be publicly disclosed.

 

“United States Person” means any Person that is a United States person as defined in section 7701(a)(30) of the Code.

 

“Unrestricted Cash” means, as of any date of determination, that portion of the Parent’s and its consolidated Domestic Subsidiaries’ aggregate cash and Cash Equivalent Investments that is not encumbered by or subject to any Lien (including, without limitation, any Lien permitted hereunder, other than Liens in favor of the Administrative Agent, for the benefit of the Lenders, granted pursuant to any Collateral Document and bankers’ liens), setoff (other than ordinary course setoff rights of a depository bank arising under a bank depository agreement for customary fees, charges and other account-related expenses due to such depository bank thereunder), counterclaim, recoupment, defense or other right in favor of any Person.

 

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

 

21

 

“Wholly-Owned Subsidiary” of a Person means (i) any Subsidiary of which 100% of the beneficial ownership interests shall at the time be owned or controlled, directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such Person, or by such Person and 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 shall at the time be so owned or controlled.

 

The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.  For purposes of this Agreement, Loans and Advances may be classified and referred to by Type (e.g., a “Eurodollar Loan” or a “Eurodollar Advance”).

 

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 a Loan to the Borrowers on the Effective Date, in an amount equal to such Lender’s Commitment by remitting immediately available funds to an account designated by the Administrative Agent not later than the time specified by the Administrative Agent.  Amounts repaid in respect of Loans may not be reborrowed.  The Borrowers shall be jointly and severally liable in respect of all amounts owing in respect of the Loans.

 

2.2.         Termination.  The Aggregate Outstanding Credit Exposure and all other unpaid Obligations under this Agreement and the other Loan Documents shall be paid in full by the Borrowers on the Facility Termination Date.

 

2.3.         Ratable Loans; Types of Advances.  Each Advance hereunder shall consist of Loans made from the several Lenders ratably according to their Pro Rata Shares on the Effective Date.  The Advances may be Base Rate Advances or Eurodollar Advances, or a combination thereof.

 

2.4.         Termination and Reduction of Commitments; Optional Principal Payments; Mandatory Prepayments.

 

(a)           The Commitments shall terminate on the Effective Date in accordance with Section 4.1.

 

(b)           The Borrowers may from time to time pay, without penalty or premium, all outstanding Base Rate Advances, or, in a minimum aggregate amount of $1,000,000 and incremental amounts in integral multiples of $1,000,000, any portion of the aggregate outstanding Base Rate Advances upon same day notice by 11:00 a.m. (Central time) to the Administrative Agent.  The Borrowers 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 Eurodollar Advances, or, in a minimum aggregate amount of $1,000,000 and incremental amounts in integral multiples of $1,000,000, any portion of the aggregate outstanding Eurodollar Advances upon delivery of a notice by 11:00 a.m. (Central time) to the Administrative Agent at least two (2) Business Days prior to such repayment. Notwithstanding

 

22

 

any contrary provision in any Loan Document, any notice of prepayment delivered by the Borrowers in connection with (i) any refinancing of all or any portion of the Loans, (ii) any incurrence of Indebtedness or (iii) any asset sale or other disposition, in each case the proceeds of which transaction are intended to be used for such prepayment, may be contingent upon the consummation of such transaction and may be revoked by the Borrowers in the event such transaction is not consummated; provided, that should any such revocation occur, the Borrowers shall pay any associated funding indemnification amounts required by Section 3.4 and any other losses incurred by the Lenders as a result of such revocation.  All such amounts pursuant to this Section 2.4(b) shall be applied to the installments of the Loans set forth in Section 2.9(b) in inverse order of maturity.

 

(c)           In the event and on each occasion that any Net Proceeds are received by or on behalf of any Borrower or any Subsidiary in respect of any “Prepayment Event”, the Borrowers shall, within three (3) Business Days after such Net Proceeds are received by any Borrower or any Subsidiary, prepay the Obligations under this Agreement and the other Loan Documents in an aggregate amount equal to 100% of such Net Proceeds; provided, that in the case of any event described in clause (i) or clause (ii) of the definition of the term “Prepayment Event”, if any Borrower or any Subsidiary shall deliver to the Administrative Agent a certificate of an Authorized Officer on behalf of such Person to the effect that it intends to apply the Net Proceeds from such event (or a portion thereof specified in such certificate), within 180 days after receipt of such Net Proceeds, to (x) acquire, replace or rebuild or (y) commence rebuilding or obtain a binding commitment to acquire, replace or rebuild, in each case, real property, equipment or other tangible assets (excluding inventory) to be used in the business of any Borrower or any Subsidiary, and certifying that no Default has occurred and is continuing, then no prepayment shall be required pursuant to this paragraph in respect of the Net Proceeds specified in such certificate, and provided, further, that to the extent any such Net Proceeds therefrom have not been so applied, with respect to clause (x) above, by the end of such 180-day period, or with respect to clause (y) above, by the end of an additional 180-day period, a prepayment shall be required in an amount equal to such Net Proceeds that have not been so applied unless such 180-day period or 360-day period, as applicable, is extended by the Administrative Agent or the Required Lenders in their respective discretion.  All prepayments made pursuant to this Section 2.4(c) shall be applied to the installments of the Loans set forth in Section 2.9(b) in inverse order of maturity.

 

2.5.         Method of Selecting Types and Interest Periods for Advances.  The applicable Borrower shall select the Type of Advance and, in the case of each Eurodollar Advance, the Interest Period applicable thereto from time to time.  The applicable Borrower shall give the Administrative Agent irrevocable notice in the form of Exhibit D (a “Borrowing Notice”) not later than 11:00 a.m. (Central time) on the Borrowing Date of each Base Rate Advance, two (2) Business Days before the Borrowing Date for each Eurodollar Advance, specifying:

 

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

 

(ii)                                  the aggregate amount of such Advance, and

 

(iii)                               the Type of Advance selected.

 

23

 

 

Not later than 1:00 p.m. (Central 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 applicable Borrower at the Administrative Agent’s aforesaid address.

 

2.6.         Conversion and Continuation of Outstanding Advances; Maximum Number of Interest Periods.  Base Rate Advances shall continue as Base Rate Advances unless and until such Base Rate Advances are converted into Eurodollar Advances pursuant to this Section 2.6 or are repaid in accordance with Section 2.4.  Each Eurodollar Advance shall continue as a Eurodollar Advance until the end of the then applicable Interest Period therefor, at which time such Eurodollar Advance shall be automatically converted into a Base Rate Advance unless (x) such Eurodollar Advance is or was repaid in accordance with Section 2.4 or (y) the applicable Borrower shall have given the Administrative Agent a Conversion/Continuation Notice (as defined below) requesting that, at the end of such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance for the same or another Interest Period.  The applicable Borrower may elect from time to time to convert all or any part of a Base Rate Advance into a Eurodollar Advance.  The applicable Borrower shall give the Administrative Agent irrevocable notice (a “Conversion/Continuation Notice”) of each conversion of a Base Rate Advance into a Eurodollar Advance, conversion of a Eurodollar Advance to a Base Rate Advance, or continuation of a Eurodollar Advance not later than 11:00 a.m. (Central time) at least two (2) Business Days prior to the date of the requested conversion or continuation, specifying:

 

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

 

(ii)                                  the amount of such Advance which is to be converted into or continued as a Eurodollar Advance and the duration of the Interest Period applicable thereto.

 

After giving effect to all Advances, all conversions of Advances from one Type to another and all continuations of Advances of the same Type, there shall be no more than five (5) Interest Periods in effect hereunder.

 

2.7.         Interest Rates.  Each Base Rate Advance shall bear interest on the outstanding principal amount thereof, for each day from and including the date such Advance is made or, for Advances, is automatically converted from a Eurodollar Advance into a Base Rate Advance pursuant to Section 2.6, to but excluding the date it becomes due or is converted into a Eurodollar Advance pursuant to Section 2.6 hereof, at a rate per annum equal to the Base Rate for such day.  Changes in the rate of interest on that portion of any Advance maintained as a Base Rate Advance will take effect simultaneously with each change in the Alternate Base Rate.  Each Eurodollar Advance shall bear interest on the outstanding principal amount thereof from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period at the interest rate applicable to such Eurodollar Advance based upon the applicable Borrower’s selections under Sections 2.5 and 2.6 and the Pricing Schedule.  No Interest Period may end after the Facility Termination Date.

 

24

 

2.8.         Rates Applicable After Event of Default.  Notwithstanding anything to the contrary contained in Section 2.5, 2.6 or 2.7, during the continuance of an Event of Default the Required Lenders may, at their option, by written notice to the Borrowers (which notice (and implementation) may be revoked at the option of the Required Lenders notwithstanding any provision of Section 8.3 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 Eurodollar Advance.  During the continuance of an Event of Default the Required Lenders may, at their option, by notice to the Borrowers (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 8.3 requiring unanimous consent of the Lenders to changes in interest rates), declare that (i) each Eurodollar Advance shall from and after such notice bear interest for the remainder of the applicable Interest Period at the rate otherwise applicable to such Interest Period plus 2.00% per annum and (ii) each Base Rate Advance shall from and after such notice bear interest at a rate per annum equal to the Base Rate in effect from time to time plus 2.00% per annum, provided that, during the continuance of an Event of Default under Section 7.6 or 7.7, the interest rates set forth in clauses (i) and (ii) 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 waived, the interest rate applicable to advances shall revert to the rates applicable prior to the occurrence of an Event of Default.

 

2.9.         Method of Payment; Repayment of Loans.

 

(a)           All payments of the Obligations under this Agreement and the other Loan Documents 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 Borrowers, by 1:00 p.m. (Central time) on the date when due and shall 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 accounts of the Borrowers maintained with U.S. Bank for each payment of principal, interest and fees as it becomes due hereunder.

 

(b)           The Borrowers shall repay the Loans on each date set forth below (or, if such date is not a Business Day, on the immediately preceding Business Day) in the aggregate principal amount set forth opposite such date (as adjusted from time to time pursuant to Section 2.4(c)):

 

	
Date
    	
 
    	
Amount
    	
 
    
	
September 30, 2012
    	
 
    	
$
    	
2,500,000
    	
 
    
	
December 31, 2012
    	
 
    	
$
    	
2,500,000
    	
 
    
	
March 31, 2013
    	
 
    	
$
    	
2,500,000
    	
 
    
	
June 30, 2013
    	
 
    	
$
    	
2,500,000
    	
 
    
	
September 30, 2013
    	
 
    	
$
    	
3,125,000
    	
 
    
	
December 31, 2013
    	
 
    	
$
    	
3,125,000
    	
 
    

 

25

 

	
Date
    	
 
    	
Amount
    	
 
    
	
March 31, 2014
    	
 
    	
$
    	
3,125,000
    	
 
    
	
June 30, 2014
    	
 
    	
$
    	
3,125,000
    	
 
    
	
September 30, 2014
    	
 
    	
$
    	
3,750,000
    	
 
    
	
December 31, 2014
    	
 
    	
$
    	
3,750,000
    	
 
    
	
March 31, 2015
    	
 
    	
$
    	
3,750,000
    	
 
    
	
June 30, 2015
    	
 
    	
$
    	
3,750,000
    	
 
    
	
September 30, 2015
    	
 
    	
$
    	
4,375,000
    	
 
    
	
December 31, 2015
    	
 
    	
$
    	
4,375,000
    	
 
    
	
March 31, 2016
    	
 
    	
$
    	
4,375,000
    	
 
    
	
June 30, 2016
    	
 
    	
$
    	
4,375,000
    	
 
    
	
September 30, 2016
    	
 
    	
$
    	
4,375,000
    	
 
    
	
December 31, 2016
    	
 
    	
$
    	
4,375,000
    	
 
    
	
March 31, 2017
    	
 
    	
$
    	
4,375,000
    	
 
    

 

To the extent not previously paid, all unpaid Loans shall be paid in full in cash by the Borrowers on the Facility Termination Date.

 

2.10.       Noteless Agreement; Evidence of Indebtedness.  (a)  Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrowers 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 and 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 Borrowers to each Lender hereunder, and (iii) the amount of any sum received by the Administrative Agent hereunder from the Borrowers and each Lender’s share thereof.

 

(c)           The entries maintained 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 Borrowers to repay the Obligations in accordance with their terms.

 

(d)           Any Lender may request that its Loans be evidenced by a promissory note representing its Loans, substantially in the form of Exhibit E (a “Note”).  In such event, the Borrowers shall prepare, execute and deliver to such Lender such Note payable to such Lender in a form supplied by the Administrative Agent.  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 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.

 

2.11.       Telephonic Notices.  Each Borrower hereby authorizes the Lenders and the Administrative Agent to extend, convert or continue Advances, effect selections of Types of

 

26

 

Advances and to transfer funds based on telephonic or e-mail notices made by any person or persons the Administrative Agent or any Lender in good faith believes to be acting on behalf of the Borrowers, it being understood that the foregoing authorization is specifically intended to allow Borrowing Notices and Conversion/Continuation Notices to be given telephonically and by e-mail.  Each Borrower agrees to deliver promptly to the Administrative Agent a written confirmation (which may include e-mail) of each telephonic or e-mail 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 demonstrable error.  The parties agree to prepare appropriate documentation to correct any such error within ten (10) days after discovery by any party to this Agreement.

 

2.12.       Interest Payment Dates; Interest and Fee Basis.  Interest accrued on each Base Rate Advance shall be payable in arrears on each Payment Date, commencing with the first such Payment Date to occur after the date hereof and at maturity.  Interest accrued on each Eurodollar Advance shall be payable on the last day of its applicable Interest Period, on any date on which the Eurodollar Advance is prepaid, whether by acceleration or otherwise, and at maturity.  Interest accrued on each Eurodollar Advance having an Interest Period longer than three (3) months shall also be payable on the last day of each three-month interval during such Interest Period.  Interest on all Advances and fees shall be calculated for actual days elapsed on the basis of a 360-day year, except that interest at the Base Rate shall be calculated for actual days elapsed on the basis of a 365/366-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 1:00 (Central time) at the place of payment.  If any payment of principal of or interest on an Advance shall become due on a day which is not a Business Day, such payment shall be made on the immediately preceding Business Day.

 

2.13.       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 Commitment reduction notice, Borrowing Notice, Conversion/Continuation Notice, and repayment notice received by it hereunder.  The Administrative Agent will notify each Lender of the interest rate applicable to each Eurodollar Advance promptly upon determination of such interest rate and will give each Lender prompt notice of each change in the Alternate Base Rate.

 

2.14.       Lending Installations.  Each Lender may book its Advances at any Lending Installation selected by such Lender, and may change its Lending Installation from time to time.  All terms of this Agreement shall apply to any such Lending Installation and the Loans and any Notes issued hereunder shall be deemed held by each Lender for the benefit of any such Lending Installation.  Each Lender may, by written notice to the Administrative Agent and the Borrowers in accordance with Article XIII, designate replacement or additional Lending Installations through which Loans will be made by it and for whose account Loan payments are to be made.

 

2.15.       Non-Receipt of Funds by the Administrative Agent.  Unless a 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 Borrowers, a payment of principal, interest or fees to

 

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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 such 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 commencing on 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 greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (y) in the case of payment by a Borrower, the interest rate applicable to the relevant Loan.

 

2.16.       Replacement of Lender.  If any Borrower is required pursuant to Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any Lender’s obligation to make or continue, or to convert Base Rate Advances into Eurodollar Advances shall be suspended pursuant to Section 3.3 or if any Lender defaults in its obligation to make a Loan or declines to approve an amendment or waiver that is approved by the Required Lenders or otherwise becomes a Defaulting Lender (any Lender so affected an “Affected Lender”), the Borrowers may elect, 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 such replacement, and provided further that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrowers and the Administrative Agent shall agree, as of such date, to purchase for cash at par the Advances and other Obligations under this Agreement and the other Loan Documents due to the Affected Lender pursuant to an assignment substantially in the form of Exhibit C and to become a Lender for all purposes under this Agreement and 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 Borrowers shall pay to such Affected Lender in same day funds on the day of such replacement all interest, fees and other amounts then accrued but unpaid to such Affected Lender by the Borrowers hereunder to and including the date of termination, including without limitation payments due to such Affected Lender under Sections 3.1, 3.2, 3.4 and 3.5.

 

2.17.       Limitation of Interest.  The Borrowers, the Administrative Agent and the Lenders intend to strictly comply with all applicable laws, including applicable usury laws.  Accordingly, the provisions of this Section 2.17 shall govern and control over every other provision of this Agreement or any other Loan Document which conflicts or is inconsistent with this Section 2.17, even if such provision declares that it controls.  As used in this Section 2.17, the term “interest” includes the aggregate of all charges, fees, benefits or other compensation which 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 this Agreement.  In no event shall any Borrower or any other Person be obligated to pay, or any Lender have any right or privilege to

 

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reserve, receive or retain, (a) 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 (b) total interest in excess of the amount which such Lender could lawfully have contracted for, reserved, received, retained or charged had the interest been calculated for the full term of this Agreement 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 which 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 when 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 contained in this Agreement or in any other Loan Document which directly or indirectly relate to interest shall ever be construed without reference to this Section 2.17, 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 Loan or any other Obligation outstanding hereunder or under the other Loan Documents 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 which produces the excess, 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 Borrowers’ obligations to such Lender, effective as of the date or dates when the event occurs which 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.

 

2.18.       Defaulting Lenders.

 

(a)           Defaulting Lender Adjustments.  Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

 

(i)                                     Waivers and Amendments.  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders.

 

(ii)                                  Payments. The Administrative Agent shall apply any payment of principal, interest, fees or other amounts received by it from or for the account of a Defaulting Lender as the Administrative Agent may determine in its discretion.

 

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(b)           Defaulting Lender Cure.  If the Borrowers and the Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans to be held pro rata by the Lenders in accordance with the Commitments, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

2.19.       Designation of Borrowing Subsidiaries.  The Parent may from time to time request that a Material Domestic Subsidiary be added to this Agreement and the other Loan Documents as an additional Borrower with the ability to request and receive Loans from the Lenders (each, a “Borrowing Subsidiary”).  Each such request shall be delivered in writing to the Administrative Agent and shall specify the name of such Material Domestic Subsidiary, such Material Domestic Subsidiary’s jurisdiction of organization, and the Business Day on which the Parent would like such joinder to be given effect.  Such request shall be delivered at least thirty (30) days (or such shorter period as may be approved by the Administrative Agent in its sole discretion) prior to the date on which the Parent wishes to join such Borrowing Subsidiary hereto, and shall be subject to the consent of the Administrative Agent (not to be unreasonably withheld or delayed).  The Administrative Agent, subsequent to its receipt of such request, may ask the Parent for additional information related to the proposed Borrowing Subsidiary in its reasonable discretion.  In order to join a Borrowing Subsidiary hereto, the Parent shall cause the delivery or satisfaction of the following to the Administrative Agent at least five (5) Business Days (or such shorter period as may be approved by the Administrative Agent in its sole discretion) prior to the date on which the Parent has requested that such joinder be given effect: (i) a Borrowing Subsidiary Agreement executed by the Parent, the applicable Borrowing Subsidiary and the Administrative Agent, in the form of Exhibit I-1 hereto or otherwise in form and substance reasonably acceptable to the Administrative Agent, pursuant to which such Borrowing Subsidiary shall agree to be bound by the terms and conditions hereof and shall be entitled to request and receive Loans hereunder, (ii) joinder agreements to each of the Guaranty and the Security Agreement, (iii) each of the other Collateral Documents that the Administrative Agent may request, (iv) documentation evidencing the requisite changes to Section 5.12(ii) and (v) all other conditions precedent set forth in Section 4.3.  The Administrative Agent shall promptly provide a copy of such Borrowing Subsidiary Agreement to the Lenders.  Upon satisfaction of the requirements set forth in this Section 2.19, the applicable Borrowing Subsidiary shall for all purposes of this Agreement be a party to this Agreement until the Parent shall have executed and delivered to the Administrative Agent a Borrowing Subsidiary Termination with respect to such Material Domestic Subsidiary, whereupon such Material Domestic Subsidiary shall cease to be a Borrowing Subsidiary and a party to this Agreement.  Each Material Domestic Subsidiary that is or becomes a Borrowing Subsidiary pursuant hereto hereby irrevocably appoints the Parent as its agent for all purposes relevant to this Agreement and each related document, including service of process.

 

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2.20.       Increase Option.  So long as the Borrowers’ Qualified Receivables Transactions shall have terminated or will contemporaneously terminate and the accounts or notes receivable thereunder have been pledged or will be contemporaneously pledged as Collateral for the benefit of the Lenders pursuant to Section 6.24, the Borrowers may from time to time elect to add senior secured revolving loan commitments hereto, in each case in minimum increments of $10,000,000 or such lower amount as the Borrowers and the Administrative Agent agree upon, so long as, after giving effect thereto, the aggregate amount of all such senior secured revolving loan commitments does not exceed $75,000,000 (such additional senior secured revolving loan commitments, the “Additional Commitments”).  The Borrowers may arrange for any such Additional Commitments to be provided by one or more Lenders (each such Lender, an “Increasing Lender”), or by one or more new banks, financial institutions or other entities that are Eligible Assignees (each such new bank, financial institution or other entity, an “Augmenting Lender”), to extend the Additional Commitments; provided that (i) each Augmenting Lender and each Increasing Lender shall be subject to the reasonable approval of the Borrowers and the Administrative Agent and (ii) (x) in the case of an Increasing Lender, the Borrowers and such Increasing Lender execute an agreement substantially in the form of Exhibit F hereto, and (y) in the case of an Augmenting Lender, the Borrowers and such Augmenting Lender execute an agreement substantially in the form of Exhibit G hereto.  No consent of any Lender (other than the Lenders participating in the Additional Commitments) shall be required for any Additional Commitment pursuant to this Section 2.20.  Additional Commitments created pursuant to this Section 2.20 shall become effective on the date agreed by the Borrowers, the Administrative Agent and the relevant Increasing Lenders or Augmenting Lenders, and the Administrative Agent shall notify each Lender thereof.  Notwithstanding the foregoing, no Additional Commitments (or any Lender’s Additional Commitment) shall become effective under this section unless, (i) on the proposed date of the effectiveness of such addition, (A) the conditions set forth in paragraphs (a) and (b) of Section 4.2 shall be satisfied or waived by the Required Lenders and the Administrative Agent shall have received a certificate to that effect dated such date and executed by an Authorized Officer of the Parent and (B) the Parent shall be in compliance (on a pro forma basis reasonably acceptable to the Administrative Agent) with the covenants contained in Section 6.23 and (ii) the Administrative Agent shall have received documents (A) consistent with those delivered on the date hereof as to the corporate power and authority of each Borrower to borrow hereunder after giving effect to such addition and (B) as it may request to evidence termination of the Qualified Receivables Transactions and the pledge of the accounts or notes receivable thereunder as Collateral for the benefit of the Lenders pursuant to Section 6.24.  On the effective date of any Additional Commitments, each relevant Increasing Lender and Augmenting Lender shall make available to the Administrative Agent such amounts in immediately available funds as the Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such addition, each Lender’s portion of the outstanding revolving loans of all the Increasing Lenders and Augmenting Lenders to equal its pro rata share of such outstanding revolving loans.  Additional Commitments shall be treated substantially the same as (and in any event no more favorably than) the Loans hereunder.

 

Additional Commitments may be made hereunder pursuant to an amendment or restatement (an “Additional Commitment Amendment”) of this Agreement and, as appropriate, the other Loan Documents, executed by the Borrowers, each Increasing Lender, each Augmenting Lender and the Administrative Agent at the time this Section 2.20 is exercised, and

 

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reflecting additional terms deemed standard and customary in the market at that time for a revolving credit facility (including, without limitation, requisite changes to Section 5.12(ii), a commitment fee or facility fee in respect of the revolving commitments, letter of credit and swing line mechanics (including related fees), and associated consent rights (such as, but not limited to, letter of credit issuers having the ability to consent to Persons (including Lenders) taking assignments of revolving commitments)).  The applicable interest rate margins applicable to the Additional Commitments shall be determined by the Borrowers and the Lenders thereunder; provided, that in the event the applicable interest rate margin for any Additional Commitment is higher than the Applicable Margin for the Loans by more than 50 basis points, then the Applicable Margin for the Loans shall be increased to the extent necessary so that such Applicable Margin is equal to the applicable interest rate margins for such Additional Commitment minus 50 basis points; provided, further, that in determining the applicable interest rate margins for the Additional Commitments and the Loans, (i) customary arrangement or commitment fees payable to the Arranger (or its Affiliates) in connection with the Loans or any Additional Commitment shall be excluded, and (ii) if an Additional Commitment includes an interest rate floor greater than the interest rate floor applicable to the Loans, such increased amount shall be equated to the applicable interest rate margin for purposes of determining whether an increase to the Applicable Margin for the Loans shall be required, to the extent an increase in the interest rate floor for the Loans would cause an increase in the interest rate then in effect thereunder, and in such case the interest rate floor (but not the Applicable Margin) applicable to the Loans shall be increased by such amount.  The Additional Commitment Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent, to effect the provisions of this Section 2.20.  Nothing contained in this Section 2.20 shall constitute, or otherwise be deemed to be, a commitment on the part of any Lender to provide Additional Commitments, at any time.

 

ARTICLE III

 

YIELD PROTECTION; TAXES

 

3.1.         Yield Protection.  If, after the date of this Agreement, there occurs any adoption of or change in any law, governmental or quasi-governmental rule, regulation, policy, guideline, interpretation, or directive (whether or not having the force of law) or in the interpretation, promulgation, implementation or administration thereof by any governmental or quasi-Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, including, notwithstanding the foregoing, all requests, rules, guidelines or directives (x) in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act or (y) promulgated by the Bank for International Settlements, the Basel Committee on Banking Regulations and Supervisory Practices (or any successor or similar authority) or the United States financial regulatory authorities, in each case of clauses (x) and (y), regardless of the date enacted, adopted, issued, promulgated or implemented, or compliance by any Lender or applicable Lending Installation with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency (any of the foregoing, a “Change in Law”) which:

 

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(a)           subjects any Lender or any applicable Lending Installation or the Administrative Agent to any Taxes (other than with respect to (i) Indemnified Taxes, (ii) Taxes described in clauses (ii) through (iv) of the definition of Excluded Taxes, (iii) Connection Income Taxes and (iv) Other Taxes) on its loans, loan principal, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto, or

 

(b)           imposes or 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 any applicable Lending Installation (other than reserves and assessments taken into account in determining the interest rate applicable to Eurodollar Advances), or

 

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

 

and the result of any of the foregoing is to increase the cost to such Person of making or maintaining its Loans or Commitment or to reduce the amount received by such Person in connection with such Loans or Commitment, then, within fifteen (15) days after demand by such Person, the Borrowers shall pay such Person, as the case may be, such additional amount or amounts as will compensate such Person for such increased cost or reduction in amount received; provided that such demand is made within 270 days after the occurrence of any such Change in Law.

 

3.2.         Changes in Capital Adequacy Regulations.  If a Lender determines the amount of capital or liquidity required or expected to be maintained by such Lender, any Lending Installation of such Lender, or any corporation or holding company controlling such Lender is increased as a result of (i) a Change in Law or (ii) any change after the date of this Agreement in the Risk-Based Capital Guidelines, then, within fifteen (15) days of demand by such Lender, the Borrowers shall pay such Lender the amount necessary to compensate for any shortfall in the rate of return on the portion of such increased capital or liquidity which such Lender determines is attributable to this Agreement, its Outstanding Credit Exposure or its Commitment to make Loans hereunder (after taking into account such Lender’s policies as to capital adequacy or liquidity), in each case that is attributable to such Change in Law or change in the Risk-Based Capital Guidelines, as applicable; provided that such demand is made within 270 days after the occurrence of any such Change in Law or change in Risk-Based Capital Guidelines, as applicable.

 

3.3.         Availability of Types of Advances; Adequacy of Interest Rate.  If the Administrative Agent or the Required Lenders determine that deposits of a type and maturity appropriate to match fund Eurodollar Advances are not available to such Lenders in the relevant market or the Administrative Agent, in consultation with the Lenders, determines that the interest

 

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rate applicable to Eurodollar Advances is not ascertainable or does not adequately and fairly reflect the cost of making or maintaining Eurodollar Advances, then the Administrative Agent shall suspend the availability of Eurodollar Advances and require any affected Eurodollar 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 (a) any payment of a Eurodollar Advance occurs on a date which is not the last day of the applicable Interest Period, whether because of acceleration, prepayment or otherwise, (b) a Eurodollar Advance is not made on the date specified by a Borrower for any reason other than default by the Lenders, (c) a Eurodollar Loan is converted other than on the last day of the Interest Period applicable thereto, (d) any Borrower fails to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto, or (e) any Eurodollar Loan is assigned other than on the last day of the Interest Period applicable thereto as a result of a request by a Borrower pursuant to Section 2.16, the Borrowers will jointly and severally indemnify each Lender for such Lender’s costs, expenses and Interest Differential (as reasonably determined by such Lender in good faith) incurred as a result of such prepayment.  The term “Interest Differential” shall mean that sum equal to the greater of zero or 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, Borrowers agree that Interest Differential shall not be discounted to its present value.

 

3.5.         Taxes.

 

(a)           Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law.  If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax or Other Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings of Indemnified Tax or Other Tax applicable to additional sums payable under this Section 3.5) the applicable Lender or the Administrative Agent receives an amount equal to the sum it would have received had no such deduction or withholding been made.

 

(b)           The Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

 

(c)           The Loan Parties shall jointly and severally indemnify the Lender or the Administrative Agent, within fifteen (15) days after demand therefor, for the full amount of any

 

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Indemnified Taxes and Other Taxes (including Indemnified Taxes and Other Taxes imposed or asserted on or attributable to amounts payable under this Section 3.5) payable or paid by such Lender or the Administrative Agent or required to be withheld or deducted from a payment to such Lender or the Administrative Agent and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes and Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrowers by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(d)           Each Lender shall severally indemnify the Administrative Agent, within fifteen (15) days after demand therefor, for (i) any Indemnified Taxes and Other Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and Other Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 12.2(c) relating to the maintenance of a Participant Register, and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (d).

 

(e)           As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 3.5, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(f)            (i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrowers and the Administrative Agent, at the time or times reasonably requested by the Borrowers or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrowers or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably requested by the Borrowers or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrowers or the Administrative Agent as will enable the Borrowers or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.5(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to

 

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any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

 

(ii) Without limiting the generality of the foregoing,

 

(A) any Lender that is a United States Person for U.S. federal income Tax purposes shall deliver to the Borrowers and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrowers or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding Tax;

 

(B) any Non-U.S. Lender shall, to the extent it is legally entitled to do so, deliver to the Borrowers and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Non-U.S. Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrowers or the Administrative Agent), whichever of the following is applicable:

 

(i)  in the case of a Non-U.S. Lender claiming the benefits of an income Tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such Tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such Tax treaty;

 

(ii)  executed originals of IRS Form W-8ECI;

 

(iii) in the case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate to the effect that such Non-U.S. Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of a Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (y) executed originals of IRS Form W-8BEN; or

 

(iv) to the extent a Non-U.S. Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-8IMY or IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable.

 

(C)  any Non-U.S. Lender shall, to the extent it is legally entitled to do so, deliver to the Borrowers and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Non-U.S. Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrowers or the Administrative Agent), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly

 

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completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrowers or the Administrative Agent to determine the withholding or deduction required to be made; and

 

(D) if a payment made to a Lender or Administrative Agent under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender or Administrative Agent were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender or Administrative Agent shall deliver to the Borrowers and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrowers or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrowers or the Administrative Agent as may be necessary for the Borrowers and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender or Administrative Agent has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

(iii)          Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrowers and the Administrative Agent in writing of its legal inability to do so.

 

(g)           If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 3.5 (including by the payment of additional amounts pursuant to this Section 3.5), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid.  This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

 

(h)           Each party’s obligations under this Section 3.5 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

 

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3.6.         Selection of Lending Installation; Mitigation Obligations; Lender Statements; Survival of Indemnity.  To the extent reasonably possible, each Lender shall designate an alternate Lending Installation with respect to its Eurodollar Loans to reduce any liability of the Borrowers to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurodollar Advances under Section 3.3, so long as such designation is not, in the judgment of such Lender, disadvantageous to such Lender.  Each Lender shall deliver a written statement of such Lender to the Borrowers (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 Borrowers in the absence of manifest error.  Determination of amounts payable under such Sections in connection with a Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar Loan through the purchase of a deposit of the type and maturity corresponding to the deposit used as a reference in determining the Eurodollar 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 Borrowers of such written statement.  The obligations of the Borrowers 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.         Effective Date.  The Lenders shall not be required to make the initial Credit Extension hereunder unless each of the following conditions is satisfied:

 

(a)           The Administrative Agent shall have received executed counterparts of each of this Agreement, the Security Agreement and the Guaranty.

 

(b)           The Administrative Agent shall have received a certificate, signed by the chief financial officer of the Parent, stating that on the date of the initial Credit Extension (1) no Default or Event of Default has occurred and is continuing and (2) the representations and warranties contained in Article V are (x) with respect to any representations or warranties that contain a materiality qualifier, true and correct in all respects as of such 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 in all respects on and as of such earlier date and (y) with respect to any representations or warranties that do not contain a materiality qualifier, true and correct in all material respects as of such 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 in all material respects on and as of such earlier date.

 

(c)           The Administrative Agent shall have received a written opinion of the Loan Parties’ counsel (which may include local counsel and in-house counsel) with respect to each of the Loan Parties and FastCat, addressed to the Lenders and in form and substance acceptable to the Administrative Agent.

 

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(d)           The Administrative Agent shall have received any Notes requested by a Lender pursuant to Section 2.10 payable to each such requesting Lender.

 

(e)           The Administrative Agent shall have received such documents and certificates relating to the organization, existence and good standing of each initial Loan Party, the authorization of the transactions contemplated hereby and any other legal matters relating to such Loan Parties, the Loan Documents or the transactions contemplated hereby, all in form and substance satisfactory to the Administrative Agent and its counsel and as further described in the List of Closing Documents.

 

(f)            The Administrative Agent shall have received all reasonable and documented fees and other amounts due and payable on or prior to the date hereof, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrowers hereunder.

 

(g)           There shall not have occurred a material adverse change in the business, Property, financial condition or results of operations of the Parent and its Subsidiaries, taken as a whole, or FastCat and its Subsidiaries, taken as a whole, in each case since March 31, 2012.

 

(h)           The Administrative Agent shall have received evidence of all governmental, equity holder, corporate and third party consents and approvals necessary in connection with the contemplated financing and the FastCat Acquisition (including Hart-Scott-Rodino clearance and all necessary approvals from the board of directors and shareholders of Panther, in each case as required with respect to the FastCat Acquisition) and all applicable waiting periods shall have expired without any action being taken by any authority that would be reasonably likely to restrain, prevent or impose any material adverse conditions on the Parent and its Subsidiaries, taken as a whole, or FastCat, taken as a whole, and no law or regulation shall be applicable which in the reasonable judgment of the Administrative Agent could have such effect.

 

(i)            No action, suit, investigation or proceeding is pending or, to the knowledge of any Borrower or any Subsidiary, threatened in any court or before any arbitrator or Governmental Authority that would reasonably be expected to result in a Material Adverse Effect.

 

(j)            The Administrative Agent shall have received:  (i) pro forma financial statements giving effect to the FastCat Acquisition and the initial Credit Extensions contemplated hereby, which demonstrate, in the Administrative Agent’s reasonable judgment, together with all other information then available to the Administrative Agent, that the Borrowers can repay their debts and satisfy their other obligations as and when they become due, and can comply with the financial covenants set forth in Section 6.23, (ii) such information as the Administrative Agent may reasonably request to confirm the tax, legal, and business assumptions made in such pro forma financial statements, (iii) unaudited consolidated financial statements of the Parent and its Subsidiaries for the fiscal quarter ended March 31, 2012, and (iv) audited consolidated financial statements of the Parent and its Subsidiaries for the fiscal years ended 2009, 2010 and 2011.

 

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(k)           The Administrative Agent shall have received the results of a recent lien search in each of the jurisdictions where the initial Loan Parties are organized, and each such search shall reveal no Liens on any of the assets of the Loan Parties except for Liens permitted by Section 6.16 or discharged on or prior to the date hereof pursuant to a pay-off letter or other documentation satisfactory to the Administrative Agent.

 

(l)            UCC financing statements naming each initial Loan Party, as debtor, and the Administrative Agent, as secured party, shall be in proper form for filing.

 

(m)          Mortgages for each of the five (5) real properties not subject to Section 6.25 which have been agreed by the Administrative Agent and the Parent as of the Effective Date to be subject at all times to a perfected Lien in favor of the Administrative Agent shall be in proper form for recordation or registration, as applicable, together with all Mortgage Instruments with respect to such properties described in the section entitled “Mortgage and Other Real Property-Related Deliveries” in the List of Closing Documents.

 

(n)           (i) The final terms and conditions of each aspect of the FastCat Acquisition, including, without limitation, all tax aspects thereof, shall be consistent in all material respects with the written description thereof received from the Parent in April 2012 and shall be satisfactory to the Administrative Agent, (ii) the Purchase Agreement and all other agreements, instruments and documents relating to the FastCat Acquisition shall be satisfactory to the Administrative Agent and the Lenders and shall provide for a maximum acquisition consideration of $180,000,000 plus (A) any working capital, net asset, and cash/debt adjustments provided for under the Purchase Agreement and (B) transaction costs, and (iii) the Parent will deliver to the Administrative Agent a certificate signed by an Authorized Officer confirming (A) that there have been no modifications to the Purchase Agreement which are adverse to the Lenders, (B) attaching a certified copy of the Purchase Agreement and all amendments, modifications, supplements and attachments thereto, and (C) confirming that the FastCat Acquisition has been, or will be, substantially contemporaneously with the making of the initial Loan hereunder, consummated in accordance with the terms of the Purchase Agreement and in compliance with applicable law and regulatory approvals.

 

(o)           The Administrative Agent shall have received evidence of insurance coverage in compliance with the terms of Sections 5.18 and 6.6.

 

(p)           There shall exist no Default or Event of Default, nor would a Default or Event of Default result from the consummation of the FastCat Acquisition or the initial Credit Extension.

 

(q)           The Administrative Agent shall have received a certificate, signed by an Authorized Officer of the Parent, stating that as of the Effective Date (after giving effect to the FastCat Acquisition), the Parent and its Subsidiaries, on a consolidated basis, are Solvent.

 

(r)            The Administrative Agent shall have received all documentation and other information reasonably requested by it under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act, with respect to each of the Borrowers, FastCat, and their respective Subsidiaries.

 

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(s)            The Administrative Agent shall have received evidence satisfactory to it that any credit facility currently in effect for any FastCat entity (other than the facility evidenced by this Agreement) shall have been terminated and cancelled and all Indebtedness thereunder shall have been fully repaid (including to the extent being so repaid with the initial Loans) and any and all Liens thereunder shall have been terminated and released concurrent with being so repaid (including with the initial Loans).

 

4.2.         Each Credit Extension.  The Lenders shall not be required to make any Credit Extension unless on the applicable Borrowing Date:

 

(a)           There exists no Default or Event of Default, nor would a Default or Event of Default result from such Credit Extension.

 

(b)           The representations and warranties contained in Article V are (x) with respect to any representations or warranties that contain a materiality qualifier, true and correct in all respects 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 in all respects on and as of such earlier date and (y) with respect to any representations or warranties that do not contain a materiality qualifier, true and correct in all material respects 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 in all material respects on and as of such earlier date.

 

Each Borrowing Notice with respect to each such Credit Extension shall constitute a representation and warranty by the Borrowers that the conditions contained in Sections 4.2(a) and (b) have been satisfied.

 

4.3.         Designation of a Borrowing Subsidiary.  The designation of a Material Domestic Subsidiary as a Borrowing Subsidiary pursuant to Section 2.19 is subject to the condition precedent that the Parent or such proposed Borrowing Subsidiary shall have furnished or caused to be furnished to the Administrative Agent:

 

(a)           Executed counterparts of each of the Borrowing Subsidiary Agreement, a joinder to the Guaranty, a joinder to the Security Agreement and each other Collateral Document that the Administrative Agent may request;

 

(b)           Copies, certified by the secretary or assistant secretary of such Material Domestic Subsidiary, of resolutions of its board of directors or other applicable governing body (and resolutions of other bodies, if any are deemed necessary by the Administrative Agent) approving the Borrowing Subsidiary Agreement and any other Loan Documents to which such Material Domestic Subsidiary is becoming a party and such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of such Material Domestic Subsidiary;

 

(c)           An incumbency certificate, executed by the secretary or assistant secretary of such Material Domestic Subsidiary, which shall identify by name and title and bear the signature of the officers of such Material Domestic Subsidiary authorized to request Advances hereunder and sign the Borrowing Subsidiary Agreement and the other Loan Documents to

 

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which such Material Domestic Subsidiary is becoming a party, upon which certificate the Administrative Agent and the Lenders shall be entitled to rely until informed of any change in writing by the Parent or such Material Domestic Subsidiary;

 

(d)           If requested by the Administrative Agent, opinions of counsel to such Material Domestic Subsidiary, in form and substance reasonably satisfactory to the Administrative Agent and its counsel, with respect to the laws of its jurisdiction of organization, creation and perfection of security interests, and such other matters as are reasonably requested by the Administrative Agent or its counsel and addressed to the Administrative Agent and the Lenders;

 

(e)           To the extent requested by any Lender, Notes for each Lender, and any other instruments and documents reasonably requested by the Administrative Agent; and

 

(f)            All documentation and other information reasonably requested by the Lenders or the Administrative Agent under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

 

Each of the Borrowers, jointly and severally, represents and warrants to the Lenders that:

 

5.1.         Existence and Standing.  Each Borrower and each Subsidiary is a corporation, partnership (in the case of Subsidiaries only) or limited liability company duly and properly incorporated or formed, 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 corporate, partnership or limited liability company authority to conduct its business (i) in its jurisdiction of formation and (ii) in each other jurisdiction in which its business is conducted, solely with respect to this clause (ii), except as would not reasonably be expected to result in a Material Adverse Effect.

 

5.2.         Authorization and Validity.  Each Loan Party 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 each Loan Party of the Loan Documents to which it is a party and the performance of its obligations thereunder have been duly authorized by proper corporate, partnership or limited liability company proceedings, and the Loan Documents to which each Loan Party is a party constitute legal, valid and binding obligations of such Loan Party enforceable against such Loan Party 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 each 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 Borrowers or any Subsidiaries or (ii) any Borrower’s or any Subsidiary’s articles or certificate of incorporation,

 

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partnership agreement, certificate of partnership, articles or certificate of organization, by-laws, or operating or other management agreement, as the case may be, or (iii) the provisions of any indenture, instrument or agreement to which any Borrower or any Subsidiary is a party or is subject, or by which it, or its Property, is bound, or conflict with or constitute a default thereunder, or result in, or require, the creation or imposition of any Lien in, of or on the Property of a 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, or filing, recording or registration with, or exemption by, or other action in respect of any governmental or public body or authority, or any subdivision thereof, which has not been obtained by a Borrower or any Subsidiary, is required to be obtained by a Borrower or any Subsidiary in connection with the execution and delivery of the Loan Documents, the borrowings under this Agreement, the payment and performance by any 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, 2011 audited consolidated financial statements of the Parent and its Subsidiaries (prior to the Effective Date), and their unaudited financial statements dated as of March 31, 2012, heretofore delivered to the Lenders were prepared in accordance with GAAP in effect on the date such statements were prepared (except that such financial statements do not include footnotes and are subject to audit adjustments) and fairly present in all material respects the consolidated financial condition and operations of Parent and its Subsidiaries (prior to the Effective Date) at such date and the consolidated results of their operations for the period then ended.

 

5.5.         Material Adverse Change.  Since March 31, 2012, there has been no change in the business, Property, financial condition or results of operations of the Borrowers and their Subsidiaries, taken as a whole, which could reasonably be expected to have a Material Adverse Effect.

 

5.6.         Taxes.  The Borrowers and their Subsidiaries have filed all United States federal and state income Tax returns and all other material Tax returns which are required to be filed by them and have paid all United States federal and state income Taxes and all other material Taxes due from the Borrowers and their Subsidiaries, including, without limitation, pursuant to any assessment received by any Borrower or any Subsidiary, except (a) such Taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided in accordance with GAAP and as to which no Lien exists and (b) such Taxes for which the failure to pay could not reasonably be expected to result in a Material Adverse Effect.  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 Borrowers and their Subsidiaries in respect of any Taxes or other governmental charges are adequate.

 

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 any Borrower or any Subsidiary which could reasonably be expected to have a Material Adverse Effect.  Other than any liability incident to any litigation, arbitration or proceeding which could not reasonably be expected to have a Material Adverse Effect, no Borrower has any material Contingent Obligations not provided for or disclosed in the financial statements referred to in Section 5.4.

 

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5.8.         Subsidiaries.  Schedule 5.8 contains an accurate list of all Subsidiaries of each Borrower as of the date of this Agreement, setting forth their respective jurisdictions of organization and the percentage of their respective capital stock or other ownership interests owned by the relevant 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.  With respect to each Plan, the Borrowers and all ERISA Affiliates have paid all required minimum contributions and installments on or before the due dates provided under Section 430(j) of the Code and could not reasonably be subject to a lien under Section 430(k) of the Code or Title IV of ERISA.  Neither any Borrower nor any ERISA Affiliate has filed, pursuant to Section 412(c) of the Code or Section 302(c) of ERISA, an application for a waiver of the minimum funding standard.  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 written information, exhibit or report furnished by any Borrower or any Subsidiary to the Administrative Agent or to any Lender in connection with the negotiation of, or compliance with, the Loan Documents contained any material misstatement of fact or omitted to state a material fact necessary to make the statements contained therein not misleading.

 

5.11.       Regulation U.  Margin stock (as defined in Regulation U) constitutes less than 25% of the value of those assets of the Borrowers and their Subsidiaries which are subject to any limitation on sale, pledge, or other restriction hereunder.

 

5.12.       Material Agreements.  Neither any Borrower nor any Subsidiary is a party to any agreement or instrument or subject to any charter or other corporate restriction which could reasonably be expected to have a Material Adverse Effect.  Neither any Borrower nor any Subsidiary is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (i) any agreement to which it is a party, which default could reasonably be expected to have a Material Adverse Effect or (ii) as of the Effective Date, any agreement or instrument evidencing or governing Indebtedness in excess of $1,000,000.

 

5.13.       Compliance With Laws.  The Borrowers and their Subsidiaries are in compliance 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; except, solely with respect to traffic laws, as could not reasonably be expected to result in a Material Adverse Effect.

 

5.14.       Ownership of Properties.  Except as set forth on Schedule 5.14, on the date of this Agreement, the Borrowers and their Subsidiaries will have defensible title, free of all Liens other than those permitted by Section 6.16, to all of the Property and assets reflected in the Parent’s most recent consolidated financial statements provided to the Administrative Agent as owned by

 

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the Borrowers and their Subsidiaries other than as may have been disposed of in a manner permitted by Section 6.13(a).

 

5.15.       Plan Assets; Prohibited Transactions.  No Borrower is 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 Section 3(3) of ERISA) which is subject to Title I of ERISA or any plan (within the meaning of Section 4975 of the Code), and neither the execution of this Agreement nor the making of Credit Extensions hereunder gives rise to a prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code.

 

5.16.       Environmental Matters.  Each Borrower’s Property and operations and those of its Subsidiaries are in material compliance with applicable Environmental Laws and no Borrower or Subsidiary thereof is subject to any liability under Environmental Laws, except for such noncompliance or liability that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect.  Neither any Borrower nor any Subsidiary has received, to the Parent’s knowledge, any notice to the effect that its Property and/or operations are not in material compliance with any of the requirements of applicable Environmental Laws or are the subject of any federal or state investigation evaluating whether any remedial action is needed to respond to a release of any Hazardous Materials, which non-compliance or remedial action could reasonably be expected to have a Material Adverse Effect.

 

5.17.       Investment Company Act.  Neither any 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.  Each Borrower maintains, and has caused each Subsidiary to maintain, with financially sound and reputable insurance companies, insurance (including, without limitation, liability insurance) in such amounts, subject to such deductibles and self-insurance retentions and covering such Property and risks as are consistent with sound business practice.

 

5.19.       Subordinated Indebtedness.  The Secured Obligations constitute senior Indebtedness which is entitled to the benefits of the subordination provisions of all outstanding Subordinated Indebtedness.

 

5.20.       Solvency.

 

(a)           Immediately after the consummation of the transactions to occur on the date hereof and 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, the Parent and its Subsidiaries, on a consolidated basis, will be Solvent.

 

(b)           No Borrower intends to, or intends to permit any of its Subsidiaries to, and no Borrower believes 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.       No Default.  No Default or Event of Default has occurred and is continuing.

 

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ARTICLE VI

 

COVENANTS

 

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

 

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

 

(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 nationally recognized independent certified public accountants, or other certified public accountants acceptable to the Required Lenders, prepared in accordance with GAAP on a consolidated basis for itself and its Subsidiaries, including balance sheets as of the end of such period, related profit and loss and reconciliation of surplus statements, and a statement of cash flows, accompanied by (a) any final management letter prepared by said accountants and (b) if available, 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 with respect to the financial covenants set forth in Section 6.23, or if, in the opinion of such accountants, any such financial covenant Default or Event of Default shall exist, stating the nature and status thereof.

 

(b)           Within 45 days after the close of the first three (3) quarterly periods of each of its fiscal years, for itself and its Subsidiaries, consolidated unaudited balance sheets as at the close of each such period and consolidated profit and loss and reconciliation of surplus statements (including sufficient detail for independent calculation of the financial covenants set forth in Section 6.23) and a statement of cash flows for the period from the beginning of such fiscal year to the end of such quarter, all certified by the chief financial officer of Parent.

 

(c)           As soon as available, but in any event within 90 days after the beginning of each fiscal year of the Parent, a copy of the plan and forecast (including a projected consolidated balance sheet, income statement and cash flow statement) of the Parent for such fiscal year.

 

(d)           Together with the financial statements required under Sections 6.1(a) and (b), a compliance certificate in substantially the form of Exhibit B signed on behalf of the Parent by its chief financial officer or treasurer 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.

 

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

 

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(f)            Promptly upon the filing thereof, copies of all registration statements and annual, quarterly, monthly or other regular reports and proxy statements which any Borrower or any Subsidiary files with the SEC.

 

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

 

If any information which is required to be furnished to the Lenders under this Section 6.1 is required by law or regulation to be filed by a Borrower with a government body on an earlier date, and is so filed on an earlier date, then the information required hereunder shall be furnished to the Lenders at such earlier date so filed.

 

The Borrowers shall ensure that the Administrative Agent receives notice of the filing of any financial statement or other information required to be furnished pursuant to Sections 6.1(a), (b), (e) or (f).  Such filings shall be deemed to have been furnished on the date on which the Administrative Agent receives notice that the Parent has filed such financial statement or information with the SEC or it is available on the Parent’s website or the EDGAR website on the Internet 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, the Borrowers shall deliver paper copies of any such financial statement or information to the Administrative Agent if the Administrative Agent reasonably requests the Borrowers to furnish such paper copies until written notice to cease delivering such paper copies is given by the Administrative Agent.

 

6.2.         Use of Proceeds.  The Borrowers will, and will cause each Subsidiary to, use the proceeds of the Credit Extensions (i) to pay the purchase price for the FastCat Acquisition, and to pay the fees, costs and expenses arising in connection therewith and with this Agreement, (ii) for working capital, Capital Expenditures, share repurchases and other lawful corporate purposes and (iii) to refinance Indebtedness of FastCat existing on the Effective Date.  The Borrowers will not, nor will they permit any Subsidiary to, use any of the proceeds of the Advances to purchase or carry any “margin stock” (as defined in Regulation U) in violation of applicable law or Section 5.11.

 

6.3.         Notice of Material Events.  The Borrowers will, and will cause each Subsidiary to, give notice in writing to the Administrative Agent:

 

(a)           Immediately, and in any event within one (1) Business Day after an Authorized Officer of any Borrower obtains knowledge thereof, of the occurrence of any Default or Event of Default; and

 

(b)           Promptly, and in any event within three (3) Business Days after an Authorized Officer of any Borrower obtains knowledge thereof, of the occurrence of:

 

(i)                                     the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority (including pursuant to any applicable Environmental Laws) against or affecting any Borrower or any Subsidiary that, if

 

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adversely determined, would reasonably be expected to result in a Material Adverse Effect;

 

(ii)                                  with respect to a Plan, (A) any failure of any Borrower or any ERISA Affiliate to pay all required minimum contributions and installments on or before the due dates provided under Section 430(j) of the Code, except as could not reasonably be expected to result in a Material Adverse Effect, or (B) the filing by any Borrower or any ERISA Affiliate pursuant to Section 412(c) of the Code or Section 302(c) of ERISA, of an application for a waiver of the minimum funding standard;

 

(iii)                               the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, would reasonably be expected to result in a Material Adverse Effect;

 

(iv)                              any material change in accounting policies of, or financial reporting practices by, any Borrower or any Subsidiary; and

 

(v)                                 any other development, financial or otherwise, which would reasonably be expected to have a Material Adverse Effect.

 

Each notice delivered under this Section shall be accompanied by a statement of an officer of the relevant Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

 

6.4.         Conduct of Business.  The Borrowers will, and will cause each Subsidiary to, carry on and conduct their business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted and do all things necessary to (i) 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 (ii) maintain all requisite corporate, partnership or limited liability company authority to conduct its business in each jurisdiction in which its business is conducted.

 

6.5.         Taxes.  The Borrowers will, and will cause each Subsidiary to, timely file complete and correct United States federal and applicable material 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 (i) those which are being contested in good faith by appropriate proceedings, with respect to which adequate reserves have been set aside in accordance with GAAP and (ii) those for which the failure to pay could not reasonably be expected to result in a Material Adverse Effect.

 

6.6.         Insurance.  The Borrowers will, and will cause each Subsidiary to, maintain with financially sound and reputable insurance companies, insurance (including, without limitation, liability insurance) in such amounts, subject to such deductibles and self-insurance retentions and covering such Property and risks as are consistent with sound business practice, and the Borrowers will furnish to any Lender upon request full information as to the insurance carried.  The Administrative Agent shall be named as lender loss payee and/or additional insured with

 

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respect to any such insurance providing coverage in respect of any Collateral, and each provider of any such insurance shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to the Administrative Agent, that it will give the Administrative Agent thirty (30) days prior written notice before any such policy or policies shall be canceled.  The Borrowers shall notify the Administrative Agent in writing, promptly after any Authorized Officer’s awareness thereof, if (i) any such policy or policies shall be materially altered in a manner adverse to the Administrative Agent and/or the Lenders or (ii) the amount of coverage thereunder shall be reduced.

 

6.7.         Compliance with Laws and Material Contractual Obligations.  The Borrowers will, and will cause each Subsidiary to, (i) 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, solely with respect to traffic laws, as would not reasonably be expected to result in a Material Adverse Effect and (ii) perform its obligations under agreements to which it is a party, unless the failure to so perform would not reasonably be expected to result in a Material Adverse Effect.

 

6.8.         Maintenance of Properties.  The Borrowers 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, unless the failure to do so would not reasonably be expected to result in a Material Adverse Effect.

 

6.9.         Books and Records; Inspection.  The Borrowers will, and will cause each Subsidiary to, keep proper books of record and account in which full, true and correct entries in all material respects are made of all dealings and transactions in relation to its business and activities.  The Borrowers will, and will cause each Subsidiary to, permit the Administrative Agent, by its representatives and agents, to inspect any of the Property, books and financial records of each Borrower and each Subsidiary, to examine and make copies of the books of accounts and other financial records of each Borrower and each Subsidiary, and to discuss the affairs, finances and accounts of each 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; provided, however, that only two such inspections and examinations may be conducted at the Borrowers’ expense in any fiscal year, unless an Event of Default has occurred and is continuing, in which case the Administrative Agent, any of its respective representatives or independent contractors, and any Lender shall not be so limited.

 

6.10.       Payment of Obligations.  The Borrowers will, and will cause each of their Subsidiaries to, pay their respective obligations, including Tax liabilities, that, if not paid, would reasonably be expected to result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, and (b) the relevant Borrower or the relevant Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP.

 

6.11.       Indebtedness.  The Borrowers will not, nor will they permit any of their Subsidiaries to, create, incur or suffer to exist any Indebtedness, except:

 

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(a)           The Loans.

 

(b)           Indebtedness existing on the date hereof and described in Schedule 6.11 and any renewal, extension or refinancing of such Indebtedness that does not increase the principal amount thereof in excess of accrued interest then owing.

 

(c)           Indebtedness arising under non-speculative Rate Management Transactions.

 

(d)           Receivables Transaction Attributed Indebtedness not to exceed the principal amount of $100,000,000, any performance guaranties directly related thereto, and any notes owing from (i) special-purpose entities to any Subsidiaries of the Parent or (ii) any Subsidiary of the Parent to any other Subsidiary of the Parent, in each case that have sold or conveyed accounts receivable to such special-purpose entities or such Subsidiary, as applicable, which such notes are subordinated to the indebtedness owing to any financial institution or investor providing financing for Qualified Receivables Transactions.

 

(e)           Subordinated Indebtedness permitted pursuant to Section 6.19.

 

(f)            Notes Payable and Capitalized Lease Obligations, provided that the aggregate principal amount of such Indebtedness does not exceed $125,000,000 at any time outstanding.

 

(g)           Indebtedness of any Loan Party to any other Loan Party.

 

(h)           Unsecured Indebtedness of any Borrower to any non-Guarantor and any Guarantor to any non-Guarantor, provided that in each case, the payment of such Indebtedness shall be subordinated to payment of the Secured Obligations to the written satisfaction of the Required Lenders and the Administrative Agent.

 

(i)            Unsecured Indebtedness of any non-Guarantor to any Borrower or any Guarantor, provided that the aggregate amount of such Indebtedness, taken together with the Investments permitted under Section 6.14(i), does not exceed $10,000,000 at any time outstanding.

 

(j)            Indebtedness not otherwise permitted in clauses (a) through (i) above, provided that the aggregate principal amount of such other Indebtedness does not exceed $50,000,000 at any time outstanding.

 

6.12.       Merger.  The Borrowers will not, nor will they permit any of their Subsidiaries to, merge or consolidate with or into any other Person, or permit any other Person to merge into or consolidate with any of them, or liquidate or dissolve, except that (i) any Subsidiary of a Borrower may merge, liquidate or dissolve into any Borrower or a Wholly-Owned Subsidiary of any Borrower that is a Domestic Subsidiary, (ii) any Guarantor may merge, liquidate or dissolve into any other Guarantor or into any Borrower (iii) any Subsidiary of a Borrower that is not a Guarantor may merge, liquidate or dissolve into any Borrower or any Guarantor and (iv) any Borrower and any Subsidiary of a Borrower may merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with such Borrower or

 

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Subsidiary, in each case (x) solely pursuant to a Permitted Acquisition and (y) solely to the extent such Borrower or Subsidiary is the surviving entity after giving effect to such merger or consolidation.

 

6.13.       Sale of Assets.  The Borrowers will not, nor will they permit any of their Subsidiaries to, lease, sell or otherwise dispose of its Property to any other Person, 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 other equipment used or useful in the Borrowers’ business consistent with Section 6.4, or the Net Proceeds of such sale are applied within the time period specified in Section 2.4(c) or to the purchase price of such equipment used or useful in the Borrowers’ business consistent with Section 6.4.

 

(c)           Leases, sales or other dispositions of its Property (including, without limitation, equity interests of Subsidiaries of Parent) that, together with all other Property of the Borrowers and their Subsidiaries previously leased, sold or disposed of as permitted by this Section (other than pursuant to clauses (a), (b) or (d) hereof) during the twelve-month period ending with the month in which any such lease, sale or other disposition occurs, do not constitute a Substantial Portion of the Property of the Parent and its Subsidiaries.

 

(d)           Any transfer of an interest in accounts or notes receivable and related assets as part of a Qualified Receivables Transaction.

 

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

 

(a)           Cash Equivalent Investments.

 

(b)           Existing Investments in Subsidiaries and other Investments in existence on the date hereof and described in Schedule 6.14.

 

(c)           Investments constituting Permitted Acquisitions.

 

(d)           Investments constituting non-speculative Rate Management Transactions.

 

(e)           Travel and relocation advances to management personnel and employees in the ordinary course of business.

 

(f)            Investments comprised of capital contributions (whether in the form of cash, a note, or other assets) to a Subsidiary or other special-purpose entity created solely to engage in a Qualified Receivables Transaction or otherwise resulting from transfers of assets permitted by Section 6.11(d) to such a special-purpose entity.

 

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(g)           Investments, loans or advances made by any Borrower in or to any other Borrower or any Guarantor and made by any Guarantor in or to any Borrower or any other Guarantor.

 

(h)           Investments, unsecured loans or advances made by any non-Guarantor in or to any Borrower or any Guarantor, provided that the payment of any such loans shall be subordinated to payment of the Secured Obligations to the written satisfaction of the Required Lenders and the Administrative Agent.

 

(i)            Investments, unsecured loans or advances made by any Borrower or any Guarantor in or to any non-Guarantor, provided that the aggregate amount of such Investments, taken together with the Indebtedness permitted under Section 6.11(i), does not exceed $10,000,000 at any time outstanding.

 

(j)            Investments not otherwise set forth in clauses (a) through (i) above, provided that the aggregate principal amount of such other Investments does not exceed $25,000,000 at any time outstanding.

 

6.15.       Acquisitions.  The Borrowers will not, nor will they permit any Subsidiary to, make any Acquisition other than Permitted Acquisitions.

 

6.16.       Liens.  The Borrowers will not, nor will they permit any of their Subsidiaries to, create, incur, or suffer to exist any Lien in, of or on the Property of any Borrower or any of their Subsidiaries, except:

 

(a)           Liens for taxes, assessments or governmental charges or levies on its Property if the same shall not at the time be 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 shall have been set aside on its books.

 

(b)           Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ liens and other similar liens arising in the ordinary course of business which secure payment of obligations not more than 60 days past due or which are being contested in good faith by appropriate proceedings and for which adequate reserves shall 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, or 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 and which do not in any material way affect the marketability of the same or interfere with the use thereof in the business of the Borrowers or their 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 accounts, securities accounts or other funds maintained with a creditor depository institution; provided that (i) such account is not a dedicated cash collateral account and is not subject to restriction against

 

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access by the Borrowers or a Subsidiary in excess of those set forth by regulations promulgated by the Board of Governors of the Federal Reserve, and (ii) such account is not intended by the Borrowers or any Subsidiary to provide collateral to the depository institution.

 

(f)            Liens existing on the date hereof and described in Schedule 6.16 and any renewal, extension or replacement of such Liens in connection with the refinancing of any related Indebtedness, solely with respect to the assets originally secured pursuant to such Lien.

 

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

 

(i)            Liens incurred in connection with any transfer of an interest in accounts or notes receivable or related assets and Liens on all assets of any special-purpose entity as part of a Qualified Receivables Transaction.

 

(j)            Liens securing Indebtedness permitted under Section 6.11(f).

 

(k)           Liens securing Indebtedness and not otherwise set forth in clauses (a) through (j) above, provided that the aggregate amount of Indebtedness secured by Liens described in this clause (k) at any time does not exceed $50,000,000 at any time outstanding.

 

6.17.       Net Capital Expenditures.  The Borrowers will not, nor will they permit any of their Subsidiaries to, expend, or be committed to expend, in excess of $150,000,000 for Net Capital Expenditures during any one fiscal year on a non-cumulative basis in the aggregate for the Borrowers and their Subsidiaries; provided that up to $50,000,000 of such amount, if not expended in the fiscal year for which it is permitted, may be carried over for expenditure in the immediately succeeding fiscal year only, but shall not be available in any subsequent fiscal years; provided, further, that if any such amount is so carried over, it will be deemed used in the applicable subsequent fiscal year before the amount of Net Capital Expenditures permitted for such subsequent fiscal year pursuant to the first sentence of this Section 6.17.

 

6.18.       Affiliates.  The Borrowers will not, and will not permit any Subsidiary to, enter into any transaction (including, without limitation, the purchase or sale of any Property or service) with, or make any payment or transfer to, any Affiliate except (i) in the ordinary course of business and pursuant to the reasonable requirements of the Borrowers’ or Subsidiaries’ businesses and upon fair and reasonable terms no less favorable to the applicable Borrower or Subsidiary than such Borrower or Subsidiary would obtain in a comparable arms-length transaction and (ii) transactions between any Borrower or any Subsidiary, on the one hand, and any Subsidiary or other special-purpose entity created to engage solely in a Qualified Receivables Transaction.

 

6.19.       Subordinated Indebtedness.  The Borrowers will not, nor will they permit any of their Subsidiaries to, (a) incur Subordinated Indebtedness in excess of $20,000,000 in the aggregate at any time outstanding or (b) make any amendment or modification to the indenture,

 

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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 other than as permitted under an accompanying subordination agreement in form and substance satisfactory to the Administrative Agent or the Required Lenders.

 

6.20.       Sale of Accounts.  The Borrowers will not, nor will they permit any Subsidiary to, sell or otherwise dispose of any notes receivable or accounts receivable (other than defaulted accounts receivable), with or without recourse except to the extent permitted by Section 6.11(d).

 

6.21.       [Intentionally Omitted].

 

6.22.       Restricted Payments.  The Borrowers will not, nor will they permit any Subsidiary to, make any Restricted Payment, except that (i) any Subsidiary of the Parent may declare and pay dividends or make distributions to a Borrower or to a Wholly-Owned Subsidiary, (ii) the Parent may declare and pay stock dividends to its equity holders, and (iii) provided that no Default or Event of Default shall exist before or after giving effect to such dividends or be created as a result thereof, the Parent may declare and pay cash dividends to its equity holders.

 

6.23.       Financial Covenants.

 

(a)           Fixed Charge Coverage Ratio.  Commencing June 30, 2012, the Parent will not permit the ratio, determined as of the end of each of its fiscal quarters for the then most-recently ended four (4) fiscal quarters, of (i) Consolidated EBITDAR minus Maintenance Capital Expenditures minus Restricted Payments minus cash Taxes to (ii) cash Consolidated Interest Expense plus Consolidated Rentals plus Mandatory Indebtedness Retirement Obligations, all calculated for the Parent and its Subsidiaries on a consolidated basis (such ratio, the “Fixed Charge Coverage Ratio”), to be less than 1.25 to 1.0.  Pro forma treatment of Material Acquisitions and Material Dispositions shall not apply to the calculation of this ratio.

 

(b)           Adjusted Leverage Ratio.  Commencing June 30, 2012, the Parent will not permit the ratio, determined as of the end of each of its fiscal quarters, of (i) Consolidated Adjusted Funded Indebtedness to (ii) Consolidated EBITDAR for the then most-recently ended four (4) fiscal quarters (such ratio, the “Adjusted Leverage Ratio”) to be greater than 3.00 to 1.0.

 

6.24.       Further Assurances.

 

(a)           If the Parent or any Subsidiary of Parent organizes or acquires a new Material Domestic Subsidiary that is not a special-purpose entity created solely to engage in a Qualified Receivables Transaction, the Parent or such Subsidiary will, within thirty (30) days after the date on which such new Material Domestic Subsidiary was organized or acquired (or such later date as may be approved by the Administrative Agent in its sole discretion), cause such new Material Domestic Subsidiary to execute, by joinder, the Guaranty and the Security Agreement, to be accompanied by appropriate corporate resolutions, other corporate documentation, legal opinions in form and substance reasonably satisfactory to the Administrative Agent and its counsel, if requested, and Collateral Documents and associated filings reasonably satisfactory to the Administrative Agent.

 

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(b)           Without limiting the foregoing, each Loan Party will, and will cause each Subsidiary to, execute and deliver, or cause to be executed and delivered, to the Administrative Agent such documents, agreements and instruments (including, without limitation, landlord waivers, bailee agreements, Mortgages and Mortgage Instruments), and will take or cause to be taken such further actions (including the filing and recording of UCC financing statements, fixture filings, Mortgages, deeds of trust and other documents and such other actions or deliveries of the type required by Article IV, as applicable), which may be required by law or which the Administrative Agent may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority of the Liens created or intended to be created by the Collateral Documents, all in form and substance reasonably satisfactory to the Administrative Agent and all at the expense of the Loan Parties.  Without limiting the generality of the foregoing, each Loan Party will cause (i) the issued and outstanding equity interests of each of its Domestic Subsidiaries (including the equity interests of special-purpose entities created solely to engage in a Qualified Receivables Transaction but excluding the equity interests of any Domestic Subsidiaries that are owned directly or indirectly by a controlled foreign corporation (within the meaning of section 957 of the Code) directly owned by such Loan Party) and the Applicable Pledge Percentage of each of its First Tier Foreign Subsidiaries to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent, (ii) substantially all of the personal property of such Loan Party that may be perfected by recordation of UCC financing statements to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent pursuant to such UCC financing statements (subject to the exclusions set forth in the definition of “Excluded Property” in the Security Agreement), and (iii) the eight (8) real properties agreed by the Administrative Agent and the Parent as of the Effective Date (subject to Section 6.25) to be subject at all times to a perfected Lien in favor of the Administrative Agent, in each case, to secure the Secured Obligations in accordance with the terms and conditions of the Collateral Documents or such other pledge and security documents as the Administrative Agent shall reasonably request.  Furthermore, the Administrative Agent may, in its sole discretion at any time after the Effective Date, require each Loan Party to, within sixty (60) days after its request (or such later date as may be approved by the Administrative Agent in its sole discretion), (i) deliver additional Mortgage Instruments for the real property encumbered on the Effective Date, (ii) cause additional real property of such Loan Party to be subject to a first priority, perfected Lien in favor of the Administrative Agent through delivery and filing of Mortgages and Mortgage Instruments, and (iii) cause rolling stock (including vehicles and trailers) of such Loan Party in which a security interest may not be perfected by the recordation of UCC financing statements to be subject to a first priority, perfected Lien in favor of the Administrative Agent, in each case to secure the Secured Obligations in accordance with the terms and conditions of the Collateral Documents or such other pledge and security documents as the Administrative Agent shall reasonably request.

 

(c)           If any Loan Party owns any equity interest in a First Tier Foreign Subsidiary, it will execute and deliver to the Administrative Agent a pledge agreement in a form satisfactory to the Administrative Agent, together with such supporting documentation (including, without limitation, authorizing resolutions and opinions of counsel) as the Administrative Agent may request in order to create a perfected, first priority security interest in the equity interests in such First Tier Foreign Subsidiary, provided that such pledges shall not

 

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exceed the Applicable Pledge Percentage of the equity interests of such First Tier Foreign Subsidiary.

 

6.25.       Post-Closing Covenant.  Within thirty (30) days after the date hereof (or such later date as may be approved by the Administrative Agent in its sole discretion), the Borrowers shall deliver the Mortgages, together with the Mortgage Instruments described in the section entitled “Post-Closing Mortgage and Other Real Property-Related Deliveries” in the List of Closing Documents, for each of the real properties located in Carlisle, Pennsylvania, North Little Rock, Arkansas, and Sauk Village, Illinois.

 

ARTICLE VII

 

DEFAULTS

 

The occurrence of any one or more of the following events shall constitute an Event of Default (each, an “Event of Default”):

 

7.1.         Any representation or warranty made or deemed made by or on behalf of any Borrower or any Subsidiary 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 shall be materially false on the date as of which made or confirmed.

 

7.2.         Nonpayment of (i) principal of any Loan when due or (ii) interest upon any Loan or other obligations under any of the Loan Documents within five (5) days after the same becomes due.

 

7.3.         The breach by any Borrower of any of the terms or provisions of Section 6.2, 6.3, 6.4, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17, 6.18, 6.19, 6.20, 6.22, 6.23, 6.24 or 6.25.

 

7.4.         The breach by any Borrower (other than a breach which constitutes an Event of Default under another Section of this Article VII) of any of the terms or provisions of this Agreement which is not remedied within thirty (30) days after the Parent’s receipt of written notice of such breach from the Administrative Agent or a Lender.

 

7.5.         Failure of any Borrower or any of its Subsidiaries to pay when due any Material Indebtedness; or the default by any 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 contained in any Material Indebtedness Agreement, or any other event shall occur or condition exist, 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; or any Material Indebtedness of any Borrower or any of its Subsidiaries shall be 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 any Borrower or any of its Subsidiaries shall not pay, or admit in writing its inability to pay, its debts generally as they become due.

 

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7.6.         Any Borrower or Active Subsidiary shall (i) have an order for relief entered with respect to it under the Federal bankruptcy laws as now or hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any Substantial Portion of the Property of the Parent and its Subsidiaries, (iv) institute any proceeding seeking an order for relief under the Federal bankruptcy laws as now or hereafter in effect or 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 fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (v) take any corporate or other organizational action to authorize or effect any of the foregoing actions set forth in this Section 7.6 or (vi) fail to contest in good faith any appointment or proceeding described in Section 7.7; provided, however, that should three (3) or more Subsidiaries that are not Active Subsidiaries be subject to events, occurrences or actions set forth in this Section 7.6, an Event of Default shall be deemed to have occurred hereunder.

 

7.7.         Without the application, approval or consent of the relevant Borrower or Active Subsidiary, a receiver, trustee, examiner, liquidator or similar official shall be appointed for such Borrower or Active Subsidiary or any Substantial Portion of such Person’s Property, or a proceeding described in Section 7.6(iv) shall be instituted against such Borrower or Active Subsidiary and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a period of thirty (30) consecutive days; provided, however, that should three (3) or more Subsidiaries that are not Active Subsidiaries be subject to events, occurrences or actions set forth in this Section 7.7, an Event of Default shall be deemed to have occurred hereunder.

 

7.8.         Any court, government or governmental agency shall condemn, seize or otherwise appropriate, or take custody or control of, all or any portion of the Property of any Borrower or Active Subsidiary which, when taken together with all other Property of the Borrowers and Active 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; provided, however, that should three (3) or more Subsidiaries that are not Active Subsidiaries be subject to events, occurrences or actions set forth in this Section 7.8, an Event of Default shall be deemed to have occurred hereunder.

 

7.9.         Any Borrower or any Subsidiary shall fail within thirty (30) days to pay, bond or otherwise discharge one or more (i) judgments or orders for the payment of money in excess of $10,000,000 (or the equivalent thereof in currencies other than Dollars) in the aggregate, or (ii) nonmonetary judgments or orders which, 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.       (a) With respect to a Plan, a Borrower or an ERISA Affiliate is subject to a lien in excess of $10,000,000 pursuant to Section 430(k) of the Code or Section 302(c) of ERISA or Title IV of ERISA, or (b) an ERISA Event shall have occurred 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.

 

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7.11.       Any Change in Control shall occur.

 

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 period of grace therein provided.

 

7.14.  Any Loan Document shall fail to remain in full force or effect or any action shall be taken by a Loan Party to discontinue or to assert the invalidity or unenforceability of any Guaranty, or any Guarantor shall fail to comply with any of the terms or provisions of any Guaranty to which it is a party, or any Guarantor shall deny that it has any further liability under any Guaranty to which it is a party, or shall give notice to such effect.

 

7.15.  Any Collateral Document shall for any reason fail to create a valid and perfected first priority security interest in any Collateral purported to be covered thereby, except as permitted by the terms of any Collateral Document or the terms hereof, or any Collateral Document shall fail to remain in full force or effect or any action shall be taken by a Loan Party to discontinue or to assert the invalidity or unenforceability of any Collateral Document, or any Loan Party shall fail to comply with any of the terms or provisions of any Collateral Document to which it is a party.

 

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 with respect to any Borrower, the obligations of the Lenders to make Loans hereunder shall automatically terminate and the Obligations under this Agreement and the other Loan Documents shall immediately become due and payable without any election or action on the part of the Administrative Agent or any Lender.  If any other Event of Default occurs and is continuing, the Required Lenders (or the Administrative Agent with the consent of the Required Lenders) may terminate or suspend the obligations of the Lenders to make Loans hereunder, or declare the Obligations under this Agreement and the other Loan Documents to be due and payable, or both, whereupon the Obligations under this Agreement and the other Loan Documents shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which the Borrowers hereby expressly waive.

 

(b)           If, within thirty (30) days after acceleration of the maturity of the Obligations under this Agreement and the other Loan Documents or termination of the obligations of the Lenders to make Loans hereunder as a result of any Event of Default (other than any Event of Default as described in Section 7.6 or 7.7 with respect to a Borrower) and before any judgment or decree for the payment of the Obligations under this Agreement and the other Loan Documents shall have been obtained or entered, the Required Lenders (in their sole discretion) shall so direct, the Administrative Agent shall, by notice to the Borrowers, rescind and annul such acceleration and/or termination.

 

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(c)           Upon the occurrence 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 under this Agreement and the other Loan Documents have automatically become immediately due and payable as set forth in the first sentence of Section 8.1(a)), any amounts received by the Administrative Agent on account of the Obligations shall be applied by the Administrative Agent in the following order:

 

(a)           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;

 

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

 

(c)           Third, to payment of accrued and unpaid interest on the Loans, ratably among the Lenders in proportion to the respective amounts described in this Section 8.2(c) payable to them;

 

(d)           Fourth, to payment of all Secured Obligations ratably among the Lenders; and

 

(e)           Last, the balance, if any, to the Borrowers or as otherwise required by Law.

 

8.3.         Amendments.  Subject to the provisions of this Section 8.3, the Required Lenders (or the Administrative Agent with the consent in writing of the Required Lenders), the Borrowers may enter into agreements supplemental hereto for the purpose of adding or modifying any provisions to the Loan Documents (other than the Fee Letter, any Assignment and Assumption Agreement, any Borrowing Subsidiary Agreement, any Increasing Lender Supplement and any Augmenting Lender Supplement, each of which may be amended solely by the parties thereto) or changing in any manner the rights of the Lenders or the Borrowers hereunder or waiving any Default or 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; or postpone any regularly scheduled payment of principal of any Loan (provided, that only the consent of the Required Lenders shall be required to alter the order of application of prepayments as set forth in Sections 2.4(b) or (c) from inverse order to pro rata) or forgive all or any portion of the principal amount thereof; or reduce the rate or extend the time of payment of interest or fees thereon; or increase the amount of the Commitment of such Lender hereunder.

 

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(b)           without the consent of all of the Lenders, change the definition of Required Lenders.

 

(c)           without the consent of all of the Lenders, amend this Section 8.3 or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder.

 

(d)           without the consent of all of the Lenders, release all or substantially all of the Guarantors of the Obligations or, except as otherwise provided in Section 10.16, release all or substantially all of the Collateral.

 

(e)           without the consent of each Lender directly affected thereby, amend Section 8.2.

 

No amendment of any provision of this Agreement relating to the Administrative Agent shall be effective without the written consent of the Administrative Agent.  The Administrative Agent may waive payment of the fee required under Section 12.3(c) without obtaining the consent of any other party to this Agreement.  Notwithstanding anything to the contrary herein, the Administrative Agent may, with the consent of the Borrowers only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure any ambiguity, omission, mistake, defect or inconsistency of a technical or immaterial nature, as determined in good faith by the Administrative Agent.

 

8.4.         Preservation of Rights.  No delay or omission of the Lenders 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 an Event of Default or the inability of the Borrowers 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 8.3, and then only to the extent in such writing specifically set forth.  All remedies contained in the Loan Documents or by law afforded shall be cumulative and all shall be available to the Administrative Agent and the Lenders until the Obligations have been paid in full.

 

8.5.         Secured Rate Management Transactions and Secured Cash Management Services.  No Lender or Affiliate that provides Cash Management Services or Rate Management Transactions that obtains the benefits of any Collateral by virtue of the provisions hereof or of any Collateral Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents.  Notwithstanding any other provision of this Article VIII to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Cash Management Services and Rate Management Transactions.

 

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ARTICLE IX

 

GENERAL PROVISIONS

 

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

 

9.2.         Governmental Regulation.  Anything contained in this Agreement to the contrary notwithstanding, no Lender shall be obligated to extend credit to the Borrowers 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 Borrowers, the Administrative Agent and the Lenders and supersede all prior agreements and understandings among the Borrowers, the Administrative Agent and the Lenders relating to the subject matter thereof other than those contained in the Fee Letter which shall survive and remain in full force and effect during the term of this Agreement.

 

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 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 Borrowers shall reimburse the Administrative Agent and the Arranger upon demand for all reasonable and documented 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, and consultants’ fees, travel expenses, CUSIP registration expenses and reasonable fees, charges and disbursements of one primary legal counsel for the Administrative Agent and the Arranger, one local counsel in each relevant jurisdiction for the Administrative Agent and the Arranger, and regulatory counsel for the Administrative Agent and the Arranger, in each case, incurred from time to time, in connection with the due diligence, preparation, administration, negotiation, execution, delivery, syndication, distribution (including, without limitation, via DebtX and any other internet service selected by the Administrative Agent), review, amendment, modification and administration of the Loan Documents.  The Borrowers also agree to reimburse the Administrative Agent, the Arranger and

 

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the Lenders for any costs and out-of-pocket expenses, including, without limitation, filing and recording costs and fees, costs of any environmental review, and consultants’ fees, travel expenses and reasonable fees, charges and disbursements of one primary legal counsel for the Administrative Agent and the Arranger, one local counsel in each relevant jurisdiction for the Administrative Agent and the Arranger, regulatory counsel for the Administrative Agent and the Arranger, one additional counsel for all Lenders other than the Administrative Agent, and additional counsel in light of actual or potential conflicts of interest or the availability of different claims or defenses, in each case, incurred from time to time, paid or incurred by the Administrative Agent, the Arranger or any Lender in connection with the collection and enforcement of the Loan Documents.  Expenses being reimbursed by the Borrowers under this Section include, without limitation, the cost and expense incurred in connection with the Reports described in the following sentence.  The Borrowers acknowledge 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 Borrowers’ assets for internal use by U.S. Bank from information furnished to it by or on behalf of the Borrowers, after U.S. Bank has exercised its rights of inspection pursuant to this Agreement.

 

(b)           The Borrowers hereby further agree to jointly and severally indemnify and hold harmless the Administrative Agent, each Lender, their respective affiliates, and each of their directors, officers and employees, agents and advisors against all losses, claims, damages, penalties, judgments, liabilities and expenses (including, without limitation, all expenses of litigation or preparation therefor (including reasonable fees, charges and disbursements of outside counsel) whether or not the Administrative Agent, any Lender or any affiliate is a party thereto) which any of them may pay or incur arising out of or relating to this Agreement, the other Loan Documents, the transactions contemplated hereby, any actual or alleged presence or release of Hazardous Materials on or from any Property owned or operated by any Borrower or any of their Subsidiaries, any environmental liability related in any way to any Borrower or any Subsidiary, or any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party, any Borrower or any Subsidiary, or the direct or indirect application or proposed application of the proceeds of any Credit Extension hereunder except (i) to the extent that they relate solely to a dispute among the Lenders or (ii) 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, including, without limitation, reasonable attorneys’ fees and settlement costs.  The obligations of the Borrowers under this Section 9.6 shall survive the termination of this Agreement.

 

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, and all financial ratios shall be determined on a consolidated basis in accordance with GAAP; provided, however that, notwithstanding any other

 

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provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made without giving effect to (i) any election under Accounting Standards Codification Section 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Borrower or any of its Subsidiaries at “fair value”, as defined therein, or (ii) any treatment of Indebtedness in respect of convertible debt instruments under Financial Accounting Standards Codification Subtopic 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.  If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and the Borrowers, the Administrative Agent and the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrowers 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 Borrowers 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 Borrowers on the one hand and the Lenders and the Administrative Agent on the other hand shall be solely that of borrower and lender.  Neither the Administrative Agent, the Arranger nor any Lender shall have any fiduciary responsibilities to the Borrowers.  Neither the Administrative Agent, the Arranger nor any Lender undertakes any responsibility to the Borrowers to review or inform them of any matter in connection with any phase of the Borrowers’ businesses or operations.  The Borrowers agree that neither the Administrative Agent, the Arranger nor any Lender shall have liability to the Borrowers (whether sounding in tort, contract or otherwise) for losses suffered by the Borrowers 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 nor any Lender shall have any liability with respect to, and the Borrowers hereby waive, release and agree not to sue for, any special, indirect, consequential or punitive damages suffered by the Borrowers in connection with, arising out of, or in any way related to the Loan Documents or the transactions contemplated thereby.  It is agreed that the Arranger shall, in its capacity as such, have no duties or responsibilities under the Agreement or any other Loan Document. Each Lender acknowledges that it has not relied and will not rely on the

 

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Arranger in deciding to enter into the Agreement or any other Loan Document or in taking or not taking any action.

 

9.11.       Confidentiality.  The Administrative Agent and each Lender agrees to hold any confidential information which it may receive from any Borrower 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 legal counsel, accountants, and other professional advisors to the Administrative Agent or such Lender or to a Transferee, (iii) to regulatory officials, (iv) to any Person 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, (vii) to rating agencies if requested or required by such agencies in connection with a rating relating to the Advances hereunder, (viii) to any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement, (ix) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, and (x) to the extent such information (1) becomes publicly available other than as a result of a breach of this section or (2) becomes available to the Administrative Agent or any Lender on a non-confidential basis from a source other than a Borrower; in each case of clauses (i), (ii), and (v) through (viii), provided the relevant Persons are advised of and instructed to adhere to such confidentiality requirements.  Without limiting Section 9.4, the Borrowers agree that the terms of this Section 9.11 shall set forth the entire agreement between the Borrowers 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 9.11 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) for the repayment of the Credit Extensions provided for herein.

 

9.13.       Disclosure.  Each 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 Borrowers and their Affiliates.

 

9.14.       USA PATRIOT ACT NOTIFICATION.  The following notification is provided to the Loan Parties pursuant to Section 326 of the Patriot Act:

 

Each Lender that is subject to the requirements of the Patriot Act hereby notifies the Borrowers and each other Loan Party that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies such Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the Patriot Act.

 

9.15.       Bankruptcy Petition.  The Administrative Agent and each Lender hereby covenant and agree that, prior to the date that is one year and one day after the payment in full of all

 

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Indebtedness and other obligations of any special-purpose entity formed pursuant to any Qualified Receivables Transaction under such Qualified Receivables Transaction, it will not institute against, or join any other Person in instituting against, such special-purpose entity any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.

 

ARTICLE X

 

THE ADMINISTRATIVE AGENT

 

10.1.       Appointment; Nature of Relationship.  U.S. Bank National Association is hereby appointed by each of the Lenders 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 contained 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 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 of each thereof, together with such powers as are reasonably incidental thereto.  The Administrative Agent shall have no implied duties to the Lenders, or any 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 Borrowers, the Lenders or any Lender for any action taken or omitted to be taken by it or them 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 such Person.

 

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

 

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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 Borrowers or any guarantor of any of the Obligations or of any of the Borrowers’ 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 it shall be requested in writing to do so by the Required Lenders.  The Administrative Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Loan Document unless it shall first be 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.

 

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 such 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 believed by it 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 shall have 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 Pro Rata Shares (disregarding, for the avoidance of doubt, the exclusion of Defaulting Lenders

 

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therein) (i) for any amounts not reimbursed by the Borrowers for which the Administrative Agent is entitled to reimbursement by the Borrowers 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 which 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(d) shall, notwithstanding the provisions of this Section 10.8, be paid by the relevant Lender in accordance with the provisions thereof.  The obligations of the Lenders under this Section 10.8 shall survive payment of the Obligations and termination of this Agreement.

 

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 a 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 not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Borrower or any Subsidiary 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 indicates, 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 any Borrower or any Subsidiary in which such Borrower or such Subsidiary is not restricted hereby from engaging with any other Person.

 

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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 Parent 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 shall deem 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 any Borrower or any of the Borrowers’ 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 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 Borrowers, such resignation to be effective upon the appointment of a successor Administrative Agent or, if no successor Administrative Agent has been appointed, forty-five (45) days after the retiring Administrative Agent gives notice of its intention to resign.  The Administrative Agent may be removed at any time that it constitutes a Defaulting Lender by written notice received by the Administrative Agent from the Required Lenders, such removal to be effective on the date specified by the Required Lenders.  Upon any such resignation or removal, the Required Lenders shall have the right to appoint, on behalf of the Borrowers and the Lenders, a successor Administrative Agent.  If no successor Administrative Agent shall have been so appointed by the Required Lenders within thirty (30) 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 Borrowers and the Lenders, a successor Administrative Agent.  Notwithstanding the previous sentence, the Administrative Agent may at any time, with the consent of the Parent (so long as no Event of Default has occurred and is continuing), and without the consent of any Lender, appoint any of its Affiliates which 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 Borrowers 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

 

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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 or removal of the Administrative Agent, the resigning or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the Loan Documents.  After the effectiveness of the resignation or removal 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.  In the event that there is a successor to the Administrative Agent by merger, or the Administrative Agent assigns its duties and obligations to an Affiliate pursuant to this Section 10.12, then the term “Prime Rate” as used in this Agreement shall mean the prime rate, base rate or other analogous rate of the new Administrative Agent.

 

10.13.     Administrative Agent and Arranger Fees.  The Parent agrees to pay to the Administrative Agent and the Arranger, for their respective accounts, the fees agreed to by the Parent, the Administrative Agent and the Arranger pursuant to that certain letter agreement dated as of May 8, 2012 between U.S. Bank and the Parent (as amended, restated, supplemented or otherwise modified, renewed or replaced from time to time pursuant to the terms hereof and thereof, the “Fee Letter”), or as otherwise agreed from time to time.

 

10.14.     Delegation to Affiliates.  The Borrowers 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) which 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 Borrowers on their behalf the Collateral Documents and all related UCC financing statements and any UCC financing statements, agreements, documents or instruments as shall be 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 Borrowers on their behalf any agreements, documents or instruments as shall be necessary or appropriate to effect any releases of (i) Collateral which shall be permitted by the terms hereof or of any other Loan Document or which shall otherwise have been approved by the Required Lenders (or, if required by the terms of Section 8.3, all of the Lenders) in writing or (ii) Guarantors which shall be permitted by the terms hereof (either pursuant to Section 6.13(c) or as a result of such Guarantor no longer constituting a “Material Domestic Subsidiary” pursuant to the requirements of such definition) or of any other Loan Document or which shall otherwise have been approved by the Required Lenders (or, if required by the terms of Section 8.3, all of the Lenders) in writing; provided that should such Guarantor subsequently constitute a “Material Domestic Subsidiary” pursuant to the

 

69

 

requirements of such definition, it shall be required to become a Guarantor under the Loan Documents pursuant to Section 6.24(a).

 

10.17.     Syndication Agents, etc.  Neither any of the Lenders identified in this Agreement as a Syndication Agent shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such.  Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender.  Each Lender hereby makes the same acknowledgments with respect to such Lenders as it makes with respect to the Administrative Agent in Section 10.11.

 

10.18.     No Advisory or Fiduciary Responsibility.  In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each Borrower acknowledges and agrees that: (i)(A) the arranging and other services regarding this Agreement provided by the Lenders are arm’s-length commercial transactions between the Borrowers and their Affiliates, on the one hand, and the Lenders, on the other hand, (B) each Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) each Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii)(A) each of the Lenders is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for any Borrower or any of its Affiliates, or any other Person and (B) no Lender has any obligation to any Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) each of the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrowers and their Affiliates, and no Lender has any obligation to disclose any of such interests to the Borrowers or their Affiliates.  To the fullest extent permitted by law, each Borrower hereby waives and releases any claims that it may have against each of the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 

ARTICLE XI

 

SETOFF; RATABLE PAYMENTS

 

11.1.       Setoff.  Each Borrower hereby acknowledges the setoff right that each Lender retains in all deposits, credits and deposit accounts (including all account balances, whether provisional or final and whether or not collected or available) of such 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 any Borrower becomes insolvent, however evidenced, or any Event of Default occurs, such 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, shall then be due and regardless of the existence or adequacy of any collateral, guaranty or any other security, right or remedy available to such Lender or the Lenders; provided, that in the event that any Defaulting Lender shall exercise such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative

 

70

 

Agent for further application in accordance with the provisions of Section 2.18 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.

 

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 which might be subject to setoff or otherwise, receives collateral or other protection for its Obligations or such amounts which 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 or other protection 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, appropriate further adjustments shall be made.

 

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 Borrowers and the Lenders and their respective successors and assigns permitted hereby, except that (i) no Borrower shall 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 and 12.3(c).  Any attempted assignment or transfer by any party not made in compliance with this Section 12.1 shall be null and void, unless such attempted assignment or transfer is treated as a participation in accordance with the terms of this Agreement.  The parties to this Agreement acknowledge that clause (ii) of this Section 12.1 relates only to absolute assignments and this Section 12.1 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 which 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 which made any Loan or which 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 which made any Loan or which 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

 

71

 

assignment to be bound by all the terms and provisions of the Loan Documents.  Any request, authority or consent of any Person, who 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.

 

(a)           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.  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 Borrowers under this Agreement shall be determined as if such Lender had not sold such participating interests, and the Borrowers 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.

 

(b)           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 provided that each such Lender may agree in its participation agreement with its Participant that such Lender will not vote to approve any amendment, modification or waiver with respect to any Outstanding Credit Exposure or Commitment in which such Participant has an interest which would require consent of all of the Lenders pursuant to the terms of Section 8.3 or of any other Loan Document.

 

(c)           Benefit of Certain Provisions.  Each 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 Borrowers further agree that each Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4, 3.5, 9.6 and 9.10 (subject to the requirements and limitations therein, including the requirements under Section 3.5(f) (it being understood that the documentation required under Section 3.5(f) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 12.3, provided that 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 Borrowers.  Each Lender that sells a

 

72

 

participation shall, acting solely for this purpose as an agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in any Outstanding Credit Exposure, any Note, any Commitment or any other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Outstanding Credit Exposure, any Note, any Commitment or any other obligations under the Loan Documents) to any Person except to the extent that such disclosure is necessary to establish that such Outstanding Credit Exposure, any Note, any Commitment or any other obligations under the Loan Documents is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

12.3.       Assignments.

 

(a)           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 C or in such other form reasonably acceptable to the Administrative Agent as may be agreed to by the parties thereto.  Each such assignment with respect to a Purchaser which is not a Lender or 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 Borrowers and the Administrative Agent otherwise consent) 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.

 

(b)           Consents.  The consent of the Borrowers 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 Borrowers shall not be required if an Event of Default has occurred and is continuing; provided  further that the Borrowers shall be deemed to have consented to any such assignment unless they shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof.  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.  Any consent required under this Section 12.3(b) shall not be unreasonably withheld or delayed.

 

(c)           Effect; Effective Date.  Upon (i) delivery to the Administrative Agent of an assignment, together with any consents required by Sections 12.3(a) and 12.3(b), and (ii) payment by the assigning Lender or assignee Lender of a $3,500 fee to the Administrative Agent for processing such assignment (unless such fee is waived by the Administrative Agent), such assignment shall become effective on the effective date specified in such assignment.  The

 

73

 

 

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 Borrowers, 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 which 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 12.3 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 12.3(c), the transferor Lender, the Administrative Agent and the Borrowers 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.

 

(d)           Register.  The Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at one of its offices in the United States of America, a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Lender, pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrowers, 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 any Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.

 

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

 

74

 

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 facsimile and e-mail as follows:

 

(i)            if to the Borrowers, to them at c/o Arkansas Best Corporation, P.O. Box 10048, Fort Smith, AR 72917-0048, Attention:  Don Pearson, Facsimile:  (479) 785-8650, E-mail:  dpearson@arkbest.com;

 

(ii)           if to the Administrative Agent, to it at U.S. Bank National Association, Agency Services, 800 Nicollet Mall, 3rd Floor, Minneapolis, MN  55402-7020, Attention: Cheryl Durst, Facsimile:  (612) 303-3851, E-mail:  CHERYL.DURST@usbank.com; with a copy to U.S. Bank National Association, Lending Services, 800 Nicollet Mall, 3rd Floor, Minneapolis, MN  55402-7020, Attention: Ted Hanson, Facsimile:  (612) 303-2265, E-mail:  edward.hanson1@usbank.com;

 

(iii)          if to a Lender, to it at its address (or facsimile number or e-mail address) 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 facsimile and e-mail shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given 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.  Each of the parties hereto hereby agrees that all notices and other communications to one another hereunder may be delivered or furnished by electronic communication (including e-mail and internet or intranet websites).

 

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.

 

75

 

(c)           Change of Address, Etc.  Any party hereto may change its address, facsimile number or e-mail address for notices and other communications hereunder by notice to the other parties hereto given in the manner set forth in this Section 13.1.

 

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 it shall have been executed by the Administrative Agent, and when the Administrative Agent shall have received counterparts hereof which, 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 or electronic means (including pdf) shall be effective as delivery of a manually executed counterpart of this Agreement.

 

14.2.       Electronic Execution of Assignments.  The words “execution,” “signed,” “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.

 

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 OTHER THAN NEW YORK GENERAL OBLIGATIONS LAW SECTIONS 5-1401 AND 5-1402) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

 

15.2.       CONSENT TO JURISDICTION.  EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND EACH BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY

 

76

 

WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BROUGHT BY THE ADMINISTRATIVE AGENT OR ANY LENDER IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.  NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.

 

15.3.       WAIVER OF JURY TRIAL.  EACH BORROWER, THE ADMINISTRATIVE AGENT 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]

 

77

 

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

 

 

	
 
    	
ARKANSAS   BEST CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Donald W. Pearson
    
	
 
    	
Name:
    	
Donald   W. Pearson
    
	
 
    	
Title:
    	
Vice   President - Treasurer
    

 

Signature Page to

Arkansas Best Credit Agreement

 

 

	
 
    	
U.S.   BANK NATIONAL ASSOCIATION,
   as a Lender and as Administrative Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Edward B. Hanson
    
	
 
    	
Name:
    	
Edward   B. Hanson
    
	
 
    	
Title:
    	
Vice   President
    

 

Signature Page to

Arkansas Best Credit Agreement

 

 

	
 
    	
BRANCH   BANKING AND TRUST COMPANY, as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert M. Searson
    
	
 
    	
Name:
    	
Robert   M. Searson
    
	
 
    	
Title:
    	
Senior   Vice President
    

 

Signature Page to

Arkansas Best Credit Agreement

 

 

	
 
    	
PNC   BANK, NATIONAL ASSOCIATION, as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gerald S. Kirk
    
	
 
    	
Name:
    	
Gerald   S. Kirk
    
	
 
    	
Title:
    	
Vice   President
    

 

Signature Page to

Arkansas Best Credit Agreement

 

 

	
 
    	
REGIONS   BANK,
   as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   David Cravens
    
	
 
    	
Name:
    	
David   Cravens
    
	
 
    	
Title:
    	
Executive   Vice President
    

 

Signature Page to

Arkansas Best Credit Agreement

 

 

	
 
    	
THE   FIRST NATIONAL BANK OF FORT SMITH, as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   James C. Fourmy, Jr.
    
	
 
    	
Name:
    	
James   C. Fourmy, Jr.
    
	
 
    	
Title:
    	
Senior   Vice President
    

 

Signature Page to

Arkansas Best Credit Agreement

 

 

 

PRICING SCHEDULE

 

	
APPLICABLE
   MARGIN
    	
 
    	
LEVEL I
    STATUS
    	
 
    	
LEVEL II
   STATUS
    	
 
    	
LEVEL III
   STATUS
    	
 
    	
LEVEL IV
   STATUS
    	
 
    	
LEVEL V
   STATUS
    	
 
    
	
Eurodollar Rate
    	
 
    	
1.25
    	
%
    	
1.50
    	
%
    	
1.75
    	
%
    	
2.00
    	
%
    	
2.50
    	
%
    
	
Base Rate
    	
 
    	
0.25
    	
%
    	
0.50
    	
%
    	
0.75
    	
%
    	
1.00
    	
%
    	
1.50
    	
%
    

 

For the purposes of this Schedule, the following terms have the following meanings, subject to the final paragraph of this Schedule:

 

“Financials” means the annual or quarterly financial statements of the Parent delivered pursuant to Section 6.1(a) or (b), together with the compliance certificate delivered pursuant to Section 6.1(d).

 

“Level I Status” exists at any date if, as of the last day of the fiscal quarter of the Parent referred to in the most recent Financials, the Adjusted Leverage Ratio is less than or equal to 1.00 to 1.00.

 

“Level II Status” exists at any date if, as of the last day of the fiscal quarter of the Parent referred to in the most recent Financials, (i) the Parent has not qualified for Level I Status and (ii) the Adjusted Leverage Ratio is less than or equal to 1.50 to 1.00.

 

“Level III Status” exists at any date if, as of the last day of the fiscal quarter of the Parent referred to in the most recent Financials, (i) the Parent has not qualified for Level I Status or Level II Status and (ii) the Adjusted Leverage Ratio is less than or equal to 2.00 to 1.00.

 

“Level IV Status” exists at any date if, as of the last day of the fiscal quarter of Parent referred to in the most recent Financials, (i) the Parent has not qualified for Level I Status, Level II Status or Level III Status and (ii) the Adjusted Leverage Ratio is less than or equal to 2.50 to 1.00.

 

“Level V Status” exists at any date if the Parent has not qualified for Level I Status, Level II Status, Level III Status or Level IV Status.

 

“Status” means either Level I Status, Level II Status, Level III Status, Level IV Status or Level V Status.

 

The Applicable Margin shall be determined in accordance with the foregoing table based on the Parent’s Status as reflected in the then most recently delivered Financials.  Adjustments, if any, to the Applicable Margin shall be effective from and after the first day of the first fiscal month immediately following the date on which the delivery of such Financials is required until the first day of the first fiscal month immediately following the next such date on which delivery of such Financials of the Parent and its Subsidiaries is so required.  If the Parent fails to deliver the Financials to the Administrative Agent at the time required pursuant to Section 6.1, then the Applicable Margin shall be the highest Applicable Margin set forth in the foregoing table until three (3) days after such Financials are so delivered.  Until the third day after delivery of the

 

 

Financials for the fiscal quarter ending on December 31, 2012, the Applicable Margin shall be the higher of (i) the applicable rate per annum corresponding to the Status associated with the Adjusted Leverage Ratio as of the Effective Date and (ii) the applicable rate per annum corresponding to Level III Status.

 

 

SCHEDULE 1
 Commitments

 

	
Lender
    	
 
    	
Total
   Commitment
    	
 
    	
Total Commitment
   Percentage
    	
 
    
	
U.S. BANK NATIONAL   ASSOCIATION
    	
 
    	
$
    	
27,500,000
    	
 
    	
27.500000000000
    	
%
    
	
BRANCH BANKING AND TRUST   COMPANY
    	
 
    	
$
    	
25,000,000
    	
 
    	
25.000000000000
    	
%
    
	
PNC BANK, NATIONAL ASSOCIATION
    	
 
    	
$
    	
25,000,000
    	
 
    	
25.000000000000
    	
%
    
	
REGIONS BANK
    	
 
    	
$
    	
12,500,000
    	
 
    	
12.500000000000
    	
%
    
	
THE FIRST NATIONAL BANK OF FORT   SMITH
    	
 
    	
$
    	
10,000,000
    	
 
    	
10.000000000000
    	
%
    
	
TOTAL COMMITMENTS
    	
 
    	
$
    	
100,000,000
    	
 
    	
100.00
    	
%
    

 

 

Schedule 5.8

 

Subsidiaries

 

PART I.                                                  Subsidiaries of Borrowers before giving effect to the FastCat Acquisition:

 

	
 
    	
 
    	
Jurisdiction of
    	
 
    	
% Ownership
    	
 
    
	
Name
    	
 
    	
Incorporation
    	
 
    	
Interest
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Subsidiaries of Arkansas Best   Corporation:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ABF Freight System, Inc.
    	
 
    	
Delaware
    	
 
    	
100
    	
 
    
	
Transport Realty, Inc.
    	
 
    	
Arkansas
    	
 
    	
100
    	
 
    
	
Data-Tronics Corp.
    	
 
    	
Arkansas
    	
 
    	
100
    	
 
    
	
ABF Cartage, Inc.
    	
 
    	
Delaware
    	
 
    	
100
    	
 
    
	
Land-Marine Cargo, Inc.
    	
 
    	
Puerto   Rico
    	
 
    	
100
    	
 
    
	
ABF Freight System Canada, Ltd.
    	
 
    	
Canada
    	
 
    	
100
    	
 
    
	
ABF Freight System de Mexico, Inc.
    	
 
    	
Delaware
    	
 
    	
100
    	
 
    
	
Motor Carrier Insurance, Ltd.
    	
 
    	
Bermuda
    	
 
    	
100
    	
 
    
	
Tread-Ark Corporation
    	
 
    	
Delaware
    	
 
    	
100
    	
 
    
	
ABF Farms, Inc.
    	
 
    	
Arkansas
    	
 
    	
100
    	
 
    
	
Global Supply Chain Services, Inc.
    	
 
    	
Arkansas
    	
 
    	
100
    	
 
    
	
Albert Companies, Inc.
    	
 
    	
Delaware
    	
 
    	
100
    	
 
    
	
Moving Solutions, Inc.
    	
 
    	
Arkansas
    	
 
    	
100
    	
 
    
	
Carotrans Canada, LTD
    	
 
    	
Canada
    	
 
    	
100
    	
 
    
	
Carotrans de Mexico,   S.A. DE C.V.
    	
 
    	
Mexico
    	
 
    	
100
    	
 
    
	
PartSpan, Inc.
    	
 
    	
Arkansas
    	
 
    	
100
    	
 
    
	
Fast Cat   Acquisition, Inc.
    	
 
    	
Delaware
    	
 
    	
100
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Subsidiaries of Albert   Companies, Inc.
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Addison Moving and   Storage, Inc.
    	
 
    	
Texas
    	
 
    	
100
    	
 
    
	
Albert Furniture   Company 
    	
 
    	
Texas
    	
 
    	
100
    	
 
    
	
Albert Moving &   Storage, Inc.
    	
 
    	
Texas
    	
 
    	
100
    	
 
    
	
Albert Container   Concepts 
    	
 
    	
Texas
    	
 
    	
100
    	
 
    
	
Albert   Properties, Ltd.
    	
 
    	
Texas
    	
 
    	
100
    	
 
    
	
Beck Forwarding   Company, Inc.
    	
 
    	
Texas
    	
 
    	
100
    	
 
    
	
Brian Forwarding   Company, Inc.
    	
 
    	
Texas
    	
 
    	
100
    	
 
    
	
James Forwarding   Company, Inc.
    	
 
    	
Texas
    	
 
    	
100
    	
 
    
	
Jason Forwarding   Company, Inc.
    	
 
    	
Texas
    	
 
    	
100
    	
 
    
	
Justin Forwarding   Company, Inc.
    	
 
    	
Texas
    	
 
    	
100
    	
 
    
	
Robert Forwarding   Company, Inc.
    	
 
    	
Texas
    	
 
    	
100
    	
 
    
	
Wichita Valley   Distributors, Inc.
    	
 
    	
Texas
    	
 
    	
100
    	
 
    
	
Moving Hound, LLC
    	
 
    	
Texas
    	
 
    	
100
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Subsidiaries of ABF Freight   System, Inc.:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
FreightValue, Inc.
    	
 
    	
Arkansas
    	
 
    	
100
    	
 
    
	
ABF Freight System (B.C.) Ltd.
    	
 
    	
British   Columbia
    	
 
    	
100
    	
 
    
	
ABF Aviation, LLC
    	
 
    	
Arkansas
    	
 
    	
100
    	
 
    
	
ABF Freight Funding LLC
    	
 
    	
Delaware
    	
 
    	
100
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Subsidiaries of Tread-Ark   Corporation (formerly Treadco, Inc.):
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
FleetNet America, Inc.
    	
 
    	
Arkansas
    	
 
    	
100
    	
 
    

 

 

PART II.                                             Additional Subsidiaries of the Borrowers after giving effect to the FastCat Acquisition:

 

	
 
    	
 
    	
Jurisdiction of
    	
 
    	
% Ownership
    	
 
    
	
Name
    	
 
    	
Incorporation
    	
 
    	
Interest
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Subsidiaries of Arkansas Best   Corporation:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Panther Expedited Services, Inc.
    	
 
    	
Delaware
    	
 
    	
100
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Subsidiaries of Panther   Expedited Services, Inc.:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Panther II Transportation, Inc.
    	
 
    	
Ohio
    	
 
    	
100
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Subsidiaries of Panther II   Transportation, Inc.:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Panther II, Inc.
    	
 
    	
Ohio
    	
 
    	
100
    	
 
    
	
Panther Global Premium Logistics, Inc.
    	
 
    	
Ohio
    	
 
    	
100
    	
 
    
	
Elite Transportation Services, LLC
    	
 
    	
Oregon
    	
 
    	
100
    	
 
    
	
Integres Global Logistics, Inc.
    	
 
    	
Delaware
    	
 
    	
100
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Subsidiaries of Integres Global   Logistics, Inc.:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Key Transportation Services, Inc.
    	
 
    	
Texas
    	
 
    	
100
    	
 
    

 

 

Schedule 5.14

Properties

 

15.4.       PART I.                 Exceptions before giving effect to the FastCat Acquisition:

 

15.5.       None.

 

15.6.       PART II.               Additional exceptions after giving effect to the FastCat Acquisition:

 

15.7.       None.

 

 

Schedule 6.11

 

Indebtedness

 

PART I.                                                  Indebtedness of the Borrowers and their Subsidiaries before giving effect to the FastCat Acquisition:

 

1.              Indebtedness under that certain Letter of Credit Agreement, dated December 8, 2009 between PNC Bank, National Association and Arkansas Best Corporation in the approximate outstanding amount of $2.2 million.

 

2.              Indebtedness under that certain Letter of Credit Agreement, dated December 9, 2009 between Arkansas Best Corporation and SunTrust Bank in the approximate outstanding amount of $1.0 million.

 

3.              Indebtedness under that certain Letter of Credit Agreement, dated November 17, 2011 between BOKF, National Association and Arkansas Best Corporation in the approximate outstanding amount of $4.0 million.

 

4.              Indebtedness under that certain Continuing Reimbursement Agreement for Letters of Credit, dated as of November 4, 2011 between U.S. Bank National Association and Arkansas Best Corporation in the approximate outstanding amount of $3.7 million.

 

5.              Indebtedness under that certain Continuing Reimbursement Agreement for Letters of Credit, dated as of November 4, 2011 with BB&T Bank in the approximate outstanding amount of $3.7 million.

 

6.              Indebtedness under that certain Letter of Credit Agreement, dated August 23, 1993 with First National Bank of Fort Smith in the approximate outstanding amount of $600,000.

 

7.              Indebtedness under that certain Letter of Credit Agreement, dated November 17, 2011 between BOKF, National Association and Arkansas Best Corporation in the approximate outstanding amount of $4.0 million.

 

Part II.                                                       Additional Indebtedness of the Borrowers and their Subsidiaries after giving effect to the FastCat Acquisition:

 

None.

 

 

Schedule 6.14

 

Investments

 

PART I.                                                  Investments of the Borrowers and their Subsidiaries before giving effect to the FastCat Acquisition:

 

None.

 

PART II.                                             Additional Investments of the Borrowers and their Subsidiaries after giving effect to the FastCat Acquisition:

 

None.

 

 

Schedule 6.16

 

Liens

 

PART I.                                                  Liens against the Borrowers and their Subsidiaries before giving effect to the FastCat Acquisition:

 

1.         Liens on cash which secure outstanding letters of credit and the Letter of Credit Agreements on Schedule 6.11.

 

PART II.                                             Additional Liens against the Borrowers and their Subsidiaries after giving effect to the FastCat Acquisition:

 

None.

 

 

EXHIBIT A

 

[Reserved].

 

EXH. A-1

 

 

EXHIBIT B

 

FORM OF COMPLIANCE CERTIFICATE

 

To:                             The Lenders parties to the
 Credit Agreement Described Below

 

This Compliance Certificate is furnished pursuant to that certain Credit Agreement dated as of June 15, 2012 (as amended, modified, renewed or extended from time to time, the “Agreement”) among Arkansas Best Corporation (the “Parent”), the Borrowing Subsidiaries from time to time party thereto (together with the Parent, the “Borrowers”), the lenders party thereto and U.S. Bank National Association, as Administrative Agent for the Lenders.  Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.

 

THE UNDERSIGNED HEREBY CERTIFIES THAT:

 

1.             I am the duly elected [Chief Financial Officer][Treasurer] of the Parent;

 

2.             I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Borrowers and their Subsidiaries during the accounting period covered by the attached financial statements;

 

3.             The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes a Default or Event of Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth below; and

 

4.             Schedule I attached hereto sets forth financial data and computations evidencing the Borrowers’ compliance with certain covenants of the Agreement, all of which data and computations are true, complete and correct.

 

5.             Schedule II hereto sets forth the determination of the interest rates to be paid for Advances commencing on the first day of the first fiscal month immediately following the date on which the delivery hereof is required under the Credit Agreement.

 

6.             Schedule III attached hereto sets forth the various reports and deliveries which are required at this time under the Credit Agreement, the Collateral Documents and the other Loan Documents, and the status of compliance.

 

Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Borrowers have taken, are taking, or propose to take with respect to each such condition or event:

 

EXH. B-1

 

 

 

The foregoing certifications, together with the computations set forth in Schedule I and Schedule II hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this      day of               ,       .

 

 

	
 
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:   [Chief Financial Officer][Treasurer]
    

 

EXH. B-2

 

SCHEDULE I TO COMPLIANCE CERTIFICATE

 

Compliance as of [                  ], 20[    ] with
 Provisions of Section 6.23 of
 the Agreement

 

 

SCHEDULE II TO COMPLIANCE CERTIFICATE

 

Borrowers’ Applicable Margin Calculation

 

 

SCHEDULE III TO COMPLIANCE CERTIFICATE

 

Reports and Deliveries Currently Due

 

 

EXHIBIT C

 

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

 

 

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.  The Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below, the interest in and to all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto that represents the amount and percentage interest identified below of all of the Assignor’s outstanding rights and obligations under the respective facilities identified below (including without limitation any letters of credit, guaranties and swing line loans included in such facilities and, to the extent permitted to be assigned under applicable law, all claims (including without limitation contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity), suits, causes of action and any other right of the Assignor against any Person whether known or unknown arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby) (the “Assigned Interest”).  Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

 

	
1.
    	
Assignor:
    	
 
    
	
 
    	
 
    	
 
    
	
2.
    	
Assignee:
    	
                                                              [and   is an Affiliate/ Approved Fund of [identify Lender](1)(1)
    
	
 
    	
 
    	
 
    
	
3.
    	
Borrowers:
    	
 
    

 

(1)  Select as applicable.

 

EXH. C-1

 

	
4.
    	
Administrative   Agent:
    	
U.S.   Bank National Association, as the agent under the Credit Agreement.
    
	
 
    	
 
    	
 
    
	
5.
    	
Credit   Agreement:
    	
The   $100,000,000 Credit Agreement dated as of June 15, 2012 among Arkansas   Best Corporation, the Borrowing Subsidiaries from time to time party thereto   (collectively, the “Borrowers”), the Lenders party thereto, U.S. Bank   National Association, as Administrative Agent, and the other agents party   thereto.
    
	
 
    	
 
    	
 
    
	
6.
    	
Assigned   Interest:
    	
 
    

 

	
Facility Assigned
    	
 
    	
Aggregate Amount of
   Commitment/Loans
   for all Lenders(2)
    	
 
    	
Amount of
   Commitment/Loans
   Assigned(3)
    	
 
    	
Percentage Assigned

of
   Commitment/Loans(4)
    	
 
    
	
[                        ]
    	
(5)
    	
$
    	
[                        ]
    	
 
    	
$
    	
[                        ]
    	
 
    	
[              ]
    	
%
    
	
[                        ]
    	
 
    	
$
    	
[                        ]
    	
 
    	
$
    	
[                        ]
    	
 
    	
[              ]
    	
%
    
	
[                        ]
    	
 
    	
$
    	
[                        ]
    	
 
    	
$
    	
[                        ]
    	
 
    	
[              ]
    	
%
    

 

	
7.
    	
Trade   Date:  [                                            ](6)
    
	
 
    	
 
    
	
Effective   Date:   [                                        ],   20[    ] [TO BE INSERTED BY ADMINISTRATIVE AGENT AND   WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER BY THE   ADMINISTRATIVE AGENT.]
    

 

(2)  Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.

(3)  Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.

(4)  Set forth, to at least 12 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

(5)  Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g., “Term Loan Commitment”).

(6)  Insert if satisfaction of minimum amounts is to be determined as of the Trade Date.

 

EXH. C-2

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

 

	
 
    	
 
    	
ASSIGNOR
    
	
 
    	
 
    	
[NAME   OF ASSIGNOR]
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
ASSIGNEE
    
	
 
    	
 
    	
[NAME   OF ASSIGNEE]
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
[Consented   to and](7) Accepted:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
U.S.   BANK NATIONAL ASSOCIATION, as Administrative Agent
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
[Consented to:](8)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
[NAME OF RELEVANT PARTY]
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    

 

(7)  To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.

(8)  To be added only if the consent of the Borrowers is required by the terms of the Credit Agreement.

 

EXH. C-3

 

ANNEX 1
 TERMS AND CONDITIONS FOR
 ASSIGNMENT AND ASSUMPTION

 

1.             Representations and Warranties.

 

1.1          Assignor.  The Assignor represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby.  Neither the Assignor nor any of its officers, directors, employees, agents or attorneys shall be responsible for (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency, perfection, priority, collectibility, or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrowers, any of their Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document, (iv) the performance or observance by the Borrowers, any of their Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Documents, (v) inspecting any of the property, books or records of the Borrowers, or any guarantor, or (vi) any mistake, error of judgment, or action taken or omitted to be taken in connection with the Loans or the Loan Documents.

 

1.2.         Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iii) agrees that its payment instructions and notice instructions are as set forth in Schedule 1 to this Assignment and Assumption, (iv) confirms that none of the funds, monies, assets or other consideration being used to make the purchase and assumption hereunder are “plan assets” as defined under ERISA and that its rights, benefits and interests in and under the Loan Documents will not be “plan assets” under ERISA, (v) agrees to indemnify and hold the Assignor harmless against all losses, costs and expenses (including, without limitation, reasonable attorneys’ fees) and liabilities incurred by the Assignor in connection with or arising in any manner from the Assignee’s non-performance of the obligations assumed under this Assignment and Assumption, (vi) it has received a copy of the Credit Agreement, together with copies of financial statements and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (vii) attached as Schedule 1 to this Assignment and Assumption is any documentation required to be delivered by the Assignee with respect to its tax status pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with

 

 

their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

 

2.             Payments.  The Assignee shall pay the Assignor, on the Effective Date, the amount agreed to by the Assignor and the Assignee.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, Reimbursement Obligations, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

 

3.             General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

 

 

 

EXHIBIT D

 

FORM OF BORROWING NOTICE

 

TO:         U.S. Bank National Association, as administrative agent (the “Administrative Agent”) under that certain Credit Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), dated as of June 15, 2012 among Arkansas Best Corporation (the “Parent”), the Borrowing Subsidiaries from time to time party thereto (together with the Parent, the “Borrowers”) the financial institutions party thereto, as lenders (the “Lenders”), and the Administrative Agent.

 

Capitalized terms used herein shall have the meanings ascribed to such terms in the Credit Agreement.

 

The undersigned Borrower hereby gives to the Administrative Agent a request for borrowing pursuant to Section 2.5 of the Credit Agreement, and such Borrower hereby requests to borrow on [                              ], 20[    ] (the “Borrowing Date”) from the Lenders, on a pro rata basis, an aggregate principal Dollar Amount of $[                      ] as:

 

1.  o       a Base Rate Advance

 

2.  o       a Eurodollar Advance with an Interest Period of [              ] month(s)

 

The undersigned hereby certifies to the Administrative Agent and the Lenders that (i) the representations and warranties contained in Article V of the Credit Agreement are (a) with respect to any representations or warranties that contain a materiality qualifier, true and correct in all respects as of the 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 in all respects on and as of such earlier date and (b) with respect to any representations or warranties that do not contain a materiality qualifier, true and correct in all material respects as of the 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 in all material respects on and as of such earlier date; (ii) as of the Borrowing Date, there exists no Default or Event of Default, nor shall a Default or Event of Default result from such Credit Extension; and (iii) all other relevant conditions set forth in Section 4.2 of the Credit Agreement have been satisfied.

 

******

 

EXH. D-1

 

IN WITNESS WHEREOF, the undersigned has caused this Borrowing Notice to be executed by its authorized officer as of the date set forth below.

 

Dated:                                , 20    

 

 

	
 
    	
[BORROWER]
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

EXH. D-2

 

EXHIBIT E

 

NOTE

 

[DATE]

 

[                                      ], a [                            ] (the “Borrower”), promises to pay to [                                                         ] (the “Lender”) the aggregate unpaid principal amount of all Loans made by the Lender to the Borrower pursuant to Article II of the Agreement (as hereinafter defined), in immediately available funds at the applicable office of U.S. Bank National Association, as Administrative Agent, together with interest on the unpaid principal amount hereof at the rates and on the dates set forth in the Agreement.  The Borrower shall pay the principal of and accrued and unpaid interest on the Loans in full on the Facility Termination Date.

 

The Lender shall, and is hereby authorized to, record on the schedule attached hereto, or to otherwise record in accordance with its usual practice, the date and amount of each Loan and the date and amount of each principal payment hereunder.

 

This Note is one of the Notes issued pursuant to, and is entitled to the benefits of, the Credit Agreement dated as of June 15, 2012 (which, as it may be amended or modified and in effect from time to time, is herein called the “Agreement”), among the Borrower, [Arkansas Best Corporation,] the Borrowing Subsidiaries from time to time party thereto, the lenders party thereto, including the Lender and U.S. Bank National Association, as Administrative Agent, to which Agreement reference is hereby made for a statement of the terms and conditions governing this Note, including the terms and conditions under which this Note may be prepaid or its maturity date accelerated.  This Note is secured pursuant to the Collateral Documents and guaranteed pursuant to the Guaranty, all as more specifically described in the Agreement, and reference is made thereto for a statement of the terms and provisions thereof.  Capitalized terms used herein and not otherwise defined herein are used with the meanings attributed to them in the Agreement.

 

In the event of default hereunder, the undersigned agree to pay all costs and expenses of collection, including reasonable attorneys’ fees.  The undersigned waive demand, presentment, notice of nonpayment, protest, notice of protest and notice of dishonor.

 

THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS OTHER THAN NEW YORK GENERAL OBLIGATIONS LAW SECTIONS 5-1401 AND 5-1402)   OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL BANKS.

 

EXH. E-1

 

	
 
    	
[                                        ]
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Print   Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

EXH. E-2

 

SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
 TO
 NOTE OF [                          ],
 DATED [            ]

 

 

	
Date
    	
 
    	
Principal
   Amount of
   Loan
    	
 
    	
Maturity
   of Interest
   Period
    	
 
    	
Principal
   Amount
   Paid
    	
 
    	
Unpaid
   Balance
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

EXH. E-3

 

EXHIBIT F

 

FORM OF INCREASING LENDER SUPPLEMENT

 

INCREASING LENDER SUPPLEMENT, dated [                    ], 20[    ] (this “Supplement”), by and among each of the signatories hereto, to the Credit Agreement, dated as of June 15, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Arkansas Best Corporation, the Borrowing Subsidiaries from time to time party thereto (collectively, the “Borrowers”), the Lenders party thereto and U.S. Bank National Association, as administrative agent (in such capacity, the “Administrative Agent”).

 

W I T N E S S E T H

 

WHEREAS, pursuant to Section 2.20 of the Credit Agreement, the Borrowers have the right, subject to the terms and conditions thereof, to request one or more Lenders to undertake Additional Commitments under the Credit Agreement from time to time;

 

WHEREAS, the Borrowers have given notice to the Administrative Agent of their intention to obtain Additional Commitments pursuant to such Section 2.20 of the Credit Agreement; and

 

WHEREAS, pursuant to Section 2.20 of the Credit Agreement, the undersigned Increasing Lender now desires to provide Additional Commitments under the Credit Agreement by executing and delivering to the Borrowers and the Administrative Agent this Supplement;

 

NOW, THEREFORE, each of the parties hereto hereby agrees as follows:

 

1.  The undersigned Increasing Lender agrees, subject to the terms and conditions of the Credit Agreement, that on the date of this Supplement it shall provide Additional Commitments with respect to revolving loans in the amount of $[                    ].

 

2.  The Borrowers hereby represent and warrant that no Default or Event of Default has occurred and is continuing on and as of the date hereof.

 

3.  Terms defined in the Credit Agreement shall have their defined meanings when used herein.

 

4.  This Supplement shall be governed by, and construed in accordance with, the laws of the State of New York.

 

5.  This Supplement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same document.

 

EXH. F-1

 

IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to be executed and delivered by a duly authorized officer on the date first above written.

 

 

	
 
    	
 
    	
[INSERT   NAME OF INCREASING LENDER]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
Accepted   and agreed to as of the date first written above:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
ARKANSAS   BEST CORPORATION
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
[BORROWING   SUBSIDIARIES]
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Acknowledged   as of the date first written above:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
U.S. BANK   NATIONAL ASSOCIATION
    	
 
    	
 
    
	
as   Administrative Agent
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

EXH. F-2

 

EXHIBIT G

 

FORM OF AUGMENTING LENDER SUPPLEMENT

 

AUGMENTING LENDER SUPPLEMENT, dated [                    ], 20[    ] (this “Supplement”), to the Credit Agreement, dated as of June 15, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Arkansas Best Corporation, the Borrowing Subsidiaries from time to time party thereto (collectively, the “Borrowers”), the Lenders party thereto and U.S. Bank National Association, as administrative agent (in such capacity, the “Administrative Agent”).

 

W I T N E S S E T H

 

WHEREAS, the Credit Agreement provides in Section 2.20 thereof that any bank, financial institution or other entity may extend Additional Commitments under the Credit Agreement subject to the approval of the Borrowers and the Administrative Agent, by executing and delivering to the Borrowers and the Administrative Agent a supplement to the Credit Agreement in substantially the form of this Supplement; and

 

WHEREAS, the undersigned Augmenting Lender was not an original party to the Credit Agreement but now desires to become a party thereto;

 

NOW, THEREFORE, each of the parties hereto hereby agrees as follows:

 

1.     The undersigned Augmenting Lender agrees to be bound by the provisions of the Credit Agreement and agrees that it shall, on the date of this Supplement, become a Lender for all purposes of the Credit Agreement to the same extent as if originally a party thereto, with an Additional Commitment with respect to revolving loans of $[                    ].

 

2.     The undersigned Augmenting Lender (a) represents and warrants that it is legally authorized to enter into this Supplement; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 6.1 thereof, as applicable, and has reviewed such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Supplement; (c) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.

 

EXH. G-1

 

3.     The undersigned’s address for notices for the purposes of the Credit Agreement is as follows:

 

[                      ]

 

4.     The Borrowers hereby represent and warrant that no Default or Event of Default has occurred and is continuing on and as of the date hereof.

 

5.     Terms defined in the Credit Agreement shall have their defined meanings when used herein.

 

6.     This Supplement shall be governed by, and construed in accordance with, the laws of the State of New York.

 

7.     This Supplement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same document.

 

[remainder of this page intentionally left blank]

 

EXH. G-2

 

IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to be executed and delivered by a duly authorized officer on the date first above written.

 

 

	
 
    	
 
    	
[INSERT   NAME OF AUGMENTING LENDER]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Accepted   and agreed to as of the date first written above:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
ARKANSAS   BEST
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
[BORROWING   SUBSIDIARIES]
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Acknowledged   as of the date first written above:
    	
 
    	
 
    
	
U.S. BANK   NATIONAL ASSOCIATION
    	
 
    	
 
    
	
as   Administrative Agent
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

EXH. G-3

 

 

EXHIBIT H

 

[Reserved].

 

EXH. H-1

 

EXHIBIT I-1

 

FORM OF BORROWING SUBSIDIARY AGREEMENT

 

BORROWING SUBSIDIARY AGREEMENT dated as of [          ], among Arkansas Best Corporation, an Arkansas corporation (the “Parent”), [Name of Borrowing Subsidiary], a [                    ] (the “New Borrowing Subsidiary”), and U.S. Bank National Association, as administrative agent (in such capacity, the “Administrative Agent”).

 

Reference is hereby made to the Credit Agreement, dated as of June 15, 2012 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Parent, the Borrowing Subsidiaries from time to time party thereto, the Lenders from time to time party thereto and U.S. Bank National Association, as Administrative Agent.  Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.

 

Under the Credit Agreement, the Lenders have agreed, upon the terms and subject to the conditions therein set forth, to make Loans to certain Borrowing Subsidiaries (collectively with the Parent, the “Borrowers”), and the Parent and the New Borrowing Subsidiary desire that the New Borrowing Subsidiary become a Borrowing Subsidiary.  In addition, the New Borrowing Subsidiary hereby authorizes the Parent to act on its behalf as and to the extent provided for in Article II of the Credit Agreement.  [Notwithstanding the preceding sentence, the New Borrowing Subsidiary hereby designates the following officers as being authorized to request Borrowings under the Credit Agreement on behalf of the New Borrowing Subsidiary and sign this Borrowing Subsidiary Agreement and the other Loan Documents to which the New Borrowing Subsidiary is, or may from time to time become, a party:  [                            ].]

 

Each of the Parent and the New Borrowing Subsidiary represent and warrant that the representations and warranties of the Borrowers in the Credit Agreement relating to the New Borrowing Subsidiary and this Agreement are true and correct on and as of the date hereof, other than representations given as of a particular date, in which case they shall be true and correct as of that date.  The Parent agrees that the guarantee of the Parent contained in the Credit Agreement will apply to the Obligations of the New Borrowing Subsidiary.  Upon execution of this Agreement by each of the Parent, the New Borrowing Subsidiary and the Administrative Agent, the New Borrowing Subsidiary shall be a party to the Credit Agreement and shall constitute a “Borrowing Subsidiary” for all purposes thereof, and the New Borrowing Subsidiary hereby agrees to be bound by all provisions of the Credit Agreement.

 

This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

EXH. I-1-1

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their authorized officers as of the date first appearing above.

 

 

	
 
    	
ARKANSAS   BEST CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
[BORROWING   SUBSIDIARY]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
U.S.   BANK NATIONAL ASSOCIATION
    
	
 
    	
as   Administrative Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

EXH. I-1-2

 

EXHIBIT I-2

 

FORM OF BORROWING SUBSIDIARY TERMINATION

 

U.S. Bank National Association
 as Administrative Agent
 for the Lenders referred to below

[                  ]
 [                  ]

Attention:  [                    ]

 

[Date]

 

Ladies and Gentlemen:

 

The undersigned, Arkansas Best Corporation (the “Parent”), refers to the Credit Agreement dated as of June 15, 2012 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Parent, the Borrowing Subsidiaries from time to time party thereto (collectively, the “Borrowers”) and U.S. Bank National Association, as Administrative Agent.  Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.

 

The Parent hereby terminates the status of [                            ] (the “Terminated Borrowing Subsidiary”) as a Borrowing Subsidiary under the Credit Agreement.  [The Parent represents and warrants that no Loans made to the Terminated Borrowing Subsidiary are outstanding as of the date hereof and that all amounts payable by the Terminated Borrowing Subsidiary in respect of interest and/or fees (and, to the extent notified by the Administrative Agent or any Lender, any other amounts payable under the Credit Agreement) pursuant to the Credit Agreement have been paid in full on or prior to the date hereof.] [The Parent acknowledges that the Terminated Borrowing Subsidiary shall continue to be a Borrower until such time as all Loans made to the Terminated Borrowing Subsidiary shall have been prepaid and all amounts payable by the Terminated Borrowing Subsidiary in respect of interest and/or fees (and, to the extent notified by the Administrative Agent or any Lender, any other amounts payable under the Credit Agreement) pursuant to the Credit Agreement shall have been paid in full, provided that the Terminated Borrowing Subsidiary shall not have the right to make further Borrowings under the Credit Agreement.]

 

[Signature Page Follows]

 

EXH. I-2-1

 

This instrument shall be construed in accordance with and governed by the laws of the State of New York.

 

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ARKANSAS   BEST CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

EXH. I-2-2Exhibit 4.1

 

 

 

 

 

 

 

 

 

 

 

 

Hydro-Québec

 

US$1,000,000,000 1.375% Global Notes Series JP due June 19, 2017

 

Guaranteed irrevocably and unconditionally by Québec

 

 

 

 

 

 

 

 

 

 

 

FISCAL AGENCY AGREEMENT

 

 

 

FISCAL AGENCY AGREEMENT

 

THIS AGREEMENT dated as of June 19, 2012.

 

AMONG:

 

	
 
    	
HYDRO-QUÉBEC, a body corporate duly incorporated and validly existing under the Hydro-Québec Act, as issuer,

 

(“Hydro-Québec”)
    
	
 
    	
 
    
	
 
    	
- and -
    
	
 
    	
 
    
	
 
    	
QUÉBEC, as guarantor

 

(the “Guarantor”)
    
	
 
    	
 
    
	
 
    	
- and -
    
	
 
    	
 
    
	
 
    	
DEUTSCHE   BANK TRUST COMPANY AMERICAS, a New York banking corporation, as fiscal   agent, registrar, transfer agent and principal paying agent,

 

(the “Fiscal Agent”)
    
	
 
    	
 
    
	
 
    	
- and -
    
	
 
    	
 
    
	
 
    	
DEUTSCHE   BANK AG, LONDON BRANCH, as London paying agent and London transfer agent

 

(the “London Agent”)
    

 

 

 

WHEREAS pursuant to a terms agreement (the “Terms Agreement”), dated as of June 12, 2012, between Hydro-Québec, the Guarantor and Merrill Lynch, Pierce, Fenner & Smith Incorporated, CIBC World Markets Corp., HSBC Securities (USA) Inc. and RBC Capital Markets, LLC, as Representatives  of the several Underwriters named therein, which incorporates by reference all of the provisions of the Underwriting Agreement Standard Provisions for Hydro-Québec’s Debt Securities Guaranteed Irrevocably and Unconditionally as to Principal, Premium and Interest by Québec, dated June 12, 2012, as amended or supplemented from time to time, Hydro-Québec has agreed to create, issue and sell  $1,000,000,000 in lawful money of the United States of America (“U.S. dollars” or “US$” or “$”) aggregate principal amount of 1.375% Global Notes Series JP due June 19, 2017 (herein collectively called the “Notes”, or individually, a “Note”), guaranteed irrevocably and unconditionally by the Guarantor as to payments of principal and interest and Additional Amounts, if any (the “Guarantee”);

 

 

WHEREAS the sale of the Notes pursuant to the Terms Agreement has taken place as described in a Prospectus Supplement dated June 12, 2012, which contains a description of the Notes and the clearing and settlement procedures related thereto;

 

WHEREAS the Notes are issuable in the form of one or more fully registered global certificates (the “Global Notes”) and the Global Notes are to be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York (“DTC”), and held by the Fiscal Agent,  as custodian for DTC (the “Custodian”);

 

WHEREAS as long as DTC or its nominee is the registered holder of the Global Notes it shall be considered the absolute owner of the Notes for all purposes notwithstanding any notice to the contrary, and none of Hydro-Québec, the Guarantor or the Fiscal Agent will have any responsibility or liability for any aspect of the records of DTC, Euroclear Bank S.A./N.V., as operator of the Euroclear System (“Euroclear”), or Clearstream Banking, société anonyme (“CBL”) (collectively, the “Clearing Systems”) relating to or payments made by any of the Clearing Systems on account of beneficial interests in the Global Notes;

 

WHEREAS investors may hold interests in the Global Notes directly through any of the Clearing Systems if they are participants of such systems, or indirectly through organizations which are participants in such systems;

 

WHEREAS all Notes are recorded in a register held by the Fiscal Agent (the “Register”), and are registered in the name of Cede & Co., for the benefit of owners of beneficial interests in the Notes through the Clearing Systems; and

 

WHEREAS owners of beneficial interests in Notes are not, except in limited circumstances, entitled to receive Certificated Notes (as hereinafter defined).

 

NOW THEREFORE it is hereby agreed as follows:

 

1.            Definitions

 

Terms and expressions defined in the “Terms and Conditions” of the Notes contained in the form of Global Notes set forth in Schedule A (the “Terms and Conditions”) shall have the same meaning when used in this Agreement unless otherwise defined herein or unless the context otherwise requires. “Note holders” or “holders of Notes” or “holders” or “registered holders” refers to persons entered in the Register as registered holders of Notes.

 

2.            Appointment

 

Hydro-Québec hereby appoints the Fiscal Agent as its registrar, fiscal agent, transfer agent and principal paying agent in respect of the Notes upon and subject to the terms and conditions contained herein and in the Terms and Conditions of the Notes and the Fiscal Agent hereby accepts such appointments.  The Fiscal Agent shall have the powers and authority granted to and conferred upon it hereby and in the Notes and such further powers and authority to act on behalf of Hydro-Québec as Hydro-Québec may hereafter grant to or confer upon it with the written concurrence of the Fiscal Agent.

 

-2-

 

3.            Issue of the Notes

 

(1)          The Notes shall be issued in the form of one or more Global Notes registered in the name of Cede & Co., as nominee of DTC, and shall be executed by Hydro-Québec substantially in the form attached as Schedule A with such changes as may be agreed among Hydro-Québec, the Guarantor and the Fiscal Agent. The Guarantee of the Guarantor shall be endorsed on the Global Notes. The aggregate principal amount of Notes to be issued and outstanding at any time whether in the form of the Global Notes or Certificated Notes issued in accordance with Section 5, shall not exceed $1,000,000,000, except to the extent further Notes are issued in accordance with Section 19. Forthwith after such execution, the Global Notes shall be delivered to the Fiscal Agent and shall be authenticated by the Fiscal Agent upon the written order of Hydro-Québec (or by such other person as the Fiscal Agent may appoint for such purpose with the consent of Hydro-Québec), and shall be held by the Fiscal Agent as Custodian.

 

(2)          Owners of beneficial interests in the Global Notes will not, except in the limited circumstances described in Section 5, be entitled to receive certificates representing Notes (the “Certificated Notes”) or to have Notes registered in their names, nor will they be considered owners or holders of Notes under this Agreement. The Certificated Notes which may be issued in such limited circumstances will be in fully registered form and substantially in the form of the Global Notes, with the appropriate adjustments and changes (and including the use of a summary of the Terms and Conditions of the Notes), consistent with the provisions of this Agreement, as may be agreed upon by Hydro-Québec, the Guarantor and the Fiscal Agent. The Guarantee of the Guarantor shall be endorsed on the Certificated Notes.

 

(3)          The Global Notes shall be issued and delivered only to or to the order of Cede & Co., as nominee for DTC, or its successor appointed by Hydro-Québec in accordance with Subsection 5(1). The Global Notes shall be in the principal amount from time to time endorsed thereon.

 

(4)          So long as Cede & Co., as nominee of DTC, with respect to the Global Notes, is the registered owner of the Global Notes, and subject to applicable law, DTC, or its nominee, as the case may be, will be deemed to be, and will be treated as, the absolute owner of the Notes represented by the Global Notes for all purposes, notwithstanding any notice to the contrary. None of Hydro-Québec, the Guarantor or the Fiscal Agent will have any responsibility or liability for any aspect of the records of the Clearing Systems relating to or payments made by the Clearing Systems on account of beneficial ownership interests in the Global Notes or for maintaining, supervising or reviewing any records of the Clearing Systems relating to such beneficial ownership interests.

 

(5)          The Global Notes and the Certificated Notes shall be signed (either manually or by facsimile signature) by two authorized representatives of Hydro-Québec,  and shall be authenticated by the Fiscal Agent upon the written authorization of

 

-3-

 

Hydro-Québec (or by such other person as the Fiscal Agent may appoint for such purpose with the consent of Hydro-Québec). The Guarantee shall be endorsed on the Global Notes and on the Certificated Notes and shall be signed (either manually or by facsimile signature) by the Minister of Finance or any other authorized representative of the Guarantor authorized to conclude and to sign on behalf of the Minister of Finance, any borrowings or any documents related thereto.

 

4.            The Register and Transfers

 

(1)          The Fiscal Agent, as registrar and transfer agent of Hydro-Québec, shall be responsible for (i) maintaining a record of the aggregate holdings of the Global Notes of Cede & Co. in the Register; (ii) ensuring that payments of principal and interest in respect of the Notes received by the Fiscal Agent from Hydro-Québec are duly credited to Cede & Co.; (iii) transmitting to Hydro-Québec any notices from holders of Notes; and (iv) maintaining at its principal office in The City of New York, New York (the “New York Office”) a register for the following: (a) registering transfers between holders of Notes, (b) registering and maintaining a record of any further issues of Notes pursuant to Section 19 and any subsequent transfers thereof.

 

(2)          In the event Certificated Notes are issued in exchange for the Global Notes under the limited circumstances described in Section 5, the Fiscal Agent shall (a) register and maintain a record of holders of Certificated Notes and (b) register transfers of Notes among holders of Certificated Notes in accordance with such procedures as the Fiscal Agent shall deem reasonable upon consultation with Hydro-Québec.

 

(3)          The Fiscal Agent shall not be required to inquire into, or take any action in respect of transfers of beneficial ownership interests in the Global Notes (i) within each Clearing System, or (ii) between Clearing Systems’ participants.

 

(4)          The Fiscal Agent will not impose any fees in respect of the Notes, other than reasonable fees for the replacement of lost, stolen, mutilated or destroyed Notes as set out in Section 5.

 

(5)          The Register shall at all reasonable times be open for inspection by Hydro-Québec and any agent of Hydro-Québec. In the event of any discrepancy between the principal amount of the Global Notes and the aggregate principal amount of Notes held by Cede & Co., as shown on the Register, the aggregate principal amount of Notes as shown on the Register shall prevail.

 

(6)          Neither Hydro-Québec nor the Fiscal Agent shall be required (i) to register the transfer or exchange of any Notes on any Interest Payment Date or during a period commencing at the close of business of the New York Office of the Fiscal Agent on the 14th calendar day immediately preceding any such date and ending on such date; or (ii) to register the transfer or exchange of any Notes during the

 

-4-

 

period commencing at the close of business of the New York Office of the Fiscal Agent on the record date of any notice by Hydro-Québec of any Notes to be redeemed or purchased through the date the notice of redemption or purchase is given; or (iii) to register the transfer or exchange of any Notes called for redemption unless upon due presentation thereof such Notes called for redemption shall not be redeemed.

 

(7)          Subject to applicable law, Hydro-Québec, the Fiscal Agent or any other agents of Hydro-Québec or the Fiscal Agent shall not be charged with notice of or be bound to see to the execution of any trust, whether express, implied or constructive, in respect of any Notes and may register the transfer of all or part of the Notes on the direction of the holder thereof, whether named as trustee or otherwise, as though that person were the beneficial owner thereof.

 

5.            Replacement, Exchange and Transfer of Notes

 

(1)                              Hydro-Québec will issue or cause to be issued Certificated Notes upon registration of transfer of, or in exchange for, Notes represented by the Global Notes i) if DTC notifies Hydro-Québec that it is unwilling or unable to continue as depositary in connection with the Global Notes or ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when it is required to be and a successor depository is not appointed by Hydro-Québec within 90 days after receiving such notice or becoming aware that DTC is no longer so registered; ii) if Hydro-Québec, in its sole discretion at any time, determines not to have any of the Notes represented by Global Notes or iii) upon request by DTC, acting on direct or indirect instructions of a one or more holders of a Global Note or any beneficial owner of an interest in a Global Note, but only after an event of default entitling the holders to give Hydro-Québec written notice that such holders elect to declare the principal amount of the Notes held by them and represented by such Global Note to be due and payable has occurred and is continuing; provided that if DTC is unwilling or does not promptly make such request to Hydro-Québec, then any owner of a beneficial interest in such Global Note shall be entitled to make such request with respect to such interest.

 

(2)          In respect of any such issuance of Certificated Notes, pursuant to Subsection 5(1) above, (i) Hydro-Québec shall promptly provide the Fiscal Agent with a sufficient number of Certificated Notes in blank form to proceed with such issuance, (ii) DTC shall cause any such Global Notes to be delivered to the Fiscal Agent and provide the Fiscal Agent with the necessary registration information for such Certificated Notes, (iii) the Fiscal Agent shall upon written authorization of Hydro-Québec authenticate and deliver such Certificated Notes in an aggregate principal amount equal to the principal amount of any such Global Notes to be exchanged for such Certificated Notes, (iv) the Fiscal Agent shall cancel any such Global Notes and in the case of a partial exchange, issue and deliver to or to the order of DTC new Global Notes equal to the unexchanged portion of any such

 

-5-

 

Global Notes partially exchanged for Certificated Notes and (v) the Fiscal Agent shall reduce accordingly the holdings of the Global Notes on the Register.  Such Certificated Notes shall be delivered as directed by the persons in whose names such Certificated Notes are to be registered. All Notes represented by Certificated Notes issued upon any such issuance in exchange for the Notes represented by the Global Notes, shall have the Guarantee of the Guarantor endorsed thereon (which Guarantee shall be a valid obligation of the Guarantor), shall be a valid obligation of Hydro-Québec, shall be entitled to the same benefits under this Agreement as the Global Notes, and shall be so exchanged without charge to the Fiscal Agent, DTC or the transferee. On or after any such exchange, the Fiscal Agent shall direct all payments in respect of such Certificated Notes to the registered holders thereof, including when such exchange occurred after the record date for any payment and prior to the date of such payment.

 

(3)          Hydro-Québec expressly acknowledges that if a Certificated Note is not promptly issued to a beneficial owner of an interest in a Global Note in accordance with the terms of this Section 5, then such beneficial owner shall be entitled to pursue any remedy under this Agreement, the Notes or applicable law with respect to the portion of the Global Note that represents such beneficial owner’s interest therein as if such Certificated Note had been issued.

 

(4)                              If any Global Notes are, pursuant to this section, exchanged for Certificated Notes, the Fiscal Agent, or an agent duly authorized by the Fiscal Agent, shall be thereby authorized from time to time, in accordance with the provisions of the Notes and of this Section, to authenticate and deliver:

 

(a)          Notes in exchange for or in lieu of Notes outstanding on the Register with the same maturity and of like form which have become mutilated, defaced, destroyed, stolen or lost, provided that the applicant therefor shall have (i) paid such costs as may have been incurred in connection therewith; (ii) (in the case of a lost, stolen or destroyed Note) furnished the Fiscal Agent with such evidence (including evidence as to the serial number of the Notes in question) and indemnity in respect thereof as Hydro-Québec and the Fiscal Agent may require; and (iii) surrendered to the Fiscal Agent any mutilated or defaced Notes to be replaced; and

 

(b)                              Notes of an authorized form and denomination in exchange for a like aggregate principal amount of Notes.

 

Each new Note authenticated and delivered upon any registration of transfer or exchange for or in lieu of the whole or any part of any Note shall carry all the rights to interest, if any, accrued and unpaid and to accrue which were carried by the whole or such part of such latter Note, and notwithstanding anything to the contrary herein contained, such new Note shall be dated the date of the authentication of such Note.

 

-6-

 

6.            Paying Agents

 

(1)          The Fiscal Agent shall act as the principal paying agent for Hydro-Québec in connection with the Notes. Hydro-Québec hereby appoints Deutsche Bank AG, London Branch, as the London paying agent and London transfer agent (the “London Agent”) and may appoint any additional paying agents or transfer agents or terminate the appointment of any paying agents or transfer agents at any time except that if and for so long as the Notes are admitted to the Official List of the Financial Services Authority in its capacity as competent authority and to trading on the London Stock Exchange’s regulated market and the rules of the London Stock Exchange so require, Hydro-Québec will maintain a paying agent and transfer agent in London.

 

(2)          Hydro-Québec undertakes to maintain a paying agent in a Member State of the European Union that is not obliged to withhold or deduct tax pursuant to the European Council Directive 2003/48/EC or any other law implementing or complying with, or introduced in order to conform to, such Directive.

 

7.            Payments by Hydro-Québec to the Fiscal Agent

 

(1)          Hydro-Québec shall, on each date on which payment of principal or interest (and any Additional Amounts) in respect of the Notes is due and payable as specified in the Terms and Conditions of the Notes under the headings “Interest” and  “Maturity, Redemption and Purchases”, transfer or cause to be transferred to the corporate trust account (not later than 10:00 a.m. New York time) in same-day funds in The City of New York, New York designated by the Fiscal Agent such amount in U.S. dollars as is necessary to make all payments due with respect to the Notes on such due date as required by the terms of the Notes and the Fiscal Agent shall apply such monies to such payment.

 

(2)          All monies paid to the Fiscal Agent pursuant to and for the payment of the amounts referred to in this Section 7 shall be received and held by the Fiscal Agent as agent for Hydro-Québec and shall be applied to the payment of the appropriate U.S. dollar amounts at the time and in the manner provided in this Agreement and the Notes.

 

(3)          All monies paid to the Fiscal Agent pursuant to this Agreement shall be held by the Fiscal Agent in a separate account, (if any) under arrangements agreed upon separately by Hydro-Québec and the Fiscal Agent, from the moment when such monies are received until the time of actual payment, for the benefit of the holders of the Notes to apply the said monies for payment of principal and interest (and any Additional Amounts) due in respect of the Notes.  If for any reason the amounts paid to the Fiscal Agent pursuant to this paragraph are insufficient to satisfy all such claims for interest payable in respect of all Notes, the Fiscal Agent shall not be obliged to pay any such claims until the Fiscal Agent has received the full amount of the moneys then due and payable.  The Fiscal Agent shall, to the extent permitted by law, return to Hydro-Québec any funds transferred to it for

 

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payments with respect to the Notes that are not so paid by the Fiscal Agent at the expiration of three years after the due date for payment thereof.

 

8.            Payment of Notes

 

(1)          All payments in respect of the Notes represented by the Global Notes will be made by the Fiscal Agent to the registered holder of the Global Notes as set forth in the Terms and Conditions of the Notes.

 

(2)          Payments of principal, interest and Additional Amounts, if any, in respect of Certificated Notes will be made by the Fiscal Agent after receipt of such payment from Hydro-Québec as provided in Section 7 and as provided in the Terms and Conditions of the Notes.

 

(3)          Hydro-Québec and the Guarantor shall have the right to require a holder of a Note, as a condition of payment of the principal of or interest and any Additional Amounts on a Note, to deliver to the Fiscal Agent a certificate in such form as Hydro-Québec or the Guarantor may from time to time prescribe in order to enable Hydro-Québec or the Guarantor to determine its duties and liabilities with respect to (i) any taxes, assessments or governmental charges which Hydro-Québec, the Guarantor or the Fiscal Agent may be required to deduct or withhold from payments in respect of such Note under any present or future law of Canada or Québec or any regulation thereunder and (ii) any reporting or other requirements under such law or regulation. Hydro-Québec and the Guarantor shall each be entitled to determine its duties and liabilities with respect to such deduction, withholding, reporting or other requirements on the basis of information contained in such certificate or, if no certificate shall be presented, on the basis of any presumption created by any such law or regulation, and shall be entitled to act in accordance with such determination.

 

(4)                              Subject to applicable law and the terms hereof, Hydro-Québec, the Guarantor, the Fiscal Agent and any other agent of Hydro-Québec, the Guarantor or the Fiscal Agent shall deem and treat the person whose name appears in the Register as the registered holder of a Note as the absolute owner thereof for all purposes whatsoever notwithstanding any notice to the contrary and any payment in U.S. dollars of or on account of the principal of and interest and any Additional Amounts on such Note shall be made only to or to the order in writing of such holder, and such payment shall be valid and effectual to discharge the liability of Hydro-Québec, the Guarantor, the Fiscal Agent, the London Agent and any other agent of Hydro-Québec, the Guarantor, the Fiscal Agent or the London Agent on such Note to the extent of the sum or sums so paid.

 

(5)          The registered holder of any Note shall be entitled to the payments of principal of and interest and any Additional Amounts on such Note, free from all rights of set-off or counterclaim between Hydro-Québec, the Guarantor and the original or any intermediate holder thereof and all persons may act accordingly and a transferee of a Note shall, after the appropriate form of transfer is lodged with the Fiscal

 

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Agent or other agent of Hydro-Québec or the Fiscal Agent for the purpose of and upon compliance with all other conditions relating thereto required by this Agreement or by any conditions contained in such Note or by law, be entitled to be entered on the Register as the owner of such Note free from all rights of set-off or counterclaim between Hydro-Québec, the Guarantor and his transferor or any previous holder thereof, save in respect to rights of which Hydro-Québec is required to take notice by statute or by order of a court of competent jurisdiction. The delivery to Hydro-Québec, the Guarantor or the Fiscal Agent by a holder of a Note or the receipt by such holder of the principal, interest and any Additional Amounts in respect of such Note shall be a good discharge to Hydro-Québec, the Guarantor and the Fiscal Agent, which shall not be bound to inquire into the title of such holder, save as ordered by a court of competent jurisdiction or as required by statute.

 

(6)          Where a Note is registered in more than one name, the principal and interest and any Additional Amounts from time to time payable in respect thereof shall be paid to or to the order of all the joint holders thereof, failing written instructions to the contrary from all such joint holders, and such payment shall be a valid discharge to Hydro-Québec, the Guarantor or the Fiscal Agent and to any other agent of Hydro-Québec, the Guarantor or the Fiscal Agent.

 

(7)          In the case of the death of one or more joint holders, the principal of and interest and any Additional Amounts on any Notes registered in their names may, notwithstanding Section 8(4), be paid to the survivor or survivors of such holders whose receipt therefor shall constitute a valid discharge to Hydro-Québec, the Guarantor or the Fiscal Agent and to any other agent of Hydro-Québec, the Guarantor or the Fiscal Agent.

 

9.            Cancellation of Notes

 

All Notes that are presented for replacement, exchange or transfer pursuant to Section 5 or repaid on maturity or upon redemption or purchased shall upon such transfer, replacement, exchange, repayment or purchase being made, be cancelled by the Fiscal Agent. The Fiscal Agent shall, as soon as reasonably possible after the date of any such transfer, replacement, exchange, repayment or purchase, furnish Hydro-Québec with a certificate or certificates stating: (i) the serial numbers and total number of Notes so transferred, replaced, exchanged, redeemed, purchased or repaid; and (ii) the amount, if any, paid in respect of such Notes. All Notes canceled and retired by the Fiscal Agent pursuant to this Section shall be destroyed from time to time in a manner consistent with the Fiscal Agent’s securities destruction policy and applicable law and upon the issuance of a certificate of destruction of the Notes, duly signed by a representative of the Fiscal Agent, to Hydro-Québec.

 

10.         Maturity, Redemption and Purchases

 

Unless previously redeemed for tax reasons as provided in the Terms and Conditions of the Notes, or purchased, the principal amount of the Notes shall be due and

 

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payable on June 19, 2017 or, if June 19, 2017 is not a Business Day, on the next following Business Day.

 

Upon receipt of a written notice of intention to redeem, not less than 30 days nor more than 60 days prior to the date fixed for redemption, (provided, however, that in any event written notice of redemption shall be given to the Fiscal Agent not less than 45 days prior to the date fixed for redemption) the Fiscal Agent shall cause to be given on behalf of Hydro-Québec, in accordance with the provisions under the heading “Notices” in the Terms and Conditions of the Notes, a notice of redemption stating: (i) the date fixed for redemption; (ii) the redemption price; and (iii) if applicable, the place or places of surrender of the Notes to be redeemed.

 

Hydro-Québec may, if not in default under the Notes, at any time purchase Notes in any manner and at any price. If purchases are made by tender, tenders must be available to all holders of Notes alike.

 

11.         Financial Documents

 

For so long as any of the Notes are outstanding, (i) each of Hydro-Québec and the Guarantor, for its own part, agrees to supply, upon request, the Fiscal Agent and the London Agent with copies of all documents required to be available by any stock exchange on which the Notes are for the time being listed, (ii) Hydro-Québec agrees to supply, upon request, the Fiscal Agent and the London Agent with copies of the latest interim financial statements and annual reports of Hydro-Québec as filed on Form 18-K and (iii) the Guarantor agrees to supply, upon request, the Fiscal Agent and the London Agent with electronic recordings in PDF or other form  of the Guarantor’s latest consolidated statements of revenues and expenditures and annual budget as soon as practicable after the publication thereof for inspection by holders of Notes at the Fiscal Agent’s New York Office and the London Agent’s office in London. Notwithstanding anything herein contained, the obligations of each of Hydro-Québec and the Guarantor under this Section will terminate on such date as all amounts required to be paid to the holders of Notes by Hydro-Québec under the Notes have been paid in full.  The Fiscal Agent and the London Agent, subject to their being provided with electronic recordings in PDF or other form  of the documents referred to above, undertake to make such documents available, upon request, to holders of Notes at the Fiscal Agent’s New York Office and the London Agent’s office in London during the term of the Notes.  All financial documents of Hydro-Québec and the Guarantor referred to in this Section will also be made available from the Electronic Data Gathering, Analysis and Retrieval System, which is commonly known by the acronym EDGAR, through the Securities and Exchange Commission’s website (http://www.sec.gov).

 

12.         Fees and Expenses

 

Hydro-Québec shall pay to the Fiscal Agent, and the London Agent such fees for their respective services hereunder as are agreed upon separately by and between Hydro-Québec and the Fiscal Agent and the London Agent, respectively.  The obligations of Hydro-Québec pursuant to this Section shall survive the resignation or removal of the Fiscal Agent or the London Agent, and the satisfaction or termination of this Agreement and payment of the Notes.

 

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Hydro-Québec will also pay on demand all out-of-pocket costs and expenses (including legal expenses) not already covered separately and which are reasonably incurred and duly documented and provided to Hydro-Québec by the Fiscal Agent in connection with its services together with any applicable issue, registration, documentary or other similar duties.

 

13.         Further Reports

 

The Fiscal Agent and the London Agent will provide to Hydro-Québec and the Guarantor information regarding the financial servicing of the Notes expressed in such form as Hydro-Québec and the Guarantor may reasonably require. The Fiscal Agent or the London Agent, as the case may be, shall inform Hydro-Québec and the Guarantor promptly of any notice or other communication addressed to Hydro-Québec or the Guarantor in connection with the Notes, including any notice of any legal action or proceeding which may be brought against Hydro-Québec or the Guarantor and of which the Fiscal Agent has notice.

 

 

 

14.         Meetings of Holders of Notes

 

(1)          The Fiscal Agent shall, on receipt of a written request of Hydro-Québec or a written request signed in one or more counterparts by the holders of not less than 10% of the principal amount of the Notes then outstanding and upon being indemnified to its reasonable satisfaction by Hydro-Québec or the holders of Notes signing such request against the costs which may be incurred in connection with the calling and holding of such meeting, convene a meeting of the holders of Notes for any lawful purpose affecting their interests. If the Fiscal Agent fails to give notice convening such meeting within 30 days after receipt of such request and indemnity, Hydro-Québec or such holders of Notes, as the case may be, may convene such meeting. Every such meeting shall be held in The City of New York, New York or such other place as may be approved or determined by the Fiscal Agent.

 

(2)          At least 21 days’ notice of any meeting shall be given to the holders of Global Notes or Certificated Notes, as the case may be, in the manner provided pursuant to the provisions under the heading “Notices” in the Terms and Conditions of the Notes and a copy thereof shall be sent by post to the Fiscal Agent unless the meeting has been called by the Fiscal Agent, to Hydro-Québec unless the meeting has been called by Hydro-Québec and to the Guarantor.  Such notice shall state the day, time, place and purpose of the meeting and the general nature of the business to be transacted thereat, and shall include a statement to the effect that, prior to 48 hours before the time fixed for the meeting, (i) in the limited circumstances in which Certificated Notes have been issued, those holders of Certificated Notes who deposit such Notes with the Fiscal Agent or any other person authorized for such purpose by the Fiscal Agent or Hydro-Québec or (ii) in the case of Notes being represented by a Global Note, those persons recorded in the Register, shall be entitled to obtain voting certificates for appointing proxies, but it shall not be necessary for any such notice to set out the terms of any

 

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resolution to be proposed at such meeting or any other provisions. All notices of meetings shall contain a requirement that the Clearing Systems must notify Clearing Systems participants and, if known, owners of beneficial interests in the Global Notes of the meeting in accordance with procedures established from time to time by the Clearing Systems.  The registered holders of Notes shall seek voting instructions on the matters to be raised at such meeting from the Clearing Systems participants or, if known, from the owners of beneficial interests in Notes in accordance with the applicable procedure of the Clearing Systems.  For greater certainty, it is acknowledged that none of Hydro-Québec, the Fiscal Agent, any clearing agency or any intermediary or participant shall be required to comply with the time limits set out in the applicable procedure of the Clearing Systems but shall use all reasonable efforts to otherwise comply with such procedure and attempt to provide non-registered holders of Notes with meeting materials and voting rights as if such non-registered holders of Notes were registered holders thereof.

 

(3)          A holder of Notes may appoint any person by instrument in writing as the holder’s proxy in respect of a meeting of the holders of Notes or any adjournment of such meeting, and such proxy shall have all rights of the holder of Notes in respect of such meeting.

 

(4)          A person, who need not be a holder of Notes, nominated in writing by the Fiscal Agent shall be chairman of the meeting and if no person is so nominated or if the person so nominated is not present within 15 minutes from the time fixed for the holding of the meeting, the holders of the Notes present in person or by proxy shall choose a person present to be chairman, and, failing such choice, Hydro-Québec may appoint a chairman.

 

(5)          At a meeting of holders of Notes, a quorum shall consist of one or more holders of Notes present in person or by proxy who represent at least a majority in aggregate principal amount of the Notes at the time outstanding. If a quorum of the holders of Notes shall not be present within one-half hour after the time fixed for holding any meeting, the meeting, if convened by or at the request of holders of Notes, shall be dissolved, but if otherwise convened the meeting shall stand adjourned without notice to the same day in the next week (unless such day is not a business day in the place where the meeting is to take place in which case it shall stand adjourned until the next business day thereafter) at the same time and place unless the chairman shall appoint some other place, day or time of which not less than 7 days’ notice shall be given in the manner provided above. At any adjourned meeting called by Hydro-Québec or the Fiscal Agent one or more holders of Notes present in person or by proxy shall constitute a quorum and may transact the business for which the meeting was originally convened notwithstanding that they may not represent at least a majority in aggregate principal amount of the Notes then outstanding.

 

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(6)          The chairman of any meeting at which a quorum of the holders of Notes is present may, with the consent of the holder(s) of a majority in aggregate principal amount of the Notes represented thereat, adjourn any such meeting and no notice of such adjournment need be given except such notice, if any, as the meeting may prescribe.

 

(7)          Every motion or question submitted to a meeting shall be decided by Extraordinary Resolution (as hereinafter defined) and in the first place by the votes given on a show of hands. At any such meeting, unless a poll is duly demanded as herein provided, a declaration by the chairman that a resolution has been carried or carried unanimously or by a particular majority or lost or not carried by a particular majority shall be conclusive of the fact. On any question submitted to a meeting when ordered by the chairman or demanded by a show of hands by one or more holders of Notes acting in person or by proxy and holding at least 2% in aggregate principal amount of the Notes then outstanding, a poll shall be taken in such manner as the chairman shall direct.

 

(8)          On a poll each holder of Notes present in person or represented by a proxy duly appointed by an instrument in writing shall be entitled to one vote in respect of each US$1,000, or its equivalent, principal amount of Notes then held by such holder. A proxy need not be a holder of Notes. In the case of Notes held jointly, any one of the joint holders present in person or by proxy may vote in the absence of the other or others; but in case more than one of them be present in person or by proxy, only one of them may vote in respect of each US$1,000, or its equivalent, principal amount of Notes of which they are joint holders.

 

(9)          Hydro-Québec, the Fiscal Agent and the Guarantor, by their respective officers, directors and representatives, and the legal advisors of Hydro-Québec, the Fiscal Agent and the Guarantor, may attend any meeting of the holders of Notes, but shall have no vote as such.

 

(10)       Subject to Section 16 hereof, in addition to all other powers conferred upon them by any other provision of this Agreement or by law, holders of Notes at a meeting shall have the following powers, any one or combination of which may be exercised from time to time by Extraordinary Resolution:

 

(a)          power to confirm any modification or amendment of this Agreement or the terms and conditions of the Notes proposed by Hydro-Québec;

 

(b)          power to direct or authorize the Fiscal Agent to exercise any power, right, remedy or authority given to it by this Agreement or the Notes in any manner specified in such Extraordinary Resolution or to refrain from exercising any such power, right, remedy or authority;

 

(c)          power to waive and direct the Fiscal Agent to waive any default on the part of Hydro-Québec in complying with any provisions of this Agreement or the Notes or to waive and direct the Fiscal Agent to waive future

 

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compliance with any provision or provisions of this Agreement or the Notes; and

 

(d)          power to repeal, modify or amend any Extraordinary Resolution previously passed by the holders of Notes;

 

provided, however, that no such modification nor amendment to this Agreement or to the terms and conditions of the Notes or any other action taken may, without the consent of the holder of each such Note affected thereby: (i) change the stated maturity or interest payment date of any such Note; (ii) reduce the principal amount of or rate of interest on any such Note; (iii) change the currency of payment of any such Note; (iv) impair the right to institute suit for the enforcement of any payment on or with respect to such Note or the Guarantee; (v) reduce the percentage of the holders of Notes necessary to modify or amend this Agreement or the terms and conditions of the Notes or reduce the percentage of votes required for the taking of action or the quorum required at any meeting of holders of Notes; or (vi) reduce the percentage of outstanding Notes necessary to waive any future compliance or past default.

 

(11)       All actions that may be taken and all powers that may be exercised by the holders of Notes at a meeting held as hereinbefore provided may also be taken and exercised by the holders of not less than 662/3 percent of the aggregate principal amount of the Notes at the time outstanding by an instrument in writing signed in one or more counterparts and the expression “Extraordinary Resolution” when used in this Agreement shall include an instrument so signed.

 

(12)       The term “Extraordinary Resolution” means a resolution proposed to be passed at a meeting of holders of Notes duly convened for the purpose and held in accordance with the provisions of this Agreement, and passed by the affirmative vote of the holders of not less than 662/3 percent of the aggregate principal amount of Notes represented at the meeting in person or by proxy, or as an instrument in writing signed by the holders of not less than 662/3 percent of the aggregate principal amount of the outstanding Notes.

 

(13)       Minutes of all resolutions and proceedings at every meeting of holders of Notes held in accordance with the provisions of this Agreement shall be made and entered in books to be from time to time provided for that purpose by the Fiscal Agent at the expense of Hydro-Québec and any such minutes, if signed by the chairman of the meeting at which such resolutions were passed or proceedings taken, or by the chairman of the next succeeding meeting of the holders of Notes, shall be prima facie evidence of the matters therein stated and, until the contrary is proved, every such meeting, in respect of the proceedings of which minutes shall have been made, shall be deemed to have been duly held and convened, and all resolutions passed and proceedings taken thereat to have been duly passed and taken.

 

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(14)                    Every Extraordinary Resolution passed in accordance with the provisions of this Agreement at a meeting of holders of Notes shall be binding upon all the holders of Notes, whether present at or absent from such meeting, and every instrument in writing signed by holders of Notes in accordance with Subsection 14(11) of this Agreement shall be binding upon all the holders of Notes (whether or not a signatory). Subject to the provisions for its indemnity herein contained, the Fiscal Agent shall be bound to give effect accordingly to every such Extraordinary Resolution.

 

(15)                    The Fiscal Agent, or Hydro-Québec with the approval of the Fiscal Agent, may from time to time make and from time to time vary such regulations as it shall deem fit:

 

(a)                            for the deposit of instruments appointing proxies at such place as the Fiscal Agent, Hydro-Québec or the holders of Notes convening a meeting, as the case may be, may in the notice convening such meeting direct;

 

(b)                            for the deposit of instruments appointing proxies at some approved place or places other than the place at which the meeting is to be held and enabling particulars of such instruments appointing proxies to be mailed or sent by any other means of recorded communication before the meeting to Hydro-Québec or to the Fiscal Agent at the place where the same is to be held and for the voting of proxies so deposited as though the instruments themselves were produced at the meeting.

 

Any regulation so made shall be binding and effective and votes given in accordance therewith shall be valid and shall be counted. Save as such regulations may provide, the only persons who shall be entitled to vote at a meeting of holders of Notes shall be the holders thereof or their duly appointed proxies.

 

(16)                    The powers and any combination of the powers in this Agreement stated to be exercisable by the holders of Notes by Extraordinary Resolution may be exercised from time to time and the exercise of any one or more such powers or any combination of powers from time to time shall not be deemed to exhaust the right of the holders of Notes to exercise such power or powers or combination of powers then or any power or powers or combination of powers thereafter from time to time.

 

15.                            Indemnities

 

(1)                            Hydro-Québec agrees to indemnify and hold harmless each of the Fiscal Agent and the London Agent and their respective officers, directors, employees, representatives and agents against all claims, actions, demands, damages, costs and losses (including all reasonably incurred legal fees and expenses) arising out of or relating to (a) in the case of the Fiscal Agent, its duties as fiscal agent, registrar, transfer agent and principal paying agent, or (b) in the case of the London Agent, its duties as London paying agent and London transfer agent, in each case of

 

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clause (a) and (b) with respect to the Notes, except such as may result from the Fiscal Agent or the London Agent’s, as applicable, gross negligence, wilful misconduct or bad faith.

 

(2)                           This Section 15 shall survive the payment in full of all obligations of the Notes, whether by redemption, repayment or otherwise and the resignation or removal of the Fiscal Agent or the London Agent.

 

16.                            Modifications

 

This Agreement and the Notes may be amended by Hydro-Québec, the Guarantor and the Fiscal Agent without notice to or the consent of the holders of Notes, for the purpose of (i) curing any ambiguity, (ii) curing, correcting or supplementing any defective provisions contained herein, (iii) effecting the issue of further Notes of Hydro-Québec pursuant to Section 19 or (iv) in any other manner in which Hydro-Québec, the Guarantor and the Fiscal Agent, acting on the advice of independent counsel, may deem necessary or desirable, which will not be inconsistent with this Agreement or the Notes and which, in the reasonable opinion of Hydro-Québec, the Guarantor and the Fiscal Agent, will not adversely affect the interest of the holders of Notes.

 

This Agreement may also be amended by Extraordinary Resolution of the holders of the Notes as specified in Section 14 of this Agreement and in the Terms and Conditions of the Notes under the heading “Modifications.”

 

No amendment may be made to this Agreement which would in any way alter, amend or change the duties, responsibilities, obligations of or the protections afforded to the Fiscal Agent and the London Agent from those set out in this Agreement as at the date of this Agreement without the prior written consent of the Fiscal Agent and the London Agent.

 

17.                            The Fiscal Agent and London Agent

 

The duties, responsibilities and obligations of the Fiscal Agent and the London Agent shall be limited to those expressly set forth herein and no duties, responsibilities or obligations shall be inferred or implied against the Fiscal Agent or the London Agent.  The Fiscal Agent and the London Agent shall not be required to expend or risk any of its own funds or otherwise incur any liability, financial or otherwise, in the performance of any of its duties hereunder.

 

(1)                            Subject to Subsection 7(3), in acting under this Agreement and in connection with the Notes, the Fiscal Agent and the London Agent are acting solely as agents of Hydro-Québec and do not assume any obligation or relationship of agency, administration of the property of others or trust with any of the holders of Notes, except that all amounts received and held by the Fiscal Agent and the London Agent for payment in respect of the Notes shall be held in trust for the holders of the Notes in a separate account or accounts for payment to the holders of Notes as provided herein.

 

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(2)                           The Fiscal Agent and the London Agent may consult with legal counsel and shall be protected and shall incur no liability for action taken or not taken, or suffered to be taken or not taken, with respect to all legal matters upon which they have received advice from their respective counsel in good faith and in accordance with the opinions and advice of such counsel.

 

(3)                           The Fiscal Agent and the London Agent and their respective officers, directors and employees may become the owners of, or acquire an interest in, any Notes, with the same rights that they would have if the Fiscal Agent or the London Agent was not acting as agent hereunder, and may engage or be interested in any financial or other transaction with Hydro-Québec, and may act on behalf of, or as a depositary, trustee or agent for, any committee or body of holders of Notes or holders of other obligations of Hydro-Québec as freely as if the Fiscal Agent or the London Agent was not acting as agent hereunder.

 

(4)                           The Fiscal Agent and the London Agent may rely and shall be protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, letter, telegram, facsimile transmission or other paper or document believed by them to be genuine and to have been signed, sent or presented by or on behalf of the proper party or parties and in particular, may rely and shall be protected in acting on the basis of any such notice which is given in accordance with the provisions hereof.

 

(5)                           The Fiscal Agent and London Agent shall not incur any liability for not performing any act or fulfilling any duty, obligation or responsibility hereunder by reason of any occurrence beyond the control of the Fiscal Agent and London Agent (including but not limited to any act or provision of any present or future law or regulation or governmental authority, any act of God or war, civil unrest, local or national disturbance or disaster, any act of terrorism, or the unavailability of the Federal Reserve Bank wire or facsimile or other wire or communication facility).

 

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18.                            Resignation or Replacement of Fiscal Agent and London Agent

 

(1)                            Hydro-Québec agrees that there shall at all times be (a) a registrar, fiscal agent, transfer agent and principal paying agent hereunder and (b) subject to Section 6 of this Agreement, a London paying agent and London transfer agent, in each case, until (i) all of the Notes authenticated and delivered hereunder shall have been delivered to the Fiscal Agent for cancellation or become due and payable, and moneys sufficient to pay the principal of and interest on such Notes shall have been made available for payment and either paid or returned to Hydro-Québec as provided herein or (ii) Hydro-Québec having established to the satisfaction of the Fiscal Agent and the London Agent that Hydro-Québec may avail itself of defenses under all relevant laws for the prescription of actions in respect of any outstanding Notes.

 

(2)                           The Fiscal Agent and the London Agent may resign at any time by sending at least 90 days’ written notice by registered mail to Hydro-Québec and the Guarantor. Upon receipt of such notice, Hydro-Québec shall appoint another financial institution or institutions as successor registrar, fiscal agent, transfer agent and principal paying agent (the “Successor Fiscal Agent”), or as successor London paying agent and London transfer agent (the “Successor London Agent”), as applicable, under this Agreement. Subject to the provisions hereof, Hydro-Québec may terminate the appointment of the Fiscal Agent as registrar, fiscal agent, transfer agent and principal paying agent, or terminate the appointment of the London Agent as London paying agent and London transfer agent, and appoint another financial institution or institutions as Successor Fiscal Agent or Successor London Agent, as applicable, under this Agreement; provided that it give the Fiscal Agent or the London Agent, as applicable, not less than 90 days’ written notice of termination. Neither the resignation nor the termination of the appointment of the Fiscal Agent as registrar, fiscal agent, transfer agent and principal paying agent or the London Agent as London paying agent and London transfer agent shall take effect until the appointment of the Successor Fiscal Agent or Successor London Agent, as applicable, becomes effective. If Hydro-Québec is unable to agree upon a Successor Fiscal Agent or Successor London Agent within thirty (30) days after such notice, the Fiscal Agent or London Agent may apply to a court of competent jurisdiction for the appointment of a Successor Fiscal Agent or Successor London Agent or for other appropriate relief.  The costs and expenses (including its attorneys’ fees and expenses) incurred by the Fiscal Agent or London Agent in connection with such proceeding shall be paid by Hydro-Québec.  On the effective date of the resignation of the Fiscal Agent or the London Agent or of the termination of its appointment as registrar, fiscal agent, transfer agent and principal paying agent or as London paying agent and London transfer agent, as applicable, the Fiscal Agent or the London Agent, as applicable, shall deliver to its successor all funds, securities and other property of Hydro-Québec then on deposit with or held by it to the extent such funds, securities and other property relate to the appointment being transferred and all documents relating to the Notes to the extent such documents relate to the appointment being

 

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transferred, and Hydro-Québec shall pay to the Fiscal Agent or the London Agent, as applicable, all amounts owed by Hydro-Québec to such agent, pursuant to this Agreement up to the said effective date.  After the resignation or removal of the Fiscal Agent or London Agent, the provisions of Section 17 hereof shall inure to its benefit as to any action taken or omitted to be taken by it while it was the Fiscal Agent or London Agent, as applicable, hereunder.

 

(3)                           If the Fiscal Agent or London Agent shall be adjudged bankrupt or insolvent, or shall file a voluntary petition in bankruptcy or makes an assignment for the benefit of its creditors or consents to the appointment of a receiver or custodian of all or any substantial part of its property, or shall admit in writing of its inability to pay or meet its debts as they mature, or if a receiver or custodian of it or of all or any substantial part of its property shall be appointed or if any public officer shall have taken charge or control of it or of its property or affairs, for the purposes of rehabilitation, conservation or liquidation, a Successor Fiscal Agent or a Successor London Agent, as applicable, shall be appointed by Hydro-Québec. Upon such an appointment of a Successor Fiscal Agent or a Successor London Agent, the Fiscal Agent or the London Agent, as applicable, shall cease to be a registrar, fiscal agent, transfer agent and principal paying agent, or a London paying agent and London transfer agent, as applicable, hereunder whether or not notice of such termination shall have been given. If no Successor Fiscal Agent or Successor London Agent shall have been appointed by Hydro-Québec, any holder of a Note, on behalf of itself and all other holders of a Note, or the Fiscal Agent or the London Agent, as applicable, may petition any court of competent jurisdiction for the appointment of a Successor Fiscal Agent or a Successor London Agent, as applicable.

 

(4)                            Any Successor Fiscal Agent or Successor London Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and to Hydro-Québec an instrument accepting such appointment hereunder, and thereupon such Successor Fiscal Agent or Successor London Agent, without any further act, deed or conveyance, shall become vested with all the authority, rights, powers, trusts, immunities, duties and obligations of such predecessor, with like effect as if originally named as the Fiscal Agent or London Agent, as applicable, hereunder.  Hydro-Québec will give prompt written notice to each other agent named pursuant to Section 2 hereof of the appointment of a Successor Fiscal Agent or Successor London Agent and shall give notice to holders of the Notes.

 

(5)                            Any corporation or bank into which the Fiscal Agent or the London Agent may be merged or converted or any corporation or bank with which the Fiscal Agent or the London Agent may be consolidated, or any corporation or bank resulting from any merger, conversion or consolidation to which the Fiscal Agent or the London Agent shall be a party, or any corporation or bank to which the Fiscal Agent or the London Agent shall sell or otherwise transfer all or substantially all of its corporate trust business shall be a Successor Fiscal Agent or Successor London Agent, as applicable, under this Agreement without the execution or filing of any

 

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paper or any further act on the part of any of the parties hereto; provided that such Successor Fiscal Agent or Successor London Agent shall be qualified as elsewhere provided in this Agreement.

 

19.                          Further Issues

 

Hydro-Québec may from time to time without notice to or consent of the holders of the Notes create and issue further notes having the same terms and conditions as the Notes (or in all respects except for the payment of interest accruing prior to the issue date of such further notes or except for the first payment of interest thereon), and such further notes shall be consolidated and form a single series with the Notes. Any further notes forming a single series with the outstanding Notes shall be issued with the benefit of, and subject to an agreement supplemental to, this Agreement.

 

20.                          Prescription

 

Under Québec law, an action to enforce a right to payment under the Notes may be prescribed if it is not exercised within three years of the date the payment is due.

 

21.                          General

 

(1)                              Any notice pursuant to this Agreement shall be in writing in English and deemed to have been duly given upon the dispatch of such notice by registered mail or telecopier (to be confirmed in writing by registered mail), addressed to (a) Hydro-Québec, (b) the Guarantor, (c) the Fiscal Agent or (d) the London Agent, as follows:

 

Hydro-Québec:

 

Hydro-Québec

75 René-Lévesque Boulevard West

6th Floor

Montréal (Québec)

CANADA H2Z 1A4

 

Attention:  Director – International Financing, Cash and Financial Services

Telecopier No:  (514) 289-5143

Telephone No:  (514) 289-2210

 

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the Guarantor:

 

Québec

Ministère des Finances 

Direction principale du financement des organismes publics et de la

documentation financière

12, rue Saint-Louis

Québec (Québec)

CANADA G1R 5L3

Attention:  La directrice principale

Telecopier No:  (418) 643-4700

Telephone No:  (418) 643-8141

 

Fiscal Agent:

 

Deutsche Bank Trust Company Americas

Trust & Agency Services

60 Wall Street, 27th Floor

MS: NYC60-2710

New York, New York 10005

Attention: Corporates Team Deal Manager – Hydro-Québec 2012

Fax No:  (732) 578-4635

 

With a copy to:

Deutsche Bank Trust Company Americas

c/o Deutsche Bank National Trust Company

Trust & Agency Services

100 Plaza One, Mailstop JCY03-0699

Jersey City, New Jersey 07311

Attn:  Corporates Team Deal Manager – Hydro-Québec 2012

Fax:  (732) 578-4635

 

London Agent:

 

Deutsche Bank AG, London Branch

Winchester House

1 Great Winchester Street

London EC2N 2DB

Attention: Trust & Securities Services

Fax No:   +44 (0) 207 547 6149

Telephone No:  +44 (0) 207 545 8000

 

or to any other address or number of which either of the parties shall have notified the other in writing in accordance with this provision.

 

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(2)     THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF QUÉBEC AND THE LAWS OF CANADA APPLICABLE THEREIN.

 

Hydro-Québec and the Guarantor hereby irrevocably consent to the fullest extent permitted by law to the giving of any relief (including, without limitation, the making or enforcement of any order or judgment) made or given in connection with any proceedings arising out of or in connection with this Agreement and the Notes.

 

Hydro-Québec and the Guarantor hereby appoint the person from time to time who holds the position of Delegate General of Québec in New York, One Rockefeller Plaza, 26th floor, New York, New York, 10020-2102, as their authorized agent (the “Authorized Agent”) upon whom process may be served in any action by the Fiscal Agent or the holder of any Note and based upon this Agreement, the Notes or the Guarantee which may be instituted in any State or Federal court in The City of New York, and expressly accept the non-exclusive jurisdiction of any such court in respect of such action. Hydro-Québec and the Guarantor hereby irrevocably waive any immunity to service of process in respect of any such action to which the Authorized Agent might otherwise be entitled. Such appointment shall be irrevocable as long as any of the Notes remain outstanding, except that, if for any reason the Authorized Agent ceases to be able to act as agent or no longer has an address in The City of New York, Hydro-Québec and the Guarantor will appoint another person or persons in The City of New York, selected in their discretion, as Authorized Agent(s). Hydro-Québec and the Guarantor will take any and all action, including the filing of any and all documents and instruments that may be necessary to continue such appointment or appointments in full force and effect as aforesaid. Service of process upon the Authorized Agent, together with written notice of such service mailed or delivered to Hydro-Québec and to the Guarantor at their respective addresses set forth in Section 21(1), shall be deemed in every respect effective service of process upon Hydro-Québec and the Guarantor. Notwithstanding the foregoing, any action by the Fiscal Agent or the holder of any Note and based upon this Agreement, the Notes or the Guarantee may be instituted in any competent court in Québec. Each of Hydro-Québec and the Guarantor hereby waives, to the fullest extent permitted by applicable law, any immunity to jurisdiction to which it might otherwise be entitled in any action based on this Agreement, the Notes or the Guarantee which may be instituted as provided in this clause in any State or Federal court in The City of New York or in any competent court in Québec.

 

(3)                            USA PATRIOT Act Section 326 Customer Identification Program

 

The parties hereto acknowledge that in order to help the United States government fight the funding of terrorism and money laundering activities, pursuant to Federal regulations that became effective on October 1, 2003 (Section 326 of the USA PATRIOT Act) all financial institutions are required to obtain, verify, record and

 

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update information that identifies each person establishing a relationship or opening an account.  The parties to this Agreement agree that they will provide to the Fiscal Agent such information as it may request, from time to time, in order for the Fiscal Agent to satisfy the requirements of the USA PATRIOT Act, including but not limited to the name, address, tax identification number and other information that will allow it to identify the individual or entity who is establishing the relationship or opening the account and may also ask for formation documents such as articles of incorporation or other identifying documents to be provided.

 

(4)                           This Agreement shall extend to and enure to the benefit of and be binding upon Hydro-Québec, the Guarantor, the Fiscal Agent and the London Agent and their respective successors and assigns.

 

(5)                           This Agreement may be executed in separate counterparts, and each such counterpart, when so executed and delivered, shall be deemed to be an original. Such counterparts shall together constitute one and the same agreement.

 

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IN WITNESS WHEREOF, this Agreement has been executed in New York as of the date first above written.

 

	
 
    	
HYDRO-QUÉBEC
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
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Authorized Representative
    	
 
    

 

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DEUTSCHE BANK TRUST COMPANY   AMERICAS
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
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Authorized Officer
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
DEUTSCHE BANK AG, LONDON BRANCH
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
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Authorized Officer
    	
 
    

 

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SCHEDULE A

 

FORM OF GLOBAL NOTE

 

 

 

Unless this Global Note is presented by an authorized representative of The Depository Trust Company, 55 Water Street, New York, New York, a New York corporation (“DTC”), to Hydro-Québec or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

 

	
Series JP
    	
Certificate No. [ ]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CUSIP 4488148U0
    

 

 

HYDRO-QUÉBEC

 

[$   ]

 

1.375% Global Notes Series JP

due June 19, 2017

 

Guaranteed irrevocably and unconditionally by Québec

 

This Global Note, registered in the name of Cede & Co., as nominee of DTC (the “Global Note”), is a permanent Global Note in respect of the duly authorized issue of notes referred to above (the “Notes”) of Hydro-Québec, a body corporate validly existing under the Hydro-Québec Act, (Revised Statutes of Québec, Chapter H-5), payment of which is irrevocably and unconditionally guaranteed subject to the guarantee given by Québec (the “Guarantee”), as guarantor (the “Guarantor”), and which is issued pursuant to a fiscal agency agreement, dated as of June 19, 2012, among Hydro-Québec, the Guarantor, Deutsche Bank Trust Company Americas as registrar, fiscal agent, transfer agent and principal paying agent (the “Fiscal Agent” which term includes any successor registrar, fiscal agent, transfer agent and principal paying agent under the Fiscal Agency Agreement) and Deutsche Bank AG, London Branch as London paying agent and London transfer agent (the “London Agent” which term includes any successor London paying agent and London transfer agent under the Fiscal Agency Agreement), as such agreement may be supplemented or amended, as the case may be (the “Fiscal Agency Agreement”).  This Global Note or any other Global Note in this form and so registered may also represent any further notes which Hydro-Québec may issue, from time to time, pursuant to the Terms and Conditions hereof and Section 19 of the Fiscal Agency Agreement.  In the event

 

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such further notes are issued, the word “Notes” as defined above shall be deemed to also refer to such further notes.

 

This Global Note and all the rights of the holder hereof are expressly subject to the Fiscal Agency Agreement, and this Global Note and the Fiscal Agency Agreement constitute a contract to all of the terms and conditions of which the holder by acceptance hereof assents, is bound by and is deemed to have notice of.  All defined terms unless defined herein have the meaning ascribed to them in the Fiscal Agency Agreement.  Copies of the Fiscal Agency Agreement are available for inspection at the principal office of the Fiscal Agent and the London Agent and from the Electronic Data Gathering, Analysis and Retrieval System, which is commonly known by the acronym EDGAR, through the Securities and Exchange Commission’s website (http://www.sec.gov).

 

This is a fully registered Global Note without coupons attached.  In certain limited circumstances, as described in Section 5 of the Fiscal Agency Agreement, it is exchangeable in whole or in part, at the office of the Fiscal Agent, for Certificated Notes.

 

FOR VALUE RECEIVED, Hydro-Québec hereby promises to pay to Cede & Co. or its registered assigns in the manner hereinafter mentioned on June 19, 2017 (or on such earlier date as the Principal Amount (as hereinafter defined) may become payable in accordance with the terms hereof) the principal sum set forth in Schedule I hereto from time to time (the “Principal Amount”) in lawful money of the United States of America  on presentation and surrender of this Global Note, and to pay interest in arrears on the said Principal Amount at the rate of 1.375% per annum, from June 19, 2012, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, in two equal semi-annual installments on June 19 and December 19 in each year (each an “Interest Payment Date”), commencing December 19, 2012, until the Principal Amount is paid in full or duly made available for payment, in each case together with such further sum, if any, as may be payable by way of Additional Amounts in accordance with the provisions set forth herein and should Hydro-Québec at any time default in the payment of any of the Principal Amount or interest on this Global Note or any Additional Amounts, to pay interest on the amount in default (before as well as after judgment) at the same rate, in like money, on the same dates.  References herein to principal and interest in respect of this Global Note or the Certificated Notes shall be deemed also to refer to any Additional Amounts which may be payable concurrently therewith, unless the context otherwise requires.  Interest will cease to accrue on this Global Note on June 19, 2017, subject to a change of such date as hereinabove mentioned (or on such earlier date as the Principal Amount may become payable in accordance with the terms hereof), unless, upon due presentation of this Global Note, payment of the Principal Amount or any Additional Amounts is improperly withheld or refused.

 

This Global Note shall not become valid and obligatory for any purpose unless and until this Global Note has been authenticated by the Fiscal Agent or its authorized representative.

 

TERMS AND CONDITIONS

 

Status of the Notes and Guarantee

 

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The Notes will be the direct, unsecured and unconditional obligations of Hydro-Québec.  The Notes will rank equally among themselves and with all other unsecured debt securities issued by Hydro-Québec and outstanding at the date hereof or thereafter.

 

The Guarantor will irrevocably and unconditionally guarantee the due and punctual payment of the principal of and interest and any Additional Amounts on the Notes upon default in payment by Hydro-Québec, when and as the same shall respectively become due and payable, at maturity, upon call for redemption prior to maturity, by acceleration or otherwise.  The Guarantee will be endorsed on the certificates representing the Notes.  Any funds required for the Guarantee shall be taken out of the Consolidated Revenue Fund of Québec.  The Guarantee will be a direct, unconditional and unsecured obligation of the Guarantor and will rank equally in right of payment with all other unsecured obligations for borrowed money of the Guarantor outstanding at the date hereof or in the future.

 

Form, Denomination and Registration

 

The Notes will be issued in the form of one or more fully registered Global Notes registered in the name of Cede & Co., as nominee of DTC, and held by Deutsche Bank Trust Company Americas, as custodian for DTC (the “Custodian”).  Beneficial interests in the Global Notes will be represented through book-entry accounts of financial institutions acting on behalf of owners of such beneficial interests as direct and indirect participants in DTC, Euroclear Bank S.A./N.V., as operator of the Euroclear System, and Clearstream Banking, société anonyme (collectively, the “Clearing Systems”). The Clearing Systems will be responsible for establishing and maintaining book-entry accounts for their participants having interests in the Notes.  None of Hydro-Québec, the Guarantor or the Fiscal Agent will have any responsibility or liability for any aspect of the records of the Clearing Systems relating to or payments made by such Clearing Systems on account of beneficial interests in the Global Notes or for maintaining, supervising or reviewing any records of such Clearing Systems relevant to such beneficial interests.  Owners of beneficial interests in Notes will not, except in limited circumstances described herein, be entitled to receive certificates representing Notes (“Certificated Notes”) or to have Notes registered in their names, and will not be considered holders thereof under the Fiscal Agency Agreement.

 

The Notes will only be sold in denominations of US$1,000 or integral multiples thereof.

 

The Fiscal Agent will be responsible for (i) maintaining a record of the aggregate holdings of Notes, (ii) ensuring that payments of principal and interest in respect of the Notes received by the Fiscal Agent from Hydro-Québec are duly credited to DTC, and (iii) transmitting to Hydro-Québec any notices from owners of beneficial interests in Notes.  The Fiscal Agent will not impose any fees in respect of the Notes, other than reasonable fees for the replacement of lost, stolen, mutilated or destroyed Notes.  However, owners of beneficial interests in Notes may incur fees payable in respect of the maintenance and operation of the book-entry accounts in which such Notes are held with the Clearing Systems.

 

Certificated Notes

 

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No owner of a beneficial interest in a Note will be entitled to receive a Certificated Note in definitive form except in the limited circumstances described herein.

 

Hydro-Québec will issue or cause to be issued Certificated Notes upon registration of, transfer of, or in exchange for Notes represented by this Global Note (i) if DTC notifies Hydro-Québec that it is unwilling or unable to continue as depositary in connection with the Global Notes or ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when it is required to be so registered and a successor depositary is not appointed by Hydro-Québec within 90 days after receiving such notice or becoming aware that DTC is no longer so registered; (ii) if Hydro-Québec, in its sole discretion at any time, determines not to have any of the Notes represented by Global Notes; or (iii) upon request by DTC, acting on direct or indirect instructions of one or more registered holders of this Global Note or any beneficial owner of an interest in this Global Note, but only after an event of default entitling the registered holders to give Hydro-Québec written notice that such holders elect to declare the principal amount of the Notes held by them and represented by this Global Note to be due and payable has occurred and is continuing; provided that if DTC is unwilling or does not promptly make such request to Hydro-Québec, then any beneficial owner of an interest in this Global Note shall be entitled to make such request with respect to such interest. A publication will be made in accordance with “Notices” below describing how payments on Certificated Notes will be made.

 

In respect of any such issuance of Certificated Notes, (i) Hydro-Québec shall promptly provide the Fiscal Agent with a sufficient number of Certificated Notes in blank form to proceed with such issuance, (ii) DTC shall cause this Global Note to be delivered to the Fiscal Agent and provide the Fiscal Agent with the necessary registration information for such Certificated Notes, (iii) the Fiscal Agent shall authenticate and deliver such Certificated Notes in an aggregate principal amount equal to the principal amount of this Global Note to be exchanged for such Certificated Notes, (iv) the Fiscal Agent shall cancel this Global Note and in the case of a partial exchange, issue and deliver to or to the order of DTC a new Global Note equal to the unexchanged portion of this Global Note partially exchanged for Certificated Notes and (v) the Fiscal Agent shall reduce accordingly the holdings of the registered holder on the Register.  Such Certificated Notes shall be delivered as directed by the persons in whose names such Certificated Notes are to be registered. All Notes represented by Certificated Notes issued upon any such issuance in exchange for the Notes represented by this Global Note shall have the Guarantee of the Guarantor endorsed thereon (which Guarantee shall be a valid obligation of the Guarantor), shall be a valid obligation of Hydro-Québec, shall be entitled to the same benefits under the Fiscal Agency Agreement as the Global Notes, and shall be so exchanged without charge to the Fiscal Agent, DTC or the transferee. On or after any such exchange, the Fiscal Agent shall direct all payments in respect of such Certificated Notes to the registered holders thereof, including when such exchange occurred after the record date for any payment and prior to the date of such payment.

 

Hydro-Québec expressly acknowledges that if a Certificated Note is not promptly issued to a beneficial owner of an interest in this Global Note as contemplated herein, then such beneficial owner shall be entitled to pursue any remedy under the Fiscal Agency Agreement, the Notes or

 

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applicable law with respect to the portion of this Global Note that represents such beneficial owner’s interest therein as if such Certificated Note had been issued.

 

Title

 

Subject to applicable law and the terms of the Fiscal Agency Agreement, Hydro-Québec, the Guarantor and the Fiscal Agent will deem and treat the persons in whose name the Global Notes are registered, initially Cede & Co., as the absolute owners thereof for all purposes whatsoever notwithstanding any notice to the contrary.  All payments to or on the order of the registered holders shall be valid and effectual to discharge the liability of Hydro-Québec, the Guarantor, the Fiscal Agent and the London Agent on the Notes to the extent of the sum or sums so paid.

 

Interest

 

The Notes will bear interest from June 19, 2012 at a rate of 1.375% per annum, payable in two equal semi-annual installments in arrears on June 19 and December 19, commencing December 19, 2012.  Interest on the Notes will cease to accrue on the date fixed for redemption or repayment unless, upon due presentation of the Notes, payment of principal is improperly withheld or refused.

 

Whenever it is necessary to compute any amount of interest in respect of the Notes, other than with respect to regular semi-annual payments, such interest shall be calculated on the basis of a 360-day year of twelve 30-day months.  The rate of interest specified in the Notes is a nominal rate and all interest payments and computations are to be made without allowances or deductions for deemed reinvestment.

 

For purposes of disclosure pursuant to the Interest Act (Canada), the rate of interest payable on any basis other than a full calendar year may be determined by multiplying the applicable annual interest rate by a fraction the numerator of which is the actual number of days in the period for which interest is payable and the denominator of which is 365 days or 366 days, as the case may be.

 

Payments

 

Principal of and interest and any Additional Amounts on the Notes are payable by Hydro-Québec in lawful money of the United States of America (“U.S. dollars”,  “US$” or “$”) to the person registered at the close of business on the relevant record date in the register held by the Fiscal Agent.  The Fiscal Agent will act as Hydro-Québec’s principal paying agent for the Notes pursuant to the Fiscal Agency Agreement.

 

If any date for payment in respect of any Notes is not a Business Day, the holder thereof shall not be entitled to payment until the next following Business Day, and no further interest shall be paid in respect of the delay in such payment.  In this paragraph, “Business Day” means a day on which banking institutions in The City of New York and in any other applicable place of payment are not authorized or obligated by law or executive order to be closed.

 

Record Date

 

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The record date for purposes of payments of principal of and interest and Additional Amounts, if any, on the Notes will be as of 5:00 p.m., New York City time, on the fourteenth calendar day preceding the maturity date or any interest payment date, as applicable. Ownership positions within each Clearing System will be determined in accordance with the normal conventions observed by such system.

 

Payment of Additional Amounts

 

All payments of principal and interest by Hydro-Québec or the Guarantor will be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or charges of whatever nature imposed or levied by or on behalf of the Government of Canada or any province, territory or political division thereof or any authority or agency therein or thereof having power to tax, unless the withholding or deduction of such taxes, duties, assessments or charges is required by law or by interpretation or administration thereof.  In that event, Hydro-Québec or the Guarantor  will, subject to Hydro-Québec’s redemption rights pursuant to the Fiscal Agency Agreement and the Notes, pay such additional amounts (the “Additional Amounts”) as may be necessary in order that the net amounts receivable by the holder after such withholding or deduction shall equal the respective amounts of principal or interest which would have been receivable in respect of the Notes or the Guarantee in the absence of such withholding or deduction, except that no such Additional Amount shall be payable with respect to any Note or Guarantee:

 

(i)         to, or to a third party on behalf of, a holder who is liable to such taxes, duties, assessments or charges in respect of such Note or Guarantee by reason of that person having some connection with Canada other than the mere holding or use outside Canada, or ownership as a non-resident of Canada, of such Note; or

 

(ii)        presented for payment more than 30 days after the Relevant Date (as defined below) except to the extent that the holder thereof would have been entitled to such Additional Amounts on presenting the same for payment on or before such thirtieth day; or

 

(iii)       where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other law implementing or complying with, or introduced in order to conform to, such Directive; or

 

(iv)       presented for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting the relevant Note to another paying agent in a Member State of the European Union.

 

As used herein, “Relevant Date” means:

 

(A)       the date on which such payment first becomes due; or

 

(B)       if the full amount of the moneys payable has not been received by the Fiscal Agent on or prior to such date, the date on which, the full amount of such moneys having been so received, notice to that effect is duly given to the holders of the Notes or the Guarantee in accordance with the notice procedures set forth in the provisions of the heading “Notices” below.

 

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Maturity, Redemption and Purchases

 

Unless previously redeemed for tax reasons as provided below, or purchased, the Principal Amount (at par) of the Notes shall be due and payable on June 19, 2017.

 

If as a result of any change in, or amendment to, or in the official application of, the laws of Canada or the regulations of any taxing authority therein or thereof or any change in, or in the official application of, or execution of, or amendment to, any treaty or treaties affecting taxation to which Canada is a party, which change or amendment shall have become effective after June 19, 2012, it is determined by Hydro-Québec or the Guarantor that Hydro-Québec or the Guarantor, as the case may be, would be required at, or at any time prior to, maturity of the Notes to pay Additional Amounts as described above under the heading “Payment of Additional Amounts”, the Notes may be redeemed in whole but not in part at the option of Hydro-Québec on not less than 30 days’, nor more than 60 days’ published notice in accordance with the provisions of the heading “Notices” below, at the principal amount thereof together with accrued interest.

 

Hydro-Québec may, if not in default under the Notes, purchase Notes at any time, in any manner and at any price. If purchases are made by tender, tenders must be available to all holders of Notes alike.

 

Modifications

 

The Fiscal Agency Agreement and the Notes may be amended by Hydro-Québec, the Guarantor and the Fiscal Agent without notice to or the consent of the holder of any Note, for the purpose of (i) curing any ambiguity, (ii) curing, correcting or supplementing any defective provisions contained therein, (iii) effecting the issue of further notes as described below under “Further Issues” or (iv) in any other manner which Hydro-Québec, the Guarantor and the Fiscal Agent, acting on the advice of independent counsel, may deem necessary or desirable and which will not be inconsistent with the Notes and which, in the reasonable opinion of Hydro-Québec, the Guarantor and the Fiscal Agent, will not adversely affect the interest of the holders of Notes.

 

The Fiscal Agency Agreement contains provisions for convening meetings of registered holders of Notes to modify or amend by Extraordinary Resolution the Fiscal Agency Agreement (except as provided in the immediately preceding paragraph) and the Notes (including the terms and conditions thereof) or waive future compliance therewith or past default thereon by Hydro-Québec.  An Extraordinary Resolution duly passed at any such meeting shall be binding on all holders of Notes, whether present or not; provided, however, that no such modification or amendment to the Fiscal Agency Agreement or to the terms and conditions of the Notes or any other action taken may, without the consent of the holder of each such Note affected thereby, (i) change the stated maturity or interest payment date of any such Note, (ii) reduce the principal amount of or rate of interest on any such Note, (iii) change the currency of payment of any such Note, (iv) impair the right to institute suit for the enforcement of any payment on or with respect to such Note or the Guarantee, (v) reduce the percentage of the holders of Notes necessary to modify or amend the Fiscal Agency Agreement or the terms and conditions of the Notes or reduce the percentage of votes required for the taking of action or the quorum required at any

 

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meeting of holders of Notes, or (vi) reduce the percentage of outstanding Notes necessary to waive any future compliance or past default.

 

No amendment may be made to the Fiscal Agency Agreement or the Notes which would in any way alter, amend or change the duties, responsibilities, obligations of or the protections afforded to the London Agent from those set out in the Fiscal Agency Agreement as at the date of the Fiscal Agency Agreement and the Notes as at the date of the Notes without the prior written consent of the London Agent.

 

Governing Law

 

The Fiscal Agency Agreement, the Notes and the Guarantee shall be construed in accordance with and governed by the laws of Québec and the laws of Canada applicable in Québec.

 

Each of Hydro-Québec and the Guarantor irrevocably consents to the fullest extent permitted by law to the giving of any relief (including, without limitation, the making or enforcement of any order or judgment) made or given in connection with any proceedings arising out of or in connection with the Fiscal Agency Agreement, the Notes and the Guarantee.

 

Events of Default

 

In the event that (a) Hydro-Québec shall default in the payment of any principal of or interest or Additional Amounts, if any, on the Notes, as the same shall become due and payable, and such default shall continue for a period of 30 days or (b) default shall be made in the due performance or observance by Hydro-Québec of any covenant or agreement contained in the Notes, other than the payment of principal, interest or Additional Amounts, or in the Fiscal Agency Agreement, and such default shall continue for a period of 60 days or (c) Hydro-Québec shall default in the payment of any principal of or premium, if any,  or interest or any Additional Amounts on any indebtedness (direct or under a guarantee) for borrowed money, other than the Notes, as the same shall become due and payable, and such default shall continue for a period of 30 days, provided that the foregoing shall not be taken into account so long as the aggregate principal amount of all such indebtedness (direct or under a guarantee) for borrowed money with respect to which the foregoing has occurred does not exceed US$50,000,000 (or its equivalent in other currencies), then at any time thereafter and during continuance of such default, the registered holder of any Note (or its proxy) may deliver or cause to be delivered to Hydro-Québec at Direction-Financement international, encaisse et services financiers, 75 René-Lévesque Boulevard West, Sixth Floor, Montréal, Québec, Canada  H2Z 1A4, a written notice that such registered holder elects to declare the principal amount of the Notes held by him (the serial number or numbers of the Notes which represent such Notes and the principal amount of the Notes owned by him and the subject of such declaration being set forth in such notice) to be due and payable and, in the cases falling within either (a) or (c) above, on the fifteenth day after delivery of such notice, or, in the cases falling within (b) above, on the thirtieth day after delivery of such notice, the principal of the Notes referred to in such notice plus accrued interest thereon shall become due and payable, unless prior to that time all such defaults theretofore existing shall have been cured.

 

Notices

 

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All notices to the holders will be valid (i) in the case of Certificated Notes, if sent by first class mail (or equivalent) or, if posted to an overseas address, by airmail, or if delivered, to each holder (or the first named of joint holders) at each such holder’s address as it appears in the Register held by the Fiscal Agent, (ii) in the case of Notes represented by a Global Note, if delivered to DTC for communication by it to the persons shown in its records as having interests therein and (iii) in either case, if and so long as the Notes are admitted to trading on, and listed on any stock exchange or are admitted to trading by another relevant authority, if in accordance with the rules and regulations of the relevant stock exchange or other relevant authority. Any such notice shall be deemed to have been given on the date of such delivery (or, if delivered more than once or on different dates, on the first date on which delivery is made) or, in the case of mailing, on the fourth weekday following such mailing.

 

Further Issues

 

Hydro-Québec may from time to time without notice to or consent of the holders of the Notes create and issue further notes having the same terms and conditions as the Notes (or in all respects except for the payment of interest accruing prior to the issue date of such further notes or except for the first payment of interest thereon), and such further notes shall be consolidated and form a single series with the Notes. Any further notes forming a single series with the outstanding Notes shall be issued with the benefit of, and subject to an agreement supplemental to, the Fiscal Agency Agreement.

 

Prescription

 

Under Québec law, an action to enforce a right to payment under the Notes may be prescribed if it is not exercised within three years of the date the payment is due.

 

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IN WITNESS WHEREOF, HYDRO-QUÉBEC has caused this Global Note to be signed by its duly authorized Representative as of June 19, 2012 in New York, New York.

 

	
 
    	
HYDRO-QUÉBEC
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    	
 
    	
 
    
	
 
    	
 
    	
Authorized Representative
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
And:
    	
/s/
    	
 
    	
 
    
	
 
    	
 
    	
Authorized Representative
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Authenticated by:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
DEUTSCHE BANK TRUST COMPANY AMERICAS
    	
 
    	
 
    	
 
    
	
(as Fiscal Agent)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Authorized Officer
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Authentication Date:
    	
 
    	
 
    	
 
    

 

-35-

 

GUARANTEE BY QUÉBEC

 

By virtue of the powers conferred by the Parlement du Québec and of the authorization of the Gouvernement du Québec by an Order in Council dated [  ], Québec hereby irrevocably and unconditionally guarantees to the registered holder of this Global Note and pledges its full faith and credit for the due and punctual payment, upon default in payment by Hydro-Québec, of the principal of this Global Note and the interest thereon together with Additional Amounts, if any, as and when the same shall respectively become due and payable (without taking into account any applicable grace period or notice period set out in the terms and conditions of the Notes), whether at stated maturity or upon previous call for redemption or by acceleration or otherwise; and hereby expressly waives the benefits of discussion and division and any prior notice or protest to, demand upon or action against Hydro-Québec or Québec.

 

This Guarantee shall be construed in accordance with and governed by the laws of Québec and the laws of Canada applicable therein.

 

Québec irrevocably consents to the fullest extent permitted by law to the giving of any relief (including, without limitation, the making or enforcement of any order or judgment) made or given in connection with any proceedings arising out of or in connection with this Guarantee.

 

Dated the 19th day of June, 2012.

 

Executed on behalf of Québec in New York, New York.

 

 

 

 

	
/s/
    	
 
    
	
 
    	
 
    
	
Authorized Officer
    	
 
    

 

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SCHEDULE ONE TO THE GLOBAL NOTE NO. _____

 

HYDRO-QUÉBEC

 

1.375% Global Notes Series JP due June 19, 2017

 

	
Initial Principal Amount
    	
 
    	
Additional Principal
   Amount
    	
 
    	
Aggregate Principal
   Amount
    	
 
    	
Authorization
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
US$                                   
    	
 
    	
US$                             
    	
 
    	
US$                             
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
US$                             
    	
 
    	
US$                             
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
US$                             
    	
 
    	
US$                             
    	
 
    	
 
    	
 
    

 

-37-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00205-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00205-of-00352.parquet"}]]