AMENDED AND RESTATED CREDIT AGREEMENT Dated as of August 28, 2009 among

Exhibit 10.1

Execution Copy

 

Unpublished CUSIP Number: [                                  ]

$125,000,000

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of August 28, 2009

among

PACER INTERNATIONAL, INC.

AND EACH OF ITS DOMESTIC SUBSIDIARIES PARTY HERETO,

as Borrowers,

BANK OF AMERICA, N.A.,

as Administrative Agent and Swing Line Lender,

The L/C Issuers Party Hereto,

The Lenders Party Hereto

and

BANC OF AMERICA SECURITIES LLC,

as

Sole Lead Arranger and Sole Book Manager

 

TABLE OF CONTENTS

 

 

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TABLE OF CONTENTS

(continued)

 

 

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TABLE OF CONTENTS

(continued)

 

 

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TABLE OF CONTENTS

(continued)

 

 

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TABLE OF CONTENTS

(continued)

SCHEDULES

 

EXHIBITS

 

 

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AMENDED AND RESTATED CREDIT AGREEMENT

This AMENDED AND RESTATED CREDIT AGREEMENT (“ Agreement ”) is entered into as of August 28, 2009, among PACER INTERNATIONAL, INC., a Tennessee corporation (“ Pacer ”) and each of its Domestic Subsidiaries party hereto (collectively, the “ Borrowers ” and individually, a “ Borrower ”), each lender from time to time party hereto (collectively, the “ Lenders ” and individually, a “ Lender ”), each issuer of letters of credit from time to time party hereto (collectively, the “ L/C Issuers ” and individually, an “ L/C Issuer ”), and BANK OF AMERICA, N.A. , as Administrative Agent and Swing Line Lender.

W I T N E S S E T H :

WHEREAS, pursuant to that certain Credit Agreement, dated as of April 5, 2007, by and among Pacer, the lenders party thereto (the “ Existing Lenders ”), the Existing L/C Issuers party thereto and Bank of America, N.A., as Administrative Agent and Swing Line Lender (as amended to date, the “ Existing Credit Agreement ”), the Existing Lenders have extended credit in the form of revolving loans and letters of credit.

WHEREAS, Pacer has requested that the Existing Lenders and the Existing L/C Issuers continue to make available to Pacer and each of the other Borrowers a revolving line of credit for revolving loans and letters of credit in an amount not to exceed $125,000,000, and which extensions of credit the Borrowers will use for the purposes permitted hereunder;

WHEREAS, each of the Borrowers is engaged in an interrelated business enterprise with an identity of interests, and accordingly the financing provided under this Agreement will directly and indirectly benefit each of the Borrowers;

WHEREAS, each Borrower desires that (a) the L/C Issuers continue the Existing Letters of Credit as Letters of Credit and the Lenders continue the Existing Loans and Existing Commitments as Loans and Commitments hereunder and (b) the L/C Issuers and the Lenders agree to amend and restate the Existing Credit Agreement in its entirety for the purpose of making the amendments reflected herein;

WHEREAS, the Lenders and the L/C Issuers have agreed to amend and restate the Existing Credit Agreement in its entirety for the purpose of making the amendments reflected herein, which amendment and restatement shall become effective on the Closing Date;

NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for good and valuable consideration, the receipt of which hereby acknowledged, the parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

“ AAR ” means the American Association of Railroads or any successor thereto.

“ AAR Rules ” means the Code of Car Service Rules/Code of Car Hire Rules contained in AAR Circular OT-10 as promulgated in the Official Railway Equipment Register, as in effect from time to time, or any successor thereto.

“ Account ” has the meaning specified in the UCC, and includes all rights to payment for goods sold or leased, or for services rendered.

“ Account Debtor ” means a Person who is obligated under an Account, Chattel Paper or General Intangible.

“ Accounts Formula Amount ” means (i) 85% of the Value of Eligible Accounts, plus (ii) 85% of the Value of Eligible Earned-But-Unbilled Accounts, up to, in the case of this clause (ii), an aggregate amount not to exceed $17,500,000.

“ Acquisition ” shall mean any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of in excess of 50% of the Equity Interests of any Person, or otherwise causing any Person to become a Subsidiary, or (b) a merger or consolidation or any other combination with another Person (other than a Person that is a Subsidiary) in which a Borrower or a Subsidiary is the surviving Person, or (c) the acquisition of substantially all the assets of, or of a line of business from, another Person.

“ Acquisition Pro Forma ” has the meaning specified in the definition of Permitted Acquisition.

“ Acquisition Projections ” means, with respect to any Acquisition, updated versions of the most recently delivered projections covering the one-year period commencing on the date of such Acquisition and otherwise prepared in accordance with the projections and based upon historical financial data of a recent date reasonably satisfactory to the Administrative Agent, taking into account such Acquisition.

“ Actual Knowledge ” means, with respect to any information or event, that a Responsible Officer of a Borrower has actual knowledge of such information or event.

“ Administrative Agent ” means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

“ Administrative Agent’s Office ” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 11.02 , or such other address or account as the Administrative Agent may from time to time notify to the Borrowers, the L/C Issuers and the Lenders.

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

 

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“ Affiliate ” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“ Agent/BAS Fee Letter ” means the letter agreement, dated August 3, 2009, by and among the Borrower Agent, the Administrative Agent and BAS.

“ Agent Indemnitees ” means the Administrative Agent and its officers, directors, employees, Affiliates, agents and attorneys.

“ Aggregate Commitments ” means the Commitments of all the Lenders.

“ Agreement ” means this Credit Agreement.

“ Allocable Amount ” has the meaning specified in Section 2.16(c)(ii) .

“ Annual Capex Carryover Limit ” means, for any Fiscal Year of Pacer and its Subsidiaries, 50% of the excess of (a) the maximum permitted amount of Capital Expenditures set forth for such Fiscal Year in the chart contained in Section 7.13 over (b) the aggregate amount of Capital Expenditures made by the Borrowers and their respective Subsidiaries during such Fiscal Year.

“ Anti-Terrorism Laws ” means any laws relating to terrorism or money laundering, including the Patriot Act.

“ Applicable Percentage ” means with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Commitments represented by such Lender’s Commitment at such time. If the commitment of each Lender to make Loans and the obligation of each L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 9.02 or if the Aggregate Commitments have expired, then the Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such Lender most recently in effect, giving effect to any subsequent assignments. The Applicable Percentage of each Lender, as of the Closing Date and after giving effect to the amendment and restatement of the Existing Credit Agreement, is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

“ Applicable Rate ” means (a) with respect to a commitment fee, the following percentages per annum, based on the average unused amount of the Aggregate Commitments:

 

 

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and (b) with respect to all other fees and rates of interest, the following percentages per annum, based upon the Fixed Charge Coverage Ratio during any period described in Section 7.12 hereof, as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(a) :

 

Notwithstanding the foregoing, until the date of delivery of the financial statements and corresponding Compliance Certificate for the period ending March 31, 2010, margins shall be determined as if Pricing Level II were applicable. Thereafter, any increase or decrease in the Applicable Rate resulting from a change in the Fixed Charge Coverage Ratio shall become effective as of the first day of the first calendar month following the date a Compliance Certificate is delivered pursuant to Section 6.02(a) with respect to any period described in Section 7.12 hereof; provided , however , that if a Compliance Certificate is not delivered when due in accordance with such Section, then Pricing Level II shall apply as of the fifth Business Day after the date on which such Compliance Certificate was required to have been delivered, and shall continue to so apply until the first day of the first calendar month following the date on which such Compliance Certificate is so delivered (and thereafter the Pricing Level otherwise determined in accordance with this definition shall apply). Notwithstanding anything to the contrary contained in this definition, the determination of the Applicable Rate for any period shall be subject to the provisions of Section 2.13(b) .

“ Applicable Law ” means all laws, rules, regulations and governmental guidelines applicable to the Person, conduct, transaction, agreement or matter in question, including all applicable statutory law, common law and equitable principles, and all provisions of constitutions, treaties, statutes, rules, regulations, orders and decrees of Governmental Authorities.

“ 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 BAS.

“ Assigned Contracts ” means as to any Borrower, collectively, all of such Borrower’s rights and remedies under, and all moneys and claims for money due or to become due to such Borrower under those contracts set forth on Schedule 1.01(a) , and any and all amendments, supplements, extensions, and renewals thereof including all rights and claims of such Borrower now or hereafter existing: (i) under any insurance, indemnities, warranties, and guarantees provided for or arising out of or in connection with any of the foregoing agreements; (ii) for any damages arising out of or for breach or default under or in connection with any of the foregoing

 

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contracts; (iii) to all other amounts from time to time paid or payable under or in connection with any of the foregoing agreements; or (iv) to exercise or enforce any and all covenants, remedies, powers and privileges thereunder.

“ Assignee Group ” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by the terms of this Agreement), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form approved by the Administrative Agent.

“ Assignment of Claims Act ” means the Federal Assignment of Claims Act (31 U.S.C. Section 3727).

“ Attributable Indebtedness ” means, on any date, (a) in respect of any capital lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining minimum required lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease.

“ Audited Financial Statements ” means the audited consolidated balance sheet of Borrowers and Subsidiaries for the Fiscal Year ended December 26, 2008 , and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such Fiscal Year of Borrowers and Subsidiaries, including the notes thereto.

“ Availability ” means the Borrowing Base minus the principal balance of all Loans.

“ Availability Block ” means an escalating amount which is initially $0.00 as of the Closing Date, and which, thereafter, increases by $500,000 on each Availability Block Application Date; provided that if, and only for so long as, the Borrowers’ most recently ended calendar month prior to a given Availability Block Application Date is an FCCR Compliant Month, then such Availability Block shall cease to escalate and shall instead be released in four successive equal monthly installments (beginning on such Availability Block Application Date and, thereafter, on each successive Availability Block Application Date); provided further that if, for any month after an FCCR Compliant Month, the Borrowers shall have failed to have maintained a minimum Availability Block Fixed Charge Coverage Ratio of greater than 1.25:1.00, the release of any remaining Availability Block shall be suspended and the Availability Block shall, thereafter, again constitute an escalating amount which is initially set at the amount of the Availability Block then in effect, and which, thereafter, increases by $500,000 on each Availability Block Application Date, beginning on the next occurring Availability Block Application Date.

“ Availability Block Application Date ” means September 30, 2009 and the last Business Day of each calendar month thereafter.

 

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“ Availability Block Fixed Charge Coverage Ratio ” means the Fixed Charge Coverage Ratio calculated as of the applicable month-end and measured on a rolling twelve-month basis; provided that for any month ending on or prior to July 31, 2010, the applicable measurement period shall begin on August 1, 2009.

“ Availability Period ” means the period from and including the Closing Date to the earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Commitments pursuant to Section 2.07 , and (c) the date of termination of the commitment of each Lender to make Loans and of the obligation of the L/C Issuers to make L/C Credit Extensions pursuant to Section 9.02 .

“ Availability Reserve ” means the sum (without duplication) of (a) the L/C Reserve, (b) the Bank Product Reserve, (c) the aggregate amount of liabilities secured by Liens upon Collateral that are senior to the Administrative Agent’s Liens (but imposition of any such reserve shall not waive an Event of Default arising therefrom); (d) the Availability Block; and (e) such additional reserves, in such amounts and with respect to such matters, as the Administrative Agent in its reasonable discretion may elect to impose from time to time.

“ Bank of America ” means Bank of America, N.A. and its successors.

“ Bank of America Indemnitees ” means Bank of America and its officers, directors, employees, Affiliates, agents and attorneys.

“ Bank of Montreal ” means the Bank of Montreal.

“ Bank Product ” means any of the following products, services or facilities extended to any Borrower or Subsidiary by a Lender or any of its Affiliates (or by a Lender (or an Affiliate of a Lender) at the time any Bank Product Obligations were incurred but has ceased to be a Lender (or whose Affiliate has ceased to be a Lender) hereunder): (a) FX/Cash Management Products; (b) products under Swap Contracts; and (c) commercial credit card and merchant card services; provided , however , that for any of the foregoing to be included as a “Secured Obligation” for purposes of a distribution under Section 9.03 , the applicable Secured Party and Loan Party must have previously provided written notice to the Administrative Agent with a copy to the Borrower Agent of (i) the existence of such Bank Product, (ii) the proposed maximum dollar amount of obligations arising thereunder which may be included (below, at or above such level), at the reasonable discretion of the Administrative Agent, as a Bank Product Reserve (“ Bank Product Amount ”), and (iii) the methodology to be used by such parties in determining the Bank Product Obligations owing from time to time. The Bank Product Amount may be changed from time to time upon written notice to the Administrative Agent by the Secured Party and Loan Party. No Bank Product Amount may be established or increased at any time that a Default or Event of Default exists, or if a reserve in such amount would cause an Overadvance.

“ Bank Product Amount ” has the meaning specified in the definition of Bank Product.

“ Bank Product Obligations ” means Indebtedness and other obligations of a Loan Party relating to Bank Products, including, without limitation, (i) the FX/Cash Management Obligations owing to any FX/Cash Management Obligation Providers, and (ii) the Swap Obligations owing to any Swap Obligation Providers.

 

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“ Bank Product Reserve ” means the aggregate amount of reserves established by the Administrative Agent from time to time in its reasonable discretion in respect of Bank Product Obligations.

“ Bankruptcy Code ” means Title 11 of the United States Code, as now and hereafter in effect, or any successor statute.

“ BAS ” means Banc of America Securities LLC, in its capacity as a joint lead arranger and sole book manager.

“ Base Rate ” means for any day, a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the Eurodollar Rate for a 30 day interest period as determined on such day, plus 1.0% and (c) the rate of interest in effect for such day as announced from time to time by Bank of America as its “prime rate.” The “prime rate” is a rate set by Bank of America based upon various factors, including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

“ Base Rate Committed Loan ” means a Committed Loan that is a Base Rate Loan.

“ Base Rate Loan ” means a Loan that bears interest based on the Base Rate.

“ Borrowed Money ”: with respect to any Loan Party, without duplication, its (a) Indebtedness that (i) arises from the lending of money by any Person to such Loan Party, (ii) is evidenced by notes, drafts, bonds, debentures, credit documents or similar instruments, (iii) accrues interest or is a type upon which interest charges are customarily paid (excluding trade payables owing in the Ordinary Course of Business), or (iv) was issued or assumed as full or partial payment for Property; (b) Capital Leases; (c) reimbursement obligations with respect to letters of credit; and (d) guaranties of any Debt of the foregoing types owing by another Person.

“ Borrower Agent ” has the meaning specified in Section 2.05 .

“ Borrowers ” has the meaning specified in the introductory paragraph hereto.

“ Borrower Materials ” has the meaning specified in Section 6.02 .

“ Borrowing ” means a Committed Borrowing or a Swing Line Borrowing, as the context may require.

“ Borrowing Base ” means, on any date of determination, an amount equal to the lesser of (a) the Aggregate Commitments, minus the L/C Reserve, minus the Availability Block, or (b) the sum of the Accounts Formula Amount, plus the Equipment Formula Amount, minus the Availability Reserve, in each case as of such date; provided that notwithstanding any provision

 

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set forth herein to the contrary, no amendment, waiver or consent hereunder shall amend the definition of Borrowing Base (and the defined terms used in such definition), increase any advance rate or decrease the Availability Block without the written consent of each Lender.

“ Borrowing Base Certificate ” means a certificate, in form and substance satisfactory to the Administrative Agent, by which Borrowers certify calculation of the Borrowing Base.

“ Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

“ Canadian Dollar ” and “ Can$ ” shall mean the lawful money of Canada.

“ Capital Expenditures ” means, with respect to any Person for any period, the aggregate of all expenditures by such Person and its Subsidiaries during such period on account of property, plant and equipment or analogous fixed assets that are capital expenditures as determined in accordance with GAAP, whether such expenditures are paid in cash or financed (excluding normal replacements and maintenance which are properly charged to current operations).

“ Capital Lease ” means any lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

“ Cash Collateral ” means cash, and any interest or other income earned thereon, that is delivered to the Administrative Agent to Cash Collateralize any Obligations.

“ Cash Collateral Account ” means a demand deposit, money market or other account established by the Administrative Agent at such financial institution as the Administrative Agent may select in its discretion, which account shall be subject to the Administrative Agent’s Liens for the benefit of Secured Parties.

“ Cash Collateralize ” means the delivery of cash to the Administrative Agent, as security for the payment of Obligations, in an amount equal to (a) with respect to L/C Obligations, 103% of the aggregate L/C Obligations, and (b) with respect to any inchoate, contingent or other Obligations (including Bank Product Obligations), the Administrative Agent’s good faith estimate of the amount due or to become due, including all fees and other amounts relating to such Obligations. “ Cash Collateralization ” has a correlative meaning.

“ Cash Equivalents ” means (a) marketable obligations issued or unconditionally guaranteed by, and backed by the full faith and credit of, the United States government, maturing within 12 months of the date of acquisition; (b) certificates of deposit, time deposits and bankers’ acceptances maturing within 12 months of the date of acquisition, and overnight bank deposits, in each case which are issued by a commercial bank organized under the laws of the United States or any state or district thereof, rated A-1 (or better) by S&P or P-1 (or better) by Moody’s at the time of acquisition, and (unless issued by a Lender) not subject to offset rights; (c) repurchase obligations with a term of not more than 30 days for underlying investments of the

 

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types described in clauses (a) and (b) entered into with any bank meeting the qualifications specified in clause (b); (d) commercial paper rated A-1 (or better) by S&P or P-1 (or better) by Moody’s, and maturing within nine months of the date of acquisition; and (e) shares of any money market fund that has substantially all of its assets invested continuously in the types of investments referred to above, has net assets of at least $500,000,000 and has the highest rating obtainable from either Moody’s or S&P.

“ Cash Management Implementation Date ” has the meaning specified in Section 8.02(d).

“ CERCLA ” means the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. § 9601 et seq .).

“ Chassis ” means the intermodal chassis owned by any Borrower or any other Loan Party, consisting of steel frames with rubber tires and employed in the conduct of such Borrower’s or such other Loan Party’s business to transport containers over highways.

“ Change in Law ” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.

“ Change of Control ” means an event or series of events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “ option right ”)), directly or indirectly, of 35% or more of the equity securities of Pacer entitled to vote for members of the board of directors or equivalent governing body of Pacer on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right);

(b) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of Pacer cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body; or

 

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(c) all or substantially all of a Borrower’s assets are sold or transferred, other than a sale or transfer to another Borrower.

“ Claims ” means all liabilities, obligations, losses, damages, penalties, judgments, proceedings, interest, costs and expenses of any kind (including remedial response costs, reasonable attorneys’ fees and Extraordinary Expenses) at any time (including after Full Payment of the Obligations, resignation or replacement of Agent, or replacement of any Lender) incurred by or asserted against any Indemnitee in any way relating to (a) any Loans, Letters of Credit, Loan Documents, or the use thereof or transactions relating thereto, (b) any action taken or omitted to be taken by any Indemnitee in connection with any Loan Documents, (c) the existence or perfection of any Liens, or realization upon any Collateral, (d) exercise of any rights or remedies under any Loan Documents or Applicable Law, or (e) failure by any Obligor to perform or observe any terms of any Loan Document, in each case including all costs and expenses relating to any investigation, litigation, arbitration or other proceeding (including an Insolvency Proceeding or appellate proceedings), whether or not the applicable Indemnitee is a party thereto.

“ Closing Date ” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 11.01 .

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Collateral ” means all of the “ Pledged Collateral ” referred to in the Pledge Agreement, all of the “ Collateral ” referred to in the Security Agreement and all of the other Property that is or is intended under the terms hereof or of the Collateral Documents to be subject to Liens in favor of the Administrative Agent (for the benefit of the Secured Parties) securing the Secured Obligations.

“ Collateral Documents ” means, collectively, the Security Agreement, the Pledge Agreement, the Mexican Pledge Agreement, any Control Agreements and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Administrative Agent (for the benefit of the Secured Parties) securing the Secured Obligations.

“ Commitment ” means, as to each Lender, its obligation to (a) make Committed Loans to the Borrowers pursuant to Section 2.01 , (b) purchase participations in L/C Obligations, and (c) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement; provided that notwithstanding any provision set forth herein to the contrary, no amendment, waiver or consent hereunder or supplement hereto shall increase the aggregate Commitments in excess of $175,000,000 without the written consent of each Lender.

“ Committed Borrowing ” means a borrowing consisting of simultaneous Committed Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01 .

“ Committed Loan ” has the meaning specified in Section 2.01 .

 

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“ Committed Loan Notice ” means a notice of (a) a Committed Borrowing, (b) a conversion of Committed Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a) , which, if in writing, shall be substantially in the form of Exhibit A .

“ Compliance Certificate ” means a certificate substantially in the form of Exhibit D .

“ Consolidated EBITDA ” means, for any period, for Pacer and its Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income for such period plus (a) the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges for such period, (ii) the provision for Federal, state, local and foreign income taxes payable by Pacer and its Subsidiaries for such period, (iii) depreciation and amortization expense, (iv) other non-recurring expenses of Pacer and its Subsidiaries reducing such Consolidated Net Income which do not represent a cash item in such period or any future period, (v) non-cash charges or expenses related to equity plans or stock option awards in such period, (vi) payroll taxes on exercise of stock options in such period, (vii) for any such period that includes the month of August 2009, the actual amount of operating losses in the month of August 2009 associated with Pacer Transport, Inc. in an aggregate amount not to exceed $500,000 and (viii) non-recurring operational restructuring charges (including downsizing and closures) incurred on or prior to the first anniversary of the Closing Date, in an aggregate amount not to exceed $2,000,000 in any three-month period and not to exceed $5,000,000 in the aggregate from and after the Closing Date and minus (b) the following to the extent included in calculating such Consolidated Net Income: (i) Federal, state, local and foreign income tax credits of Pacer and its Subsidiaries for such period and (ii) all non-cash items increasing Consolidated Net Income for such period.

“ Consolidated Interest Charges ” means, for any period, for Pacer and its Subsidiaries on a consolidated basis, all interest expense in such period determined in accordance with GAAP.

“ Consolidated Net Income ” means, for any period, for Pacer and its Subsidiaries on a consolidated basis, the net income of Pacer and its Subsidiaries (excluding extraordinary gains and extraordinary losses) for that period determined in accordance with GAAP.

“ Contractual Obligation ” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its Property is bound.

“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.

“ Control Agreement ” has the meaning specified in the Security Agreement.

“ Credit Extension ” means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.

“ CWA ” means the Clean Water Act (33 U.S.C. §§ 1251 et seq.).

 

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“ Debtor Relief Laws ” means the Bankruptcy Code, 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 and affecting the rights of creditors generally.

“ Default ” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

“ Default Rate ” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided , however , that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus 2% per annum.

“ Defaulting Lender ” means any Lender that (a) has failed to fund any portion of the Committed Loans, participations in L/C Obligations or participations in Swing Line Loans required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder unless such failure has been cured, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute or unless such failure has been cured, or (c) has been deemed insolvent or become the subject of any Insolvency Proceeding.

“ Disposition ” or “ Dispose ” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any Property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

“ Dollar ” and “ $ ” mean lawful money of the United States.

“ Dollar Equivalent ” of any currency with respect to any amount of Dollars at any date means the equivalent in such currency of such amount of Dollars, calculated on the basis of the arithmetical mean of the buy and sell spot rates of exchange of the Administrative Agent for such other currency at 11:00 a.m., London time, on the date on or as of which such amount is to be determined.

“ Domestic Subsidiary ” means any direct or indirect Subsidiary that is organized under the laws of the United States or any state thereof, provided that the direct or indirect parent of such Subsidiary is not a Foreign Subsidiary.

“ Dominion Account ” means a special account established by Borrowers at Bank of America or another bank reasonably acceptable to the Administrative Agent, over which the Administrative Agent has exclusive control for withdrawal purposes.

 

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“ Eligible Account ” means an Account owing to a Borrower that arises in the Ordinary Course of Business from the sale of goods or rendition of services, is payable in Dollars or Canadian Dollars and is deemed by the Administrative Agent, in its reasonable commercial discretion, to be an Eligible Account. Without limiting the foregoing, no Account shall be an Eligible Account, unless the Administrative Agent in its sole discretion otherwise elects, if:

(a) it is unpaid for more than (i) 90 days after the original invoice date, or (ii) in the case of Accounts owing to RF International, Ltd. or Ocean World Lines, Inc. only, more than 120 days after the original invoice date;

(b) 50% or more of the Accounts owing by the Account Debtor are not Eligible Accounts under the foregoing clause;

(c) when aggregated with other Accounts owing by the Account Debtor, it exceeds 10% of the aggregate Eligible Accounts (or such higher percentage as Agent may establish for the Account Debtor from time to time);

(d) it does not conform with a covenant or representation herein;

(e) it is owing by a creditor or supplier, or is otherwise subject to a potential offset, counterclaim, dispute, deduction, discount, recoupment, reserve, defense, chargeback, credit or allowance (but ineligibility shall be limited to the amount thereof);

(f) an Insolvency Proceeding has been commenced by or against the Account Debtor; or the Account Debtor has failed, has suspended or ceased doing business, is liquidating, dissolving or winding up its affairs, or is not Solvent; or the Borrower is not able to bring suit or enforce remedies against the Account Debtor through judicial process;

(g) the Account Debtor is organized or has its principal offices or assets outside the United States or Canada;

(h) it is owing by a Government Authority, unless the Account Debtor is the United States or any department, agency or instrumentality thereof and the Account has been assigned to Agent in compliance with the Assignment of Claims Act;

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

(j) the goods giving rise to it have not been delivered to and accepted by the Account Debtor, the services giving rise to it have not been accepted by the Account Debtor, or it otherwise does not represent a final sale, including, without limitation, any accounts related to deferred revenue;

(k) it is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment;

(l) its payment has been extended or it arises from a sale on a cash-on-delivery basis;

 

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(m) it arises from a sale to an Affiliate, from a sale on a bill-and-hold, guaranteed sale, sale-or-return, sale-on-approval, consignment, or other repurchase or return basis, or from a sale to a Person for personal, family or household purposes;

(n) it represents a progress billing or retainage;

(o) it includes a billing for interest, fees or late charges, but ineligibility shall be limited to the extent thereof. In calculating delinquent portions of Accounts under clauses (a) and (b), credit balances more than 90 days old will be excluded;

(p) it is not yet evidenced by a written invoice or bill; provided that the Railcar Receivables shall constitute Eligible Accounts without a written invoice or bill;

(q) when aggregated with all other Accounts receivable in Canadian Dollars otherwise constituting Eligible Accounts, it exceeds the Dollar Equivalent of $2,000,000; or

(r) it is a Railcar Receivable and, from and after the date that is 30 days after the Closing Date, the Greenbrier Acknowledgement shall not have been executed or shall not remain in full force and effect.

If any Account at any time ceases to be an Eligible Account (including, without limitation, upon any Disposition thereof as further specified in Section 2.06(d) ), such Account shall promptly be excluded from the calculation of Eligible Account.

Notwithstanding the foregoing, the Accounts of any Person acquired pursuant to a Permitted Acquisition shall not be included in Eligible Accounts without the prior written consent of the Administrative Agent and Required Lenders.

“ Eligible Assignee ” a Person that is (a) a Lender, U.S.-based Affiliate of a Lender or Approved Fund; (b) any other financial institution approved by the Administrative Agent (which approval by Administrative Agent shall not be unreasonably withheld or delayed) and Borrower Agent (which approval by Borrower Agent shall not be unreasonably withheld or delayed, and shall be deemed given if no objection is made within two Business Days after notice of the proposed assignment), that is organized under the laws of the United States or any state or district thereof, has total assets in excess of $5 billion, extends asset-based lending facilities in its Ordinary Course of Business and whose becoming an assignee would not constitute a prohibited transaction under Section 4975 of the Code or any other Applicable Law; and (c) during any Event of Default, any Person acceptable to the Administrative Agent in its discretion.

“ Eligible Earned-But-Unbilled Account ” means an Account that would constitute an Eligible Account but for the failure to satisfy clause (p) thereof; provided that while such Account shall not yet be evidenced by a written invoice or bill, such Account shall have been earned; and provided further that such Account may constitute an Eligible Earned-But-Unbilled Account only for the period from and after the date such Account was first earned until the date that is 30 days thereafter. Notwithstanding the foregoing, the Accounts of any Person acquired pursuant to a Permitted Acquisition shall not be included in Eligible Earned-But-Unbilled Accounts without the prior written consent of the Administrative Agent and Required Lenders.

 

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“ Eligible Equipment ” means all Equipment constituting Railcars or Chassis, in each case owned by and used in the operation of the business of any Borrower and which is deemed by the Administrative Agent, in its reasonable commercial discretion, to be Eligible Equipment. No Equipment shall be Eligible Equipment unless the Administrative Agent, in its sole discretion elects, if:

(a) it is the subject of a finance or trade credit arrangement between any Borrower as obligor and a third party obligee or it is not owned outright by the applicable Borrower;

(b) it is not subject to the Administrative Agent’s Liens, which are perfected as to such Equipment, or it is subject to any other Lien whatsoever;

(c) without limiting the foregoing clause (b), (i) with respect to any Chassis which is subject to a certificate of title (or other similar) statute under applicable law, the applicable Borrower failed to provide for the Administrative Agent’s Lien to be indicated on such certificate of title (or other relevant registration) or failed to take all other steps necessary or reasonably requested by Administrative Agent in order to provide the Administrative Agent with a first priority perfected security interest in such Chassis under applicable law, in each case within the time periods allowed under the Security Agreement or (ii) with respect to any Railcar, the applicable Borrower failed to execute and deliver to Administrative Agent such Memorandum of Security Agreements (as defined in the Security Agreement) as the Administrative Agent and the Required Lenders may reasonably request, failed to record such Memorandum of Security Agreements with the Surface Transportation Board or failed to take such other action as the Administrative Agent or the Required Lenders may reasonably request, to perfect the Administrative Agent’s security interest in such Rolling Stock (as defined in the Security Agreement);

(d) it is not in good operating condition, is unmerchantable, is defective, is being repaired, or does not meet all standards imposed by any Governmental Authority having regulatory authority over such Equipment, their use or sale;

(e) it is not currently usable or has otherwise suffered an Event of Loss;

(f)(i) it is located outside the United States, Canada or Mexico or (ii) if located in Canada or Mexico, it is not used in the Ordinary Course of Business;

(g) from and after the date that is 45 days after the Closing Date, it is located on leased premises, is located at rail yards, rail ramps or other container terminal operations in each case not owned by any Borrower or is in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person (including, without limitation, any location at which Chassis are stored while not interchanged to or in use by Motor Carriers (as defined in the UIAA) in accordance with the UIAA, which is not owned by a Borrower), unless either the lessor or such Person has delivered a subordination agreement, access agreement, landlord agreement or other similar agreement in a form acceptable to the Administrative Agent, or an Availability Reserve for rents, handling, removal, storage or other charges has been established for Equipment at that location; or

(h) it does not conform with a covenant or representation herein.

 

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If any Equipment at any time ceases to be Eligible Equipment (including, without limitation, upon any Disposition thereof or upon receipt of insurance proceeds or condemnation awards related thereto as further specified in Sections 2.06(d) and 2.06(f) ), such Equipment shall promptly be excluded from the calculation of Eligible Equipment.

Notwithstanding the foregoing, the Railcars and Chassis of any Person acquired pursuant to a Permitted Acquisition (and the Railcars and Chassis otherwise acquired by any Borrower other than Railcars and Chassis acquired in connection with the replacement of damaged Railcars or Chassis if such replacement Railcars and Chassis are (w) used or useful in the operation of the business of the Borrowers, (x) of equal or greater value, (y) acquired with the proceeds of insurance received with respect to such replaced Railcars or Chassis and (z) free of Liens) shall not be included in Eligible Equipment without the prior written consent of the Administrative Agent and Required Lenders.

“ Enforcement Action ” means any action to enforce any Obligations or Loan Documents or to realize upon any Collateral (whether by judicial action, self-help, notification of Account Debtors, exercise of setoff or recoupment, or otherwise).

“ Environmental Agreement ” means each agreement of Borrowers with respect to any Real Estate subject to a Mortgage, pursuant to which Borrowers agree to indemnify and hold harmless the Administrative Agent and Lenders from liability under any Environmental Laws.

“ Environmental Laws ” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems, including without limitation CERCLA, RCRA and CWA.

“ Environmental Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ Environmental Notice ” means a notice (whether written or oral) from any Governmental Authority or other Person of any noncompliance with, investigation of a violation of, litigation relating to, or fine or liability under any Environmental Law, or with respect to any Environmental Release, environmental pollution or hazardous materials, including any complaint, summons, citation, order, claim, demand or request for correction, remediation or otherwise.

“ Environmental Permit ” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

 

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“ Environmental Release ” means a release as defined in CERCLA or under any other Environmental Law.

“ Equipment ” of a Person means all of such Person’s now owned and hereafter acquired machinery, equipment, transportation equipment, furniture, furnishings, fixtures, and other tangible personal Property (except Inventory), including embedded software, Railcars, motor vehicles (and Chassis) with respect to which a certificate of title has been issued, aircraft, dies, tools, jigs, molds and office equipment, as well as all of such types of Property leased by such Person and all of the such Person’s rights and interests with respect thereto under such leases (including, without limitation, options to purchase); together with all present and future additions and accessions thereto, replacements therefor, component and auxiliary parts and supplies used or to be used in connection therewith, and all substitutes for any of the foregoing, and all manuals, drawings, instructions, warranties and rights with respect thereto; wherever any of the foregoing is located, but excluding Inventory of such Person.

“ Equipment Appraisal ” means the most recent appraisal conducted by an independent appraisal firm and delivered pursuant to Section 8.03(d) .

“ Equipment Formula Amount ” means the lesser of (a) 80% of the Value of Eligible Equipment and (b) $25,000,000, which such lesser amount shall be reduced by an aggregate amount equal to $250,000 per month on the last Business Day of each calendar month, from and after September 30, 2009.

“ Equity Distribution ” has the meaning specified in Section 7.06(e) .

“ Equity Distribution Pro Forma ” has the meaning specified in Section 7.06(e) .

“ Equity Distribution Projections ” means, with respect to any Equity Distribution, updated versions of the most recently delivered projections covering the one-year period commencing on the date of such Equity Distribution and otherwise prepared in accordance with the projections and based upon historical financial data of a recent date reasonably satisfactory to the Administrative Agent, taking into account such Equity Distribution.

“ Equity Interests ” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

“ ERISA ” means the Employee Retirement Income Security Act of 1974.

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) under common control with any Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

 

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“ ERISA Event ” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by any Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by any Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization or in “endangered” status under Section 432 of the Code; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) any Borrower or any ERISA Affiliate fails to meet the funding requirements of Sections 412 and 430 of the Code or Sections 302 and 303 of ERISA, with respect to any Pension Plan; (f) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (g) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Borrower or any ERISA Affiliate.

“ Eurodollar Rate ” means, for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“ BBA LIBOR ”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

“ Eurodollar Rate Loan ” means a Committed Loan that bears interest at a rate based on the Eurodollar Rate.

“ Event of Default ” has the meaning specified in Section 9.01 .

“ Event of Loss ” means, with respect to any Railcar or Chassis, the occurrence of any of the following events:

(a) total loss or destruction thereof;

(b) theft or disappearance thereof without recovery;

 

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(c) damage rendering such Railcar or Chassis unfit for normal use and, in the judgment of any Borrower, beyond repair at reasonable cost; and

(d) any condemnation, seizure, forced sale or other taking of title to or use of any such Railcar or Chassis.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

“ Excluded Subsidiary ” means (a) Ocean World Lines Europe GmbH, provided that (i) the net book value of the consolidated assets of such Foreign Subsidiary (measured as of the end of Borrowers’ most recent fiscal month end) does not exceed $5,500,000 and (ii) the consolidated operating income of such Foreign Subsidiary (measured as of the end of the Borrower’s most recent fiscal month end) does not exceed $500,000; and (b) any Foreign Subsidiary of the Borrower, (i) with consolidated assets the net book value of which (measured as of the end of the Borrower’s most recent fiscal month end) is less than $10,000 or (ii) that has consolidated revenues (measured as of the end of Borrowers’ most recent fiscal month end) of less than $10,000. Such determinations shall be made with respect to the Foreign Subsidiaries at the time that the monthly financial statements for Pacer and its Subsidiaries are delivered pursuant to Section 6.01 ; provided , however , that if a Person becomes a Subsidiary pursuant to or in connection with an Acquisition, then such determination shall be made as of the date of such Acquisition, based on the financial statements of such Person for its most recent month end for which financial statements are available (which may be unaudited).

“ Excluded Taxes ” means, with respect to the Administrative Agent, any Lender, any L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of a Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes) or similar Taxes, by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which any Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by Borrower Agent under Section 11.13 ), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 3.01(e) , except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from any Borrower with respect to such withholding tax pursuant to Section 3.01(a) .

“ Existing Commitments ” means “Commitments” as defined in the Existing Credit Agreement.

“ Existing Credit Agreement ” has the meaning specified in the recitals hereto.

 

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“ Existing L/C Issuers ” means the “L/C Issuers” as defined in the Existing Credit Agreement.

“ Existing Lenders ” has the meaning specified in the recitals hereto.

“ Existing Letters of Credit ” means the standby letters of credit listed on Schedule 1.01(b) .

“ Existing Loan Documents ” means “Loan Documents” as defined in the Existing Credit Agreement.

“ Existing Loans ” means the “Loans” as defined in the Existing Credit Agreement which are outstanding on the Closing Date immediately prior to the effectiveness of this Agreement.

“ Extraordinary Expense ” means all costs, expenses or advances that the Administrative Agent may incur during a Default or Event of Default, or during the pendency of an Insolvency Proceeding of a Loan Party, including those relating to (a) any audit, inspection, repossession, storage, repair, appraisal, insurance, manufacture, preparation or advertising for sale, sale, collection, or other preservation of or realization upon any Collateral; (b) any action, arbitration or other proceeding (whether instituted by or against the Administrative Agent, any Lender, any Loan Party, any representative of creditors of a Loan Party or any other Person) in any way relating to any Collateral (including the validity, perfection, priority or avoidability of the Administrative Agent’s Liens with respect to any Collateral), Loan Documents, Letters of Credit or Obligations, including any lender liability or other Claims; (c) the exercise, protection or enforcement of any rights or remedies of Agent in, or the monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction of any taxes, charges or Liens with respect to any Collateral; (e) any Enforcement Action; (f) negotiation and documentation of any modification, waiver, workout, restructuring or forbearance with respect to any Loan Documents or Obligations; and (g) Protective Advances. Such costs, expenses and advances include transfer fees, Other Taxes, storage fees, insurance costs, permit fees, utility reservation and standby fees, legal fees, appraisal fees, brokers’ fees and commissions, auctioneers’ fees and commissions, accountants’ fees, environmental study fees, wages and salaries paid to employees of any Loan Party or independent contractors in liquidating any Collateral, and travel expenses.

“ Extraordinary Receipt ” means any cash received by or paid to or for the account of any Loan Party not in the Ordinary Course of Business, including, without limitation, purchase price adjustments, tax refunds, judgments and litigation settlements, pension plan reversions, proceeds of insurance (excluding proceeds of business interruption insurance to the extent such proceeds constitute compensation for lost earnings), condemnation awards (and payments in lieu thereof) and indemnity payments.

“ FCCR Compliant Month ” means any calendar month from and after the month of March 2010 in respect of which a Compliance Certificate has been delivered that demonstrates that the Borrowers have met the minimum Availability Block Fixed Charge Coverage Ratio of greater than 1.25:1.00.

 

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“ Federal Funds Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

“ Fee Letters ” means the Agent/BAS Fee Letter and the Issuer Fee Letters.

“ First Tier Foreign Subsidiary ” means, at any date of determination, each Foreign Subsidiary directly owned by any Borrower or any of its Domestic Subsidiaries.

“ Fiscal Year ” means the fiscal year of Borrowers and Subsidiaries for accounting and tax purposes, ending on December 31 of each year.

“ Fixed Charge Coverage Ratio ” means the ratio, determined on a consolidated basis for Pacer and its Subsidiaries for any period, of (a) Consolidated EBITDA for such period to (b) Fixed Charges for such period; provided , however , that for the purpose of the computations of the Fixed Charge Coverage Ratio (as used herein), if there has occurred an Acquisition during the relevant period, Consolidated EBITDA, Consolidated Interest Charges and Fixed Charges shall be calculated, at the option of the Borrowers, on a pro forma basis in accordance with (i) the SEC pro forma reporting rules under the Exchange Act and (ii) Regulation S-X promulgated under the Securities Act and as interpreted by the staff of the SEC (which pro forma adjustments shall be certified by the chief financial officer of Pacer), as if such Acquisition occurred on the first day of the applicable period.

“ Fixed Charges ” means the sum of (i) Consolidated Interest Charges (other than payment-in-kind and any other non-cash items included in Consolidated Interest Charges, including, without limitation, amortization or write-off of fees and original issue discount), (ii) regularly scheduled principal payments on or redemptions or similar acquisitions for value of Borrower Money (other than principal payments in connection with reductions of Availability after giving effect to reductions provided for in the definition of Equipment Formula Amount), (iii) the aggregate amount of Federal, state, local and foreign income taxes paid in cash, and (iv) Capital Expenditures (other than those financed with Borrowed Money (excluding the Loans hereunder)).

“ FLSA ” means the Fair Labor Standards Act of 1938.

“ Foreign Lender ” any Lender or L/C Issuer that is organized under the laws of a jurisdiction other than the laws of the United States, or any state or district thereof.

“ Foreign Plan ” means any employee benefit plan or arrangement (a) maintained or contributed to by any Borrower or Subsidiary that is not subject to the laws of the United States; or (b) mandated by a government other than the United States for employees of any Borrower or Subsidiary.

 

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“ Foreign Subsidiary ” means any Subsidiary of any Borrower that is not a Domestic Subsidiary.

“ FRB ” means the Board of Governors of the Federal Reserve System of the United States.

“ Full Payment ” means with respect to any Obligations, (a) the full and indefeasible cash payment thereof, including any interest, fees and other charges accruing during an Insolvency Proceeding (whether or not allowed in the proceeding); (b) if such Obligations are L/C Obligations or inchoate or contingent in nature, Cash Collateralization thereof (or delivery of a standby letter of credit acceptable to the Administrative Agent in its discretion, in the amount of required Cash Collateral); and (c) a release of any Claims of Loan Parties against the Administrative Agent, Lenders and L/C Issuers arising on or before the payment date. No Loans shall be deemed to have been paid in full until all Commitments related to such Loans have expired or been terminated.

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

“ FX/Cash Management Obligation Provider ” means any Person making credit extensions to Borrowers or Subsidiaries in respect of any FX/Cash Management Obligations to the extent such Person (i) is a Lender or an Affiliate of a Lender or (ii) is a Person that was a Lender (or an Affiliate of a Lender) at the time any such FX/Cash Management Obligations were incurred but has ceased to be a Lender (or whose Affiliate has ceased to be a Lender) hereunder.

“ FX/Cash Management Obligations ” means any and all obligations of Borrowers or any of their respective Subsidiaries owing to any Person under any FX/Cash Management Products.

“ FX/Cash Management Product ” means any agreement to provide foreign exchange or cash management services (including treasury, depository, overdraft, credit or debit card, operating, collections, payroll, trust, or other depository or disbursement accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled disbursement, overdraft, depository, information reporting, lockbox and stop payment services and other cash management arrangements).

“ GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“ Global Intercompany Note ” means a promissory note substantially in the form of Exhibit K evidencing Indebtedness owed among the Borrowers and their respective Subsidiaries.

 

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“ Governmental Approvals ” means all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and required reports to, all Governmental Authorities.

“ Governmental Authority ” means the government of the United States 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 any supra-national bodies such as the European Union or the European Central Bank).

“ Greenbrier Acknowledgement ” means an acknowledgement by each of Greenbrier Leasing Company LLC and Brandon Railroad LLC in form and substance reasonably satisfactory to the Administrative Agent.

“ Guarantee ” means, as to any Person, any (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease Property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien); provided that the term “Guarantee” shall not include endorsements for collection or deposit, in either case in the Ordinary Course of Business, or contingent or inchoate indemnity obligations in effect on the Closing Date or entered into in connection with any Acquisition or disposition of assets or Permitted Acquisitions permitted under this Agreement (other than such obligations with respect to Indebtedness). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

“ Guarantor Payment ” has the meaning specified in Section 2.16(c)(ii) .

“ Guarantors ” means, collectively, the Domestic Subsidiaries of Pacer.

“ Guaranty ” means the Guaranty, dated as of April 5, 2007 and as amended by the Guaranty Amendment, made by the Guarantors in favor of the Administrative Agent, the L/C Issuers, the Lenders and the providers of Bank Products, including without limitation the FX/Cash Management Obligation Providers and the Swap Obligation Providers.

 

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“ Guaranty Accession ” means the Accession Agreement, substantially in the form of Annex 1 to the Guaranty.

“ Guaranty Amendment ” means the Amendment to Guaranty, dated as of the date hereof, substantially in the form of Exhibit F .

“ Hazardous Materials ” means all explosive or radioactive substances or wastes and all 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 all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“ Impacted Lender ” means a Defaulting Lender or a Lender (a) which has defaulted in fulfilling its obligations under one or more other syndicated credit facilities or (b) which is Controlled by an entity that has been deemed insolvent or become subject to a bankruptcy or other similar proceeding.

“ Indebtedness ” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of Property or services (other than trade accounts payable in the Ordinary Course of Business and, in each case, not past due for more than 60 days after the date on which such trade account payable was created);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on Property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f) capital leases and Synthetic Lease Obligations; and

(g) all Guarantees of such Person in respect of any of the foregoing.

 

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For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is Non-Recourse to such Person. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any capital lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date. The amount of any Non-Recourse Indebtedness shall be the lesser of (x) the outstanding principal amount thereof and (y) the fair market value of the collateral securing the same on the books of such Person.

“ Indemnified Taxes ” means Taxes other than Excluded Taxes.

“ Indemnitees ” means Agent Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees and Bank of America Indemnitees.

“ Information ” has the meaning specified in Section 11.07 .

“ Insolvency Proceeding ” means any case or proceeding commenced by or against a Person under any state, federal or foreign law for, or any agreement of such Person to, (a) the entry of an order for relief under any Debtor Relief Laws; (b) the appointment of a receiver, trustee, liquidator, administrator, conservator or other custodian for such Person or any part of its Property; or (c) an assignment or trust mortgage for the benefit of creditors.

“ Insurance Assignment ” means each collateral assignment of insurance pursuant to which a Loan Party assigns to the Administrative Agent, for the benefit of Secured Parties, such Loan Party’s rights under business interruption or other insurance policies as the Administrative Agent deems appropriate, as security for the Obligations.

“ Intercompany Notes ” has the meaning specified in Section 7.03(j) .

“ Interest Payment Date ” means, (a) as to any Loan other than a Base Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided , however , that if any Interest Period for a Eurodollar Rate Loan exceeds one month, the respective dates that fall every month after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the first day of each month and the Maturity Date.

“ Interest Period ” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrower Agent in its Committed Loan Notice or such other period that is twelve months or less requested by the Borrower Agent and consented to by all Lenders; provided that:

(i) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

 

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(ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(iii) no Interest Period shall extend beyond the Maturity Date.

“ Inventory ” has the meaning specified in the UCC, including all goods intended for sale, lease, display or demonstration; all work in process; and all raw materials, and other materials and supplies of any kind that are or could be used in connection with the manufacture, printing, packing, shipping, advertising, sale, lease or furnishing of such goods, or otherwise used or consumed in a Borrower’s business (but excluding Equipment).

“ Investment ” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“ Intellectual Property ” means all intellectual and similar Property of a Person, including inventions, designs, patents, copyrights, trademarks, service marks, trade names, trade secrets, confidential or proprietary information, customer lists, know-how, software and databases; all embodiments or fixations thereof and all related documentation, applications, registrations and franchises; all licenses or other rights to use any of the foregoing; and all books and records relating to the foregoing.

“ Intellectual Property Claim ” means any claim or assertion (whether in writing, by suit or otherwise) that a Borrower’s or Subsidiary’s ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other Property violates another Person’s Intellectual Property.

“ IP Rights ” has the meaning specified in Section 5.19 .

“ IRS ” means the United States Internal Revenue Service.

“ ISP ” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

“ Issuer Documents ” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by any L/C Issuer and any Borrower (or any Subsidiary) or in favor of any L/C Issuer and relating to any Letter of Credit.

 

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“ Issuer Fee Letters ” means as to any L/C Issuer, any letter agreement or other document, agreement or instrument setting forth the agreement between the applicable Borrower and such L/C Issuer relating to fees payable to such L/C Issuer pursuant to Section 2.03(j) .

“ Issuing Bank Indemnitees ” means Issuing Bank and its officers, directors, employees, Affiliates, agents and attorneys.

“ Laws ” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“ L/C Advance ” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Percentage.

“ L/C Borrowing ” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Committed Borrowing.

“ L/C Conditions ” means the following conditions necessary for issuance of a Letter of Credit: (a) each of the conditions set forth in Section 4.02 ; (b) after giving effect to such issuance, total L/C Obligations do not exceed the Letter of Credit Sublimit, no Overadvance exists and, if no Loans are outstanding, the L/C Obligations do not exceed the Borrowing Base (without giving effect to the L/C Reserve for purposes of this calculation); (c) the expiration date of such Letter of Credit is (i) no more than 365 days from issuance, unless the Required Lenders have approved such expiration date and (ii) no later than the Letter of Credit Expiration Date, unless all the Lenders have approved such expiration date; (d) the Letter of Credit and payments thereunder are denominated in Dollars; and (e) the form of the proposed Letter of Credit is satisfactory to the Administrative Agent and the applicable L/C Issuer in their discretion.

“ L/C Credit Extension ” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

“ L/C Issuer ” means each of Bank of America, Bank of Montreal, and Deutsche Bank Trust Company Americas for purposes of issuing Letters of Credit under Section 2.03 , and, with respect to any Existing Letters of Credit, each letter of credit issuer named on Schedule 1.01(b) , each in its capacity as issuer of Letters of Credit hereunder, and any successor or additional issuer of Letters of Credit hereunder.

“ L/C Obligations ” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.07 . For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

 

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“ L/C Reserve ” means the aggregate of all L/C Obligations, other than (a) those that have been Cash Collateralized; and (b) if no Default or Event of Default exists, those constituting charges owing to the L/C Issuers.

“ Lender ” has the meaning specified in the introductory paragraph hereto and, as the context requires, includes the Swing Line Lender and each L/C Issuer.

“ Lender Indemnitees ” means Lenders and their officers, directors, employees, Affiliates, agents and attorneys.

“ Lending Office ” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower Agent and the Administrative Agent.

“ Letter of Credit ” means any standby letter of credit issued hereunder and shall include the Existing Letters of Credit.

“ Letter of Credit Application ” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the applicable L/C Issuer.

“ Letter of Credit Expiration Date ” means the day that is seven days prior to the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

“ Letter of Credit Fee ” has the meaning specified in Section 2.03(i) .

“ Letter of Credit Sublimit ” means an amount equal to $35,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.

“ License ” means any license or agreement under which a Loan Party is authorized to use Intellectual Property in connection with any manufacture, marketing, distribution or disposition of Collateral, any use of Property or any other conduct of its business.

“ Lien ” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real Property, and any financing lease having substantially the same economic effect as any of the foregoing).

“ Loan ” means an extension of credit by a Lender to a Borrower under Article II in the form of a Committed Loan, Swing Line Loan, Overadvance Loan or Protective Advance.

“ Loan Account ” has the meaning specified in Section 2.15 .

 

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“ Loan Documents ” means this Agreement, each Note, each Issuer Document, each Fee Letter, each Collateral Document, the Guaranty, the Reaffirmation Agreement and each of the Existing Loan Documents that are reaffirmed by the applicable Loan Parties pursuant to the Reaffirmation Agreement.

“ Loan Parties ” means, collectively, the Borrowers and each Guarantor.

“ Loan Year ” means each 12 month period commencing on the Closing Date and on each anniversary of the Closing Date.

“ Material Adverse Effect ” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, assets, Properties, liabilities (actual or contingent), condition (financial or otherwise) or prospects of Pacer and its Subsidiaries taken as a whole; (b) a material impairment of the rights and remedies of the Administrative Agent or any Lender under any of the Loan Documents, or of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party; or (d) a material adverse effect upon the perfection or priority of any Lien granted under any of the Collateral Documents.

“ Material Contract ” means, with respect to any Person, each contract to which such Person is a party involving aggregate consideration payable to or by such Person of $2,500,000 or more or otherwise material to the business, condition (financial or otherwise), operations, performance, Properties or prospects of such Person.

“ Maturity Date ” means April 5, 2012; provided , however , that if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.

“ Mexican Pledge Agreement ” means, collectively, the Pledge Agreement, dated as of June 4, 2007, and made by Pacer in favor of the Administrative Agent (for the benefit of the Secured Parties) and the Pledge Agreement, dated as of July 31, 2009, and made by Pacer in favor of the Administrative Agent (for the benefit of the Secured Parties).

“ Moody’s ” means Moody’s Investors Service, Inc., and its successors.

“ Mortgage ” means each mortgage, deed of trust or deed to secure debt pursuant to which a Borrower grants to the Administrative Agent, for the benefit of Secured Parties, Liens upon the Real Estate owned by such Borrower, as security for the Obligations.

“ Multiemployer Plan ” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which any Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

“ Net Proceeds ” means, with respect to a Disposition, proceeds (including, when received, any deferred or escrowed payments) received by a Borrower or Subsidiary in cash from such disposition, net of (a) reasonable and customary costs and expenses actually incurred in connection therewith, including legal fees and sales commissions; (b) amounts applied to

 

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repayment of Indebtedness secured by a Lien permitted by Section 7.01 that is senior to the Administrative Agent’s Liens on Collateral sold; (c) transfer or similar taxes; and (d) reserves for indemnities, until such reserves are no longer needed.

“ Non-Recourse Debt ” with respect to Pacer or any of its Subsidiaries, means any Indebtedness of such Person to the extent that the recourse of the lender (or of any trustee or analogous person acting on such lender’s behalf) are limited to rights against a particular asset or Property of Pacer or any of its Subsidiaries and do not constitute a general obligation of Pacer or any of its Subsidiaries.

“ Note ” means a promissory note made by Borrowers in favor of a Lender evidencing Loans made by such Lender, substantially in the form of Exhibit C .

“ Obligations ” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“ Ordinary Course of Business ” means the ordinary course of business of Pacer or any of its Subsidiaries, consistent with past practices and undertaken in good faith.

“ Organization Documents ” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such Person.

“ OSHA ” means the Occupational Safety and Hazard Act of 1970.

“ Other Taxes ” means all present or future stamp or documentary taxes or any other excise or Property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

“ Outstanding Amount ” means (i) with respect to Committed Loans and Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Committed Loans and Swing Line Loans, as the case may be, occurring on such date; and (ii) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by any Borrower of Unreimbursed Amounts.

 

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“ Overadvance ” has the meaning specified in Section 2.08 .

“ Overadvance Loan ” means a Base Rate Loan made when an Overadvance exists or is caused by the funding thereof.

“ Pacer ” has the meaning specified in the introductory paragraph hereto.

“ Participant ” has the meaning specified in Section 11.06(d) .

“ Patriot Act ” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).

“ Payment Item ” means each check, draft or other item of payment payable to a Borrower, including those constituting proceeds of any Collateral.

“ PBGC ” means the Pension Benefit Guaranty Corporation.

“ Pension Plan ” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by any Borrower or any ERISA Affiliate or to which such Borrower or such ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

“ Permitted Acquired Debt ” shall mean Indebtedness of a Subsidiary acquired or assumed after the Closing Date and Indebtedness of a Person merged or consolidated with or into Pacer or any of its Subsidiaries after the Closing Date, which Indebtedness in each case existed at the time of such acquisition, merger, consolidation or conversion into a Subsidiary and was not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Agreement and any Liens securing such Indebtedness shall be in compliance with Section 7.01(o) ; provided that no Default or Event of Default shall result from the assumption of such Indebtedness (regardless of principal amount).

“ Permitted Acquisition ” means any Acquisition that conforms to the following requirements:

(a) such Acquisition is consummated no earlier than twelve months after the Closing Date;

(b) the aggregate cash and non-cash consideration paid in connection with all Permitted Acquisitions since the Closing Date shall not exceed $25,000,000 in the aggregate;

 

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(c)(i) the assets to be acquired shall be located in the United States or Canada and (ii) the assets, Person, division or line of business to be acquired is a Permitted Business, and which business would not subject the Administrative Agent or any Lender to regulatory or third party approvals in connection with the exercise of its rights and remedies under this Agreement or any other Loan Documents other than approvals applicable to the exercise of such rights and remedies with respect to Borrowers prior to such Acquisition;

(d) all transactions related to such Acquisition shall be consummated in all material respects in accordance with Applicable Law;

(e) such Acquisition may not be an Unfriendly Acquisition;

(f) Borrower Agent shall have given the Administrative Agent and the Lenders at least 30 Business Days’ prior written notice of such Acquisition, which notice shall include a reasonably detailed description thereof;

(g) concurrently with delivery of the notice referred to in clause (f) above, Borrowers shall have delivered to the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent:

(i) a pro forma consolidated balance sheet, income statement and cash flow statement of Pacer and its Subsidiaries (the “ Acquisition Pro Forma ”), based on recent financial statements, which shall be complete and shall accurately and fairly present the assets, liabilities, financial condition and results of operations of Pacer and its Subsidiaries in accordance with GAAP consistently applied, but taking into account such Acquisition and the funding of all Loans in connection therewith, and such Acquisition Pro Forma shall reflect that (A) Availability for the 30-day period preceding the consummation of such Acquisition would have exceeded $60,000,000 on a pro forma basis (after giving effect to such Acquisition and all Loans funded in connection therewith as if made on the first day of such period) and (B) on a pro forma basis, no Default or Event of Default shall have occurred and be continuing or would result after giving effect to such Acquisition and Borrowers would have been in compliance with the financial covenant set forth in Section 7.12 as of the last day of the month most recently ended prior to the consummation of such Acquisition (after giving effect to such Acquisition and all Loans funded in connection therewith as if made on the first day of such period), including for the purpose of determining Availability during such period;

(ii) Acquisition Projections which shall reflect that Borrowers’ Availability for the one-year period following the date of such Acquisition will not, on any occasion, be less than $60,000,000; and

(iii) a certificate of the chief financial officer of Pacer to the effect that: (A) each Borrower (after taking into consideration all rights of contribution and indemnity that such Borrower has against the other Borrowers) will be Solvent

 

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upon the consummation of such Acquisition; (B) the Acquisition Pro Forma fairly presents the financial condition of Borrowers on a consolidated basis as of the date thereof after giving effect to such Acquisition; (C) the Acquisition Projections are reasonable estimates of the future financial performance of Borrowers subsequent to the date thereof based upon the historical performance of Borrowers and the Person to be acquired and show that Borrowers shall continue to be in compliance with the financial covenant set forth in Section 7.12 for the three-year period thereafter; and (D) Borrowers have completed their due diligence investigation with respect to the Person to be acquired and such Acquisition, which investigation was conducted in a manner similar to that which would have been conducted by a prudent purchaser of a comparable business and the results of which investigation were delivered to the Administrative Agent and Lenders;

(h) no additional Indebtedness or other liabilities shall be incurred, assumed or otherwise be reflected on a consolidated balance sheet of Borrowers or the Person to be acquired after giving effect to such Acquisition, except (A) Loans made hereunder and (B) ordinary course trade payables, accrued expenses and unsecured Indebtedness of the Person to be acquired to the extent no Default or Event of Default shall have occurred and be continuing or would result after giving effect to such Acquisition.

(i) the Person to be acquired shall not have incurred an operating loss for the trailing twelve-month period preceding the date of the Acquisition, as determined based upon such Person’s financial statements for the Fiscal Year most recently ended and its most recent interim financial period completed within 60 days prior to the date of consummation of such Acquisition;

(j) the business and assets to be acquired in such Acquisition shall be free and clear of all Liens (other than the Administrative Agent’s Liens and Liens permitted by Section 7.01 );

(k) all actions required to be taken under Section 6.12 with respect to any acquired or newly formed Subsidiary in connection with such Acquisition, shall have been or will be taken in accordance therewith;

(l) on or prior to the date of such Acquisition, the Administrative Agent and the Lenders shall have received in form and substance reasonably satisfactory to the Administrative Agent, a copy of any executed purchase agreement or similar agreement with respect to such Acquisition; and

(m) at the time of such Acquisition and after giving effect thereto, Availability shall exceed $60,000,000 on a pro forma basis (after giving effect to such Acquisition and all Loans funded in connection therewith) and no Default or Event of Default shall have occurred and be continuing.

 

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Notwithstanding the foregoing, the Accounts, Railcars and Chassis of any Person acquired pursuant to a Permitted Acquisition (and the Railcars and Chassis otherwise acquired by any Borrower other than Railcars and Chassis acquired in connection with the replacement of damaged Railcars or Chassis if such replacement Railcars and Chassis are (w) used or useful in the operation of the business of the Borrowers, (x) of equal or greater value, (y) acquired with the proceeds of insurance received with respect to such replaced Railcars or Chassis and (z) free of Liens) shall not be included in Eligible Accounts, Eligible Earned-But-Unbilled Accounts, or Eligible Equipment without the prior written consent of the Administrative Agent and Required Lenders.

“ Permitted Business ” shall mean the freight and transportation-related services and related businesses and including, without limitation, trucking (including full truckload and less- than truckload trucking services, and dry-van refrigerated, flatbed and specialized heavy haul trucking services), railway shipping, intermodal and other marketing or brokerage services (by rail, truck, air or water), warehousing, freight forwarding, ocean common carrier services, customs brokerage, freight consolidation, deconsolidation, distribution and cross-dock services, cartage and drayage, general consumer and specialized freight services, comprehensive transportation management and services, traffic management, railroad signal project management, rail terminal management and logistics services to coordinate the foregoing services (including integrated freight transportation), and any other business or activities as may be substantially similar, incidental or related thereto, and reasonable extensions of the foregoing.

“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“ Plan ” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by any Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

“ Platform ” has the meaning specified in Section 6.02 .

“ Pledge Accession ” means the Accession Agreement, substantially in the form of Annex 2 to the Pledge Agreement.

“ Pledge Agreement ” means the Pledge Agreement, dated as of April 5, 2007 and as amended by the Pledge Agreement Amendment, and made by each Borrower and each Domestic Subsidiary in favor of the Administrative Agent (for the benefit of the Secured Parties).

“ Pledge Agreement Amendment ” means the Amendment to Pledge Agreement, substantially in the form of Exhibit G .

“ Pledge Supplement ” means the Pledge Supplement, substantially in the form of Annex 1 to the Pledge Agreement.

“ Property ” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

“ Protective Advances ” has the meaning specified in Section 2.09 .

“ Public Lender ” has the meaning specified in Section 6.02 .

 

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“ Railcar Receivables ” means an Account owing to a Borrower that arises in the Ordinary Course of Business under or in connection with agreements associated with car hire settlement managed by the Railroad Clearinghouse, an entity of AAR.

“ Railcars ” means the intermodal double-stack railcars owned by any Borrower or any other Loan Party and employed in the conduct of such Borrower’s or such other Loan Party’s business.

“ RCRA ” means the Resource Conservation and Recovery Act (42 U.S.C. §§ 6991-6991i).

“ Reaffirmation Agreement ” means the Reaffirmation Agreement, dated as of the date hereof, and made by each Loan Party, substantially in the form of Exhibit J .

“ Real Estate ” means all right, title and interest (whether as owner, lessor or lessee) in any real Property or any buildings, structures, parking areas or other improvements thereon.

“ Register ” has the meaning specified in Section 11.06(c) .

“ Related Parties ” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

“ Related Real Estate Documents ” means with respect to any Real Estate subject to a Mortgage, the following, in form and substance satisfactory to the Administrative Agent and received by the Administrative Agent for review at least 15 days prior to the effective date of the Mortgage: (a) a mortgagee title policy (or binder therefor) covering the Administrative Agent’s interest under the Mortgage, in a form and amount and by an insurer acceptable to the Administrative Agent, which must be fully paid on such effective date; (b) such assignments of leases, estoppel letters, attornment agreements, consents, waivers and releases as the Administrative Agent may require with respect to other Persons having an interest in the Real Estate; (c) a current, as-built survey of the Real Estate, containing a metes-and-bounds property description and flood plain certification, and certified by a licensed surveyor acceptable to the Administrative Agent; (d) flood insurance in an amount, with endorsements and by an insurer acceptable to the Administrative Agent, if the Real Estate is within a flood plain; (e) a current appraisal of the Real Estate, prepared by an appraiser acceptable to the Administrative Agent, and in form and substance satisfactory to Required Lenders; (f) an environmental assessment, prepared by environmental engineers acceptable to the Administrative Agent, and accompanied by such reports, certificates, studies or data as the Administrative Agent may reasonably require, which shall all be in form and substance satisfactory to Required Lenders; and (g) an Environmental Agreement and such other documents, instruments or agreements as the Administrative Agent may reasonably require with respect to any environmental risks regarding the Real Estate.

“ Report ” has the meaning specified in Section 10.04(c) .

“ Reportable Event ” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

 

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“ Request for Credit Extension ” means (a) with respect to a Borrowing, conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.

“ Required Lenders ” means, as of any date of determination, Lenders having more than 50% of the Aggregate Commitments or, if the commitment of each Lender to make Loans and the obligation of the L/C Issuers to make L/C Credit Extensions have been terminated pursuant to Section 9.02 , Lenders holding in the aggregate more than 50% of the Total Outstandings (with the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Lender for purposes of this definition); provided that the Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

“ Responsible Officer ” means the chief executive officer, president, chief financial officer, treasurer, assistant treasurer or controller of a Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other Property) with respect to any Equity Interest of 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 Interest, or on account of any return of capital to a Borrower’s stockholders, partners or members.

“ Royalties ” means all royalties, fees, expense reimbursement and other amounts payable by a Borrower under a License.

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

“ SEC ” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

“ Secured Obligations ” means, collectively, (i) the Obligations and (ii) subject to the proviso in the definition of Bank Products (which shall apply solely for purposes of any distribution under Section 9.03 ), the Bank Product Obligations.

“ Secured Parties ” means (i) the Administrative Agent, (ii) the L/C Issuers, (iii) the Swing Line Lender, (iv) the Lenders and (v) subject to Bank Product Obligations being deemed “Secured Obligations” in accordance with the terms of this Agreement, providers of Bank Products, including without limitation the FX/Cash Management Obligation Providers and the Swap Obligation Providers.

 

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“ Securities Act ” means the Securities Act of 1933, as amended from time to time, and any successor statute.

“ Security Agreement ” means the Amended and Restated Security Agreement, dated as of the date hereof, and made by each Borrower and each Domestic Subsidiary in favor of the Administrative Agent (for the benefit of the Secured Parties), substantially in the form of Exhibit I .

“ Security Agreement Accession ” means an Accession Agreement, substantially in the form of Exhibit A to the Security Agreement.

“ Security Agreement Supplement ” means the Security Agreement Supplement, substantially in the form of Exhibit B to the Security Agreement.

“ Solvent ” means, with respect to any Person, that as of the date of determination both (i) (a) the sum of such Person’s debt (including contingent liabilities) does not exceed all of its Property, at a fair valuation; (b) the Person is able to pay the probable liabilities on such Person’s then existing debts as they become absolute and matured; (c) such Person’s capital is not unreasonably small in relation to its business or any contemplated or undertaken transaction; and (d) such Person does not intend to incur, or believe that it will incur, debts beyond its ability to pay such debts as they become due; and (ii) such Person is “solvent” within the meaning given that term and similar terms under Applicable Laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (discounted to present value at rates believed to be reasonable by such Person acting in good faith).

“ Subordinated Debt Document ” means all agreements, certificates, documents and instruments executed or delivered by any Borrower or any Subsidiary thereof evidencing unsecured Indebtedness of such Borrower or such Subsidiary which has maturities and terms, and which is subordinated to payment of the Obligations in a manner approved in writing by the Administrative Agent and the Required Lenders, and any renewals, modifications, or amendments thereof which are approved in writing by the Administrative Agent and the Required Lenders.

“ Subsidiary ” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares or securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of a Borrower.

“ Surface Transportation Board ” means the Surface Transportation Board, an agency of the Federal Government of the United States, and any successor agency thereof.

 

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“ Swap Contract ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “ Master Agreement ”), including any such obligations or liabilities under any Master Agreement.

“ Swap Obligation Provider ” means a Person making credit extensions to Pacer or any of its Subsidiaries in respect of any Swap Obligations to the extent such Person (i) is a Lender or an Affiliate of a Lender or (ii) is a Person that was a Lender (or an Affiliate of a Lender) at the time any such Swap Obligations were incurred but has ceased to be a Lender (or whose Affiliate has ceased to be a Lender) hereunder.

“ Swap Obligations ” means any and all obligations of Pacer or any of its Subsidiaries owing to any Person under any Swap Contracts.

“ Swap Termination Value ” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to- market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

“ Swing Line Borrowing ” means a borrowing of a Swing Line Loan pursuant to Section 2.04 .

“ Swing Line Lender ” means Bank of America in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.

“ Swing Line Loan ” has the meaning specified in Section 2.04(a) .

“ Swing Line Loan Notice ” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b) , which, if in writing, shall be substantially in the form of Exhibit B .

“ Swing Line Sublimit ” means an amount equal to the lesser of (a) $10,000,000 and (b) the Aggregate Commitments. The Swing Line Sublimit is part of, and not in addition to, the Aggregate Commitments.

 

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“ Synthetic Lease Obligation ” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of Property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

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

“ Threshold Amount ” means $5,000,000.

“ Total Outstandings ” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.

“ Type ” means, with respect to a Committed Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.

“ UCC ” means the Uniform Commercial Code as in effect in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “ UCC ” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

“ UIAA ” means that Uniform Intermodal Interchange and Facilities Access Agreement, effective as of April 20, 2009, administered by The Intermodal Association of North America, together with each addendum thereto executed by Pacer Stacktrain, Inc. and each Motor Carrier party thereto, each in the form delivered to the Administrative Agent prior to the Closing Date, pursuant to which Pacer Stacktrain, Inc. and each Motor Carrier have agreed additional terms and conditions applicable to the interchange of Chassis to such Motor Carrier by Pacer Stacktrain, Inc.

“ Unfriendly Acquisition ” means any Acquisition that has not, at the time of the first public announcement of an offer relating thereto, been approved by the board of directors (or other legally recognized governing body) of the Person to be acquired; except that with respect to any Acquisition of a non-U.S. Person, an otherwise friendly Acquisition shall not be deemed to be unfriendly if it is not customary in such jurisdiction to obtain such approval prior to the first public announcement of an offer relating to a friendly Acquisition.

“ United States ” and “ U.S. ” mean the United States of America.

“ Unreimbursed Amount ” has the meaning specified in Section 2.03(c)(i) .

“ Value ” means (a) for Equipment, its net orderly liquidation value, expected to be realized at an orderly, negotiated sale held within a reasonable period of time, net of all liquidation expenses, as determined from the most recent Equipment Appraisal; provided that after calculating any Value giving effect to the most recent Equipment Appraisal, in no event

 

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shall the Value attributed to any item of Equipment (or the aggregate Value attributed to all Equipment) be greater than the Value of such item of Equipment (or the aggregate Value attributed to all Equipment) as determined by calculating Value based on the Equipment Appraisal immediately preceding such most recent Equipment Appraisal; and (b) for an Account, its face amount, net of any returns, rebates, discounts (calculated on the shortest terms), credits, allowances or Taxes (including sales, excise or other Taxes) that have been or could be claimed by the Account Debtor or any other Person.

“ Wholly-Owned Subsidiary ” means any Subsidiary of Pacer in which (other than directors’ qualifying shares or other amounts of Equity Interests required to be held other than by Pacer or any Subsidiary by any Applicable Laws) 100% of the Equity Interests at the time as of which any determination is being made is owned, beneficially and of record, by Pacer, or by one or more of the other Wholly-Owned Subsidiaries, or both.

1.02 Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “ include ,” “ includes ” and “ including ” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “ shall .” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “ herein ,” “ hereof ” and “ hereunder ,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “ asset ” and “ property ” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

(b) In the computation of periods of time from a specified date to a later specified date, the word “ from ” means “ from and including ;” the words “ to ” and “ until ” each mean “ to but excluding ;” and the word “ through ” means “ to and including .”

(c) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

 

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1.03 Accounting Terms. (a)  Generally . All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

(b) Changes in GAAP . 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 either the Borrowers or 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, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrowers shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

1.04 UCC Terms. As used herein, the following terms have the meanings ascribed to them in the UCC: “Chattel Paper,” “Deposit Account,” “General Intangibles” and “Instrument.”

1.05 Rounding. Any financial ratios required to be maintained by the Borrowers pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

1.06 Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Pacific time (daylight or standard, as applicable).

1.07 Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided , however , that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

1.08 Borrowing Base Calculations. Borrowing Base calculations shall be consistent with historical methods of valuation and calculation, and otherwise satisfactory to the Administrative Agent (and not necessarily calculated in accordance with GAAP).

 

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ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

2.01 Committed Loans. Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan, a “ Committed Loan ”) to each Borrower from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s Commitment; provided , however , that after giving effect to any Committed Borrowing, (i) the Total Outstandings shall not exceed the Borrowing Base, and (ii) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s pro rata share of the Borrowing Base. Within the limits of each Lender’s Commitment, and subject to the other terms and conditions hereof, the Borrowers may borrow under this Section 2.01 , prepay under Section 2.06 , and reborrow under this Section 2.01 . Committed Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein, provided that Loans made on the Closing Date shall be Base Rate Loans.

2.02 Borrowings, Conversions and Continuations of Committed Loans. (a) Each Committed Borrowing, each conversion of Committed Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Borrower Agent’s irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 10:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Committed Loans, and (ii) on the requested date of any Borrowing of Base Rate Committed Loans; provided , however , that if any Borrower wishes to request Eurodollar Rate Loans having an Interest Period other than one, two, three or six months in duration as provided in the definition of “Interest Period,” the applicable notice must be received by the Administrative Agent not later than 10:00 a.m. four Business Days prior to the requested date of such Borrowing, conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them. Not later than 10:00 a.m., three Business Days before the requested date of such Borrowing, conversion or continuation, the Administrative Agent shall notify the Borrower Agent (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders. Each telephonic notice by the Borrower Agent pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower Agent. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c) , each Borrowing of or conversion to Base Rate Committed Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. No more than five (5) Borrowings of Eurodollar Rate Loans may be outstanding at any time, and all Eurodollar Rate Loans having the same length and beginning date of their Interest Periods shall be aggregated together and considered one Borrowing for this purpose. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether

 

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the applicable Borrower is requesting a Committed Borrowing, a conversion of Committed Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Committed Loans to be borrowed, converted or continued, (iv) the Type of Committed Loans to be borrowed or to which existing Committed Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower Agent fails to specify a Type of Committed Loan in a Committed Loan Notice or if the Borrower Agent fails to give a timely notice requesting a conversion or continuation, then the applicable Committed Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the applicable Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.

(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of the applicable Committed Loans and the requested date of the Borrowing specified in such Committed Loan Notice, and if no timely notice of a conversion or continuation is provided by the Borrower Agent, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in the preceding subsection. In the case of a Committed Borrowing, each Lender shall make the amount of its Committed Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 12:00 noon on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01) , or waiver in accordance with Section 11.01 , the Administrative Agent shall make all funds so received available to the applicable Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the applicable Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower Agent; provided , however , that if on the date the Committed Loan Notice with respect to such Borrowing is given by the Borrower Agent, there are L/C Borrowings outstanding, then the proceeds of such Borrowing, first , shall be applied to the payment in full of any such L/C Borrowings, and second , shall be made available to the applicable Borrower as provided above.

(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the Required Lenders.

(d) The Administrative Agent shall promptly notify the Borrower Agent and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower Agent and the Lenders of any change in Bank of America’s prime rate used in determining the Base Rate promptly following the public announcement of such change.

 

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(e) After giving effect to all Committed Borrowings, all conversions of Committed Loans from one Type to the other, and all continuations of Committed Loans as the same Type, there shall not be more than ten Interest Periods in effect with respect to Committed Loans.

2.03 Letters of Credit.

(a) The Letter of Credit Commitments .

(i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03 , (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of Pacer or its Subsidiaries, and to amend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of Pacer or its Subsidiaries and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Total Outstandings shall not exceed the Borrowing Base, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s pro rata share of the Borrowing Base, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Borrower Agent on behalf of a Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by such Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrowers’ ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrowers may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.

(ii) No L/C Issuer shall issue any Letter of Credit if such L/C Issuer receives written notice from a Lender, the Administrative Agent or any Borrower at least one Business Day before issuance of a Letter of Credit that one or more L/C Conditions has not been satisfied. Upon receipt of such notice, no L/C Issuer shall issue any Letter of Credit until such notice is withdrawn in writing by that Lender, the Administrative Agent or that Borrower or until Required Lenders have waived such condition in accordance with this Agreement.

(iii) No L/C Issuer shall be under any obligation to issue any Letter of Credit if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any request or

 

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directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such L/C Issuer in good faith deems material to it;

(B) the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer applicable to letters of credit generally;

(C) except as otherwise agreed by the Administrative Agent and such L/C Issuer, such Letter of Credit is in an initial stated amount less than $500,000;

(D) a default of any Lender’s obligations to fund under Section 2.03(c) exists or any such Lender is at such time a Defaulting Lender hereunder, unless Cash Collateral or other credit support satisfactory to such L/C Issuer has been pledged or otherwise provided to such L/C Issuer in respect of such Defaulting Lender’s participation in such Letter of Credit or such L/C Issuer has otherwise entered into arrangements satisfactory to such L/C Issuer to eliminate such L/C Issuer’s risk with respect to such Defaulting Lender; or

(E) any Lender is at such time an Impacted Lender hereunder, unless Cash Collateral or other credit support satisfactory to such L/C Issuer has been pledged or otherwise provided to such L/C Issuer in respect of such Impacted Lender’s participation in such Letter of Credit or such L/C Issuer has otherwise entered into arrangements satisfactory to such L/C Issuer to eliminate such L/C Issuer’s risk with respect to such Impacted Lender.

(iv) No L/C Issuer shall amend any Letter of Credit if such L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.

(v) No L/C Issuer shall be under any obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

(vi) Each L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and each L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article X with respect to any acts taken or omissions suffered by such L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article X included such L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to such L/C Issuer.

 

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(b) Procedures for Issuance and Amendment of Letters of Credit .

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower Agent delivered to the applicable L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower Agent. Such Letter of Credit Application must be received by the applicable L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such later date and time as the Administrative Agent and such L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to applicable L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as such L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to such L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as such L/C Issuer may require. Additionally, the Borrower Agent shall furnish to such L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as such L/C Issuer or the Administrative Agent may require. Upon the effectiveness of any issuance, amendment or renewal of a letter of credit that will constitute a Letter of Credit hereunder, the Administrative Agent and the Lenders shall be entitled to assume that the relevant L/C Issuer has obtained such Issuer Documents as it shall have requested, executed by the relevant parties thereto to the extent required thereby.

(ii) Promptly after receipt of any Letter of Credit Application, the applicable L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower Agent and, if not, such L/C Issuer will provide the Administrative Agent with a copy thereof. Unless such L/C Issuer has received written notice from any Lender, the Administrative Agent or any Borrower, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more L/C Conditions (other than the condition set forth in clause (a) of the definition of L/C Conditions) shall not then be satisfied, then, subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date (subject to the satisfaction of the condition set forth in clause (a) of the definition of L/C Conditions on such date), issue a Letter of Credit for the account of the applicable Borrower (or the applicable Subsidiary) or enter into the applicable amendment, as the case may be, in each case in accordance with such L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably

 

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and unconditionally agrees to, purchase from such L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lender’s Applicable Percentage times the stated amount of such Letter of Credit.

(iii) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the applicable L/C Issuer will also deliver to the Borrower Agent and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.

(c) Drawings and Reimbursements; Funding of Participations .

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the applicable L/C Issuer shall notify the Borrower Agent and the Administrative Agent thereof. Not later than 10:00 a.m. on the date of any payment by an L/C Issuer under a Letter of Credit (each such date, an “ Honor Date ”), the applicable Borrower shall reimburse such L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing. If such Borrower fails to so reimburse such L/C Issuer by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the “ Unreimbursed Amount ”), and the amount of such Lender’s Applicable Percentage thereof. In such event, such Borrower shall be deemed to have requested a Committed Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Commitments and the conditions set forth in Section 4.02 (other than the delivery of a Committed Loan Notice). Any notice given by any L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

(ii) Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available to the Administrative Agent for the account of the applicable L/C Issuer at the Administrative Agent’s Office in an amount equal to its Applicable Percentage of the Unreimbursed Amount not later than 12:00 noon on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii) , each Lender that so makes funds available shall be deemed to have made a Base Rate Committed Loan to the applicable Borrower in such amount. The Administrative Agent shall remit the funds so received to such L/C Issuer.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Committed Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the applicable Borrower shall be deemed to have incurred from the applicable L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender’s payment to the Administrative Agent for the account of such L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03 .

 

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(iv) Until each Lender funds its Committed Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the applicable L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Applicable Percentage of such amount shall be solely for the account of such L/C Issuer.

(v) Each Lender’s obligation to make Committed Loans or L/C Advances to reimburse the applicable L/C Issuer for amounts drawn under Letters of Credit, issued by such L/C Issuer as contemplated by this Section 2.03(c) , shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against such L/C Issuer, the Borrowers or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided , however , that each Lender’s obligation to make Committed Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.02 (other than delivery by the Borrower Agent of a Committed Loan Notice). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the applicable Borrower to reimburse such L/C Issuer for the amount of any payment made by such L/C Issuer under any Letter of Credit, together with interest as provided herein.

(vi) If any Lender fails to make available to the Administrative Agent for the account of any L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii) , such L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to such L/C Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by such L/C Issuer in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by such L/C Issuer in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Committed Loan included in the relevant Committed Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be. A certificate of the applicable L/C Issuer submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

(d) Repayment of Participations .

(i) At any time after any L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c) , if the Administrative Agent receives for the account of such L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the applicable Borrower or otherwise, including

 

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proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Applicable Percentage thereof in the same funds as those received by the Administrative Agent.

(ii) If any payment received by the Administrative Agent for the account of any L/C Issuer pursuant to Section 2.03(c) (i) is required to be returned under any of the circumstances described in Section 11.05 (including pursuant to any settlement entered into by such L/C Issuer in its discretion), each Lender shall pay to the Administrative Agent for the account of such L/C Issuer its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

(e) Obligations Absolute . The obligation of the Borrowers to reimburse an L/C Issuer for each drawing under each Letter of Credit issued by such L/C Issuer and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document;

(ii) the existence of any claim, counterclaim, setoff, defense or other right that any Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), such L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

(iv) any payment by such L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by such L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

(v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Borrower or any Subsidiary.

 

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The Borrower Agent shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower Agent’s instructions or other irregularity, the Borrower Agent will promptly notify the applicable L/C Issuer. The applicable Borrower shall be conclusively deemed to have waived any such claim against such L/C Issuer and its correspondents unless such notice is given as aforesaid.

(f) Role of L/C Issuers . Each Lender and each Borrower agree that, in paying any drawing under a Letter of Credit, no L/C Issuer shall have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by such Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuers, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuers shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct of such Person (determined by a court of competent jurisdiction by final and nonappealable judgment); or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. Each Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided , however , that this assumption is not intended to, and shall not, preclude such Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuers, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuers shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.03(e) ; provided , however , that anything in such clauses to the contrary notwithstanding, the applicable Borrower may have a claim against an L/C Issuer, and such L/C Issuer may be liable to the such Borrower, to the extent, but only to the extent, of any direct, as opposed to indirect, consequential or exemplary, damages suffered by such Borrower which such Borrower proves were caused by such L/C Issuer’s willful misconduct or gross negligence or such L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, such L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and no L/C Issuer shall be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

(g) Cash Collateral . Upon the request of the Administrative Agent or any L/C Issuer, (i) if any L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, (ii) if, as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, or (iii) if, when Availability is less than zero, any L/C Obligations are outstanding, the Borrowers shall, in each case, immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations.

 

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Borrowers shall, on demand by the applicable L/C Issuer or the Administrative Agent from time to time, Cash Collateralize the L/C Obligations of any Defaulting Lender. Sections 2.06 and 9.02(c) set forth certain additional requirements to deliver Cash Collateral hereunder. Each Borrower hereby grants to the Administrative Agent, for the benefit of the applicable L/C Issuers and the Lenders, a Lien on all Cash Collateral. Cash Collateral shall be maintained in a Cash Collateral Account.

(h) Applicability of ISP and UCP . Unless otherwise expressly agreed by the applicable L/C Issuer and the applicable Borrower when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), the rules of the ISP shall apply to each Letter of Credit.

(i) Letter of Credit Fees . Borrowers shall pay to the Administrative Agent for the account of each Lender in accordance with its Applicable Percentage a Letter of Credit fee (the “ Letter of Credit Fee ”) for each Letter of Credit equal to the Applicable Rate times the daily amount available to be drawn under such Letter of Credit. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.07 . Letter of Credit Fees shall be (i) due and payable on the first day of each month, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand and (ii) computed on a monthly basis in arrears. If there is any change in the Applicable Rate during any month, the daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such month that such Applicable Rate was in effect. Notwithstanding anything to the contrary contained herein, upon the request of the Required Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuers . Borrowers shall pay directly to each L/C Issuer for its own account a fronting fee with respect to each Letter of Credit issued by such L/C Issuer, at a rate equal to 0.25% per annum, computed on the daily amount available to be drawn under such Letter of Credit on a quarterly basis in arrears. Such fronting fee shall be due and payable on the first day after the end of each March, June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the first payment), commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.07 . In addition, the Borrowers shall pay directly to each L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

(k) Conflict with Issuer Documents . In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.

 

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(l) Letters of Credit Issued for Subsidiaries . Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Borrowers shall be obligated to reimburse the applicable L/C Issuer hereunder for any and all drawings under such Letter of Credit. Each Borrower hereby acknowledges that the issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of such Borrower, and that such Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.

(m) Additional L/C Issuers . (i) The Borrower Agent may from time to time, upon not less than 15 Business Days’ notice from the Borrower to the Administrative Agent (or such shorter period as may be agreed by the Administrative Agent in its sole discretion), replace a previously designated L/C Issuer by designating another Lender as L/C Issuer (upon obtaining such Lender’s prior consent thereto and provided that there are no outstanding Letters of Credit issued by, or L/C Obligations owing to, such L/C Issuer to be replaced). Any such designation shall be subject to the approval of the Administrative Agent (such approval not to be unreasonably withheld or delayed). The Administrative Agent will promptly notify the Borrower Agent and the Lenders of any designation and approval of a replacement L/C Issuer. Upon any such approval of an L/C Issuer by the Administrative Agent and delivery by such L/C Issuer to the Administrative Agent of such contact and other information regarding such L/C Issuer as the Administrative Agent shall reasonably request, such Lender shall be an L/C Issuer for all purposes of this Agreement, and references to the L/C Issuers shall mean and include such Lender in its capacity as L/C Issuer.

(n) Reconciliation of Outstanding Letters of Credit . Concurrently with the effectiveness of any change in the face amount (by way of issuance, amendment, modification, whole or partial termination or release thereof or otherwise) or other material terms of the Letters of Credit issued by any L/C Issuer other than Bank of America, each of the Borrowers and the applicable L/C Issuer shall provide to the Administrative with notice of the same. On the last Business Day of each month, each of the Borrower Agent and the L/C Issuers shall provide to the Administrative Agent such information regarding the outstanding Letters of Credit as the Administrative Agent shall reasonably request, in form and substance satisfactory to the Administrative Agent (and in such standard electronic format as the Administrative Agent shall reasonably specify), for purposes of the Administrative Agent’s ongoing tracking and reporting of outstanding Letters of Credit. The Administrative Agent shall maintain a record of all outstanding Letters of Credit based upon information provided by the Borrower Agent and the L/C Issuers pursuant to this Section 2.03(n) , and such record of the Administrative Agent shall, absent manifest error, be deemed a correct and conclusive record of all Letters of Credit outstanding from time to time hereunder. Notwithstanding the foregoing, if and to the extent the Administrative Agent determines that there are one or more discrepancies between information provided by the Borrower Agent and any L/C Issuer hereunder, the Administrative Agent will notify the Borrower Agent and such L/C Issuer thereof shall endeavor to reconcile any such discrepancy.

(o) Notice to Lenders . The Administrative Agent shall provide notice to the Lenders not less frequently than quarterly as to the Letters of Credit outstanding hereunder (and in any event, to an individual Lender from time to time upon the request of such Lender).

 

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2.04 Swing Line Loans.

(a) The Swing Line . Subject to the terms and conditions set forth herein, the Swing Line Lender agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.04 , to make loans (each such loan, a “ Swing Line Loan ”) to the Borrowers from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Applicable Percentage of the Outstanding Amount of Committed Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount of such Lender’s Commitment; provided , however , that after giving effect to any Swing Line Loan, (i) the Total Outstandings shall not exceed the Borrowing Base, and (ii) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s pro rata share of the Borrowing Base, and provided , further , that the Borrowers shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions hereof, the Borrowers may borrow under this Section 2.04 , prepay under Section 2.06 , and reborrow under this Section 2.04 . Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Lender’s Applicable Percentage times the amount of such Swing Line Loan. The Swing Line Lender may require, as a condition to making any Swing Line Loans at any time that (i) a default of any Lender’s obligations to fund under Section 2.04 exists or any such Lender is at such time a Defaulting Lender hereunder, that Cash Collateral or other credit support satisfactory to the Swing Line Lender has been pledged or otherwise provided to the Swing Line Lender in respect of such Defaulting Lender’s participation in such Swing Line Loans or the Swing Lien Lender has otherwise entered into arrangements satisfactory to the Swing Line Lender to eliminate its risk with respect to such Defaulting Lenders; or (ii) any Lender is at such time an Impacted Lender hereunder, that Cash Collateral or other credit support satisfactory to the Swing Line Lender has been pledged or otherwise provided to the Swing Line Lender in respect of such Impacted Lender’s participation in such Swing Line Loan or the Swing Line Lender has otherwise entered into arrangements satisfactory to the Swing Line Lender to eliminate its risk with respect to such Impacted Lender.

(b) Borrowing Procedures . Each Swing Line Borrowing shall be made upon the Borrower Agent’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower Agent. Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing

 

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Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the first proviso to the first sentence of Section 2.04(a) , or (B) that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the applicable Borrower at its office by crediting the account of the applicable Borrower on the books of the Swing Line Lender in immediately available funds.

(c) Refinancing of Swing Line Loans .

(i) The Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the applicable Borrower (each Borrower hereby irrevocably authorizes the Swing Line Lender to so request on its behalf), that each Lender make a Base Rate Committed Loan in an amount equal to such Lender’s Applicable Percentage of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02 , without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized portion of the Aggregate Commitments and the conditions set forth in Section 4.02 . The Swing Line Lender shall furnish the Borrower Agent with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent. Each Lender shall make an amount equal to its Applicable Percentage of the amount specified in such Committed Loan Notice available to the Administrative Agent in immediately available funds for the account of the Swing Line Lender at the Administrative Agent’s Office not later than 12:00 noon on the day specified in such Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii) , each Lender that so makes funds available shall be deemed to have made a Base Rate Committed Loan to the applicable Borrower in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender.

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a Committed Borrowing in accordance with Section 2.04(c)(i) , the request for Base Rate Committed Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Lenders fund its risk participation in the relevant Swing Line Loan and each Lender’s payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such participation.

(iii) If any Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(i) , the Swing Line Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon

 

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for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the Swing Line Lender in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Swing Line Lender in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Committed Loan included in the relevant Committed Borrowing or funded participation in the relevant Swing Line Loan, as the case may be. A certificate of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

(iv) Each Lender’s obligation to make Committed Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Swing Line Lender, the Borrowers or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided , however , that each Lender’s obligation to make Committed Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 4.02 . No such funding of risk participations shall relieve or otherwise impair the obligation of the applicable Borrower to repay Swing Line Loans, together with interest as provided herein.

(d) Repayment of Participations .

(i) At any time after any Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Lender its Applicable Percentage thereof in the same funds as those received by the Swing Line Lender.

(ii) If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 11.05 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Lender shall pay to the Swing Line Lender its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the Federal Funds Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligation