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Exhibit 10.1
SECOND AMENDMENT TO LINE OF CREDIT LOAN AGREEMENT AND
TO AMENDED AND RESTATED SECURITY AGREEMENT
THIS SECOND AMENDMENT TO LINE OF CREDIT LOAN AGREEMENT AND TO AMENDED
AND RESTATED SECURITY AGREEMENT is made and entered into as of the 28th day of
January, 1997, by and between FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a
national banking association ("Bank"), LANDAIR SERVICES, INC., a Tennessee
corporation ("Borrower"), LANDAIR TRANSPORT, INC., a Tennessee corporation which
is a wholly owned subsidiary of Borrower ("LTI"), LANDAIR INTERNATIONAL
AIRLINES, INC., a Tennessee corporation which is a wholly owned subsidiary of
Borrower ("LIA"), TRANSPORTATION PROPERTIES, INC., previously known as "Landair
Properties, Inc.," a Tennessee corporation which is a wholly owned subsidiary of
Borrower ("LPI"), and FORWARD AIR, INC., a Tennessee corporation which is a
wholly owned subsidiary of Borrower ("FAI").
RECITALS
A. Bank and Borrower, LTI, LIA, LPI AND FAI (Borrower, LTI, LIA, LPI
and FAI sometimes referred to herein collectively as the "Borrowing Entities")
have entered into that certain Line of Credit Loan Agreement dated as of October
17, 1994, providing for a loan in the amount of Five Million Five Hundred
Thousand Dollars ($5,500,000.00) (the "Original Loan"), to fund operating
expenses and to cover any advances under letters of credit issued for the
benefit of creditors of the Borrowing Entities, and relating to Inventory and
other property of the Borrowing Entities (the "Original Loan Agreement").
B. Bank made the Original Loan to Borrower pursuant to various loan
documents, among them a promissory note dated as of October 17, 1994, in the
original principal amount of Five Million Five Hundred Thousand Dollars
($5,500,000.00) (the "Master Draw Note"), an amended and restated security
agreement securing the obligations of the Borrowing Entities with respect to the
Original Loan dated as of October 17, 1994, under which a security interest was
and is granted in the Collateral (the "Original Security Agreement"), and the
Original Loan Agreement.
C. Bank and the Borrowing Entities extended the maturity date set forth
in the Master Draw Note, increased the principal indebtedness which was able to
be drawn with respect to the aforesaid line of credit facility, and modified
other terms and provisions set forth in the Master Draw Note, in the Original
Loan Agreement and in the Original Security Agreement, by instruments dated as
of May 31, 1995. Such modifications to the Master Draw Note and the outstanding
indebtedness evidenced thereby were, as of May 31, 1995, set forth in and
evidenced by that certain Restated, Amended and Replacement Promissory Note (the
"Initial Replacement Note") dated as of May 31, 1995, executed by Borrower,
payable to the order of Bank, and in the original principal amount of Fifteen
Million Dollars ($15,000,000.00) (the "Amended Loan"). Such modifications to the
Original Loan Agreement and to the Original Security Agreement were set forth in
that certain First Amendment to Line of Credit Loan Agreement and to Amended and
Restated Security Agreement (the "First Amendment") dated as of May 31, 1995,
executed by the Borrowing Entities and Bank.
D. Bank and the Borrowing Entities have agreed to extend the maturity
date set forth in the Initial Replacement Note and to modify other terms and
provisions set forth in the Initial Replacement Note and in the Original Loan
Agreement and the Original Security Agreement, as amended by the First
Amendment. Such modifications to the Initial Replacement Note are set forth in
and evidenced by that certain Restated, Amended and Replacement Promissory Note
(the "Second Replacement Note") of even date herewith executed by the Borrowing
Entities, payable to the order
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of Bank, and in the original principal amount of Fifteen Million Dollars
($15,000,000.00) (the "New Loan").
E. Bank and the Borrowing Entities desire (i) that the prompt and
punctual payment of the Initial Replacement Note, as amended, restated and
replaced by the Second Replacement Note, be secured by the Original Loan
Agreement and the Original Security Agreement, as amended by the First
Amendment, in accordance with the terms thereof and hereof, and (ii) to modify
certain other provisions of the Original Loan Agreement and of the Original
Security Agreement, as amended by the First Amendment, as set forth herein.
F. The Initial Replacement Note, as amended, restated and replaced by
the Second Replacement Note, the Original Loan Agreement and the Original
Security Agreement, as amended by the First Amendment, the First Amendment, this
instrument, the Guaranties and all other instruments executed in connection with
the Original Loan, the Amended Loan and the New Loan are herein sometimes
referred to collectively as the "Loan Documents."
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the foregoing and of the agreements
set out in this instrument, and for other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows.
1. The foregoing RECITALS are agreed to by the parties and
incorporated by reference herein.
2. The Borrowing Entities have made and delivered the Second
Replacement Note to Bank, and Bank has accepted the same in accordance with the
provisions hereof and of the other Loan Documents.
3. The Loan Documents are hereby amended to include the
following:
(a) The "Commitment Fee" as described and defined in the first
sentence in the third full paragraph on page 1 of the Original Loan Agreement,
as amended by the First Amendment, shall continue to refer to the commitment fee
outlined in the commitment letter for the Amended Loan dated May 25, 1995, with
respect to future advances under the Second Replacement Note.
(b) The "Committed Line Amount" as described and defined on
page 1 of the Original Loan Agreement, as amended by the First Amendment, shall
now refer to the New Loan amount.
(c) The "Draw Certificates" form attached as Exhibit D to the
Original Loan Agreement, as amended by the First Amendment, is replaced with the
form attached hereto as Exhibit A.
(d) The "Equipment Note" and the "Master Draw Note" as
described and defined in Sections 1.15 and 1.26 of the Original Loan Agreement,
as amended by the First Amendment, shall continue to refer to the promissory
note of Borrower dated May 31, 1995, a copy of which is attached hereto as
Exhibit B. Similarly, the term "Committed Equipment Loan Amount" in Section 1.26
of the Original Loan Agreement, as amended by the First Amendment, shall
continue to refer to the principal amount of Fifteen Million Dollars
($15,000,000.00).
(e) The "Guaranties" as described and defined in Section 1.18
of the Original Loan Agreement and in Recital V of the Original Security
Agreement, as amended by the First Amendment, shall continue to refer to those
guaranty agreements dated May 31, 1995, copies of which were attached as
collective Exhibit C to the First Amendment, which shall remain in full force
and effect, it being understood and agreed, however, that the primary
obligations
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of the guarantors under said Exhibit C agreements with respect to the New Loan
are as makers of the Second Replacement Note. All obligations of each Borrowing
Entity as a "guarantor" under any Guaranty shall include all obligations of each
and every Borrowing Entity under the Equipment Note, the Line Note and all
documents relating thereto (including this Amendment).
(f) The "Line Note" as described and defined in Section 1.23
of the Original Loan Agreement and which is described and defined as the "Note
in Recital II of the Original Security Agreement, as amended by the First
Amendment, shall now refer to the promissory note of the Borrowing Entities of
even date herewith attached hereto as Exhibit C, which evidences the New Loan.
(g) The "Loan Agreement" as described and defined in Section
1.25 of the Original Loan Agreement and in Recital I of the Original Security
Agreement, as amended by the First Amendment, shall now refer to the Original
Loan Agreement, as amended by the First Amendment and as further amended by this
instrument.
(h) The "Loan" as described and defined in Recital I of the
Original Security Agreement, as amended by the First Amendment, shall now refer
to the New Loan.
(i) The "Security Agreement" as described and defined in
Section 1.35 of the Original Loan Agreement, as amended by the First Amendment,
shall now refer to the Original Security Agreement, as amended by the First
Amendment and as further amended by this instrument.
(j) The "Stated Interest Rate" as described and defined in
Section 2.3(a) of the Original Loan Agreement, as amended by the First
Amendment, shall continue to refer to the lesser of the (1) Maximum Rate, or (2)
a rate equal to (i) one percent (1.0%) per annum, less than (ii) the Base Rate
established from time to time by the Bank, to be applicable to interest charges
for the period of time commencing on May 11, 1995, until the Termination Date.
(k) The "Termination Date" as described and defined in Section
1.36 of the Original Loan Agreement, as amended by the First Amendment, shall
now refer to May 31, 1998, unless such date is extended pursuant to the
provisions of Section 9.12 of the Original Loan Agreement, as amended by the
First Amendment, in which event such extended date shall be the Termination
Date.
(l) The date "December 25, 1993" found in Sections 5.3(a) and
5.3(b) of the Original Loan Agreement, as amended by the First Amendment, is
hereby changed to "December 31, 1996," and Borrower, LTI, LIA, LPI and FAI
hereby confirm and ratify the truth and accuracy of the representations and
warranties made by them in said Sections 5.3(a) and 5.3(b), as amended by the
First Amendment, with such change.
(m) The list of actions, suits and proceedings described in
Section 5.5 of the Original Loan Agreement and listed on Exhibit J to the
Original Loan Agreement, as amended by the First Amendment, is hereby
supplemented and replaced by Exhibit D attached hereto, and Borrower, LTI, LIA,
LPI and FAI hereby confirm and ratify the representations and warranties made by
them in said Section 5.5, as amended by the First Amendment, with such change.
(n) The amount "Twenty-Nine Million Dollars ($29,000,000.00)"
found in Section 6.8 of the Original Loan Agreement, as amended to "Thirty-One
Million Dollars ($31,000,000.00)" in the First Amendment, is hereby changed to
"Forty Million Dollars ($40,000,000.00) until fiscal year end 1997 for the
Borrower," and to a potentially higher (but not lower) number equal to "Forty
Million Dollars ($40,000,000.00) plus seventy-five percent (75%) of after-tax
profit in each fiscal year of Borrower thereafter until payment in full of the
principal of and interest on the Borrower Loans," and Borrower, LTI, LIA, LPI
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and FAI hereby confirm and ratify the truth and accuracy of the representations
and warranties made by them in said Section 6.8 with such changes.
(o) The amount "Five Hundred Thousand Dollars ($500,000.00)"
found in Section 6.9 of the Original Loan Agreement is hereby changed to "Two
Million Five Hundred Thousand Dollars ($2,500,000.00)," and Borrower, LTI, LIA,
LPI and FAI hereby confirm and ratify the truth and accuracy of the
representations and warranties made by them in said Section 6.9 with such
change.
(p) Section 6.10 of the Original Loan Agreement, as amended by
the First Amendment, remains as is, and Borrower, LTI, LIA, LPI and FAI hereby
covenant and agree that each of them will, from the date hereof until payment in
full of the principal of and interest on the Borrower Loans, maintain the
debt-to-equity ratio set forth in the First Amendment and otherwise satisfy
their covenants as set forth on Exhibit F to the First Amendment.
(q) Section 6.11 of the Original Loan Agreement remains as is,
and Borrower, LTI, LIA, LPI and FAI hereby covenant and agree that each of them
will, from the date hereof until payment in full of the principal of and
interest on the Borrower Loans, maintain the cash flow coverage ratio set forth
in said Section 6.11 of the Original Loan Agreement.
4. The Borrowing Entities each represent and warrant to Bank that the
RECITALS set forth above are true and correct in all material respects and all
representations and warranties to Bank given by any of them in any one or more
of the Loan Documents are true and correct as of the date hereof. Similarly,
Borrower, LTI, LIA, LPI and FAI hereby covenant and agree to fulfill all of
their obligations and agreements made in the Loan Documents. Each Borrowing
Entity agrees to pay directly, or reimburse Bank for, all reasonable expenses,
including the reasonable fees and expenses of legal counsel, incurred in
connection with the enforcement of any one or more of the Loan Documents and the
collection of any amounts owing by any of the Borrowing Entities with respect
thereto.
5. Notwithstanding any provisions of the Loan Documents or any prior
understanding or agreement of or by any one or more of the Borrowing Entities
with Bank, as of the date of execution hereof, (a) the obligations of any one or
more of the Borrowing Entities under any one or more of the Loan Documents,
including the Guaranties, are intended to be secured by all the assets of each
of the Borrowing Entities now or hereafter owned by any one or more of the
Borrowing Entities and which assets are subject to the granting of a security
interest under the laws of the State of Tennessee or any other state where any
of the assets of any one or more of the Borrowing Entities may from time to time
be located and the federal laws of the United States of America (the "Pledged
Assets"), and in furtherance of the foregoing, each of the Borrowing Entities
hereby pledges and grants a security interest in all right, title and interest
of each of the Borrowing Entities in the Pledged Assets to and in favor of Bank,
and (b) each of the Borrowing Entities hereby jointly and severally, agrees to
pay and perform each and every obligation of payment and/or performance of any
other Borrowing Entity under any one or more of the Loan Documents.
6. The parties acknowledge that the six (6) year statute of limitations
provided by Tennessee Code Annotated Section 28-3-109, the ten (10) year statute
of limitations provided by Tennessee Code Annotated Section 28-2-111, or any
other applicable statute of limitations shall now run from May 31, 1998, and not
from any previous maturity date of the Original Loan or of the Amended Loan.
7. Except as specifically modified hereby, the Loan Documents shall
remain in full force and effect, and the same are hereby ratified and confirmed
by the Borrowing Entities in all respects. In the events of any conflict between
any provisions of any one or more of the Loan Documents, the provisions most
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favorable to Bank shall apply. This instrument is not intended to, and will not,
effect a novation of the indebtedness evidenced by the Initial Replacement Note
outstanding as of the date the Initial Replacement Note was amended, restated
and replaced by the Second Replacement Note, nor are the liens of the security
interests granted under the Original Security Agreement, as amended by the First
Amendment, intended to be released, altered, or changed in any manner except as
specifically stated herein. All capitalized terms not otherwise defined herein
shall have the same meanings as set forth in the Original Loan Agreement, as
amended by the First Amendment.
8. As an inducement to Bank to make the New Loan, (a) the Borrowing
Entities shall deliver, or cause to be delivered, to Bank the following: (i)
certified resolutions of the board of directors of each of the Borrowing
Entities authorizing this Amendment and the other New Loan documents; (ii) an
opinion of counsel and such other documentation, if any, as may be reasonably
requested by Bank to satisfy Bank that this Amendment and the other New Loan
documents have been duly authorized, executed and delivered on behalf of each
Borrowing Entity, and constitutes the valid and binding obligation of each of
the Borrowing Entities; (iii) appropriate UCC-1 or UCC-3 Financing Statements as
necessary to accomplish the purposes of this Amendment; and (iv) UCC-11 lien
searches as may be required by Bank evidencing no liens or encumbrances on any
of the Pledged Assets of any of the Borrowing Entities except liens granted
pursuant to the Borrower Loans, and liens or encumbrances, if any, approved by
Bank; (b) the Borrowing Entities shall pay directly or reimburse Bank for all
fees and expenses, including, but not limited to, any and all filing fees,
recording fees, and reasonable expenses and fees of legal counsel, incurred in
connection with the preparation and enforcement of this Amendment and other New
Loan documents; and (c) each Borrowing Entity shall execute and deliver to Bank
all further documents and perform all other acts which Bank reasonably shall
deem necessary or appropriate to perfect or protect the lien and security
interests granted pursuant to the Borrower Loans.
[Signatures on Next Page]
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IN WITNESS WHEREOF, this Second Amendment to Line of Credit Loan
Agreement and to Amended and Restated Security Agreement has been entered into
by the parties hereto as of the day and year first above written.
"BANK" "BORROWER"
FIRST TENNESSEE BANK NATIONAL LANDAIR SERVICES, INC.
ASSOCIATION
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
------------------------ --------------------------
Xxxxx Xxxxxx, Xxxxx X. Xxxxxxxxx,
Regional President President
"LTI"
LANDAIR TRANSPORT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx,
President
"LIA"
LANDAIR INTERNATIONAL
AIRLINES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx,
President
"LPI"
TRANSPORTATION PROPERTIES,
INC. previously known as
Landair Properties, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx,
President
"FAI"
FORWARD AIR, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx,
President
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