Exhibit 4.7.1
CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("Agreement"), made and entered into this 31st
day of May, 2000, by and between OLD DOMINION FREIGHT LINE, INC., a Virginia
corporation ("Borrower"), and FIRST UNION NATIONAL BANK, a national banking
association ("Bank");
WITNESSETH:
WHEREAS, Borrower and Bank are parties to that certain Credit Agreement
dated June 14, 1995, as amended by First Amendment thereto dated February 2,
1996, by Second Amendment thereto dated April 29, 1996, by Third Amendment
thereto dated June 15, 1996, by Fourth Amendment thereto dated April 22, 1997,
and by Fifth Amendment thereto dated January 14, 2000 (as amended, the "Existing
Credit Agreement"), pursuant to which Bank agreed to extend certain financial
accommodations to Borrower;
WHEREAS, Borrower has requested that Bank extend financial
accommodations to Borrower in order to provide funds for the refinancing of the
indebtedness owing by Borrower to Bank under the Existing Credit Agreement, for
working capital and such other corporate purposes as are permitted hereunder;
and
WHEREAS, Bank has agreed to extend financial accommodations for such
purposes to Borrower in the form of (a) a $50,000,000 revolving line of credit,
and (b) a $12,500,000 standby letter of credit facility to be made in accordance
with, and subject to, the terms and conditions set forth below;
NOW, THEREFORE, for and in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
expressly acknowledged, Borrower and Bank hereby agree as follows:
SECTION 1. DEFINITIONS.
1.1 Defined Terms. For purposes of this Agreement, in addition to the terms
defined elsewhere in this Agreement, the following terms shall have the meanings
set forth below:
"Adjusted LIBOR Rate" shall mean the rate per annum equal to the LIBOR Rate plus
the Applicable Margin.
"Affiliate" shall mean any Person which, directly or indirectly, owns
or controls, on an aggregate basis, including all beneficial ownership and
ownership or control as a trustee, guardian or other fiduciary, at least five
percent (5%) of the outstanding Stock having ordinary voting power to elect a
majority of the board of directors (irrespective of whether, at the time, Stock
of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) of Borrower or any
Subsidiary, or is controlled by or is under common control with Borrower or any
Subsidiary, or any stockholders of Borrower or any Subsidiary. For the purpose
of this definition, "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of management and policies, whether
through the ownership of voting securities, by contract or otherwise.
"Agreement" or "this Agreement" shall mean this Agreement and all
amendments, modifications and supplements hereto and shall refer to this
Agreement as the same may be in effect at the time such reference becomes
operative.
"Applicable Margin" shall mean, at any date of determination thereof, a
sum equal to the percentage set forth below corresponding to the Borrower's
Fixed Charge Coverage Ratio. The Applicable Margin shall be seven-tenths of one
percent (.70%) from the date hereof until reset based upon the Borrower's Fixed
Charge Coverage Ratio determined as of the Fiscal Quarter ending June 30, 2000
and as of the end of each successive Fiscal Quarter period thereafter, in
accordance with the following schedule (such change in the Applicable Margin to
take effect one (1) day after the Bank receives the Borrower's financial
statements for the relevant determination period indicating to the Bank's
satisfaction that the Applicable Margin should be reset), according to the
following schedule:
Fixed Charge Coverage Ratio Applicable Margin
--------------------------------------------- -----------------------------
Greater than 3.50 to 1.0 0.60%
Equal to or greater than 2.50 to 1.0 but 0.70%
less than or equal to 3.50 to 1.0
Less than 2.50 to 1.0 0.85%
"Assessment Rate" shall mean the assessment rate percentage (expressed
as a decimal rounded upwards, if necessary, to the next higher one hundredth of
one percent) paid by Bank to the Federal Deposit Insurance Corporation (or any
successor), excluding any refund, insuring Bank's liability for time deposits as
in effect from time to time.
"Bank" shall mean First Union National Bank, a national banking
association.
"Beneficiary" shall mean the beneficiary of a Letter of Credit issued
by Bank pursuant to this Agreement.
"Borrower" shall mean Old Dominion Freight Line, Inc., a Virginia
corporation.
"Business Day" shall mean any day (excluding Saturday, Sunday and legal
holidays) on which commercial banks in Atlanta, Georgia are open.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C.ss.9601 et. seq., as amended
from time to time, and all rules and regulations from time to time promulgated
thereunder.
"Capitalized Lease Obligation" shall mean any Indebtedness represented
by obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with Generally Accepted Accounting Principles,
and the amount of such Indebtedness shall be the capitalized amount of such
obligations determined in accordance with Generally Accepted Accounting
Principles.
"Closing" shall mean the consummation of the lending transaction
contemplated hereby to occur at the time and place set forth in Section 5.1
hereof.
"Closing Date" shall mean the date referred to in Section 5.1 hereof.
"Consolidated Subsidiary" shall mean any Subsidiary of Borrower which
is consolidated with Borrower under Borrower's finacial statements provided to
the Bank or is required to be consolidated with Borrower under Generally
Accepted Accounting Principles (including, limitation, the Guarantor).
"Default" shall mean any event or condition which, with the giving of
notice or the passage of time or both, would
constitute an Event of Default if Borrower took no action to correct the same.
"Default Rate" shall mean the LIBOR Rate in effect on the first
Business Day the Default Rate is implemented by Bank plus two percent (2%).
"Disposal" shall mean the intentional or unintentional abandonment,
discharge, deposit, injection, dumping, spilling, leaking, storing, burning,
thermal destruction or replacing of any substance so that it or any of its
constituents may enter the Environment.
"Dollars" or "$" shall mean dollars of the United States of America.
"EBIT" shall mean the earnings (or loss) before provision for income
taxes and interest for such fiscal period, as reflected on the financial
statements of Borrower supplied to Bank pursuant to Section 7.3(a) of this
Agreement, but excluding (a) any gain or loss arising from the sale of
non-operating assets, (b) any gain arising from any writeup of assets, (c)
earnings of any Subsidiary of Borrower accrued prior to the date it became a
Subsidiary, (d) earnings of any corporation, substantially all of the assets of
which have been acquired in any manner by Borrower or any of its Subsidiaries,
realized by such corporation prior to the date of such acquisition, (e) the
earnings of any Person to which the assets of Borrower or any of its
Subsidiaries shall have been sold, transferred or disposed of, or into which
Borrower or any of its Subsidiaries shall have been merged, or been a party to
any consolidation or other form of reorganization, prior to the date of such
transaction, (f) any gain arising from the acquisition of any securities of
Borrower or any of its Subsidiaries, and (g) any gain or loss arising from
extraordinary or non-recurring items, all determined in accordance with
Generally Accepted Accounting Principles.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and all rules and regulations from time to time
promulgated thereunder.
"Environment" shall mean any water, including, without limitation,
surface water and gravel water or water vapor, any land including land surface
or subsurface, stream sediments, air, fish, wildlife, plants and all other
natural resources or environmental media.
"Environmental Laws" shall mean all federal, state and local
environmental, land use, zoning, health, chemical use, safety and sanitation
laws, statutes, ordinances, regulations, codes and rules relating to the
protection of the Environment and/or governing the use, storage, treatment,
generation, transportation, processing, handling, production or Disposal of
Hazardous Substances and the policies, guidelines, procedures, interpretations,
decisions, orders and directives of federal, state and local governmental
agencies and authorities with respect thereto.
"Environmental Permits" shall mean all licenses, permits, approvals,
authorizations, consents or registrations required by any applicable
Environmental Laws and all applicable judicial and administrative orders in
connection with ownership, lease, purchase, transfer, closure, use and/or
operation of any Property owned, leased or operated by Borrower and/or as may be
required for the storage, treatment, generation, transportation, processing,
handling, production or disposal of Hazardous Substances.
"Event of Default" shall have the meaning specified in Section 9.1
hereof.
"Financials" shall mean the audited balance sheet and statement of
income, retained earnings and cash flow of Borrower for the Fiscal Year ended
December 31, 1999; the Borrower-prepared balance sheet and statement of income
and cash flow of Borrower for the Fiscal Quarter ended March 31, 2000; and all
other financial statements of Borrower delivered by Borrower to Bank pursuant to
Section 7.3 of this Agreement.
"Fiscal Quarter" shall mean one of the quarterly fiscal periods in the
Fiscal Year of Borrower.
"Fiscal Year" shall mean the period of Borrower ending on December 31
of each calendar year and commencing on January 1 of each calendar year.
"Fixed Charge Coverage Ratio" shall mean, for any Fiscal Quarter, the
ratio of (i) EBIT plus Gross Rents less Interest Income for such Fiscal Quarter
and the three (3) immediately preceding Fiscal Quarters to (ii) Interest Expense
less Interest Income plus Gross Rents for such Fiscal Quarter and the three (3)
immediately preceding Fiscal Quarters.
"Funded Debt" shall mean all Indebtedness for money borrowed, whether
direct or contingent, as determined in accordance with Generally Accepted
Accounting Principles,
including, without limitation, reimbursement and all other obligations with
respect to surety bonds and letters of credit, whether or not matured,
Capitalized Lease Obligations, the deferred purchase price of any Property or
asset or Indebtedness evidenced by a promissory note, bond, guaranty or similar
written obligation for the payment of money (including, but not limited to,
conditional sales or similar title retention agreements).
"Generally Accepted Accounting Principles" shall mean generally
accepted accounting principles as recognized by the American Institute of
Certified Public Accountants, consistently applied and maintained on a
consistent basis for Borrower throughout the period indicated and consistent
with the prior financial practices of Borrower as reflected on the Financials so
as to properly reflect the financial condition and results of operations and
changes in financial position of Borrower.
"Gross Rents" shall mean the aggregate amount of all payments which
Borrower is required to make pursuant to the terms of any lease by Borrower of
any building (including, without limitation, any of Borrower's leased terminals
and similar facilities) or office equipment or revenue producing equipment which
lease has a term of more than six (6) months, including renewals thereof.
"Guarantor" shall mean XXXX, Inc., a Delaware corporation and
Subsidiary of the Borrower.
"Guaranty" shall mean the Guaranty Agreement dated of even date
herewith executed by the Guarantor to the Bank.
"Hazardous Substances" shall mean, without limitation, any explosives,
radon, radioactive materials, asbestos, urea formaldehyde, foam insulation,
polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous
materials, hazardous waste, hazardous or toxic substances, and any other
material defined as a hazardous substance in Section 101(14) of CERCLA.
"Indebtedness" shall mean all liabilities, obligations and indebtedness
of any and every kind and nature, including, without limitation, the Obligations
and all obligations to trade creditors, whether heretofore, now or hereafter
owing, arising, due or payable to any Person and howsoever evidenced, created,
incurred, acquired or owing, whether primary, secondary, direct, contingent,
fixed or otherwise. Without in any way limiting the generality of the foregoing,
Indebtedness specifically includes the following:
(a) All obligations or liabilities of any Person that are secured by
any lien, claim, encumbrance or security interest upon Property owned by
Borrower, even though Borrower has not assumed or become liable for the payment
thereof;
(b) All obligations or liabilities created or arising under any lease
of real or personal property, or conditional sale or other title retention
agreement with respect to Property used or acquired by Borrower, even though the
rights and remedies of the lessor, seller or lender thereunder are limited to
repossession of such Property;
(c) All unfunded pension fund obligations and liabilities; and
(d) Deferred taxes.
"Interest Expense" shall mean with respect to any period of
determination the Borrower's and each Consolidated Subsidiary's total interest
on Indebtedness during such period, determined in accordance with Generally
Accepted Accounting Principles.
"Interest Income" shall mean, with respect to any period of
determination the Borrower's and each Consolidated Subsidiary's total interest
income during such period, determined in accordance with Generally Accepted
Accounting Principles.
"Investment" shall mean, as applied to any Person, any direct or
indirect purchase or other acquisition by such Person of Stock, indebtedness or
other securities or obligations of any other Person, or any direct or indirect
loan, advance, extension of credit or capital contribution by such Person to any
other Person, or any guaranty of such Person with respect to any liabilities or
obligations of any other Person.
"LIBOR Rate" shall mean, for any day, the rate per annum (rounded to
the next higher 1/100 of 1%) for one (1) month deposits in US Dollars which
appears on the Telerate Page 3750 as of 11:00 a.m. London time, on such day, or
if such day is not a London business day, then the immediately preceding London
business day. If for any reason such rate is not available on the Telerate Page
3750, then the rate per annum at which interest shall accrue with reference to
the LIBOR Rate shall be such rate as determined by the Bank from another
recognized source or interbank quotation for the London Interbank Market.
"LIBOR Rate Loans" shall mean the Revolving Loans.
"Letter of Credit" shall mean a standby letter of credit at any time
applied for by Borrower pursuant to a Letter of Credit Application and issued by
Bank for the account of Borrower pursuant to Section 3 hereof, and shall
include, without limitation, those standby letters of credit described on
Schedule 1.1A hereto.
"Letter of Credit Application" shall mean Bank's standard form of
Application and Agreement For Irrevocable Standby Letter of Credit, and such
other documents as Bank may require for its issuance of a Letter of Credit.
"Letter of Credit Facility" shall mean the facility referred to in
Section 3 hereof.
"Letter of Credit Facility Commitment" shall mean $12,500,000.
"Letter of Credit Obligations" shall mean that portion of the
Obligations constituting Borrower's obligation to reimburse Bank for all amounts
paid by Bank under, or with respect to, a Letter of Credit and all other
indebtedness, obligations and liabilities owing by Borrower to Bank under a
Letter of Credit Application.
"Loan Documents" shall mean and collectively refer to this Agreement,
the Revolving Credit Note, the Letter of Credit Applications and all agreements
and other written matters whether heretofore, now or hereafter executed by or in
behalf of Borrower and/or delivered to Bank or any Participant, with respect to
this Agreement, or with respect to the transactions contemplated by this
Agreement.
"Maximum Rate" shall mean the maximum non-usurious rate of interest
permitted by applicable state or federal law that at any time, or from time to
time, may be contracted for, taken, reserved, charged or received on the
Indebtedness in question or, to the extent permitted by applicable laws, under
such applicable laws which may hereafter be in effect and which allow a higher
maximum non-usurious interest rate than applicable laws now allow.
Notwithstanding any other provision hereof, the Maximum Rate shall be calculated
on a daily basis (computed on the actual number of days elapsed over a year of
three hundred sixty (360) days.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Net Income" shall mean, for any period, net income of Borrower for
such period determined in accordance with Generally Accepted Accounting
Principles.
"Obligations" shall collectively mean and include (i) the Revolving
Loans (including accrued interest owed in respect of the Revolving Loans) and
all other sums loaned or advanced by Bank to or on behalf of Borrower pursuant
to the terms of this Agreement, the Loan Documents or any other agreement
between Bank and Borrower, (ii) all liabilities, debts and obligations now or at
any time hereafter owing by Borrower to Bank under this Agreement or any of the
other Loan Documents or otherwise, (iii) the Letter of Credit Obligations and
all other obligations incurred by Bank, whether direct or indirect, contingent
or otherwise, due or not due, under each Letter of Credit Application or in
connection with the issuance of a Letter of Credit, (iv) all obligations and
sums due or that may become due under or in connection with any present or
future swap agreements (as defined in 11 U.S.C. ss. 101) between Borrower and
Bank, and (v) all other liabilities, debts and obligations of any and every
kind, including, but not limited to, all liabilities arising under any
agreements and contracts of guaranty, now or hereafter owing or to become due
from Borrower to Bank, whether created, evidenced, acquired or arising under
this Agreement or any of the other Loan Documents or any other instruments,
obligations, contracts or agreements of any and every kind, now or hereafter
existing or entered into between Borrower and Bank or otherwise, and whether
direct or indirect (including those acquired by assignment), absolute or
contingent, primary or secondary, due or to become due, now existing or
hereafter arising and however acquired. The term includes, without limitation,
all Revolving Loans, interest, charges, expenses, fees, attorneys' and
paralegals' fees and any other sums chargeable to Borrower by Bank under this
Agreement or any of the other Loan Documents.
"Participant" shall mean any Person, now or any time hereafter,
participating with Bank in the extension of the credit facility from Bank to
Borrower pursuant to this Agreement.
"Permitted Purchase Money Indebtedness" shall mean Purchase Money
Indebtedness of Borrower incurred after the date hereof which is secured by a
Purchase Money Lien and which, when aggregated with the principal amount of all
other such Purchase Money Indebtedness and Capitalized Lease Obligations
incurred during any fiscal year, does not exceed $15,000,000.
"Person" shall mean a corporation, an association, a partnership, a
limited liability company, an organization, a business, an individual or a
government or political subdivision thereof or any government agency.
"Plan" shall mean an employee benefit plan now or hereafter maintained
for employees of Borrower that is covered by Title IV of ERISA.
"Prime Rate" shall mean the interest rate publicly announced from time
to time by Bank to be its prime rate, which may not necessarily be its best
lending rate. The Prime Rate is a rate set by Bank based upon various factors
including Bank's cost and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans. Bank may price
some loans at, above or below the Prime Rate.
"Prohibited Transaction" shall mean any transactions set forth in
Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1986.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Purchase Money Indebtedness" shall mean (i) Indebtedness (other than
the Obligations) for the payment of all or any part of the purchase price of any
rolling stock of tractors or trailers, (ii) any Indebtedness (other than the
Obligations) incurred at any time of or within ten (10) days prior to or after
the acquisition of any rolling stock of tractors or trailers for the purpose of
financing all or any part of the purchase price thereof, and (iii) any renewals,
extensions or refinancings thereof, but not any increases in the principal
amounts thereof outstanding at the time.
"Purchase Money Lien" shall mean a lien upon Borrower's rolling stock
of tractors and trailers, but only if such lien shall at all times be confined
solely to the rolling stock of tractors and trailers the purchase price of which
was financed through the incurrence of the Purchase Money Indebtedness secured
by such lien.
"Release" shall have the same meaning as given to that term in Section
101(22) of CERCLA.
"Reportable Event" shall mean any of the events set forth in Section
4043(b) of ERISA.
"Restricted Investment" shall mean any Investment except the following:
(i) Investments to be used in the ordinary course of
business;
(ii) Current assets arising from the sale of goods and
services in the ordinary course of business of Borrower;
(iii) Investments and direct obligations of the United States
of America, or any agency thereof or obligations guaranteed by the
United States of America, provided that such obligations mature within
one (1) year from the date of acquisition thereof;
(iv) Investments in certificates of deposit maturing withi
one (1) year from the date of acquisition issued by a bank organized
under the laws of the United States or any state thereof having capital
surplus and undivided profits aggregating at least $500,000,000;
(v) Investments in commercial paper maturing no more than
one (1) year from the date of creation thereof and, at the time of
acquisition, having a rating of at least A-1 or the equivalent thereof
by Standard and Poor's Corporation or at least P-1 or the equivalent
thereof by Xxxxx'x Investors Service, Inc.;
(vi) Investments not to exceed $1,000,000 in the
aggregate in such Person or Persons as the Borrower in its discretion
determines appropriate; and
(vii) Investment made in accordance with, and pursuant to, the
investment policy of Borrower which is attached hereto as Schedule
1.1B.
"Revolving Credit Note" shall mean the promissory note of Borrower
executed and delivered to Bank pursuant to Section 2.2 hereof evidencing
Borrower's obligation to repay the Revolving Loans, together with any
amendments, modifications and supplements thereto, and any renewals or
extensions thereof, in whole or in part.
"Revolving Line of Credit" shall mean the revolving line of credit made
available by Bank to Borrower pursuant to Section 2.1 hereof.
"Revolving Line of Credit Commitment" shall mean $50,000,000.
"Revolving Loans" shall mean the loans made by Bank to Borrower under
the Revolving Line of Credit.
"Solvent" shall mean, as to any Person, that such Person has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage and is able to pay its debts as they
mature and owns property having a value, both at fair valuation and at present
fair saleable value, greater than the amount required to pay its debts.
"Stock" shall mean all shares, options, interests, partnerships or
other equivalents (howsoever designated) of or in a corporation, whether voting
or non-voting, including, without limitation, common stock, warrants, preferred
stock, convertible debentures and all agreements, instruments and documents
convertible, in whole or in part, into any one or more or all of the foregoing.
"Subsidiary" shall mean any corporation, more than fifty percent (50%)
of the outstanding Stock having ordinary voting power to elect a majority of the
board of directors of which is at the time, directly or indirectly, owned by
Borrower and/or one or more Subsidiaries (irrespective of whether, at the time,
Stock of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency).
"Tangible Net Worth" shall mean at any date the total shareholders'
equity (including capital stock, additional paid-in capital and retained
earnings after deducting treasury stock) appearing on a balance sheet of
Borrower and each Consolidated Subsidiary prepared as of such date in accordance
with Generally Accepted Accounting Principles, minus (a) the unamortized amount,
if any, of intangible assets and goodwill (including, without limitation,
franchises, licenses, patents, trademarks, trade names, copyrights, service
marks and brand names) as reflected on the balance sheet of Borrower, (b) any
Indebtedness owed to Borrower or any Consolidated Subsidiary by any Affiliate,
(c) any write-up in the book value of any fixed asset resulting from a
revaluation thereof subsequent to the Closing Date, and (d) the amount, if any,
at which any shares of Stock of Borrower or any Consolidated Subsidiary appear
on the asset side of the balance sheet of Borrower.
"Termination Date for Letter of Credit Facility" shall mean the
earliest of:
(i) The date that is three hundred sixty four days after
the date hereof;
(ii) The date of termination of the Letter of Credit
Facility by Bank after the occurrence of an Event of Default;
(iii) Such date of termination of the Letter of Credit
Facility as is mutually agreed upon by Bank and Borrower; and
(iv) The date after all Obligations have been paid in full
and Bank is no longer obligated to issue Letters of Credit hereunder.
"Termination Date for Revolving Loans" shall mean the earliest of:
(i) May 31, 2003;
(ii) The date of termination of the Revolving Line of
Credit by Bank after the occurrence of an Event of Default;
(iii) Such date of termination of the Revolving Line of
Credit as is mutually agreed upon by Bank and Borrower; and
(iv) The date after all Obligations have been paid in full
and Bank is no longer obligated to make Revolving Loans hereunder.
"Total Capitalization" shall mean, at any date of determination thereof, the
sum of Funded Debt and Tangible Net Worth.
1.2 Accounting Terms. Any accounting terms used in this Agreement hich are
not specifically defined shall have the meanings customarily given them in
accordance with Generally Accepted Accounting Principles; provided, however,
that, in the event that changes in Generally Accepted Accounting Principles
shall be mandated by the Financing Accounting Standards Board, or any similar
accounting body of comparable standing, or shall be recommended by Borrower's
certified public accountants, to the extent that such changes would modify such
accounting terms or the interpretation or computation thereof, such changes
shall be followed in defining such accounting terms only from and
after such date as Borrower and Bank shall have amended this Agreement to the
extent necessary to reflect any such changes in the financial covenants and
other terms and conditions of this Agreement.
1.3 Singular/Plural. Unless the context otherwise requires, words used
herein in the singular include the plural and words in the plural include the
singular.
1.4 Other Terms. All other terms contained in this Agreement shall, when
the context so indicates, have the meanings provided for by the Uniform
Commercial Code of the State of North Carolina to the extent the same are used
or defined therein.
SECTION 2. REVOLVING LINE OF CREDIT.
2.1 Revolving Loans. Bank hereby establishes, upon the terms and
subject to the conditions of this Agreement and in reliance upon the
representations and warranties made by Borrower hereunder, a Revolving Line of
Credit in favor of Borrower in the amount of the Revolving Line of Credit
Commitment and agrees to make and remake one or more Revolving Loans to
Borrower, upon the terms and conditions set forth herein, from time to time on
any Business Day during the period from the date hereof through but not
including the Termination Date for Revolving Loans. Each request for a Revolving
Loan by Borrower shall be in an amount not less than $100,000. Subject to the
provisions of this Section below, Borrower may borrow, repay and reborrow any
amount of the Revolving Line of Credit provided that the aggregate principal
amount of Revolving Loans outstanding at any time under the Revolving Line of
Credit may not exceed the Revolving Line of Credit Commitment. Notwithstanding
the foregoing, Bank shall not have any obligation to make a Revolving Loan
requested by Borrower hereunder unless all of the conditions precedent set forth
in Sections 5.2 and 5.3 hereof are satisfied.
2.2 Revolving Credit Note. At the Closing, Borrower shall execute and
deliver to Bank the Revolving Credit Note payable to the order of Bank for the
full amount of the Revolving Line of Credit Commitment. The Revolving Credit
Note shall be in the form of Exhibit A attached hereto and dated as of the
Closing Date. The amount of principal owing on the Revolving Credit Note at any
given time shall be the aggregate amount of all Revolving Loans made under the
Revolving Line of Credit, less all payments of principal theretofore paid by
Borrower to Bank on the Revolving Loans.
2.3 Payment of Interest on Revolving Loans. Subject to the provisions
of Section 2.5 below, Borrower shall pay to Bank interest on the unpaid
principal amount of the Revolving Loans outstanding at a rate equal to the
Adjusted LIBOR Rate. Interest will be calculated on a daily basis (computed on
the basis of actual days elapsed over a year of three hundred sixty (360) days).
Interest accrued on the Revolving Loans shall be due and payable in arrears on
the tenth (10th) day of each Fiscal Quarter after the date hereof, computed
through the last day of the prior Fiscal Quarter.
2.4 [Intentionally deleted.]
2.5 Default Rate; Post-Petition Interest. Notwithstanding any other
provision of this Agreement, upon the occurrence and during the continuance of
an Event of Default, the outstanding principal balance of the Revolving Loans,
and to the fullest extent permitted by applicable law, all interest accrued on
the Revolving Loans, shall bear interest at the Default Rate, and shall be
payable on demand. To the fullest extent permitted by applicable law, interest
shall continue to accrue on the Revolving Loans after the filing by or against
Borrower of any petition seeking any relief in bankruptcy or under any act or
law pertaining to insolvency or debtor relief, whether state, federal or
foreign.
2.6 Mandatory Repayment of Principal of Revolving Loans.
Borrower shall repay the principal of the Revolving Loans:
(i) In full, on the Termination Date for Revolving Loans; and
(ii) In full, upon the occurrence of any Event of Default and
acceleration of the Obligations by Bank pursuant to Section 10.1
hereof.
2.7 Use of Proceeds of Revolving Loans. Borrower shall use the
proceeds of all Revolving Loans for working capital and such other legal and
proper corporate purposes (duly authorized by Borrower's board of directors) as
are permitted hereunder and are consistent with all applicable laws and
statutes.
2.8 Disbursement of Revolving Loans. Borrower hereby irrevocably
authorizes Bank to disburse the proceeds of each Revolving Loan under this
Agreement (i) in accordance with the terms of any written instructions from
Borrower, (ii) in accordance with telephone instructions from any of Borrower's
duly authorized officers or other Persons in each case designated from time to
time in writing by Borrower, or (iii) by
deposit or wire transfer to Borrower's controlled disbursement or depository
account with Bank in an amount equal to the sum communicated to Bank as being
necessary to cover checks or other items of payment drawn by Borrower upon such
account and presented to Bank for payment, but in no event shall Bank be
obligated to make Revolving Loans hereunder in amounts necessary to cover any
such checks or other items of payment presented to Bank to the extent that
Borrower is not otherwise entitled to receive Revolving Loans in such amounts
from Bank pursuant to the terms hereof.
SECTION 3. LETTER OF CREDIT FACILITY.
3.1 Issuance of Letters of Credit. Bank hereby establishes, upon the
terms and subject to the conditions of this Agreement and in reliance upon the
representations and warranties made by Borrower hereunder, a letter of credit
facility in favor of Borrower in the amount of the Letter of Credit Facility
Commitment and agrees to issue one or more Letters of Credit for the account of
Borrower, upon the terms and conditions set forth herein, from time to time on
any Business Day during the period from the date hereof through but not
including the Termination Date for Letter of Credit Facility, provided that the
aggregate face amount of all Letters of Credit outstanding at any time shall not
exceed the Letter of Credit Facility Commitment and no Letter of Credit may have
an expiration date later than one (1) year from the date of its issuance, but
may provide for automatic renewal terms of one (1) year each if not terminated
within sixty (60) days of its expiration date. Notwithstanding the foregoing,
Bank shall not have any obligation to issue a Letter of Credit requested by
Borrower hereunder unless all of the conditions precedent set forth in Sections
5.2 and 5.3 hereof are satisfied.
3.2 Letter of Credit Fees. In consideration of Bank's issuing Letters
of Credit for Borrower's account pursuant to Section 3.1 hereof, Borrower agrees
to pay Bank a fee equal to the Applicable Margin for LIBOR Rate Loans effective
on the date of issue of such Letter of Credit times the face amount of each
Letter of Credit issued from time to time pursuant to this Agreement, plus the
other charges customarily charged by Bank generally to its customers for
handling, amendments, drawings on and other administration of the Letters of
Credit. Issuance fees shall be deemed fully earned upon issuance of each Letter
of Credit, shall be due and payable in advance upon the issuance of the Letter
of Credit and shall not be subject to rebate or proration upon the termination
of this Agreement for any reason; provided, however, such issuance fee shall be
subject to proration in the event the Letter of Credit to which such fee
applies is terminated or cancelled prior to the expiration date of such Letter
of Credit and Bank is released from or has no further liability under such
Letter of Credit.
3.3 Reimbursement Obligation.
(a) Borrower hereby unconditionally agrees to reimburse Bank
on the day of any drawing under a Letter of Credit for the actual amount paid by
Bank on such drawing. Borrower shall also pay interest on each unreimbursed
drawing under a Letter of Credit at a rate per annum equal to the Default Rate
(computed on the basis of actual days elapsed over a year of three hundred sixty
(360) days). Interest owing under this Section 3.3 shall be due and payable at
such time as Borrower reimburses Bank for any drawing under a Letter of Credit
and on demand. To the fullest extent permitted by applicable law, interest shall
continue to accrue on each unreimbursed drawing under a Letter of Credit after
the filing by or against Borrower of any petition seeking any relief in
bankruptcy or under any act or law pertaining to insolvency or debtor relief,
whether state, federal or foreign.
(b) Borrower's obligation under this Section 3.3 to reimburse
Bank for each drawing under a Letter of Credit shall be absolute and
unconditional under any and all circumstances and irrespective of any set-off,
counterclaim or defense to payment which Borrower may have or have had against
the Beneficiary, Bank or any other Person, including, without limitation, any
defense based upon:
(i) a failure of Borrower to receive all or any part of the
consideration with respect to which such drawing under a Letter of
Credit was made;
(ii) any lack of validity or enforceability of a Letter of
Credit, the Letter of Credit Application relating thereto or any of
the Loan Documents;
(iii) any amendment or waiver of or any consent to departure
from any of the Loan Documents;
(iv) the existence of any claim, set-off, defense or other
right which Borrower may have at any time against the Beneficiary (or
any Persons for whom the Beneficiary may be acting), Bank or any other
Person, whether in connection with this Agreement, the transactions
contemplated herein or in the Loan Documents or any unrelated
transaction;
(v) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein or made in
connection therewith being untrue or inaccurate in any respect,
provided any payment does not constitute gross negligence or willful
misconduct on the part of Bank;
(vi) any non-application or misapplication by the
Beneficiary or otherwise of the proceeds of any drawing under a Letter
of Credit;
(vii) payment by Bank under a Letter of Credit against
presentation of documentation which does not comply with the terms of
such Letter of Credit, provided such payment does not constitute gross
negligence or willful misconduct on the part of Bank; or
(viii) the failure by Bank to honor any drawing under a
Letter of Credit, provided such failure does not constitute gross
negligence or willful misconduct on the part of Bank.
3.4 Actions of Beneficiary. Borrower assumes all risks of the acts or
omissions of each Beneficiary with respect to its use of a Letter of Credit.
Neither Bank nor any of its officers or directors shall be liable or responsible
for: (a) the use which may be made of a Letter of Credit or any acts or
omissions of the Beneficiary in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement thereon, even if
such documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; or (c) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, telecopier, telex or
otherwise, except that Borrower shall have a claim against Bank, and Bank shall
be liable to Borrower, to the extent of any damages suffered by Borrower which
Borrower proves were caused by Bank's willful failure, or gross negligence
resulting in Bank's failure, to make lawful payment under a Letter of Credit
after the presentation to it by a Beneficiary of all documentation required by
the terms of a Letter of Credit to accompany a drawing thereunder strictly
complying with the terms and conditions of a Letter of Credit.
3.5 Outstanding Letters of Credit on Termination Date. On the Termination
Date for Letter of Credit Facility, if all outstanding Letters of Credit are not
terminated or cancelled and Bank released from all liability thereunder,
Borrower shall either (a) cause to be issued in favor of Bank as beneficiary a
direct pay letter of credit from a commercial bank and in form both reasonably
acceptable to Bank providing for direct reimbursement to Bank of all sums paid
by Bank on the outstanding Letters of Credit or (b) deposit with Bank funds
equal to the undrawn face amount of all Letters of Credit then outstanding to be
held by Bank as security for the outstanding Letter of Credit Obligations.
SECTION 4. PROVISIONS APPLICABLE TO BOTH THE REVOLVING LOANS AND THE LETTER OF
CREDIT OBLIGATIONS.
4.1 Payments; Manner and Application of Payments.
(a) All payments by Borrower on account of principal, interest and fees on
the Revolving Loans and the Letter of Credit Obligations shall be made in
immediately available funds to Bank at its office in Atlanta, Georgia prior to
1:00 p.m., Atlanta, Georgia time on the date payment is due, or at such other
place as is designated in writing by Bank. If any payment of principal, interest
or fees falls due on a day which is not a Business Day, then such due date shall
be extended to the next succeeding Business Day, and, with respect to principal,
interest shall accrue and be payable for such period of extension. Any payments
received by Bank later than 1:00 p.m. shall be deemed to have been made on the
next day.
(b) In the event that Borrower does not pay to Bank within fifteen (15)
days of its request therefor of any interest, fees, costs or expenses payable by
Borrower pursuant to this Agreement or the Revolving Credit Note, or any Letter
of Credit Obligations, including, without limitation, the reimbursement
obligations set forth in Section 3.3 hereof, Borrower hereby irrevocably
authorizes Bank to pay itself the same by drawing such amounts as a Revolving
Loan under the Revolving Line of Credit as of the respective due dates of such
interest, fees, costs, expenses and Letter of Credit Obligations, but the
failure of Bank to so pay itself by drawing a Revolving Loan under the Revolving
Line of Credit shall not affect Borrower's obligation to pay such interest,
fees, costs, expenses and Letter of Credit Obligations.
(c) The Bank may, but shall not be obligated to, debit the amount of any
payments of interest, fees, costs or expenses payable by Borrower to Bank under
this Agreement, when due, from one or more ordinary deposit accounts of the
Borrower maintained with the Bank, including, without limitation, Borrower's
account number 2073781132196. This authorization shall not affect the obligation
of Borrower to pay such sums when due, without notice, if there are insufficient
funds in such account to make
such payment in full on the due date thereof, or if Bank fails to debit the
account.
(d) Unless Bank is otherwise specifically instructed by Borrower, all
payments made by Borrower shall be applied (i) first, to the payment of accrued
and unpaid fees and interest on the Obligations, and (ii) second, to the payment
of unpaid principal on the Obligations; provided, however, that during the
continuance of an Event of Default, Bank shall apply all such payments to the
Obligations in any amounts and any priority as Bank in its sole discretion may
determine.
4.2 Maximum Interest Rate. Nothing contained in this Agreement, in the
Revolving Credit Note or the other Loan Documents shall be deemed to establish
or require the payment of interest to Bank at a rate in excess of the Maximum
Rate. In the event that the rate of interest required to be paid under the
provisions of this Agreement, the Revolving Credit Note or the other Loan
Documents exceeds the Maximum Rate, the rate of interest required to be paid
hereunder and under the Revolving Credit Note shall be automatically reduced to
the Maximum Rate and any amounts collected in excess of the permissible amount
shall be deemed a prepayment of principal on the Revolving Loans and the Letter
of Credit Obligations.
4.3 Increased Costs. If at any time after the date hereof, and from time to
time, Bank or any Participant shall determine reasonably and in good faith that
the adoption or modification of any applicable federal or state law, rule or
regulation regarding Bank's or any Participant's required levels of reserves,
insurance or capital (including any allocation of capital requirements or
conditions), or similar requirements, or any change therein or any
interpretation or administration thereof by any court, governmental authority,
central bank or comparable agency charged with the interpretation,
administration or compliance of Bank or any Participant with any of such
requirements (which are unforeseen by Bank at the present time), has or would
have the effect of (i) increasing Bank's or any Participant's net cost relating
to the Obligations of Borrower hereunder, (ii) reducing the yield or rate of
return of Bank or any Participant on the Obligations of Borrower hereunder to a
level below that which Bank or any Participant could have achieved but for the
adoption or modification of any such requirements, (iii) imposing any reserve,
special deposit or similar requirements relating to any extensions of credit on
or other assets of, or any deposits with or other liabilities of, Bank or any
Participant (such increases or reductions being collectively referred to herein
as "Increased Costs"), Borrower shall, within ten (10) days of any request by
Bank or any
Participant, pay to Bank or such Participant such additional amounts as (in
Bank's or any Participant's sole judgment, after good faith and reasonable
computation) will compensate Bank or such Participant for such increase in net
costs or reduction in yield or rate of return of Bank or such Participant. Upon
making such request to Borrower for the payment of such additional amounts, Bank
and such Participant shall deliver to Borrower a notice setting forth the basis
for and calculation of such Increased Costs. No failure by Bank or any
Participant to demand payment of any additional amounts payable hereunder shall
constitute a waiver of Bank's or any Participant's right to demand payment of
any amounts arising at any subsequent time in accordance with the terms hereof.
Nothing herein contained shall be construed or so operate as to require Borrower
to pay any interest, fees, costs or charges greater than is permitted by
applicable law.
4.4 Revolving Loan Fee. As a condition precedent to the Bank's obligations to
make any Revolving Loans, the Borrower shall pay to the Bank at Closing a
nonrefundable fee in the amount of $62,500.00, which fee shall be deemed fully
earned by the Bank upon Closing.
4.5 Illegality; Impracticality. If it shall become unlawful for Bank to obtain
funds in the London interbank market in order to fund or maintain LIBOR Rate
Loans or otherwise to perform its obligations hereunder with respect to any such
LIBOR Rate Loan, upon not less than five (5) Business Days notice by Bank to
Borrower, the rate of interest on all such LIBOR Rate Loans shall be the Prime
Rate minus one percent (1%) per annum. Notwithstanding any other provision of
this Agreement to the contrary, if, upon receiving notice of an election by
Borrower of a LIBOR Rate Loan or a continuation thereof, (i) deposits in United
States dollars are not quoted or available to Bank in the London interbank
market, or (ii) by reason of national or international financial, political or
economic conditions or by reason of any applicable law, treaty, rule or
regulation (whether domestic or foreign) now or hereafter in effect, or the
interpretation or administration thereof by any governmental authority, or
compliance by Bank with any request or directive of such authority (whether or
not having the force of law), including, without limitation, exchange controls,
it is impracticable, unlawful or impossible for Bank to make or continue the
relevant LIBOR Rate Loan, then Borrower shall not be entitled, so long as such
circumstances continue, to request a LIBOR Rate Loan hereunder.
4.6 Facility Fee. During the term of the Revolving Line of Credit, Borrower
shall pay Bank a facility fee at the rate of
eighteen one-hundredths of one percent (0.18%) per annum on the daily
undisbursed portions of the Revolving Line of Credit Commitment if the Fixed
Charge Coverage Ratio is greater than 3.5 to 1.0; at the rate of twenty
one-hundredths of one percent (.20%) per annum on the daily undisbursed portion
of the Revolving Line of Credit Commitment if the Fixed Charge Coverage Ratio is
less than or equal to 3.5 to 1.0 and greater than or equal to 2.5 to 1.0; and at
the rate of one-quarter of one percent (.25%) if the Fixed Charge Coverage Ratio
is less than 2.5 to one. The facility fees from the date hereof through June 30,
2000 shall be twenty one-hundredths of one percent (.20%). Such facility fee
shall accrue from and including the Closing Date through but not including the
Termination Date for Revolving Loans, shall be calculated on the basis of a
three hundred sixty (360) day year for the actual number of days elapsed, and
shall be payable quarterly in arrears on the first Business Day of each calendar
quarter commencing on July 1, 2000, or, if earlier, the Termination Date for
Revolving Loans. For purposes of this Section 4.6, the Fixed Charge Coverage
Ratio shall be determined based on the most recent financial statements
delivered by Borrower to the Bank under Section 7.3 hereof.
4.7 All Obligations to Constitute One Loan. All Obligations of Borrower under
this Agreement shall constitute one general obligation of Borrower and shall be
secured by all security interests, liens, claims, encumbrances, and rights of
offset at any time or times hereafter granted by Borrower to Bank.
SECTION 5. CLOSING; CONDITIONS OF LOANS.
5.1 Closing. The Closing shall take place on the date of the execution of this
Agreement by Bank ("Closing Date") at the offices of Xxxxx Xxxxx Mulliss &
Xxxxx, L.L.P., Greensboro, North Carolina, or at such other time and place as
the parties hereto shall mutually agree.
5.2 Conditions of Initial Revolving Loan and Issuance of Letter of Credit.
Notwithstanding any other provision of this Agreement or any other Loan
Document, and without affecting any other rights of Bank under the other
sections of this Agreement, Bank shall have no obligation under Sections 2.1 and
3.1 of this Agreement to make the initial Revolving Loan or issue any Letter of
Credit or assume obligations under any existing Letter of Credit on the Closing
Date unless and until, in addition to each of the conditions set forth in
Section 5.3 hereof, the following conditions have been satisfied in a manner
satisfactory to Bank and its counsel:
(a) No Injunction, Etc. No action, proceeding, investigation, regulation
or legislation shall have been instituted or proposed before any court,
governmental agency or legislative body to enjoin, restrain, or prohibit, or to
obtain substantial damages in respect of, or which is related to or arises out
of this Agreement or the consummation of the transactions contemplated hereby,
or which, in Bank's sole discretion, would make it inadvisable to consummate the
transactions contemplated by this Agreement.
(b) Governmental Approvals. All necessary approvals, authorizations and
consents, if any be required, of all governmental bodies (including courts)
having jurisdiction with respect to the transactions contemplated by this
Agreement shall have been obtained.
(c) Loan Documentation. Bank shall have received, on or prior to the
Closing Date, the following documents, each duly executed and delivered to Bank,
and each in form and substance satisfactory to Bank and its counsel:
(i) Revolving Credit Note. The duly executed Revolving Credit Note;
(ii) Certificate of Secretary of Borrower. Certificate of the Secretary
or an Assistant Secretary of Borrower certifying (x) that attached thereto is a
true and complete copy of the bylaws of Borrower as in effect on the date of
such certification, (y) that attached thereto is a true and complete copy of
resolutions adopted by the Board of Directors of Borrower, authorizing the
execution, delivery and performance of this Agreement and the other Loan
Documents, and the consummation of the transactions contemplated hereby and
thereby, and (z) as to the incumbency and genuineness of the signature of each
officer of Borrower executing this Agreement or any of the other Loan Documents;
(iii) Articles of Incorporation of Borrower. Copies of the Articles of
Incorporation of Borrower, and all amendments thereto, certified by the
Secretary of State of Virginia;
(iv) Certificates of Good Standing. Good standing certificates for
Borrower issued by the Secretary of State of Virginia, and the appropriate
official of each other jurisdiction where the conduct of Borrower's business
activities or the ownership of its properties necessitates qualification;
(v) Certificate as to No Default. A certificate signed by an officer of
Borrower, in form and substance satisfactory to
Bank and its counsel, dated as of the Closing Date, certifying that (x) the
representations and warranties of Borrower contained in this Agreement and the
other Loan Documents are true, correct and complete as of such date, (y) that
Borrower is on such date in compliance with all of the terms and provisions set
forth in this Agreement and the other Loan Documents, and (z) on the Closing
Date, no Default or Event of Default exists;
(vi) Disbursement Instructions. Written instructions from Borrower to
Bank as to any sums to be paid out of e proceeds of the initial Revolving Loan
made pursuant to this Agreement;
(vii) Opinion of Counsel. A written opinion of counsel to Borrower as to
the transactions contemplated by this Agreement and the other Loan Documents to
be in form and substance satisfactory to Bank and its counsel; and
(viii) Guaranty. The duly executed Guaranty;
(ix) Certificate of Secretary of Guarantor. Certificate of the Secretary
or an Assistant Secretary of Guarantor certifying (x) that attached thereto is a
true and complete copy of the bylaws of Guarantor as in effect on the date of
such certification, (y) that attached thereto is a true and complete copy of
resolutions adopted by the Board of Directors of Guarantor, authorizing the
execution, delivery and performance of the Guaranty, and the consummation of the
transactions contemplated hereby and thereby, and (z) as to the incumbency and
genuineness of the signature of each officer of Guarantor executing the
Guaranty;
(x) Articles of Incorporation of Guarantor. Copies of the Articles of
Incorporation of Guarantor, and all amendments thereto, certified by the
Secretary of State of Delaware;
(xi) Certificate of Good Standing. Good standing certificate for
Guarantor issued by the Secretary of State of Delaware, and the appropriate
official of each other jurisdiction where the conduct of Guarantor's business
activities or the ownership of its properties necessitates qualification;
(xii) Supplemental Documentation. Such other documentation as Bank or its
counsel shall reasonably request.
(d) No Material Adverse Change. Since December 31, 1999, there shall
not have occurred any material adverse change in the business, financial
condition or results of operations of Borrower, or any event, condition, or
state of facts which would
be expected materially and adversely to affect the business, financial condition
or results of operations of Borrower.
5.3 Conditions of All Loans and Letters of Credit. Notwithstanding any other
provision of this Agreement or any other Loan Document, and without affecting in
any manner the rights of Bank under the other sections of this Agreement, Bank
shall have no obligation under Sections 2.1 and 3.1 of this Agreement to make
any Revolving Loan or issue any Letter of Credit unless and until, in addition
to each of the conditions set forth in Section 5.2 hereof, the following
conditions have been and continue to be satisfied in a manner satisfactory to
Bank:
(a) No Material Adverse Change. There shall not have occurred after the
Closing Date any material adverse change in the business, financial condition or
results of operations of Borrower, or any event, condition or state of facts
which would be expected materially and adversely to affect the business,
financial condition or results of operations of Borrower.
(b) Delivery of Documents. Bank shall have received the originals or copies
of all documents required to be delivered to Bank pursuant to the terms of this
Agreement and all other certificates, reports and information required to be
delivered to Bank hereunder.
(c) Representations and Warranties. The representations and warranties
contained in Section 6 of this Agreement and the other Loan Documents are and
shall continue to be true and correct (except to the extent that they shall be
untrue or incorrect solely as a result of occurrences permitted under this
Agreement).
(d) No Default or Event of Default. No Default or Event of Default shall
have occurred and be continuing.
(e) Performance of Agreement. All covenants and agreements on the part of
Borrower to be performed hereunder shall have been performed and, unless
otherwise expressly agreed, any conditions precedent set forth in Section 5.2
hereof shall have been fulfilled.
(f) Letter of Credit Application. Bank shall have received a duly executed
Letter of Credit Application with respect to any Letter of Credit requested by
Borrower.
5.4 Waiver of Conditions. If Bank makes any Revolving Loan or issues any
Letter of Credit hereunder prior to the fulfillment of any of the conditions
precedent set forth in Sections 5.2 and 5.3 hereof, the making of such Revolving
Loan or the issuance of such Letter of Credit shall constitute only an extension
of time for the fulfillment of such condition and not a waiver thereof, and
Borrower shall thereafter use its best efforts to fulfill each such condition
promptly.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
In order to induce Bank to enter into this Agreement and to make Revolving
Loans and issue Letters of Credit, Borrower makes the following warranties and
representations to Bank:
6.1 Corporate Organization and Power. Borrower (a) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Virginia; (b) is qualified to do business and is in good standing in every
jurisdiction where the nature of its business or the ownership of its properties
requires it to be so qualified, including, without limitation, the State of
North Carolina; (c) has the power to engage in the transactions contemplated
hereby; and (d) has the full power, authority and legal right to execute and
deliver this Agreement and the other Loan Documents and to perform and observe
the terms and provisions thereof. Borrower has no Subsidiaries other than XXXX,
Inc. Except as set forth in Schedule 6.1 attached hereto, Borrower has not been
known as or used any other corporate, fictitious or trade names.
6.2 Litigation; Government Regulation. Except as set forth on Schedule 6.2
attached hereto, there are no actions, suits or proceedings pending or, to the
knowledge of Borrower, threatened against or affecting Borrower at law or in
equity before any court or administrative officer or agency which might result
in a material adverse change in the business or financial condition of Borrower
or impair Borrower's ability to perform its obligations under the Loan
Documents. Borrower is not in violation of or in default under any applicable
statute, rule, order, decree, writ, injunction or regulation of any governmental
body (including any court) where such violation would have a materially adverse
effect upon Borrower's business, property, assets, operations or condition,
financial or otherwise.
6.3 Taxes. Borrower is not delinquent in the payment of any taxes which have
been levied or assessed by any governmental authority against it or its assets.
Borrower has timely filed
all tax returns which are required by law to be filed, and has paid all taxes
shown on said returns and all other assessments or fees levied upon Borrower or
upon its properties to the extent that such taxes, assessments or fees have
become due, except such amounts thereof as are being contested in good faith and
for which adequate provision has been made for such payment. To the knowledge of
the officers of Borrower, no material controversy in respect of income taxes is
pending or threatened.
6.4 Enforceability of Loan Documents; Compliance With Other Instruments. The
Loan Documents are the legal, valid and binding obligations of Borrower,
enforceable against Borrower in accordance with their respective terms. Borrower
is not subject to any corporate restriction or to any order, rule, regulation,
writ, injunction or decree of any court or governmental authority or to any
statute which materially and adversely affects its business, property, assets or
financial condition. Borrower is not a party to any labor dispute, there are no
strikes or walkouts relating to any labor contracts and no such contract is
scheduled to expire during the term of this Agreement. Borrower is not in
default in the payment of any amount owing under, or in the performance of any
other material obligation in respect of, any indenture, loan agreement,
mortgage, lease, deed or similar agreement related to the borrowing of monies to
which Borrower is a party or by which it is bound. Neither the execution,
delivery or performance of the Loan Documents, nor compliance therewith: (a)
conflicts or will conflict with or results or will result in any breach of, or
constitutes or will constitute with the passage of time or the giving of notice
or both, a default under, (i) the Articles of Incorporation or Bylaws of
Borrower, (ii) any law, order, writ, injunction or decree of any court or
governmental authority, or (iii) any agreement or instrument to which Borrower
is a party or by which Borrower or its Property is bound or (b) results or will
result in the creation or imposition of any lien, charge or encum-brance upon
its properties pursuant to any such agreement or instrument.
6.5 Governmental Authorization. No authorization, consent or approval of any
governmental authority is required for the execution, delivery and performance
of the Loan Documents or the consummation of the transactions contemplated
thereby. Borrower has, and is in good standing with respect to, all governmental
approvals, permits, certificates, inspections, consents and franchises necessary
to continue to conduct its business as heretofore conducted and to own or lease
and operate its properties as now owned or leased by it. None of such approvals,
permits, certificates, consents, or franchises contains any term, provision,
condition or limitation more burdensome
than such as are generally applicable to Persons engaged in the same or similar
business as Borrower.
6.6 Event of Default. No event has occurred and is continuing which
constitutes a Default or an Event of Default.
6.7 Margin Securities. None of the transactions contemplated by this
Agreement (including, without limitation thereof, the use of the proceeds of the
Revolving Loans) will violate or result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, or any regulations issued pursuant
thereto. Borrower does not own or intend to carry or purchase directly or
indirectly any margin securities. None of the proceeds of the Revolving Loans
will be used to purchase or carry (or refinance any borrowing, the proceeds of
which were used to purchase or carry) any "margin security" within the meaning
of the Securities Exchange Act of 1934, as amended.
6.8 Full Disclosure. None of the Loan Documents, nor any statements
furnished by or on behalf of Borrower to Bank in connection with the Loan
Documents, contain any untrue statement of a material fact or omit a material
fact necessary to make the statements contained therein or herein not
misleading. To the best of Borrower's knowledge, there is no fact which Borrower
has not disclosed to Bank in writing which materially affects adversely or, to
the best of Borrower's knowledge, will materially affect adversely the assets,
business, profits or conditions (financial or otherwise) of Borrower or the
ability of Borrower to perform its obligations under the Loan Documents.
6.9 Business Locations. Borrower's chief executive office, principal place
of business, and other offices, places of business and locations where Borrower
keeps its books and records are at the locations set forth on Schedule 6.9
attached hereto and made a part hereof.
6.10 ERISA. Except as disclosed on Schedule 6.10 attached hereto, Borrower
does not have any Plan. Borrower has not received any notice to the effect that
it is not in full compliance with any of the requirements of ERISA. No fact or
situation that could result in a material adverse change in the financial
condition of Borrower, including, without limitation, any Reportable Event or
Prohibited Transaction, exists in connection with any Plan. Borrower has no
withdrawal liability in connection with a Multiemployer Plan.
6.11 Financials. The Financials delivered to Bank have been prepared in
accordance with Generally Accepted Accounting Principles (subject, in the case
of interim Financials, to timing and normal year-end adjustments), contain no
misstatement or omission, and fairly present the financial position, assets and
liabilities of Borrower as of the respective dates thereof and the results of
operations of Borrower for the respective periods then ended. Except for the
transactions contemplated by this Agreement, since the date of the last of the
Financials, there has been no material adverse change in the assets, liabilities
or financial position of Borrower or in the results of Borrower's operations,
and Borrower has not incurred any obligation or liability which would materially
and adversely affect its financial condition or business operations.
6.12 Title to Property. Borrower has good, indefeasible and merchantable
title to and ownership of or valid leasehold or other interests in its Property,
including without limitation, the Property reflected in the Financials.
6.13 Solvency. Borrower is Solvent.
6.14 Use of Proceeds. Borrower's use of the proceeds of any Revolving Loans
made by Bank to Borrower pursuant to this Agreement are, and continue to be,
legal and proper corporate uses (duly authorized by its Board of Directors when
necessary) and such uses are consistent with all applicable laws and statutes,
as in effect as of the date hereof.
6.15 Assets for Conduct of Business. Borrower possesses adequate assets,
licenses, patents, patent applications, copy-rights, trademarks and trade names
to conduct its business as heretofore conducted and all such licenses, patents,
patent applications, copyrights, trademarks and trade names are listed on
Schedule 6.15 attached hereto and made a part hereof.
6.16 Trade Relations. To the best of Borrower's knowledge, there exists no
actual or threatened termination, cancellation or limitation of, or any
modification or change in, any business relationship of Borrower which would
materially and adversely effect such business relationship of Borrower or any
customer or any group of customers whose purchases individually or in the
aggregate are material to the business of Borrower, or with any material
supplier, and there exists no present condition or state of facts or
circumstances which would materially adversely affect Borrower or prevent
Borrower from conducting such business after the consummation of the transaction
contemplated by this Agreement in substantially the same manner in which it has
heretofore been conducted.
6.17 Compliance With Laws. Borrower has duly complied with, and its business
operations and leaseholds are in compliance in all material respects with, the
provisions of all federal, state and local laws, rules and regulations
applicable to Borrower or the conduct of Borrower's business, including, without
limitation, all Environmental Laws, and there have been no citations, notices or
orders of non-compliance received by Borrower under any such law, rule or
regulation which would have a material and adverse effect on the business of
Borrower or the value of its Property.
6.18 Guaranty. Borrower has no outstanding guaranties of Indebtedness of
another Person except as otherwise permitted under Section 8.13 hereof.
6.19 Environmental Matters. To the best of Borrower's knowledge and except
as disclosed on Schedule 6.19A attached hereto, no aboveground or underground
storage tanks containing Hazardous Substances are, or have been located on, any
Property owned, leased or operated by Borrower. No Property owned, leased or
operated by Borrower is, or has been, used for the Disposal of any Hazardous
Substance or for the treatment, storage or Disposal of Hazardous Substances. To
the best of Borrower's knowledge and except as disclosed in Schedule 6.19B
attached hereto, no Release of a Hazardous Substance has occurred, or is
threatened on, at, from or near any Property owned, leased or operated by
Borrower. Borrower is not subject to any existing, pending or threatened suit,
claim, notice of violation, or request for information under any Environmental
Law, nor has Borrower provided any notice or information under any Environmental
Law which would have a material adverse effect upon the business of Borrower or
the value of its Property. Borrower is in compliance in all material respects
with, and has obtained all Environmental Permits required by, all Environmental
Laws.
6.20 Withholding Taxes. Borrower is current in respect to the payment of all
federal and state withholding taxes, and social security taxes. Borrower
currently accrues its payroll tax applications and maintains sufficient
available funds to satisfy its payroll tax liability.
6.21 Labor Contract; Labor Disputes. Borrower is not a party to any
collective bargaining contract or agreement with its employees. Except as set
forth on Schedule 6.21 hereto, Borrower is not a party to, and there is not
pending or threatened, any labor dispute, strike, lockout, grievance, work
stoppage or walkout relating to any labor contract to which Borrower is a
party. Borrower has complied with the provisions of the Fair Labor Standards Act
of 1938, as amended, and neither Borrower nor any of its officers, directors or
employees, has committed any unfair labor practice, as defined in the National
Labor Relations Act of 1947, as amended.
6.22 Leases. Schedule 6.22A attached hereto lists, as of the Closing Date,
all capitalized leases of Borrower and Schedule 6.22B attached hereto lists, as
of the Closing Date, all operating leases of Borrower, including, in each case,
the name of the lessor, the description of the leased Property, whether real or
personal, and the location of such Property. Borrower enjoys peaceful and
undisturbed possession under all of its leases and all such leases are valid and
subsisting and in full force and effect.
6.23 Reaffirmation of Warranties and Representations. Each request for a
Revolving Loan or a Letter of Credit by Borrower pursuant to this Agreement
shall constitute (a) an automatic warranty and representation by Borrower to
Bank that there does not then exist a Default or an Event of Default and (b) all
of the representations and warranties of Borrower contained in this Agreement
and the other Loan Documents continue to be true and correct.
6.24 Survival of Warranties and Representations. Borrower covenants,
warrants and represents to Bank that all representations and warranties of
Borrower contained in this Agreement and the other Loan Documents shall be true
at the time of Borrower's execution of this Agreement and the other Loan
Documents and shall survive the execution, delivery and acceptance thereof by
the parties thereto and the closing of the transactions described therein or
related thereto.
SECTION 7. AFFIRMATIVE COVENANTS.
Until payment in full of all Obligations of Borrower to Bank and
termination of the Bank's obligation to make Revolving Loans and issue Letters
of Credit hereunder, Borrower covenants and agrees that, unless Bank consents in
writing, Borrower will:
7.1 Repayment of Obligations. Repay the Obligations according to the terms
of this Agreement and the other Loan Documents.
7.2 Performance Under Loan Documents. Perform all Obligations required to be
performed by it under the terms of this Agreement and the other Loan Documents
and any other agreements now or hereafter existing or entered into between
Borrower and Bank.
7.3 Financial and Business Information as to Borrower. Deliver to
Bank with respect to Borrower and each Consolidated Subsidiary:
(a) As soon as practicable, but no later than sixty (60) days after the
close of each Fiscal Quarter, beginning with the current Fiscal Quarter, the
10-Q report and the Quarterly Report to Shareholders for such Fiscal Quarter or,
in the absence of such reports, a balance sheet of Borrower and each
Consolidated Subsidiary as of the close of each Fiscal Quarter, and a statement
of income and cash flow, for that portion of the Fiscal Year to date then ended,
prepared in accordance with Generally Accepted Accounting Principles (subject to
timing and normal year-end adjustments), applied on a basis consistent with that
of the preceding period or containing disclosure of the effect on the financial
position or results of operations of any change in the application of accounting
principles and practices during the Fiscal Quarter, and certified as accurate by
the chief financial officer of Borrower;
(b) As soon as possible, but no later than one hundred twenty (120) days
after the close of each Fiscal Year of Borrower, beginning with the current
Fiscal Year, a balance sheet of Borrower and each Consolidated Subsidiary as of
the close of such Fiscal Year and statements of income, retained earnings and
cash flow for the Fiscal Year then ended, prepared in accordance with Generally
Accepted Accounting Principles, applied on a basis consistent with the preceding
year or containing disclosure of the effect on financial position or results of
operation of any change in the application of accounting principles and
practices during the Fiscal Year, and accompanied by a report thereon,
containing an unqualified opinion, without scope limitations imposed by
Borrower, from a firm of independent certified public accountants selected by
Borrower and acceptable to Bank;
(c) Concurrently with the delivery of the financial statements described in
sub-section (b) hereof, a certificate from the independent certified public
accountants that in making their examination of the financial statements of
Borrower and each Consolidated Subsidiary, they obtained no knowledge of the
occurrence or existence of any Default or any Event of Default, or a statement
specifying the nature and period of existence of any such Default or Event of
Default;
(d) Concurrently with the delivery of the financial statements described in
sub-sections (a) and (b) above, a certificate from the chief executive,
operating or financial officer of Borrower certifying to Bank that, to the best
of his knowledge, Borrower
has kept, observed, performed and fulfilled each and every covenant, obligation
and agreement binding upon Borrower contained in this Agreement or the other
Loan Documents, and that no Default or Event of Default has occurred or
specifying any such Default or Event of Default, together with a financial
compliance worksheet, in form satisfactory to Bank, reflecting the computation
of the financial covenants set forth in Section 9 as of the end of the period
covered by such financial statements;
(e) As soon as possible, but not later than forty-five (45) days after the
end of each Fiscal Year, an annual forecast of Borrower and each Consolidated
Subsidiary for the succeeding Fiscal Year in reasonable detail, including a
quarterly cash flow of Borrower for the succeeding Fiscal Year (each annual
forecast shall include a balance sheet and a statement of anticipated sales,
expenses and profit and loss before taxes for each Fiscal Quarter), together
with such changes and updates in such annual forecast as may be deemed necessary
by Borrower because of any material deviation or variance between the actual
results and the corresponding projections in such annual budget;
(f) As soon as possible, but not later than ten (10) days after delivery to
Borrower, a copy of any management letter issued by Borrower's independent
public accountants with respect to the financial or accounting systems or
controls of Borrower or any Consolidated Subsidiary; and
(g) Upon Bank's written request, such other information about the financial
condition and operations of Borrower and any Consolidated Subsidiary as Bank may
from time to time reasonably request.
7.4 Notice of Certain Events. As soon as practicable, but in no event later
than five (5) Business Days after the occurrence thereof, give written notice to
Bank of: (a) any material litigation or proceeding brought against Borrower or
Guarantor, whether or not the claim is considered by Borrower to be covered by
insurance; (b) any written notice of a violation received by Borrower from any
governmental regulatory body or law enforcement authority which, if such
violation were established, might have a materially adverse effect on the
business of Borrower; (c) any labor controversy which has resulted in a strike
or other work action materially affecting Borrower; (d) any attachment,
judgment, lien, levy or order in excess of $500,000 which has been placed on or
assessed against Borrower or Guarantor or their respective Properties; (e) any
Default or Event of Default; and (f) any other matter which has resulted in
a material adverse change in the financial condition or operations of Borrower.
7.5 Corporate Existence and Maintenance of Properties. Maintain and preserve
its corporate existence and all rights, privileges and franchises now enjoyed
which are necessary for the conduct of Borrower's business, conduct its business
in an orderly, efficient and customary manner, keep its properties in good
working order and condition, and from time to time make all needed repairs to,
renewals of or replacements of its properties (except to the extent that any of
such properties is obsolete or is being replaced) so that the efficiency of such
property shall be fully maintained and preserved. Borrower shall file or cause
to be filed in a timely manner all reports, applications, estimates and licenses
which shall be required by any governmental authority and which, if not timely
filed, would have a material adverse effect on Borrower or its Property.
7.6 Payment of Indebtedness; Performance of Other Obligations. Pay all
Indebtedness when due, and all other obligations in accordance with customary
trade practices, and comply with all acts, rules, regulations and orders of any
legislative, administrative or judicial body or official applicable to
Borrower's Property or any part thereof or to the operation of Borrower's
business; provided, however, that Borrower may in good faith by appropriate
proceedings in good faith and with due diligence contest any such Indebtedness,
obligations, acts, rules, regulations, orders and directions that do not
materially adversely affect the value of its Property, and if requested by Bank,
shall establish reserves reasonably satisfactory to Bank. Borrower shall also
observe and remain in compliance with all laws, ordinances, governmental rules
and regulations to which it is subject and obtain and maintain all licenses,
permits, franchises or other governmental authorizations necessary to the
ownership of its properties or the conduct of its business, and all covenants
and conditions of all agreements and instruments to which Borrower is a party
which failure to comply or failure to maintain would materially and adversely
affect the business, prospects, profits or condition (financial or otherwise) of
Borrower.
7.7 Maintenance of Insurance. Maintain and pay for insurance upon all
Property covering such risks (but not including environmental coverage) and in
such amounts and with such insurance companies as shall be reasonably
satisfactory to Bank. Borrower shall also maintain, with financially sound and
reputable insurers, insurance with respect to its properties and business
against such casualties and contingencies of such types (including, but not
limited to, liability and cargo insurance)
and in such amounts as is customary in the case of a Person in the same or
similar business. Bank acknowledges that on the Closing Date Borrower is
self-insured.
7.8 Maintenance of Books and Records; Inspection. Maintain adequate books,
accounts and records, and prepare all financial statements required under this
Agreement in accordance with Generally Accepted Accounting Principles and in
compliance with the regulations of any governmental regulatory body having
jurisdiction over it; and, upon the occurrence of a Default or an Event of
Default, permit employees or agents of Bank at any reasonable time to inspect
Borrower's properties, and to examine or audit Borrower's books, accounts and
records and make copies and memoranda of them. Upon the occurrence of a Default
or an Event of Default, Borrower shall permit any representative of Bank during
normal business hours to visit and inspect any of the properties of Borrower, to
examine, make extracts and inspect all books of accounts, records, reports and
other papers, to make copies and extracts therefrom, and to discuss the affairs,
finances, accounts and related issues of Borrower with its officers, employees
and independent public accountants (and by this provision Borrower authorizes
said accountants to discuss the finances and affairs of Borrower), all at such
reasonable times and as often as may be reasonably requested.
7.9 Compliance with ERISA. At all times make prompt payment of contributions
required to meet the minimum funding standards set forth in ERISA with respect
to any employee benefit plan; promptly upon request, furnish to Bank copies of
any annual report required to be filed under ERISA in connection with each
employee benefit plan; not withdraw from participation in, permit the
termination or partial termination of, or permit the occurrence of any other
event with respect to any employee benefit plan that could result in liability
to the Pension Benefit Guaranty Corporation; notify Bank as soon as practicable
of any Reportable Event and of any additional act or condition arising in
connection with any employee benefit plan which Borrower believes might
constitute grounds for the termination thereof by the Pension Benefit Guaranty
Corporation or for the appointment by the appropriate United States district
court of a trustee to administer such plan; and furnish to Bank upon Bank's
request, such additional information about any employee benefit plan as may be
reasonably requested.
7.10 Depository Accounts and Cash Management Services. Maintain at
all times after the Closing Date its principal depository banking accounts and
its cash management services at Bank.
7.11 Payment of Taxes. Pay and discharge all taxes, assessments and other
governmental charges or levies imposed upon Borrower or upon its income or
profits, or upon any Property belonging to Borrower, prior to the date on which
penalties attached thereto, and all lawful claims which, if unpaid, might become
a lien or charge upon any Property; provided, however, that Borrower may in good
faith by appropriate proceedings and with due diligence contest any such tax,
assessment, charge, levy or claim, if Borrower establishes any funded reserves
reasonably requested by Bank.
7.12 Compliance with Laws. Comply in all material respects with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of Borrower's business and the ownership of its Property.
7.13 Compliance with Environmental Laws. Comply in all material respects
with all Environmental Laws and not suffer, cause or permit the Disposal or
Release of Hazardous Substances at any Property owned, leased or operated by
Borrower in violation of any Environmental Law; provided, however, in the event
of such a Disposal or Release, Borrower shall be deemed to be in compliance with
the foregoing if, within the time required by applicable Environmental Laws,
Borrower shall take all necessary remedial action to contain, remove, clean up
and remediate such Disposal or Release, and mitigate all threats to the
Environment resulting therefrom, in compliance with all applicable Environmental
Laws. Borrower shall promptly notify Bank in the event of the Disposal of
Hazardous Substance at any Property owned, leased or operated by Borrower in
violation of any Environmental Law, or in the event of any Release or threatened
Release of a Hazardous Substance from any such Property in violation of any
Environmental Law, except for a Release which could be fully remediated in
accordance with applicable Environmental Laws for less than $100,000 in the
aggregate. Borrower shall promptly deliver to Bank copies of any documents
received from the United States Environmental Protection Agency or any state,
county or municipal environmental or health agency concerning Borrower's
operations or Property and of any document submitted by Borrower to the United
States Environmental Protection Agency or any state, county or municipal,
environmental or health agency concerning Borrower's operations or Property.
SECTION 8. NEGATIVE COVENANTS.
Until payment in full of all Obligations of Borrower to Bank and termination
of the Bank's obligations to make Revolving Loans and issue Letters of Credit
hereunder, Borrower covenants and agrees that, unless Bank consents in writing,
Borrower will not, and will cause each Consolidated Subsidiary to not:
8.1 Merger and Dissolution. Liquidate or dissolve, or enter into any
consolidation, merger, syndicate or other combination or sell, lease or dispose
of, in a single transaction or a series of related transactions, its business or
assets as a whole or such part as in the opinion of Bank constitutes a
substantial portion of its business or assets.
8.2 Acquisitions. Acquire the business or all or a substantial portion of
the assets of any Person, whether by purchase of stock, assets or otherwise;
provided, however, Borrower may make such acquisitions provided the aggregate
payments (including cash and non-cash) therefor do not exceed $25,000,000 in the
aggregate.
8.3 Funded Debt. Create, incur or suffer to exist any Funded Debt except
for: (a) the Obligations owed to Bank under this Agreement and the other Loan
Documents; (b) Funded Debt set forth on Schedule 8.3 attached hereto, and all
refinancings and renewals of the letters of credit and surety bonds set forth
thereon (which such renewals and refinancings may be in either surety bond or
letter of credit forms, regardless of whether the original obligation was in
letter of credit or surety bond form), so long as the aggregate amount of such
renewals and refinancings does not exceed $13,184,500; (c) Permitted Purchase
Money Indebtedness; (d) Indebtedness not to exceed $46,000,000 in the aggregate
principal amount evidenced by senior unsecured notes issued by Borrower pursuant
to the terms and provisions of those certain Note Purchase Agreements, dated as
of June 15, 1996, and February 25, 1998, respectively, between Borrower and the
purchasers named therein, as amended, modified or supplemented from time to time
("Note Purchase Agreements"), and all other Indebtedness outstanding under the
Note Purchase Agreements subject to the limitations with respect to the
principal amount thereof set forth in this clause (d); and (e) Funded Debt (in
addition to Funded Debt permitted in subsections 8(a) through 8(d)) not to
exceed $7,000,000 in the aggregate comprised of unsecured reimbursement
obligations incurred in connection with letters of credit or surety bonds issued
for the account of the Borrower by an issuer other than the Bank.
8.4 Liens and Encumbrances. Create, assume or suffer to exist any deed of
trust, mortgage, encumbrance or other lien (including a lien of attachment,
judgment or execution) or
security interest (including the interest of a conditional seller of goods),
securing a charge or obligation, on or of any of its Property, real or personal,
whether now owned or hereafter acquired, except for: (a) the liens set forth on
Schedule 8.4 attached hereto; and (b) Purchase Money Liens securing Permitted
Purchase Money Indebtedness which are not incurred in violation of Section 8.3
of this Agreement.
8.5 Disposition of Property. Sell, lease, transfer, convey or otherwise
dispose of any of its Property except for sales or dispositions of its Property
in the ordinary course of business.
8.6 Transactions With Related Persons. Except as set forth on Schedule 8.6
attached hereto, directly or indirectly, make any loan or advance, purchase,
assume or guarantee any note to or from any of its officers, directors,
stockholders or Affiliates, or to or from any member of the immediate family of
any of its officers, directors, shareholders or Affiliates, except for travel or
other reasonable expense advances to employees in the ordinary course of
business which do not total more than $100,000 in the aggregate outstanding at
any one time; or subcontract any operations to any Affiliate; or enter into, or
be a party to, any transaction with any Affiliate or officer, director or
stockholder of Borrower, except in the ordinary course of and pursuant to the
reasonable requirements of Borrower's business and upon fair and reasonable
terms which are fully disclosed to Bank and are no less favorable to Borrower
than would obtain in a comparable arm's length transaction with a Person not an
Affiliate or stockholder of Borrower.
8.7 Restricted Investments. Make any Restricted Investment except for (a)
travel or other reasonable expense advances to employees permitted by Section
8.6 hereof; (b) prepaid expenses incurred in the ordinary course of business;
and (c) accounts created in the ordinary course of business.
8.8 Restrictions on Dividends. Declare or pay any dividends (other than
dividends payable solely in its own Stock) upon any of its Stock, or purchase,
redeem or otherwise acquire, directly or indirectly, any shares of its Stock, or
make any distribution of cash, property or assets among the holders of shares of
its Stock, or make any material change in its capital structure; provided,
however, that for any Fiscal Year Borrower may pay dividends if and only if:
(a) No Default or Event of Default shall then exist;
(b) After giving effect to such dividend, no Default or Event of Default
shall exist; and
(c) Such dividend has been duly authorized by all necessary corporate
action and is permitted by applicable law.
8.9 Fiscal Year. Change its Fiscal Year.
8.10 Sale and Leasebacks. Enter into any arrangement with any Person
providing for the leasing by Borrower of any asset which has been sold or
transferred by Borrower to such Person if such arrangement occurs more than one
hundred eighty (180) days after the initial purchase of such asset by Borrower.
8.11 New Business. Engage in any business other than the business in which
it is currently engaged or a business reasonably related thereto or make any
material change in any of its business objectives, purposes and operations which
might in any way adversely affect the repayment of the Obligations.
8.12 Subsidiaries or Partnerships. At any time after the date hereof, become
a partner or joint venturer in any partnership or joint venture or create or
acquire any Subsidiary or transfer any assets to a Subsidiary. For purposes of
this Section 8.12, cartage agency and inter-line arrangements which in each case
do not constitute Investments by Borrower and do not result in Borrower's
incurrence of direct or contingent liabilities other than in the ordinary course
of business shall not constitute partnerships or joint ventures.
8.13 Guaranty. Guarantee or otherwise, in any way, become liable with
respect to the obligations or liabilities of any Person except: (a) its
Affiliate's obligations to Bank; (b) by endorsement of instruments or items of
payment for deposit to the general account of Borrower or for delivery to Bank
on account of the Obligations; (c) those guaranties set forth on Schedule 8.13
attached hereto; and (d) guaranties supporting third-party loans to employees of
the Borrower in the ordinary course of business, not to exceed $100,000 in the
aggregate.
8.14 Transactions Affecting Repayment of Indebtedness. Enter into any
transaction which materially and adversely affects Borrower's Property or
Borrower's ability to repay any Indebtedness.
8.15 Tangible Net Worth. Permit Tangible Net Worth of Borrower and each
Consolidated Subsidiary to be less than (a) $95,000,000 on June 30, 2000, and
(b) at each Fiscal Quarter end thereafter, $95,000,000 plus the sum of fifty
percent (50%) of cumulative positive Net Income for each of the Fiscal Quarters
ending after June 30, 2000.
8.16 Funded Debt to Total Capitalization. Permit the percentage of (a)
Funded Debt of Borrower and each Consolidated Subsidiary, less the dollar amount
of undrawn letters of credit and surety bonds of Borrower ("Undrawn
Obligations") to (b) Total Capitalization of Borrower and each Consolidated
Subsidiary, less Undrawn Obligations, to be greater than 55% at any time, tested
at each Fiscal Quarter end hereafter.
8.17 Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
Ratio to be less than 1.75 to 1.0 at any time.
SECTION 9. EVENTS OF DEFAULT.
9.1 Event of Default. The occurrence of any one or more of the following
events shall constitute an "Event of Default":
(a) Borrower fails to pay any portion of the obligations when due and
payable;
(b) Borrower fails or neglects to observe, perform or comply with any term,
provision, condition or covenant contained in Sections 7.3, 7.4 or Section 8 of
this Agreement;
(c) Borrower fails or neglects to observe, perform or comply with any term,
provision, condition, covenant, warranty or representation contained in this
Agreement or the other Loan Documents or in any other agreement now existing or
hereafter executed evidencing, securing or relating in any way to the
Obligations of Borrower, which is required to be observed, performed or complied
with by Borrower, other than those enumerated in Section 9.1(b) above, and the
same is not cured within the earlier of twenty (20) days after (i) the earlier
to occur of (y) the date upon which Borrower has actual knowledge thereof, or
(z) the date upon which Borrower should have obtained actual knowledge thereof
assuming Borrower exercises due care and reasonable diligence under the
circumstances; or (ii) Bank's giving Borrower written notice thereof;
(d) If any representation or warranty made in writing by or on behalf of
Borrower in this Agreement or in the other Loan Documents or in any other
agreement now existing or hereafter executed between Borrower and Bank, or in
connection with the transactions contemplated hereby or thereby, shall prove to
have been false or incorrect in any material respect at the time as of which
such representation or warranty was made;
(e) The occurrence of any default or event of default on the part of
Borrower (including specifically, but without
limitation, due to non-payment) under the terms of any agreement, document or
instrument pursuant to which Borrower has incurred any Funded Debt in excess of
$100,000 (other than the Obligations), which default is not cured within the
time, if any, permitted therefor in the agreement governing such Funded Debt;
(f) The filing by Borrower of any voluntary petition seeking liquidation,
reorganization, arrangement, readjustment of its debts or for any other relief
under the Bankruptcy Code or under any other act or law pertaining to insolvency
or debtor relief, whether state, federal or foreign, now or hereafter existing,
or the appointment of a receiver, custodian or trustee of Borrower or for all or
a substantial part of Borrower's Property;
(g) The filing against Borrower of any involuntary petition seeking
liquidation, reorganization, arrangement, readjustment of its debts or for any
other relief under the Bankruptcy Code or under any other act or law pertaining
to insolvency or debtor relief, whether state, federal or foreign, now or
hereafter existing, and such petition is not dismissed within sixty (60) days
after the filing thereof or, if within such sixty (60) day period an order for
relief under the Bankruptcy Code or any other applicable act or law shall be
entered, then immediately upon entry of such order;
(h) Borrower ceases to be Solvent, or Borrower ceases to conduct its
business substantially as now conducted or is enjoined, restrained or in any way
prevented by court order from conducting all or any material part of its
business affairs;
(i) A notice of lien, levy or assessment is filed of record to all or any of
Borrower's assets by the United States, or any department, agency or
instrumentality thereof, or by any state, county, municipal or other
governmental agency, including, without limitation, the Pension Benefit Guaranty
Corporation, or if any taxes or debts owing at any time or times hereafter to
any one of them becomes a lien or encumbrance upon Borrower's Property and the
same is not dismissed, released, bonded or discharged within thirty (30) days
after the same becomes a lien or encumbrance or, in the case of ad valorem
taxes, prior to the last day when payment may be made without penalty;
(j) The entry of a judgment or the issuance of a warrant of attachment,
execution or similar process against Borrower or any of its Property in excess
of $500,000, which shall not be dismissed, released, discharged or bonded within
thirty (30) days from entry of judgment or the issuance of the warrant of
attachment, execution or similar process against Borrower or any of its
Property;
(k) If a custodian, trustee, receiver or assignee for the benefit of
creditors is appointed or takes possession of Borrower's Property; or
(l) The occurrence of any of the following events: (i) the happening of a
Reportable Event with respect to any profit sharing or pension plan of Borrower
governed by ERISA; (ii) the appointment of a trustee by an appropriate United
States District Court to administer any such plan; (iii) the institution of any
proceedings by the Pension Benefit Guaranty Corporation to terminate any such
plan or to appoint a trustee to administer any such plan; (iv) the failure of
Borrower to furnish to Bank a copy of each report which is filed by Borrower
with respect to each such plan promptly after the filing thereof with the
Secretary of Labor or the Pension Benefit Guaranty Corporation; or (v) the
failure of Borrower to notify Bank promptly upon receipt by Borrower of any
notice of the institution of any proceeding or any other actions which may
result in the termination of any such plan; or
(m) Guarantor fails or neglects to observe, perform or comply with any term,
provision, condition, covenant, warranty or representation contained in the
Guaranty.
SECTION 10. RIGHTS AND REMEDIES AFTER EVENT OF DEFAULT.
10.1 Rights and Remedies. Upon the occurrence of any Event of Default, Bank
shall have, in addition to all other rights and remedies which Bank may have
under this Agreement, the other Loan Documents, and applicable law, the
following rights and remedies, all of which may be exercised with or without
further notice to Borrower:
(a) The right to terminate the commitment of Bank to make Revolving Loans or
issue Letters of Credit hereunder, and, upon the occurrence of an Event of
Default specified in Section 9.1(f), (g) or (h), the obligation of Bank to make
Revolving Loans or issue Letters of Credit hereunder shall automatically be
deemed terminated;
(b) The right to declare all or any part of the Obligations immediately due
and payable, whereupon such Obligations shall become immediately due and
payable, without presentment, demand, notice or legal process of any kind, all
of which are hereby expressly waived by Borrower; and upon the occurrence of an
Event of Default specified in Section 9.1(f), (g) or (h), all of the Obligations
shall automatically become due and payable;
(c) The right to setoff and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held in other than a fiduciary
or payroll account and any other indebtedness at any time owing by Bank to or
for the credit or account of Borrower against any and all of the Obligations;
(d) Bank may cause the Beneficiary of each Letter of Credit outstanding to
draw upon such Letter of Credit for the undrawn amount thereof; and
(e) The right to exercise any remedy available to Bank at law or in equity.
10.2 Rights and Remedies With Respect to Letters of Credit. Upon the
occurrence of an Event of Default, Bank may, at its option, demand that Borrower
deposit with Bank funds equal to the undrawn face amount of all Letters of
Credit then outstanding. If Borrower fails to make such deposit within three (3)
Business Days after written demand therefor, Bank may, at its option, advance
such amount as a Revolving Loan hereunder, whether or not with the making of
such Revolving Loan the Revolving Line of Credit Commitment would be exceeded,
which shall be payable at the applicable interest rate set forth in Section 2.3
hereof. Any such funds deposited by Borrower or advanced by Bank as a Revolving
Loan shall be held by Bank in a interest bearing cash collateral account as
security for all of the Letter of Credit Obligations and to provide a fund from
which Bank shall make future payments upon drawings under the outstanding
Letters of Credit. At such time as all Letters of Credit have expired or have
been cancelled or terminated, any amount remaining in the cash collateral
account shall be applied against any outstanding Obligations owed by Borrower to
Bank, or if all Obligations have then been indefeasibly paid in full, returned
to Borrower. The provisions of this Section 10.2 shall survive the termination
of this Agreement.
10.3 Rights and Remedies Cumulative; Non-Waiver; Etc. The enumeration of
Bank's rights and remedies set forth in this Agreement is not intended to be
exhaustive and the exercise by Bank of any right or remedy shall not preclude
the exercise of any other rights or remedies, all of which shall be cumulative,
and shall be in addition to any other right or remedy given hereunder, under the
Loan Documents or under any other agreement between Borrower or Bank or which
may now or hereafter exist in law or in equity or by suit or otherwise. No delay
or failure to
take action on the part of Bank in exercising any right, power or privilege
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude other or further exercise thereof or
the exercise of any other right, power or privilege or shall be construed to be
a waiver of any Default or Event of Default. No course of dealing between
Borrower and Bank or its agents or employees shall be effective to change,
modify or discharge any provision of this Agreement or to constitute a waiver of
any Default or Event of Default.
SECTION 11. PAYMENT OF EXPENSES.
Whether or not the transactions contemplated by this Agreement shall be
consummated, Borrower will:
11.1 Fees and Expenses. Pay or reimburse Bank and any Participant upon
demand for all expenses (including, without limitation, reasonable attorneys'
and paralegals' expenses) incurred or paid by Bank in connection with: (a) the
preparation, negotiation, execution, delivery, interpretation or enforcement of
this Agreement or the other Loan Documents, or any modification of or amendment
to this Agreement or the other Loan Documents if either requested by Borrower or
if an Event of Default has occurred or any sale or sales of any interest in the
extension of the credit facility to Borrower hereunder to one or more
Participants; (b) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Bank, Borrower or any other Person) in any way relating
to this Agreement or the other Loan Documents, or Borrower's affairs; (c) any
attempt to collect the Obligations or to enforce any rights of Bank against
Borrower or any other Person which may be obligated to Bank by virtue of this
Agreement or the other Loan Documents; and (d) any refinancing or restructuring
of the credit arrangement provided under this Agreement in the nature of a
"work-out" or in any insolvency or bankruptcy proceeding.
SECTION 12. MISCELLANEOUS.
12.1 Survival of Agreements. All agreements, representations and warranties
contained herein or made in writing by or on behalf of Borrower in connection
with the transactions contemplated hereby shall survive the execution and
delivery of this Agreement and the other Loan Documents. No termination or
cancellation (regardless of cause or procedure) of this Agreement shall in any
way affect or impair the powers, obligations, duties, rights and liabilities of
the parties
hereto in any way with respect to (a) any transaction or event occurring prior
to such termination or cancellation, or (b) any of Borrower's undertakings,
agreements, covenants, warranties and representations contained in this
Agreement and the other Loan Documents and all such undertakings, agreements,
covenants, warranties and representations shall survive such termination or
cancellation. Borrower further agrees that to the extent Borrower makes a
payment or payments to Bank, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy, insolvency or similar state or federal law, common law or equitable
cause, then, to the extent of such payment or repayment, the Obligations or part
thereof intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been received by Bank.
12.2 Governing Law. This Agreement shall be interpreted, and the rights and
liabilities of the parties hereto determined, in accordance with the internal
laws (as opposed to conflicts of law provisions) of the State of North Carolina.
12.3 Notices. All notices and other communications hereunder shall be made
by telegram, telex, electronic transmitter or overnight air courier or certified
or registered mail, return receipt requested, and shall be deemed to be received
by the other party one (1) day after sending, if sent by telegram, telex,
electronic transmitter or overnight air courier, and three (3) days after
mailing, if sent by certified or registered mail. All notices shall be addressed
to the party to be notified as follows:
(a) If to Borrower: Old Dominion Freight Line, Inc.
0000 Xxxxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxx Xxxxxxxx 00000
Attn: J. Xxx Xxxx, Senior Vice
President-Finance and Chief
Financial Officer
Facsimile No. 000-000-0000
With a copy to: Old Dominion Freight Line, Inc.
0000 Xxxxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxx X. XxXxxxx, Esq.,
Senior Vice President-
General Counsel and
Secretary
Facsimile No. 000-000-0000
(b) If to Bank: First Union National Bank
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
(for street address)
Xxxx Xxxxxx Xxx 00000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
(for post office box)
Attn: Xxxxxxx X. Xxxxx, Xx.
Facsimile No. 000-000-0000
With a copy to: Xxxxx Xxxxx Mulliss & Xxxxx, L.L.P
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
(for street address)
Xxxx Xxxxxx Xxx 00000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
(for post office box)
Attn: W. Xxxxxxxxx Xxxxxxx, Esq.
Facsimile: 000-000-0000
or to such other address as each party may designate for itself by like notice
given in accordance with this Section 12.3.
12.4 Indemnification of Bank and Participants. From and at all times after
the date of this Agreement, and in addition to all of Bank's other rights and
remedies against Borrower, Borrower agrees to indemnify Bank and each
Participant and hold Bank and each Participant harmless from and against any and
all claims, losses, damages, liabilities, suits, actions, proceedings, costs and
expenses of any kind or nature whatsoever (including without limitation,
attorney's fees, costs and expenses) incurred or suffered by or asserted against
Bank or any Participant, whether direct, indirect or consequential, as a result
of or arising from or in any way relating to (a) Borrower's failure to observe,
perform or discharge its duties hereunder; (b) any suit, action or proceeding
(including any inquiry or investigation) by any Person, whether threatened or
initiated, asserting a claim for any legal or equitable remedy against any
Person under any statute or regulation, including without limitation, any
federal or state securities laws, or under any common law or equitable cause or
otherwise, arising from or in connection with the negotiation, preparation,
execution or performance of this Agreement or the other Loan Documents or any
transactions contemplated herein or therein, whether or not Bank or any
Participant is a party to any such action, proceeding, suit or the target of any
such inquiry or investigation; or (c) any claim, demand, action or suit which
may arise against Bank by reason of any action taken pursuant to this Agreement,
any Letter of Credit or any of the Loan
Documents; provided, however, the foregoing indemnification shall not apply to
any liability resulting from the gross negligence or willful misconduct of Bank
or any Participant (as finally determined by a court of competent jurisdiction).
Without limiting the generality of the foregoing, this indemnity shall extend to
any claims asserted against Bank or any Participant by any Person under any
Environmental Laws. All of the foregoing losses, liabilities, damages, costs and
expenses of Bank and each Participant shall be payable by Borrower upon demand
by Bank and shall be additional Obligations hereunder. Notwithstanding any
contrary provision of this Agreement, the obligation of Borrower under this
Section 12.4 shall survive the payment in full of the obligations and the
termination of this Agreement.
12.5 Waivers by Borrower. Except as otherwise provided for in this
Agreement, Borrower waives presentment, demand and protest and notice of
presentment, protest, default, non-payment, maturity and all other notices.
12.6 Assignment. Borrower may not sell, assign or transfer this Agreement,
or the other Loan Documents or any portion thereof, including without
limitation, Borrower's rights, title, interests, remedies, powers, and duties
hereunder or thereunder. Borrower hereby consents to Bank's participation, sale,
assignment, transfer or other disposition at any time or times hereafter of this
Agreement or the other Loan Documents, or of any portion hereof or thereof,
including without limitation, Bank's rights, title, interests, remedies, powers
and duties hereunder or thereunder.
12.7 Participants. If a Participant shall at any time participate with Bank
in making loans hereunder or under any other agreement between Bank and
Borrower, Borrower hereby grants to such Participant (in addition to any other
rights which such Participant shall have) and such Participant shall have and
hereby is granted a continuing lien and security interest in any money,
securities or other Property of Borrower in the custody or possession of
Participant, including the right to set-off, to the extent of Participant's
participating interests in the Loans, as such Participant would have if it were
a direct lender to Borrower.
12.8 Amendment. This Agreement and the other Loan Documents cannot be
amended, changed, discharged or terminated orally, but only by an instrument in
writing signed by Bank and Borrower.
12.9 Severability. To the extent any provision of this Agreement is
prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.
12.10 Entire Agreement. This Agreement and the other documents, certificates
and instruments referred to herein constitute the entire agreement between the
parties and supersede and rescind any prior agreements relating to the subject
matter hereof.
12.11 Binding Effect. All of the terms of this Agreement and the other Loan
Documents, as the same may from time to time be amended, shall be binding upon,
inure to the benefit of and be enforceable by the respective successors and
assigns of Borrower and Bank. This provision, however, shall not be deemed to
modify Section 12.6.
12.12 Captions. The captions to the various Sections and subsections of this
Agreement have been inserted for convenience only and shall not limit or affect
any of the terms hereof.
12.13 Conflict of Terms. The provisions of the other Loan Documents are
incorporated in this Agreement by this reference thereto. Except as otherwise
provided in this Agreement and except as otherwise provided in the other Loan
Documents, if any provision contained in this Agreement is in conflict with, or
inconsistent with, any provision of the other Loan Documents, the provision
contained in this Agreement shall control.
12.14 Injunctive Relief. Borrower recognizes that in the event Borrower
fails to perform, observe or discharge any of its obligations or liabilities
under this Agreement, any remedy of law may prove to be inadequate relief to
Bank. Borrower therefore agrees that Bank, if Bank so requests, shall be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving actual damages.
12.15 Construction of Agreement. Whenever the term "reasonable attorneys'
fees" is used in this Agreement or the other Loan Documents, such term shall
refer to the fees of counsel based upon usual and customary hourly rates and not
upon any fixed percentage of the Obligations.
12.16 Time of Essence. Time is of the essence of this Agreement and the
other Loan Documents.
12.17 Waiver of Jury Trial. BORROWER AND BANK AGREE THAT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR
COUNTERCLAIM, BROUGHT BY BANK OR
BORROWER, ON OR WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
DEALINGS OF THE PARTIES WITH RESPECT HERETO OR THERETO, SHALL BE TRIED ONLY BY A
COURT AND NOT BY A JURY. BANK AND BORROWER EACH HEREBY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY AND INTELLIGENTLY, AND WITH THE ADVICE OF THEIR RESPECTIVE
COUNSEL, WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL
BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. FURTHER, EACH BORROWER WAIVES
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR
PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUENTIAL OR OTHER DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. BORROWER ACKNOWLEDGES AND AGREES
THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND THAT
BANK WOULD NOT EXTEND CREDIT TO BORROWER IF THE WAIVERS SET FORTH IN THIS
SECTION WERE NOT A PART OF THIS AGREEMENT.
12.18 Arbitration. Upon demand of Borrower or Bank, whether made before or
after institution of any judicial proceeding, any claim or controversy arising
out of or relating to the Loan Documents (a "Dispute") shall be resolved by
binding arbitration conducted under and governed by the Commercial Financial
Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association (the "AAA") and the Federal Arbitration Act. Disputes may include,
without limitation, tort claims, counterclaims, a dispute as to whether a matter
is subject to arbitration, claims brought as class actions, or claims arising
from documents executed in the future. A judgment upon the award may be entered
in any court having jurisdiction. Notwithstanding the foregoing, this
arbitration provision does not apply to disputes under or related to swap
agreements. All arbitration hearings shall be conducted in the city named in the
address of Bank in the "Notices" Section above. A hearing shall begin within 90
days of demand for arbitration and all hearings shall conclude within 120 days
of demand for arbitration. These time limitations may not be extended unless a
party shows cause for extension and then for no more than a total of 60 days.
The expedited procedures set forth in Rule 51 et seq. of the Arbitration Rules
shall be applicable to claims of less than $1,000,000.00. Arbitrators shall be
licensed attorneys selected from the Commercial Financial Dispute Arbitration
Panel of the AAA. The parties do not waive applicable Federal or state
substantive law except as provided herein. Notwithstanding the preceding binding
arbitration provisions, Borrower and Bank agree to preserve, without diminution,
certain remedies that any party may exercise before or after an arbitration
proceeding is brought. The parties shall have the right to proceed in any court
of proper jurisdiction or by self-help to exercise or prosecute the following
remedies, as applicable: (i) all rights to foreclose
against any real or personal property or other security by exercising a power of
sale or under applicable law by judicial foreclosure including a proceeding to
confirm the sale; (ii) all rights of self-help including peaceful occupation of
real property and collection of rents, set-off, and peaceful possession of
personal property; (iii) obtaining provisional or ancillary remedies including
injunctive relief, sequestration, garnishment, attachment, appointment of
receiver and filing an involuntary bankruptcy proceeding; and (iv) when
applicable, a judgment by confession of judgment. Any claim or controversy with
regard to any party's entitlement to such remedies is a Dispute.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their corporate names by their duly authorized corporate officers as of the
date first above written.
OLD DOMINION FREIGHT LINE, INC.
By: J. XXX XXXX
-------------------------------
Title: Senior Vice President - Finance
-------------------------------
FIRST UNION NATIONAL BANK
By: XXXXXXX X. XXXXX, XX.
-------------------------------
Title: Senior Vice President, Director
-------------------------------
LIST OF EXHIBITS AND SCHEDULES
Exhibit Description of Exhibit Section
------- ---------------------- -------
A Revolving Credit Note 2.2
Schedule Description of Schedule Section
-------- ----------------------- -------
1.1A Letters of Credit 1.1
1.1B Investment Policy 1.1
6.1 Other Corporate, Fictitious
or Trade Names 6.1
6.2 Litigation 6.2
6.9 Places of Business and
Principal Place of Business 6.9
6.10 Plans 6.10
6.15 Patents, Trademarks and
Licenses 6.15
6.19A Environmental Matters (USTs) 6.19
6.19B Environmental matters
(Releases) 6.19
6.21 Labor Matters 6.21
6.22A Capitalized Leases 6.22
6.22B Operating Leases 6.22
8.3 Funded Debt 8.3
8.4 Permitted Liens 8.4
8.6 Related Party Transactions 8.6
8.13 Permitted Guaranties 8.13
EXHIBIT A TO
CREDIT AGREEMENT
REVOLVING CREDIT NOTE
$50,000,000 Greensboro, North Carolina
May 31, 2000
FOR VALUE RECEIVED, the undersigned OLD DOMINION FREIGHT LINE, INC., a
Virginia corporation ("Borrower"), promises to pay to FIRST UNION NATIONAL BANK,
a national banking association ("Bank"), or order, at the principal office of
the Bank in Greensboro, North Carolina, or at such other place as the Bank may
from time to time designate in writing, the principal sum of Fifty Million
Dollars ($50,000,000), or, if less, the unpaid balance of all Revolving Loans
made by the Bank to the Borrower under the Revolving Line of Credit extended by
the Bank to the Borrower pursuant to the Credit Agreement (as defined below),
together with interest on the unpaid principal amount of this Note at the rates
provided in the Credit Agreement.
This Note is the Revolving Credit Note issued to evidence Revolving
Loans made by the Bank to the Borrower under the Revolving Line of Credit
pursuant to Section 2.1 of the Credit Agreement, dated of even date herewith,
between the Borrower and the Bank, as the same may from time to time be amended
or supplemented ("Credit Agreement"), and is entitled to the benefits of and the
remedies provided in, the Credit Agreement. All of the terms, conditions and
covenants of the Credit Agreement are expressly made a part of this Note, by
reference in the same manner and with the same effect as if set forth herein.
Reference is made to the Credit Agreement for provisions for the maturity,
payment, prepayment and acceleration of this Note. All capitalized terms used in
this Note without definition shall have the meanings ascribed to such terms in
the Credit Agreement.
The Borrower, for itself and its successors and assigns, expressly
waives presentment for payment, demand, protest and notice of demand, notice of
dishonor and notice of nonpayment and all other notices.
This Note shall be governed by, construed and enforced in accordance
with the internal laws, and not the laws of conflicts, of the State of North
Carolina.
In the event that this Note shall at any time after maturity be
collected by or through an attorney-at-law, the Borrower agrees to pay, in
addition to the entire unpaid principal balance and interest due hereunder, all
collection costs, including reasonable attorneys' fees, incurred by the Bank in
collecting the indebtedness due hereunder, computed on the basis of usual and
customary rates and not on the basis of a fixed percentage of the indebtedness
due hereunder.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed by
its duly authorized corporate officers and its corporate seal to be hereunto
affixed on the day and year first above written.
OLD DOMINION FREIGHT LINE, INC.
By: J. XXX XXXX
-------------------------------
Title: Senior Vice President - Finance
-------------------------------
Schedule 1.1A
-------------
Letters of Credit
Schedule of outstanding letters of credit attached.
Schedule 1.1B
-------------
Investment Policy
See Investment Policy attached.
Schedule 6.1
------------
Other Corporate, Fictitious or Trade Names
Subsidiary: XXXX, Inc., a Delaware corporation
Schedule 6.2
------------
Litigation
None.
Schedule 6.9
------------
Places of Business and
Principal Place of Business
Corporate Headquarters:
0000 Xxxxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxx Xxxxxxxx
Corporate Annex:
0000 Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxx Xxxxxxxx 00000
See Schedule of Other Locations attached.
Schedule 6.10
-------------
Plans
1) Old Dominion 401K Retirement Plan
2) Old Dominion - Section 125 Plan
3) Old Dominion - Voluntary Employee Benefits Association
(VEBA) Trust
4) Nonqualified Deferred Compensation Plan of Old Dominion
Freight Line, Inc.
Schedule 6.15
-------------
Patents, Trademarks and Licenses
Registration Number Description Registration Date
------------------- ----------- -----------------
1,038,955 Service Xxxx Xxx 4, 1976
Pending Applications Application Number
-------------------- ------------------
Old Dominion Speed Service 75/754,145
Transline 75/553,637
Other
-----
"XXXX" Character -
unfiled copyright
Schedule 6.19A
--------------
Environmental Matters (USTs)
See Schedule attached.
Schedule 6.19B
--------------
Environmental Matters
(Releases)
None.
Schedule 6.21
-------------
Labor Matters
On or about May 20, 1999, a drivers and dockmen union election was held
at our Philadelphia, Pennsylvania terminal. The Teamsters Union won the election
by a vote of 28 to 23. Although required bargaining has taken place, the
Borrower and the Union have not signed a contract. The Borrower does not believe
that this situation has created or will create a material adverse effect on its
operations.
Borrower is not a party to any labor contract at any of its terminals
or offices.
Schedule 6.22A
--------------
Capitalized Leases
Lessor Description of Location Outstanding
------ Leased Property -------- Balance
--------------- -------
TransAmerica Various trailers obtained Various $ 316,319
Business Credit through Xxxxxx Truck Line,
Inc. acquisition
Schedule 6.22B
--------------
Operating Leases
See Schedule of terminal leases on Schedule 6.9.
Lessor Description of Property Location
------ ----------------------- --------
E & J Enterprises 163 - 1980-81 Great Dane Trailers Various
Nacarto 20 - 1997 Volvo Tractors obtained in Xxxxxx Various
Truck Line, Inc. acquisition
Fleet Capital 26 - 1997-98 Volvo tractors obtained in Various
Xxxxxx Truck Line, Inc. acquisition
Xxxxx Fargo 7 - 1998 Volvo Tractors obtained in GOTL Various
Norwest Financial acquisition
TransAmerica Business Credit 46 - 1997 and 1999 Volvo Tractors obtained in Various
GOTL acquisition
US Bank Corp 8 - 1998 Volvo Tractors obtained in GOTL Various
acquisition
Paccar Financial 28 - 1998 Peterbuilt Tractors obtained in GOTL Various
acquisition
Xxxxxx X. Xxx, Xx., Trustee Parcel of land together with improvements 0000 Xxxx Xxxx Xxxx, Xxxxxxxxxx,
thereon, 38.43 acres, fronting XX#0000 XX 00000-0000
Schedule 8.3
------------
Funded Debt
Debtholder Amount
---------- ------
American Casualty Company of Reading, PA - $1,800,000
Surety Bond No. 929110773 - Unsecured
See Schedule 1.1A.
See Funded Debt secured by liens noted on
Schedule 8.4.
See Operating Lease noted on Schedule 6.22A.
Schedule 8.4
------------
Permitted Liens
Secured Party Description of Property Outstanding Balance Location
------------- ----------------------- ------------------- --------
Philadelphia National Bank Various 1997-98 Tractors $ 1,158,823 Various
General Electric Credit 396 Trailers and 13 Tractors- $ 1,426,444 Various
Corporation GOTL acquisition
IBM Credit Corporation IBM AS/400-740 Processor; $ 2,125,584 Corporate
IBM AS/400-740 Processor Office
Upgrade; 9406 SYSTEM UNITS;
AS/400 OPERATING SYSTEM;
with various Peripherals and other
units
First Union National Bank $4,000,000 Promissory Note $ 916,642 n/a
$ 5,627,493
============
Schedule 8.6
------------
Related Party Transactions
See Section entitled "Compensation Committee Interlocks and Inside
Participation" in the Old Dominion Freight Line, Inc. Notice of Annual Meeting
of Shareholders - April 24, 2000, a copy of which is attached.
Schedule 8.13
-------------
Permitted Guaranties
As part of the consideration for the sale of Xxxxxx, Inc., Borrower maintains a
letter of credit totalling $500,000.00 to secure payment to Utica Mutual
Insurance Company for the self-insured retention portion of workmen compensation
claims.
