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Exhibit 10.4
SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENTS
THIS SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENTS is made and
entered into as of the 30th day of January, 1998, by and between FIRST TENNESSEE
BANK NATIONAL ASSOCIATION, a national banking association ("Bank"), LANDAIR
SERVICES, INC., a Tennessee corporation ("Borrower"), LANDAIR TRANSPORT, INC., a
Tennessee corporation which is a wholly owned subsidiary of Borrower ("LTI"),
LANDAIR INTERNATIONAL AIRLINES, INC., a Tennessee corporation which is a wholly
owned subsidiary of Borrower ("LIA"), TRANSPORTATION PROPERTIES, INC.,
previously known as "Landair Properties, Inc.," a Tennessee corporation which is
a wholly owned subsidiary of Borrower ("LPI"), and FORWARD AIR, INC., a
Tennessee corporation which is a wholly owned subsidiary of Borrower ("FAI").
RECITALS
A. Bank, Borrower, LTI and LIA have entered into that
certain Loan Agreement dated as of October 17, 1994, providing for a loan in the
amount of Eleven Million One Hundred Fifty-Two Thousand Dollars ($11,152,000.00)
(the "Loan"), to finance the acquisition of equipment for use in the Borrower's
operations and in the operations of LTI and LIA (the "Loan Agreement").
B. Bank has made the Loan to Borrower pursuant to various
loan documents, among them a promissory note dated as of October 17, 1994, in
the original principal amount of Eleven Million One Hundred Fifty-Two Thousand
Dollars ($11,152,000.00) (the "Master Draw Note"), a security agreement securing
the obligations of Borrower, LTI and LIA with respect to the Loan dated as of
October 17, 1994, under which a security interest was and is granted in the
aforesaid equipment (the "Security Agreement"), and the Loan Agreement. The
Master Draw Note, the Security Agreement, the Loan Agreement and all other
instruments executed in connection with the Loan, as now amended or as may be
amended hereafter, are herein referred to collectively as the "Loan Documents."
The equipment and other personal property in which a security interest was, is
and may be hereafter, granted under the Security Agreement, as amended, are
herein collectively referred to as the "Property."
C. LTI acquired and purchased additional equipment which was
paid for by Loan proceeds as of October 20, 1994, as evidenced by a draw note
and a first amendment to the Loan Agreement and to the Security Agreement, all
dated as of October 20, 1994.
D. LTI acquired and purchased other additional equipment
which was paid for by Loan proceeds as of December 23, 1994, as evidenced by a
draw note and a second amendment to the Loan Agreement and to the Security
Agreement, all dated as of December 23, 1994.
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E. LTI acquired and purchased other additional equipment
which was paid for by Loan proceeds as of May 24, 1995, as evidenced by a draw
note and a third amendment to the Loan Agreement and to the Security Agreement,
all dated as of May 24, 1995.
F. Bank, Borrower, LTI and LIA have previously and further
amended certain other provisions of the Loan, the Master Draw Note, the Loan
Agreement and the Security Agreement as evidenced by an amended, restated and
replacement promissory note dated as of May 31, 1995, in the original principal
amount of Fifteen Million Dollars ($15,000,000.00) which amended, restated and
replaced the Master Draw Note (the "Replacement Note"), and as also evidenced by
a fourth amendment to the Loan Agreement and to the Security Agreement and
related loan modification documents, all dated as of May 31, 1995.
G. LTI acquired and purchased additional equipment which was
paid for by loan proceeds evidenced by the Replacement Note as of December 22,
1995, as evidenced by a draw note and a fifth amendment to the Loan Agreement
and to the Security Agreement, all dated as of December 22, 1995.
H. Bank and Borrower, LTI, LIA, LPI and FAI (the "Borrowing
Entities") have agreed to extend the revolving credit period set forth in the
Replacement Note and to modify other terms and provisions set forth in the
Replacement Note and in the Loan Agreement and the Security Agreement, as
previously amended by those amendment instruments described above. Such
modifications to the Replacement Note are set forth in and evidenced by that
certain restated, amended and replacement promissory note (the "Second
Replacement Note") of even date herewith executed by the Borrowing Entities,
payable to the order of Bank, and in the original principal amount of Fifteen
Million Dollars ($15,000,000.00) (the "New Loan").
I. Bank and the Borrowing Entities desire (i) that the
prompt and punctual payment of the Replacement Note, as amended, restated and
replaced by the Second Replacement Note, be secured by the Loan Agreement and
the Security Agreement, as amended by those amendment instruments described
above, in accordance with the terms thereof and hereof, and (ii) to modify
certain other provisions of the Loan Agreement and of the Security Agreement, as
amended by those amendment instruments described above, as set forth herein.
J. The Replacement Note, as amended, restated and replaced
by the Second Replacement Note, the Loan Agreement and the Security Agreement,
as amended by those amendment instruments described above, this instrument, the
Guaranties and all other instruments executed in connection with the Loan, as
previously amended, and the New Loan are herein sometimes referred to
collectively as the "Loan Documents."
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the foregoing and of the
agreements set out in this instrument, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows.
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1. The foregoing RECITALS are agreed to by the parties and
incorporated by reference herein.
2. The Borrowing Entities have made and delivered the Second
Replacement Note to Bank, and Bank has accepted the same in accordance with the
provisions hereof and of the other Loan Documents.
3. The Loan Documents are hereby amended to include the following:
(a) The "Aircraft Security Agreement" as described and
defined in Section 1(a) of the Security Agreement shall now refer to the
Aircraft Security Agreement as so defined as amended by second amendment
instrument thereto dated May 31, 1995, and by third amendment instrument thereto
of even date herewith.
(b) The "Committed Amount" as described and defined on page
1 of the Loan Agreement, as amended by those amendment instruments described
above, shall refer to the New Loan amount.
(c) The "Guaranties" as described and defined in Section
1.13 of the Loan Agreement and in Recital III of the Security Agreement shall
continue to refer to those guaranty agreements dated May 31, 1995, copies of
which were attached as collective Exhibit B to the fourth amendment dated May
31, 1995, which shall remain in full force and effect, it being understood and
agreed, however, that the primary obligations of the guarantors under said
Exhibit B agreements with respect to the New Loan are as makers of the Second
Replacement Note. All obligations of each Borrowing Entity as a "guarantor"
under any Guaranty shall include all obligations of each and every Borrowing
Entity under the Master Draw Note, the Line Note and all documents relating
thereto (including this instrument).
(d) The "Line Note" as described and defined in Section 1.19
of the Loan Agreement shall now refer to the promissory note of the Borrowing
Entities of even date herewith attached hereto as Exhibit A.
(e) The "Loan Agreement" as described and defined in Section
1.20 of the Loan Agreement and in Recital V of the Security Agreement shall now
refer to the Loan Agreement, as amended by the amendment documents dated October
20, 1994, December 23, 1994, May 24, 1995, May 31, 1995, December 22, 1995, and
as further amended by this instrument.
(f) The "Loan" as described and defined in Recital I of the
Security Agreement, as amended by those amendment instruments described above,
shall now refer to the New Loan.
(g) The "Master Draw Note" as described and defined in
Section 1.22 of the Loan Agreement and in Recital II of the Security Agreement
shall now refer to the promissory note of the Borrowing Entities of even date
herewith attached hereto as Exhibit B, which evidences the New Loan.
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(h) The "Security Agreement" as described and defined in
Section 1.31 of the Loan Agreement shall now refer to the Security Agreement, as
amended by the amendment documents dated October 20, 1994, December 23, 1994,
May 24, 1995, May 31, 1995, December 22, 1995, and as further amended by this
instrument.
(i) The "Stated Interest Rate" as described and defined in
Section 2.3(a) of the Loan Agreement, as amended by those amendment instruments
described above, shall now, with respect to all Draw Notes executed on this day
and hereafter and the indebtedness evidenced thereby, refer to the lesser of the
(1) Maximum Rate, or (2) a per annum rate equal to (i) one hundred (100) "Basis
Points" greater than (ii) the "LIBOR Rate" as such terms are defined in the
Second Replacement Note. The "Stated Interest Rate" as described and defined in
Section 2.3(a) of the Loan Agreement shall, with respect to existing Draw Notes
and the indebtedness evidenced thereby other than the Aircraft Draw Note which
shall continue to bear interest at the fixed rate set forth therein, continue to
have the meaning and definition set forth in Section 2.3(a) of the Loan
Agreement, as previously amended with respect thereto.
(j) The date "December 25, 1993" found in Sections 5.3(a)
and 5.3(b) of the Loan Agreement, as amended by those amendment instruments
described above, is hereby changed to "December 31, 1996," and Borrower, LTI,
LIA, LPI and FAI hereby confirm and ratify the truth and accuracy of the
representations and warranties made by them in said Sections 5.3(a) and 5.3(b),
as amended by those amendment instruments described above, with such change.
(k) The list of actions, suits and proceedings described in
Section 5.5 of the Loan Agreement and listed on Exhibit I to the Loan Agreement,
as amended by those amendment instruments described above, is hereby
supplemented and replaced by Exhibit C attached hereto, and Borrower, LTI, LIA,
LPI and FAI hereby confirm and ratify the representations and warranties made by
them in said Section 5.5, as amended by those amendment instruments described
above, with such change.
(l) The amount "Twenty-Nine Million Dollars
($29,000,000.00)" found in Section 6.8 of the Loan Agreement, as previously
amended to "Thirty-One Million Dollars ($31,000,000.00)" in the those amendment
instruments described above, is hereby changed to "Forty Million Dollars
($40,000,000.00) until fiscal year end 1997 for the Borrower," and to a
potentially higher (but not lower) number equal to "Forty Million Dollars
($40,000,000.00) plus seventy-five percent (75%) of after-tax profit in each
fiscal year of Borrower thereafter until payment in full of the principal of and
interest on the Borrower Loans," and Borrower, LTI, LIA, LPI and FAI hereby
confirm and ratify the truth and accuracy of the representations and warranties
made by them in said Section 6.8 with such changes.
(m) Section 6.10 of the Loan Agreement, as amended by the
those amendment instruments described above, remains as amended by the fourth
amendment instrument dated May 31, 1995, and Borrower, LTI, LIA, LPI and FAI
hereby covenant and agree that each of them will, from the date hereof until
payment in full of the principal of and interest on the Borrower
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Loans, maintain the debt-to-equity ratio set forth in said fourth amendment and
otherwise satisfy their covenants as set forth on Exhibit F to said fourth
amendment.
4. The Borrowing Entities each represent and warrant to Bank that the
RECITALS set forth above are true and correct in all material respects and all
representations and warranties to Bank given by any of them in any one or more
of the Loan Documents are true and correct as of the date hereof. Similarly,
Borrower, LTI, LIA, LPI and FAI hereby covenant and agree to fulfill all of
their obligations and agreements made in the Loan Documents. Each Borrowing
Entity agrees to pay directly, or reimburse Bank for, all reasonable expenses,
including the reasonable fees and expenses of legal counsel, incurred in
connection with the enforcement of any one or more of the Loan Documents and the
collection of any amounts owing by any of the Borrowing Entities with respect
thereto.
5. Notwithstanding any provisions of the Loan Documents or any prior
understanding or agreement of or by any one or more of the Borrowing Entities
with Bank, as of the date of execution hereof, (a) the obligations of any one or
more of the Borrowing Entities under any one or more of the Loan Documents,
including the Guaranties, are intended to be secured by all the assets of each
of the Borrowing Entities now or hereafter owned by any one or more of the
Borrowing Entities and which assets are subject to the granting of a security
interest under the laws of the State of Tennessee or any other state where any
of the assets of any one or more of the Borrowing Entities may from time to time
be located and the federal laws of the United States of America (the "Pledged
Assets"), and in furtherance of the foregoing, each of the Borrowing Entities
hereby pledges and grants a security interest in all right, title and interest
of each of the Borrowing Entities in the Pledged Assets to and in favor of Bank,
and (b) each of the Borrowing Entities hereby jointly and severally, agrees to
pay and perform each and every obligation of payment and/or performance of any
other Borrowing Entity under any one or more of the Loan Documents.
6. Except as specifically modified hereby, the Loan Documents shall
remain in full force and effect, and the same are hereby ratified and confirmed
by the Borrowing Entities in all respects. In the event of any conflict between
any provisions of any one or more of the Loan Documents, the provisions most
favorable to Bank shall apply. This instrument is not intended to, and will not,
effect a novation of the indebtedness evidenced by the Replacement Note
outstanding as of the date the Replacement Note was amended, restated and
replaced by the Second Replacement Note, nor are the liens of the security
interests granted under the Security Agreement, as amended by the amendment
instruments described above, intended to be released, altered, or changed in any
manner except as specifically stated herein. All capitalized terms not otherwise
defined herein shall have the same meanings as set forth in the Loan Agreement,
as previously amended by the amendment instruments described above.
7. As an inducement to Bank to make the New Loan, (a) the Borrowing
Entities shall deliver, or cause to be delivered, to Bank the following: (i)
certified resolutions of the board of directors of each of the Borrowing
Entities authorizing this instrument and the other New Loan documents; (ii) an
opinion of counsel and/or "certification of general counsel" and such other
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documentation, if any, as may be reasonably requested by Bank to satisfy Bank
that this instrument and the other New Loan documents have been duly authorized,
executed and delivered on behalf of each Borrowing Entity, and constitutes the
valid and binding obligation of each of the Borrowing Entities; (iii)
appropriate UCC-1 or UCC-3 Financing Statements as necessary to accomplish the
purposes of this instrument; and (iv) UCC-11 lien searches as may be required by
Bank evidencing no liens or encumbrances on any of the Pledged Assets of any of
the Borrowing Entities except liens granted pursuant to the Borrower Loans, and
liens or encumbrances, if any, approved by Bank; (b) the Borrowing Entities
shall pay directly or reimburse Bank for all fees and expenses, including, but
not limited to, any and all filing fees, recording fees, and reasonable expenses
and fees of legal counsel, incurred in connection with the preparation and
enforcement of this instrument and other New Loan documents; and (c) each
Borrowing Entity shall execute and deliver to Bank all further documents and
perform all other acts which Bank reasonably shall deem necessary or appropriate
to perfect or protect the lien and security interests granted pursuant to the
Borrower Loans.
IN WITNESS WHEREOF, this Sixth Amendment to Loan and Security
Agreements has been entered into by the parties hereto as of the day and year
first above written.
"BANK" "BORROWER"
FIRST TENNESSEE BANK NATIONAL LANDAIR SERVICES, INC.
ASSOCIATION
By: __________________________ By: ______________________
Name: ____________________ Xxxxx X. Xxxxxxxxx,
Title: ___________________ President
"LTI"
LANDAIR TRANSPORT, INC.
By: ______________________
Xxxxx X. Xxxxx,
President
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"LIA"
LANDAIR INTERNATIONAL
AIRLINES, INC.
By: ______________________
Xxxxx X. Xxxxxxxx,
President
"LPI"
TRANSPORTATION PROPERTIES,
INC. previously known as
Landair Properties, Inc.
By: ______________________
Xxxxx X. Xxxxxxxx,
President
"FAI"
FORWARD AIR, INC.
By: ______________________
Xxxxx X. Xxxxxxxx,
President
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