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Exhibit 10.18
NATIONSBANK OF TENNESSEE, N.A.
LOAN AGREEMENT
This Loan Agreement (the "Agreement") dated as of July 29, 1997, by and
among NATIONSBANK OF TENNESSEE, N.A., a national banking association ("Bank");
and XXXX VII, INC., a Delaware corporation, and XXXX VII TRANSPORTATION COMPANY,
INC., a Delaware corporation (collectively "Borrower").
RECITALS:
A. Borrower has applied to Bank for a revolving line of credit
facility (the "Loan") in the principal amount of $25,000,000.
B. One of the conditions of the Loan from Bank to Borrower is
the execution of this Agreement setting forth the terms and conditions of the
Loan.
NOW THEREFORE, in consideration of the Loan described below and the
mutual covenants and agreements contained herein, and intending to be legally
bound hereby, Bank and Borrower agree as follows:
1. DEFINITIONS AND REFERENCE TERMS. In addition to any other terms
defined herein, the following terms shall have the meaning set forth with
respect thereto:
A. ACCOUNT DEBTOR: Account Debtor means any Person (as herein
defined) which is now or hereafter obligated or indebted to Borrower on any
Account Receivable.
B. ACCOUNTS RECEIVABLE: Accounts Receivable means all amounts owed
to Borrower on account of sales, leases or rentals of goods or services rendered
in the ordinary course of trade or business to or on behalf of any Person (as
herein defined) which is now or hereafter obligated or indebted to Borrower (i)
which arise from goods theretofore sold and delivered or services or rentals
theretofore rendered or made, as the case may be, to an Account Debtor (as
herein defined); (ii) with respect to which no setoffs, counterclaims or
defenses are claimed by the Account Debtor; (iii) which constitute the binding
obligation of an Account Debtor which Bank deems, in the exercise of its
reasonable business judgment, to be solvent, to be financially able to pay its
debts and obligations as they become due and to be paying its debts and
obligations as they become due; (iv) which, in the case of "dated invoices"
which specify a due date for the payment thereof, do not remain unpaid more than
ninety (90) days after the end of the month in which such due date falls, and in
the case of all other invoices, do not remain unpaid more than ninety (90) days
after the date of such invoice; (v) with respect to which the Account Debtor is
not an officer, director, agent or employee of Borrower; and (vi) which do not
arise from a "sale on approval," "sale or return," "guaranteed sale" or
"consignment."
C. BORROWER: Xxxx VII, Inc., a Delaware corporation, and Xxxx VII
Transportation Company, Inc., a Delaware corporation; collectively.
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D. BORROWER'S ADDRESS:
000 Xxxxx Xxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxx 00000
E. CURRENT LIABILITIES: Current Liabilities means the
aggregate amount of all current liabilities as determined in accordance with
GAAP, but in any event shall include all liabilities except those having a
maturity date which is more than one year from the date as of which such
computation is being made.
F. EBITDA: EBITDA means, without duplication for any period,
the following, each calculated for the trailing twelve (12) months of such
period: (a) Net Income; plus (b) any provision for (or minus any benefit from)
income or franchise taxes included in the determination of Net Income; plus (c)
interest expense deducted in the determination of Net Income; plus (d)
amortization and depreciation deducted in the determination of Net Income; plus
(e) losses from (or minus gains from) non-cash items (excluding sales, expenses
or losses related to current assets) included in the determination of Net
Income; minus (f) after tax extraordinary gains (or plus after tax extraordinary
losses) (in each case as defined under GAAP) included in the determination of
Net Income.
G. FUNDED DEBT: Funded Debt means the total indebtedness
outstanding under all recourse notes payable of Borrower, plus funded or
unfunded letters of credit issued pursuant to Borrower's application therefor,
plus capital leases of Borrower.
H. HAZARDOUS MATERIALS: Hazardous Materials include all
materials defined as hazardous materials or substances under any local, state or
federal environmental laws, rules or regulations, and petroleum, petroleum
products, oil and asbestos.
I. LOAN: Any loan described in Section 2 hereof and any
subsequent loan which states that it is subject to this Loan Agreement.
J. LOAN DOCUMENTS: Loan Documents means this Loan Agreement
and any and all promissory notes executed by Borrower in favor of Bank and all
other documents, instruments, guarantees, certificates and agreements executed
and/or delivered by Borrower, any guarantor or third party in connection with
any Loan.
K. MATERIAL ADVERSE EFFECT: Material Adverse Effect means a
material and adverse effect on the actual or prospective business, financial
conditions or operations of Borrower, Borrower's ability to pay and perform its
obligations under any of the Loan Documents or Bank's rights and remedies under
any of the Loan Documents, all as determined in Bank's reasonable discretion.
L. NET INCOME: Net Income means for any period, the net income
(or loss) of Borrower and its Subsidiaries after provision for or benefit from
income and franchise taxes determined in accordance with GAAP, but excluding:
(i) the income (or loss) of any Person (other than a Subsidiary)
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in which Borrower has an ownership interest unless received by Borrower in a
cash distribution; and (ii) the income (or loss) of any Person accrued prior to
the date it is merged into or consolidated with Borrower.
M. PERMITTED LIENS: Permitted Liens means any of the following:
i. Liens, in an aggregate amount not to exceed One
Million and No/100 Dollars ($1,000,000.00) outstanding at any one time, for
taxes, assessments or government charges not delinquent or being contested in
good faith by appropriate proceedings;
ii. Liens arising out of deposits in connection with workers'
compensation, unemployment insurance, old age pensions or other social security
or retirement benefits legislation;
iii. Deposits or pledges to secure bids, tenders, contracts, leases,
statutory obligations, surety and appeal bonds, and other obligations of like
nature arising in the ordinary course of Borrower's
business;
iv. Liens imposed by law, such as mechanics', workers',
materialmen's, carriers' or other like liens arising in the ordinary course of
Borrower's business which secure the payment of obligations which are not past
due or which are being diligently contested in good faith by appropriate
proceedings;
v. Rights of way, zoning restrictions, easements and similar
encumbrances affecting Borrower's real property which do not materially
interfere with the use of such property; and
vi. Purchase money security interests for the purchase of equipment
to be used in Borrower's business, encumbering only the equipment so purchased,
and which secures only the purchase money indebtedness incurred to acquire the
equipment so purchased and which indebtedness is otherwise permitted under this
Agreement.
N. PERSON: Person means any individual, partnership, corporation,
trust, unincorporated organization, limited liability company, association,
joint venture or other legally recognized entity having the capacity to contract
in its own name.
O. SUBSIDIARIES: Subsidiaries means those entities the majority
interest in which is now or hereafter owned, directly or indirectly, by Xxxx
VII, Inc., including at the present time, those identified on Exhibit "A"
attached hereto, as such list may be amended or restated from time to time.
P. TANGIBLE NET WORTH. Tangible Net Worth means the amount by which
total assets exceed total liabilities in accordance with GAAP.
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Q. ACCOUNTING TERMS. All accounting terms not specifically defined or
specified herein shall have the meanings generally attributed to such terms
under generally accepted accounting principles ("GAAP"), as in effect from time
to time, consistently applied, with respect to the financial statements
referenced in Section 3.H. hereof.
2. LOANS. Bank hereby agrees to make one or more loans to Borrower in
the aggregate principal face amount of Twenty-Five Million and No/100 Dollars
($25,000,000.00). The obligation to repay the loans is evidenced by a promissory
note or notes dated July 29, 1997, (the promissory note or notes together with
any and all renewals, extensions or rearrangements thereof being hereafter
collectively referred to as the "Note") having a maturity date, repayment terms
and interest rate as set forth in the Note.
A. REVOLVING LOAN FEATURE. The Loan shall consist of a revolving line
of credit facility (the "Loan") under which Borrower may from time to time,
borrow, repay and re-borrow funds. The Loan shall be repaid as set forth in the
Note with a maturity date of July 1, 2000, at which time the entire outstanding
principal balance, plus all accrued and unpaid interest, shall be due and
payable in full. Interest shall be paid monthly as more fully provided in the
Note. Notwithstanding the aggregate principal amount of the Loan, it is
understood and agreed that availability under the Loan shall be limited to the
aggregate principal sum outstanding at any time of Ten Million and no/100
Dollars ($10,000,000.00) until such time as Bank has completed to its reasonable
satisfaction, and at the sole expense of Borrower (which Borrower agrees to pay
upon demand), a field examination of Borrower's and any Subsidiaries' books and
records, as well as their respective operations, the results of which field
examination must be acceptable to Bank in its reasonable discretion. Bank shall
use its best efforts to complete such field examination within thirty (30) days
of the date hereof.
B. LETTER OF CREDIT SUBFEATURE. As a subfeature under the Loan, Bank
may from time to time issue letters of credit for the account of Borrower (each,
a "Letter of Credit" and collectively, "Letters of Credit"); provided, however,
that the form and substance of each Letter of Credit shall be subject to
approval by Bank in its sole discretion. Each Letter of Credit shall be issued
for an original term not to exceed 365 days, as designated by Borrower,
provided, however, that no Letter of Credit shall have an expiration date
subsequent to July 1, 2000. The undrawn amount of all Letters of Credit plus any
and all amounts paid by Bank in connection with drawings under any Letter of
Credit for which the Bank has not been reimbursed shall be reserved under the
Loan and shall not be available for advances thereunder. Each draft paid by Bank
under a Letter of Credit shall be deemed an advance under the Loan and shall be
repaid in accordance with the terms of the Loan; provided however, that if the
Loan is not available for any reason whatsoever, at the time any draft is paid
by Bank, or if any advance is not available under the Loan in such amount due to
any limitation of borrowing set forth herein, then the full amount of any such
draft shall be immediately due and payable, together with interest thereon, from
the date such amount is paid by Bank to the date such amount is fully repaid by
Borrower, at that rate of interest applicable to advances under the Loan. In
such event, Borrower agrees that Bank, at Bank's sole discretion may debit
Borrower's deposit account with Bank for the amount of such draft.
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C. LETTER OF CREDIT FEE. Borrower will pay by debit to Borrower's
account maintained at Bank a Letter of Credit fee payable in advance upon the
issuance of any Letter of Credit for the time period from the date of issuance
until the first day of the next calendar quarter, and thereafter on the first
day of each calendar quarter, such fee to be paid at a rate per annum equal to
(i) .35%, if the Funded Debt/EBITDA ratio is less than 1.0 to 1.0, (ii) .50%, if
the Funded Debt/EBITDA ratio is equal to or greater than 1.0 to 1.0 and equal to
or less than 1.5 to 1.0, (iii) .75%, if the Funded Debt/EBITDA ratio is greater
than 1.5 to 1.0 and equal to or less than 2.0 to 1.0, or (iv) 1.00%, if the
Funded Debt/EBITDA ratio is greater than 2.0 to 1.0, times the average daily
amounts of any undrawn portions of any Letters of Credit during the preceding
month. Also on the first of each calendar quarter, once the actual Funded
Debt/EBITDA ratio for the preceding quarter is determined, Borrower will pay, or
be credited with, by debit or credit to Borrower's account maintained at Bank,
such amount as is necessary to compensate Bank for, or to refund to Borrower,
any deficit, or surplus, in the Letter of Credit fee actually paid by Borrower
at closing or at the first of the preceding quarter as applicable.
D. UNUSED CREDIT FEE. Borrower will pay hereafter on August 1, 1997,
and on the same day of each month thereafter for the period from and including
the date the Loan was established to and including the maturity date of the
Loan, an unused credit fee at a rate per annum equal to (i) .15%, if the Funded
Debt/EBITDA ratio is less than 1.0 to 1.0, (ii) .20%, if such ratio is equal to
or greater than 1.0 to 1.0 and equal to or less than 1.50 to 1.0, (iii) .25%, if
such ratio is greater than 1.5 to 1.0 and equal to or less than 2.0 to 1.0, or
(iv) .30%, if such ratio is greater than 2.0 to 1.0, times the average daily
available portion of the Loan during the preceding month. The Borrower may at
any time upon written notice to the Bank permanently reduce the amount of the
Loan at which time the obligation of the Borrower to pay such unused credit fee
shall thereupon correspondingly be reduced.
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants
to Bank as follows:
A. GOOD STANDING. Each of the Persons composing Borrower and any
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the state of its formation and has the power and authority to own its
property and to carry on its business in each jurisdiction in which such Person
does business, except where failure to have such power and authority would not
have a Material Adverse Effect.
B. AUTHORITY AND COMPLIANCE. Borrower has full power and authority to
execute and deliver the Loan Documents and to incur and perform the obligations
provided for therein, all of which have been duly authorized by all proper and
necessary action of the appropriate governing body of Borrower. No consent or
approval of any public authority or other third party is required as a condition
to the validity of any Loan Document, and each Person composing Borrower, is in
material compliance with all laws and regulatory requirements to which each is
subject, except where failure to comply would not have a Material Adverse
Effect.
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C. BINDING AGREEMENT. This Agreement and the other Loan Documents
executed by Borrower constitute valid and legally binding obligations of
Borrower, enforceable in accordance with their respective terms, except as
enforceability may be limited by: (1) applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting the enforceability of
creditors' rights generally; (2) the effect of applicable fraudulent conveyance
and/or transfer laws, both state and federal; (3) general principles of equity
(regardless of whether considered in a proceeding in equity or at law)
including, without limitation, the possible unavailability of specific
performance, injunctive relief or any other equitable remedy; and (4) concepts
of materiality, reasonableness, good faith and fair dealing.
D. LITIGATION. There is no proceeding involving Borrower pending or, to
the knowledge of Borrower, threatened before any court or governmental
authority, agency or arbitration authority, except as disclosed to Bank in
writing and acknowledged by Bank prior to the date of this Agreement, which, if
determined adversely to Borrower, would have a Material Adverse Effect on
Borrower.
E. NO CONFLICTING AGREEMENTS. There is no charter, bylaw, stock
provision, t or other document pertaining to the organization, power or
authority of Borrower, and no provision of any existing agreement, mortgage,
indenture or contract binding on Borrower, or affecting its property, which
would conflict with or in any way prevent the execution, delivery or carrying
out of the terms of this Agreement and the other Loan Documents.
F. OWNERSHIP OF ASSETS. Borrower has good title to its respective
assets, and its assets are free and clear of liens, except for those granted to
Bank, Permitted Liens and those liens disclosed to Bank in writing prior to the
date of this Agreement.
G. TAXES. All taxes and assessments due and payable by Borrower have
been paid or are being contested in good faith by appropriate proceedings and
Borrower has filed all tax returns which it is required to file, except where
failure to pay such taxes or file such tax returns would not have a Material
Adverse Effect.
H. FINANCIAL STATEMENTS. The financial statements of Borrower
heretofore delivered to Bank have been prepared in accordance with GAAP applied
on a consistent basis throughout the period involved and fairly present
Borrower's financial condition as of the date or dates thereof, and there has
been no material adverse change in Borrower's financial condition or operations
since March 29, 1997. All factual information furnished by Borrower to Bank in
connection with this Agreement and the other Loan Documents is and will be
accurate and complete in all material respects on the date as of which such
information is delivered to Bank and is not and will not be incomplete by the
omission of any material fact necessary to make such information not misleading.
I. PLACE OF BUSINESS. Borrower's chief executive office is located at
000 Xxxxx Xxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxx 00000
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J. ENVIRONMENTAL. The conduct of Borrower's business operations and
the condition of Borrower's properties does not and will not violate in any
material manner any federal laws, rules or ordinances for environmental
protection, regulations of the Environmental Protection Agency, any applicable
local or state law, rule, regulation or rule of common law or any judicial
interpretation thereof relating primarily to the environment or Hazardous
Materials.
K. CONTINUATION OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made under this Agreement shall be deemed to be made at and as of
the date hereof and at and as of the date of any advance under the Loan.
L. SUBSIDIARIES. Other than as shown on Exhibit "A" there are no other
Subsidiaries.
4. AFFIRMATIVE COVENANTS. Until full payment and performance of all
obligations of Borrower under the Loan Documents, Borrower will, on a
consolidated basis together with any Subsidiaries, now or hereafter existing,
unless Bank consents otherwise in writing (and without limiting any requirement
of any other Loan Document):
A. FINANCIAL CONDITION. Maintain at all times Borrower's financial
condition as follows and determined, without duplication for any period, (and
exclusive of any redemptions of capital stock made by Borrower prior to the date
hereof) in accordance with GAAP applied on a consistent basis throughout the
period involved except to the extent modified by the following:
i. Maintain a ratio of Funded Debt to EBITDA of 2.25 to 1.0 or
less.
ii. Maintain a ratio of Funded Debt to Tangible Net Worth of 1.0
to 1.0 or less.
iii. Maintain a ratio of cash (and cash equivalents) plus Accounts
Receivable to Current Liabilities plus Funded Debt from the date hereof until
January 2, 1998, of 0.9 to 1.0 or greater, from January 3, 1998, until July 3,
1998, of 0.95 to 1.0 or greater and thereafter of 1.0 to 1.0 or greater.
B. FINANCIAL STATEMENTS AND OTHER INFORMATION. Maintain a
system of accounting reasonably satisfactory to Bank and in accordance with GAAP
applied on a consistent basis throughout the period involved, permit Bank's
officers or authorized representatives to visit and inspect Borrower's books of
account and other records at such reasonable times and as often as Bank may
reasonably desire, and pay the reasonable fees and disbursements of any
accountants or other agents of Bank selected by Bank for the foregoing purposes.
Unless written notice of another location is given to Bank, Borrower's books and
records will be located at Borrower's chief executive office set forth above.
All financial statements called for below shall be prepared in form and content
reasonably acceptable to Bank and by
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independent certified public accountants reasonably acceptable to Bank.
In addition, Borrower will:
i. Furnish to Bank audited financial statements of Borrower for
each fiscal year of Borrower, within one hundred twenty (120) days after the
close of each such fiscal year, prepared by a public accounting firm reasonably
acceptable to Bank.
ii. Furnish to Bank financial statements prepared by Borrower
(including a balance sheet and profit and loss statement) of Borrower, for each
quarter of each fiscal year of Borrower, within forty five (45) days after the
close of each such period, such financial statements to be certified by the
president, vice president, chief financial officer or controller of Borrower.
iii. Furnish to Bank a compliance certificate for (and executed
by an authorized representative of) Borrower in the form of Exhibit "B" attached
hereto, concurrently with and dated as of the date of delivery of each of the
financial statements as required in paragraphs i and ii above, and at such other
times as Bank may reasonably request, containing (a) a certification that the
financial statements of even date are true and correct and that the Borrower is
not in default under the terms of this Agreement, and (b) computations and
conclusions, in such detail as Bank may reasonably request, with respect to
compliance with this Agreement, and the other Loan Documents, including
computations of all quantitative covenants.
iv. Furnish to Bank promptly such additional information,
reports and statements respecting the business operations and financial
condition of Borrower and its Subsidiaries, respectively, from time to time, as
Bank may reasonably request.
C. INSURANCE. Maintain insurance with responsible insurance companies
on such of its properties, in such amounts and against such risks as is
customarily maintained by similar businesses.
D. EXISTENCE AND COMPLIANCE. Maintain its, as well as that of its
Subsidiaries, existence, good standing and qualification to do business, where
required, and comply in all material respects with all laws, regulations and
governmental requirements including, without limitation, applicable
environmental laws or regulations that are applicable to any of its or their
property, business operations and transactions, except where failure to maintain
such qualification to do business or comply with such laws, regulations or
governmental requirements would not have a Material Adverse Effect.
E. ADVERSE CONDITIONS OR EVENTS. Promptly advise Bank in
writing of (i) any condition, event or act which comes to its attention that
would have a Material Adverse Effect on Borrower's or any Subsidiary's financial
condition or operations or Bank's rights under the Loan Documents, (ii) any
litigation filed by or against Borrower or any Subsidiary, seeking damages in
excess of One Hundred Thousand and No/100 Dollars ($100,000.00) (iii) any event
that has occurred that would
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constitute an event of default under any Loan Documents and (iv) any uninsured
or partially uninsured loss through fire, theft, liability or property damage in
excess of an aggregate of Five Hundred Thousand and No/100 Dollars ($500,000.00)
during any fiscal year.
F. TAXES AND OTHER OBLIGATIONS. Pay all of its taxes, assessments and
other obligations, including, but not limited to taxes, costs or other expenses
arising out of this transaction, as the same become due and payable, except to
the extent the same are being contested in good faith by appropriate proceedings
in a diligent manner, and except where failure to pay such taxes, assessments or
other obligations would not have a Material Adverse Effect.
G. MAINTENANCE. Maintain all of its tangible property in good condition
and repair and make all necessary replacements thereof (except for such property
as Borrower in good faith determines is not useful in the conduct of its
business), and preserve and maintain all licenses, trademarks, privileges,
permits, franchises, certificates and the like necessary for the operation of
its business except where failure to so maintain, repair, replace or preserve
would not have a Material Adverse Effect.
H. ENVIRONMENTAL. Immediately advise Bank in writing of (i) any and all
enforcement, cleanup, remedial, removal, or other governmental or regulatory
actions instituted, completed or threatened pursuant to any applicable federal,
state, or local laws, ordinances or regulations relating to any Hazardous
Materials affecting Borrower's or any Subsidiary's business operations; and (ii)
all claims made or threatened by any third party against Borrower or any
Subsidiary relating to damages, contribution, cost recovery, compensation, loss
or injury resulting from any Hazardous Materials. Borrower shall immediately
notify Bank of any remedial action taken by Borrower with respect to Borrower's
business operations. Borrower will not use or permit any other party to use any
Hazardous Materials at any of Borrower's places of business or at any other
property owned by Borrower except such materials as are incidental to Borrower's
normal course of business, maintenance and repairs and which are handled in
material compliance with all applicable environmental laws.
5. NEGATIVE COVENANTS. Until full payment and performance of all
obligations of Borrower under the Loan Documents, Borrower will not, without the
prior written consent of Bank (and without limiting any requirement of any other
Loan Documents):
A. CAPITAL EXPENDITURES. Make capital expenditures during any fiscal
year (including capitalized leases) exceeding in the aggregate a number which is
equal to twenty five percent (25%) of the previous year's annual depreciation
plus Net Income.
B. LEASE EXPENDITURES. Incur new obligations for the lease or hire
of real or personal property other than capital leases requiring payments in any
fiscal year in excess of an aggregate of Five Hundred Thousand and No/100
Dollars ($500,000.00).
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C. TRANSFER OF ASSETS OR CONTROL. Sell, lease, assign or otherwise
dispose of or transfer any assets, except in the normal course of its business,
or for those assets that Borrower in good faith determines are not useful in the
conduct of its business (including, but not limited to, three (3) parcels of
real property currently held for sale), or transfer control or ownership of any
Subsidiary except for transfers to each other or to a Subsidiary.
D. LIENS. Grant, suffer or permit any contractual or noncontractual
lien on or security interest in its assets (including, without limitation, any
of Borrower's intellectual property), except in favor of Bank and except for
Permitted Liens, limited liens involving non-recourse lease related loans, and
those liens disclosed to and approved by Bank prior to the date of this
Agreement.
E. EXTENSIONS OF CREDIT. Other than loans or capital contributions to
each other or to any Subsidiaries, make or permit any Subsidiary to make, loans
or advances in excess of Two Million and No/100 Dollars ($2,000,000.00) in the
aggregate outstanding at any time, or make any capital contribution to, or
participate as a partner or joint venturer with any Person, except for
extensions of credit to customers and employees in the normal course of
Borrower's business, and except for the purchase of direct obligations of the
United States or any agency thereof with maturities of less than one year, or
obligations of Bank or any subsidiary thereof.
F. BORROWINGS. Create, incur, assume or become liable in any manner for
any indebtedness (whether for borrowed money, deferred payment for the purchase
of assets, lease payments [other than lease payments permitted by Sections 5.A
or 5.B of this Agreement], as surety or guarantor for the debt for another, or
otherwise) other than to Bank, except for normal trade debts incurred in the
ordinary course of Borrower's business, and except for existing indebtedness
disclosed to Bank in writing and acknowledged by Bank prior to the date of this
Agreement.
G. DIVIDENDS AND DISTRIBUTIONS. Make any distribution (other than
dividends payable in capital stock of Borrower, or dividends payable between
persons composing Borrower or any Subsidiaries) on any shares of any class of
its capital stock or apply any of its property or assets to the purchase,
redemption or other retirement of any shares of any class of capital stock of
Borrower in any fiscal year exceeding in the aggregate a sum which is equal to
fifty percent (50%) of Net Income for the prior fiscal year (exclusive of any
redemptions of capital stock made by Borrower prior to the date hereof), or in
any way amend its capital structure.
H. CHARACTER OF BUSINESS. Change the general character of business as
conducted at the date hereof, or engage in any type of business not reasonably
related to its business as presently conducted.
I. MANAGEMENT CHANGE. Make any substantial change in its present
executive or management personnel.
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J. NEGATIVE PLEDGE LIMITATION. Enter into any agreement with any person
other than Bank pursuant hereto which prohibits or limits the ability of
Borrower or any Subsidiary to create, incur, assume or suffer to exist any lien
upon any of the assets, rights, revenues or property, whether real, personal or
mixed, whether tangible or intangible, and whether now owned or hereafter
acquired.
K. ACQUISITIONS OR MERGERS. Acquire or enter into any merger or
consolidation, or purchase or otherwise acquire, or permit any Subsidiary to
purchase or acquire, any capital stock, assets (other than in the ordinary
course of business), obligations, or other securities of or otherwise invest in
or acquire any interest in any entity, unless:
i. The entity to be acquired had positive EBITDA during its
most recent two (2) fiscal years;
ii. The total consideration to be paid in such acquisition (as
specified in the relevant agreement) is less than ten percent (10%) of the total
assets of Borrower prior to such acquisition (provided, however, that this 10%
limitation shall not apply if the consideration for the acquisition is comprised
solely of shares of Borrower's capital stock and the price/earnings multiple for
the most recent four fiscal quarters of the entity to be acquired is less than
fifty percent (50%) of the pricing/earnings multiple (for the same period) at
which Borrower's stock is trading on a recognized exchange); and
iii. The total consideration to be paid for such acquisition (as
specified in the relevant agreement) is less than six (6) times the EBITDA of
the entity to be acquired for the most recent four fiscal quarters (provided,
however, that this six (6) times EBITDA limitation shall not apply if the
consideration for such acquisition is comprised of at least seventy-five percent
(75%) of shares of Borrower's capital stock as specified in the relevant
agreement and the price/earnings multiple for the most recent four fiscal
quarters of the entity to be acquired is less than fifty percent (50%) of the
price/earnings multiple for the same period at which Borrower's stock is trading
on a recognized exchange);
provided further, however, that in no event may Borrower enter into any
acquisition if the results of such acquisition on a pro forma basis would cause
a default hereunder.
6. DEFAULT. Borrower shall be in default under this Agreement and under
each of the other Loan Documents if it shall default in the payment of any
amounts due and owing under the Loan within five (5) days of the due date
thereof, or should it fail to timely and properly observe, keep or perform any
term, covenant, agreement or condition in any Loan Document or in any other loan
agreement, promissory note, security agreement, deed of trust, deed to secure
debt, mortgage, assignment or other contract securing or evidencing payment of
any indebtedness of Borrower to Bank or any affiliate or subsidiary of
NationsBank Corporation, and, except for the filing of any bankruptcy petition,
or the making of any assignment for the benefit of creditors (which is not
dismissed within the time permitted by the Loan Documents), and the violation of
any representations and warranties, for which no cure is possible, and any other
default hereunder which is not capable of cure, such failure shall continue
unremedied for more than thirty (30) days after such failure should occur.
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12
7. REMEDIES UPON DEFAULT. If any of the foregoing defaults shall occur
and continue unremedied beyond the cure period, if any, specified for such
default, Bank shall have all rights, powers and remedies available under each of
the Loan Documents as well as all rights and remedies available at law or in
equity.
8. NOTICES. All notices, requests or demands which any party is required or
may desire to give to any other party under any provision of this Agreement must
be in writing delivered to the other party at the following address:
Borrower:
Xxxx VII, Inc.
Xxxx VII Transportation Company, Inc.
000 Xxxxx Xxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxx Xxxxxxxx
Fax. No. 901/000-0000
Bank:
NationsBank of Tennessee, N.A.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Fax No. 901/000-0000
or to such other address as any party may designate by written notice to the
other party. Each such notice, request and demand shall be deemed given or made
as follows:
A. If sent by mail, upon the earlier of the date of receipt or five
(5) days after deposit in the U.S. Mail, first class postage prepaid;
B. If sent by any other means , upon delivery.
9. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to Bank
immediately upon demand the full amount of all costs and expenses, including
reasonable attorneys' fees incurred by Bank in connection with (a) negotiation
and preparation of this Agreement and each of the Loan Documents, and (b) all
other costs and attorneys' fees incurred by Bank for which Borrower is
obligated to reimburse Bank in accordance with the terms of the Loan Documents.
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13
10. MISCELLANEOUS. Borrower and Bank further covenant and agree as
follows, without limiting any requirement of any other Loan Document:
A. CUMULATIVE RIGHTS AND NO WAIVER. Each and every right granted to
Bank under any Loan Document, or allowed it by law or equity shall be cumulative
of each other and may be exercised in addition to any and all other rights of
Bank, and no delay in exercising any right shall operate as a waiver thereof,
nor shall any single or partial exercise by Bank of any right preclude any other
or future exercise thereof or the exercise of any other right. Borrower
expressly waives any presentment, demand, protest or other notice of any kind,
including but not limited to notice of intent to accelerate and notice of
acceleration. No notice to or demand on Borrower in any case shall, of itself,
entitle Borrower to any other or future notice or demand in similar or other
circumstances.
B. APPLICABLE LAW. This Loan Agreement and the rights and obligations
of the parties hereunder shall be governed by and interpreted in accordance with
the laws of the state of Tennessee and applicable United States federal law.
C. AMENDMENT. No modification, consent, amendment or waiver of
any provision of this Loan Agreement, nor consent to any departure by Borrower
therefrom, shall be effective unless the same shall be in writing and signed by
an officer of Bank, and then shall be effective only in the specified instance
and for the purpose for which given. This Loan Agreement is binding upon
Borrower, its successors and assigns, and inures to the benefit of Bank, its
successors and assigns; however, no assignment or other transfer of Borrower's
rights or obligations hereunder shall be made or be effective without Bank's
prior written consent, nor shall it relieve Borrower of any obligations
hereunder. There is no third party beneficiary of this Loan Agreement.
D. DOCUMENTS. All documents, certificates and other items required
under this Loan Agreement to be executed and/or delivered to Bank shall be in
form and content reasonably satisfactory to Bank and its counsel.
E. PARTIAL INVALIDITY. The unenforceability or invalidity of any
provision of this Loan Agreement shall not affect the enforceability or validity
of any other provision herein and the invalidity or unenforceability of any
provision of any Loan Document to any person or circumstance shall not affect
the enforceability or validity of such provision as it may apply to other
persons or circumstances.
F. INDEMNIFICATION. Notwithstanding anything to the contrary
contained in Section 10(G), Borrower shall indemnify, defend and hold Bank and
its successors and assigns harmless from and against any and all claims,
demands, suits, losses, damages, assessments, fines, penalties, costs or other
expenses (including reasonable attorneys' fees and court costs) arising from or
in any way related to any of the transactions contemplated hereby (except to the
extent the same results from the gross negligence
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14
or willful misconduct of Bank or its successors and assigns, as applicable),
including but not limited to actual or threatened damage to the environment,
agency costs of investigation, personal injury or death, or property damage, due
to a release or alleged release of Hazardous Materials, arising from Borrower's
business operations, any other property owned by Borrower or in the surface or
ground water arising from Borrower's business operations, or gaseous emissions
arising from Borrower's business operations or any other condition existing or
arising from Borrower's business operations resulting from the use or existence
of Hazardous Materials, whether such claim proves to be true or false. Borrower
further agrees that its indemnity obligations shall include, but are not limited
to, liability for damages resulting from the personal injury or death of an
employee of the Borrower, regardless of whether the Borrower has paid the
employee under the workmen' s compensation laws of any state or other similar
federal or state legislation for the protection of employees. The term "property
damage" as used in this paragraph includes, but is not limited to, damage to any
real or personal property of the Borrower, the Bank, and of any third parties.
The Borrower's obligations under this paragraph shall survive the repayment of
the Loan and any deed in lieu of foreclosure or foreclosure of any Deed to
Secure Debt, Deed of Trust, Security Agreement or Mortgage securing the Loan.
G. SURVIVABILITY. All covenants, agreements, representations and
warranties made herein or in the other Loan Documents shall survive the making
of the Loan and shall continue in full force and effect so long as the Loan is
outstanding or the obligation of the Bank to make any advances under the Loan
shall not have expired.
11. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR
DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL
BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE OR
ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN
THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON
ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY
TO THIS AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED
PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS
AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE
CITY OF THE BORROWER'S DOMICILE AT TIME OF THE EXECUTION OF THIS INSTRUMENT,
AGREEMENT OR DOCUMENT AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN
ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING
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15
THE ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL
ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60
DAYS.
B. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION PROVISION SHALL
BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF
LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS ARBITRATION PROVISION; OR
(II) BE A WAIVER BY THE BANK OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC.
91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE
BANK HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO)
SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR
(C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT
LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A
RECEIVER. THE BANK MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH
PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR
AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER THIS EXERCISE OF SELF HELP REMEDIES
NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL
OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY,
INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE
CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
12. NO ORAL AGREEMENT. THIS WRITTEN LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed under seal by their duly authorized representatives as of the date
first above written.
BORROWER: BANK:
XXXX VII, INC. NATIONSBANK OF TENNESSEE, N.A.
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
--------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President; Chief Title: Vice President
Financial Officer
Attest: /s/ Xxxxx X. Xxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxx
Title: Assistant Vice President
XXXX VII TRANSPORTATION COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President - Finance
Attest: /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
Title: Assistant Vice President
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EXHIBIT "A"
SUBSIDIARIES
Name Jurisdiction of Incorporation
---- -----------------------------
1. Xxxx VII Transportation Company, Inc. Delaware
Subsidiaries of Xxxx VII Transportation Company, Inc.
a. Xxxx VII Trucking, Inc. Delaware
b. Apollo Express, Inc. Kansas
c. Neptune Trucking, Inc. Kansas
d. Jupiter Transportation, Inc. Kansas
e. Taurus Trucking, Inc. Kansas
f. Orion Express, Inc. Kansas
g. Capricorn Transportation, Inc. Kansas
2. Xxxx VII Risk Management, Inc. Delaware
3. Xxxx VII Transportation Solutions, Inc. Missouri
4. Xxxx VII Logistics, S.A. de C.V. Mexico
5. MNX Carriers, Inc.: Delaware
Subsidiaries of MNX Carriers, Inc. - MNX Transport, Inc. Missouri
Subsidiary of MNX Transport, Inc.- MNX Trucking, Inc. Missouri
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