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EXHIBIT 10.1
[SANWA BANK LOGO]
1997 CREDIT AGREEMENT
(MOTOR CARGO)
This 1997 CREDIT AGREEMENT (the "Agreement") is made and entered into
this 30th day of September, 1997, by and between SANWA BANK CALIFORNIA, a
California corporation (the "Bank"), and MOTOR CARGO, a Utah corporation (the
"Borrower").
RECITALS
A. On or about June 19, 1996, the Borrower made, executed and delivered
to the Bank that certain 1996 CREDIT AGREEMENT (the "1996 Agreement") pursuant
to which the Bank agree to make Advances and issue Letters of Credit under a
Line of Credit and to Term Advances under a Term Loan (as those terms are
defined in the 1996 Agreement).
B. On or about September 16, 1993 the Borrower made, executed and
delivered a PROMISSORY NOTE, in the original principal amount of $1,061,666.86
(the "1993 Note"). The current unpaid principal balance outstanding under the
1993 Note is $522,421.31.
C. On or about March 30, 1995 the Borrower made, executed and delivered
a Term Loan Agreement which provided for a term loan in the principal amount of
$848,437.50 (the "1995 Agreement"). The current unpaid principal balance
outstanding under the 1995 Agreement is $545,424.
D. The Bank and the Borrower desire to restate the terms and amounts of
the credit extended pursuant to the 1996 Agreement and to make the 1993 Note and
the 1995 Agreement subject to the terms of this Agreement but without modifying
the time or manner of payment.
NOW, THEREFORE, the parties hereto agree as follows:
AGREEMENT
1. DEFINITIONS
1.1. DEFINITIONS. The following terms, as used in this Agreement,
shall have the following meanings:
"Advance" shall mean an Advance under the Line of Credit made
pursuant to Section 2.1.
"Business Day" shall mean a day other than a Saturday or Sunday
on which the Bank is open for business in Los Angeles, California.
"Collateral" shall mean the property described in Section 6.1,
together with any other personal property in which the Bank may be
granted a lien or security interest to secure payment of the Obligations
(subject to Permitted Liens).
"Debt" means all Indebtedness of the Borrower less Subordinated
Debt.
1997 CREDIT AGREEMENT -- Page 1
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"Default Interest Rate" means a rate per annum equal to the
Reference Rate plus three percent (3.0%).
"Drawing" shall mean the presentation of a draft(s) together
with any accompanying documents by a beneficiary under a Letter of
Credit to seeking payment under such Letter of Credit.
"Effective Tangible Net Worth" means the Borrower's stated net
worth plus Subordinated Debt but less (a) all intangible assets of the
Borrower (i.e., goodwill, trademarks, patents, copyrights, organization
expense and similar intangible items including, but not limited to trade
notes receivable, loans to officers and employees, and loans due from
related or affiliated companies) and (b) loans made to UTE, Inc. and
Motor Cargo Industries.
"Equipment" means that property described in Section 6.1(f).
"Equipment Term Advance" has the meaning given in Section 4.4.
"Event of Default" means each of those events described in
Subsection 11.1, which have not been waived by the Bank in writing,
after giving of any required notice and expiration of any applicable
grace period expressly provided therein.
"Fixed Rate" shall mean, with respect to any Fixed Rate Advance
or Fixed Rate Term Advance, the rate which is quoted and offered by the
Bank and accepted by the Borrower.
"Fixed Rate Advance" shall mean an Advance of not less than
$500,000.00 and in $100,000.00 increments thereafter which Borrower has
elected accrue interest at a Fixed Rate pursuant to Section 2.3.
"Fixed Rate Term Advance" means a Term Advance accruing interest
at the Fixed Rate.
"Funding Period" means that period from the date of this
Agreement to and including December 31, 1997.
"GAAP" shall mean generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies
with similar functions of comparable stature and authority within the
accounting profession), or in such other statements by such other entity
as may be in general use by significant segments of the U.S. accounting
profession, which are applicable to the circumstances as of the date of
determination.
"Guarantor" means each of Motor Cargo Industries, Inc., a Utah
corporation, and M.C. Leasing Inc., a Utah corporation.
"Indebtedness" shall mean, with respect to the Borrower, (i) all
indebtedness for borrowed money or for the deferred purchase price of
property or services in respect of which the Borrower is liable,
contingently or otherwise, as obligor, guarantor or otherwise, or in
respect of which the Borrower otherwise assures a creditor against loss
and (ii) obligations under leases which shall have been or should be, in
accordance with generally accepted accounting principles, reported as
capital leases in respect of which the Borrower is liable, contingently
or otherwise, or in respect of which the Borrower otherwise assures a
creditor against loss.
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"Interest Period" means, with respect to a Fixed Rate Advance
and a Fixed Rate Term Advance, the period of time commencing on the
Business Day the Fixed Rate Advance or Fixed Rate Term Advance is made
or on the Business Day on which an Advance or Term Advance is converted
to or continued as a Fixed Rate Advance or Fixed Rate Term Advance and
ending on a Business Day not less than 30 days thereafter which is
offered by Bank and selected by Borrower during which Borrower has
elected an Advance or Term Advance accrue interest at a Fixed Rate
provided that:
(i) no Interest Period shall expire on a date which is
after the Expiration Date,
(ii) if any Interest Period would otherwise end on a day
which is not a Business Day, that Interest Period shall be
extended to the next succeeding Business Day and
(iii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day
of the calendar month at the end of such Interest Period.
"Inventory" means that property described in Section 6.1(b),
"Letter of Credit" shall mean a standby letter of credit issued
by Bank pursuant to Section 3.
"Letter of Credit Obligations" shall mean, at any time, the
aggregate obligations of the Borrower then outstanding, or which may
thereafter arise in respect of Letters of Credit then issued by Bank, to
reimburse the amount paid by the Bank with respect to a past, present or
future Drawing under Letters of Credit.
"Line of Credit" shall mean the credit facility described in
Section 2.
"Lost Opportunity Rate" shall mean, for any prepayment of a
Fixed Rate Advance or Fixed Rate Term Advance, the amount, expressed as
an interest rate, by which (a) the rate, determined by Bank, at which
the Bank could have issued a certificate of deposit in an amount
approximately equal to the Fixed Rate Advance or Fixed Rate Term Advance
being prepaid and for a term approximately equal to the Interest Period
for such Advance as of the date such Advance was made, exceeds (b) as of
the respective Prepayment Date, the rate determined by Bank, at which
the Bank could issue a certificate of deposit approximately equal in
amount to the respective amount prepaid for a term approximately equal
to the respective Prepayment Term, provided that such rate shall not be
less than the rate at which U.S. Treasury Notes are offered for purchase
at 10:00 a.m., Los Angeles time, as quoted on Telerate, page 5 or such
other, similar quotation source as of any relevant Prepayment Date for a
period approximately equal to the Prepayment Term; each of (a) and (b)
adjusted for all applicable assessments and reserve requirements.
"New Term Advances" means the aggregate amount of Term Advances
made between the date of this Agreement and the last day of the Funding
Period.
"Offering" means a public offering of securities by Motor Cargo
Industries, Inc., completed on or before December 31, 1997, and
complying with all applicable securities laws.
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"Obligations" shall mean all amounts owing by the Borrower to
the Bank pursuant to this Agreement including, but not limited to the
unpaid principal amount of Advances.
"Ordinary Course of Business" means, in respect of any
transaction involving the Borrower, the ordinary course of the
Borrower's business, as conducted by the Borrower in accordance with
past practice and undertaken by the Borrower in good faith and not for
purposes of evading any covenant or restriction in any Loan Document.
"Permitted Dividend" means a non-stock dividend payable either
(a) if the Offering is timely completed or (b) a one time non-stock
dividend if the Offering is not timely completed; provided, however,
that in such latter case, the amount of the dividend shall not exceed
the amount of the tax liability of the former partners of UTE Trucking
and Leasing, LLC attributable to their contribution of their equity
interests in such company to Motor Cargo Industries, Inc.
"Permitted Liens" shall mean:
(i) liens and security interests securing indebtedness
owed by the Borrower to the Bank;
(ii) liens for taxes, assessments or similar charges
either not yet due or being contested in good faith;
(iii) liens of materialmen, mechanics, warehousemen, or
carriers or other like liens arising in the Ordinary Course of
Business and securing obligations which are not yet delinquent;
(iv) purchase money liens or purchase money security
interests upon or in any real or personal property (including,
without limitation, truck terminals acquired after the date of
this Agreement) acquired or held by the Borrower in the Ordinary
Course of Business to secure Indebtedness outstanding on the
date hereof or incurred hereafter to the extent not prohibited
under Section 10;
(v) liens on equipment leased by the Borrower to the
extent rents payable in connection therewith are not prohibited
under Section 10; and
(vi) liens and security interests which, as of the date
hereof, have been disclosed to and approved by the Bank in
writing or which may hereafter be approved by the Bank in
writing.
"Prepayment" shall mean any principal payment made with respect
to a Fixed Rate Advance or Fixed Rate Term Advance on other than the
last day of the relevant Interest Period.
"Prepayment Date" shall mean the date of the respective
Prepayment.
"Prepayment Fee" shall mean the fee described in Section 5.
"Prepayment Term" shall mean, as of the Prepayment Date, the
number of years (or fraction thereof) from the Prepayment Date to the
last day of the Interest Period applicable to the Fixed Rate Advance or
Fixed Rate Term Advance being prepaid.
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"Reference Rate" shall mean an index for a variable interest
rate which is quoted, published or announced from time to time by the
Bank as its reference rate and as to which loans may be made by the Bank
at, below or above such rate.
"Revolving Credit Limit" means FIVE MILLION DOLLARS
($5,000,000).
"Revolving Expiration Date" means May 31, 1999 or the date of
termination of the Bank's commitment to lend under this Agreement
pursuant to Section 11.2, whichever shall occur first.
"Term Advance" means an advance made pursuant to Section 4.1.
"Term Credit Limit" means:
(a) during the Funding Period, the lesser of
(1) $12,703,202 to September 31, 1997,
$12,067,254 from September 31 1997 to December 31, 1997,
or
(2) The sum of (A) $9,703,254 through September
31, 1997 and $9,067,508 from September 31, 1997 through
December 31, 1997, plus (B) 100% of the cost of the
Equipment purchased with the proceeds of Term Advances
made after the date of this Agreement; and
(b) after the Funding Period, the principal balance
outstanding under this Agreement as of the close of business on
the last day of the Funding Period, reducing:
(1) on March 31, 1997 and on the last day of
each calendar quarter thereafter through and including
December 31, 2000, $636,230 plus 5% of gross amount of
New Term Advances,
(2) on March 31, 2001 and on the last day of
each calendar quarter thereafter through and including
December 31, 2001, $199,008 plus 5% of gross amount of
New Term Advances, and
(3) on March 31, 2002 and on the last day of
each calendar quarter thereafter through and including
September 31, 2002 plus 5% of gross amount of New Term
Advances.
"Term Expiration Date" means December 31, 2002 or the date of
termination of the Bank's commitment to lend under this Agreement
pursuant to Section 11.2, whichever shall occur first.
"Term Loan" means the loan described in Section 4.
"Variable Rate" means the Reference Rate.
"Variable Rate Advance" shall mean an Advance accruing interest
at the Variable Rate.
"Variable Rate Term Advance" means a Term Advance accruing
interest at the Variable Rate.
"Working Capital Term Advance" has the meaning given in Section
4.5.
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1.2. ACCOUNTING TERMS. All references to financial statements, assets,
liabilities, and similar accounting items not specifically defined herein shall
mean such financial statements or such items prepared or determined in
accordance with GAAP consistently applied and, except where otherwise specified,
all financial data submitted pursuant to this Agreement shall be prepared in
accordance with such principles.
1.3. OTHER TERMS. Other terms not otherwise defined shall have the
meanings attributed to such terms in the California Uniform Commercial Code. .
2. REVOLVING LINE OF CREDIT
2.1. PURPOSE/LIMIT. Subject to the terms and conditions herein, the Bank
agrees to make loans and advances (each an "Advance") to the Borrower, upon the
Borrower's request therefor made prior to the Revolving Expiration Date (the
"Line of Credit") provided that the aggregate amount of such Advances
outstanding at any time plus the then outstanding Letter of Credit Obligations
shall not exceed the Revolving Credit Limit. Any sums repaid under the Line of
Credit may be reborrowed prior to the Revolving Expiration Date.
2.2. PURPOSE. Advances shall be used for working capital purposes.
2.3. INTEREST. At Borrower's option, interest shall accrue from the date
of each Advance at a variable rate per annum equivalent to the Variable Rate
(each Advance so made a "Variable Rate Advance") or the applicable Fixed Rate
(each Advance so made a "Fixed Rate Advance").
EACH FIXED RATE ADVANCE IS SUBJECT TO THE PREPAYMENT PROHIBITIONS
AND PREPAYMENT FEES ENUMERATED IN SECTION 5 BELOW.
(a) NOTICE OF BORROWING. Upon telephonic notice which shall be
received by the Bank at or before 10:00 a.m. (California time) on a
Business Day, the Borrower may request an Advance by requesting:
(1) A Variable Rate Advance. A Variable Rate Advance may
be made on the day notice is received by the Bank; provided,
however, that if the Bank shall not have received notice at or
before 10:00 a.m. on the day such Advance is requested to be
made, such Variable Rate Advance may be made, at the Bank's
option, on the next Business Day.
(2) A Fixed Rate Advance. The Borrower may elect that an
Advance be made as a Fixed Rate Advance by requesting the Bank
to provide a quote as to the rate which would apply for a
designated Interest Period (the "Fixed Rate") and, concurrently
with receiving such quote, give the Bank irrevocable notice of
the Borrower's acceptance of the rate quoted provided such
notice shall be given to the Bank not more than two (2) Business
Days prior to but not later than 10:00 a.m. (California time) on
the day (which shall be a Business Day) on which the Borrower
requests such Fixed Rate Advance to be made.
(b) NOTICE OF ELECTION TO ADJUST INTEREST RATE. Upon written
notice to the Bank, the Borrower may elect:
(1) Conversion of a Variable Rate Advance. That interest
on a Variable Rate Advance be adjusted to accrue at the Fixed
Rate by requesting the Bank to provide a quote as to the rate
which would apply for a designated Interest Period (the "Fixed
Rate") and, concurrently with receiving such quote, give the
Bank irrevocable notice of the Borrower's acceptance of the rate
quoted provided such notice shall be given to the Bank not more
than two (2) Business Days prior to but not later than 10:00
a.m. (California time)
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on the day (which shall be a Business Day) on which the Borrower
requests such Variable Rate Advance be converted to a Fixed Rate
Advance.
(2) Conversion or Continuation of a Fixed Rate Advance.
That interest on a Fixed Rate Advance, effective on the last day
of the current Interest Period pertaining to such Fixed Rate
Advance, (i) continue to accrue at a Fixed Rate by requesting
the Bank to provide a quote as to the Fixed Rate which would
apply for a designated Interest Period and, concurrently with
receiving such quote, give the Bank irrevocable notice of the
Borrower's acceptance of the rate quoted provided such notice
shall be given to the Bank not more than two (2) Business Days
prior to but not later than 10:00 a.m. (California time) on the
last day of the then expiring Interest Period, (ii) be adjusted
to commence to accrue at the Variable Rate. If the Bank shall
not have received notice as prescribed herein of the Borrower's
election that interest on any Fixed Rate Advance shall continue
to accrue at the Fixed Rate, the Borrower shall be deemed to
have elected that interest thereon shall be adjusted to accrue
at the Variable Rate upon the expiration of the Interest Period
pertaining to such Fixed Rate Advance.
(c) CONFIRMATION. Bank may, at its option, confirm in writing
the terms of any Fixed Rate Advance which confirmation shall be
considered to be correct and conclusively binding on the Borrower unless
the Borrower notifies the Bank to the contrary within 5 days after the
Borrower's receipt of any such confirmation which it deems to be
incorrect.
(d) CALCULATION OF INTEREST. Interest at the Variable Rate shall
be adjusted concurrently with any change in the Reference Rate. Interest
at both the Variable Rate and the Fixed Rate shall be computed on the
basis of 360 days per year, but charged on the actual number of days
elapsed.
(e) PAYMENT OF INTEREST. The Borrower hereby promises and agrees
to pay interest, with respect to both Variable Rate Advances and Fixed
Rate Advances, on the last day of each month commencing on the first
such day to occur after the date of this Agreement. If interest is not
paid as it becomes due, it may be added to, become and be treated as a
part of the principal, and shall thereafter bear like interest.
2.4. PRINCIPAL. Unless sooner due in accordance with the terms of this
Agreement, the Borrower hereby promises and agrees to pay to the Bank in full
the aggregate unpaid principal amount of all Advances then outstanding on the
Revolving Expiration Date, together with all accrued and unpaid interest
thereon.
2.5. EXPIRATION OF LINE OF CREDIT. Unless earlier terminated in
accordance with the terms of this Agreement, the Bank's commitment to make
Advances to the Borrower hereunder shall automatically expire on the Revolving
Expiration Date and the Bank shall not be obligated to make any further Advance
thereafter.
2.6. LATE FEE. If any payment of interest or any portion thereof, is not
paid within ten (10) calendar days after it is due, a late payment charge equal
to five percent (5%) of such past due payment may be assessed and shall be
immediately payable.
2.7. DISBURSEMENT OF PROCEEDS FROM ADVANCES. Any Advance made hereunder
shall be conclusively presumed to have been made to and for the Borrower's
benefit when the proceeds of such Advance are disbursed in accordance with the
Borrower's instructions or deposited into a checking account of the Borrower
maintained at the Bank.
2.8. LINE ACCOUNT. The Bank shall maintain on its books a record of
account in which the Bank shall make entries for each Advance and such other
debits and credits as shall be appropriate in connection with each and the Line
of Credit (the "Line Account"). The Bank shall provide the Borrower with a
monthly statement of the Borrower's Line Account, which statement shall be
considered to be
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correct and conclusively binding on the Borrower unless the Borrower notifies
the Bank to the contrary within 30 days after the Borrower's receipt of any such
statement which it deems to be incorrect.
3. LETTERS OF CREDIT
3.1. ISSUANCE OF CREDITS. The Bank hereby agrees to issue Letters of
Credit for and on behalf of Borrower for the purpose of (a) supporting the
Borrower's xxxxxxx'x compensation self-insurance program, and (b) bonding and
liability insurance, provided that the aggregate amount of Advances outstanding
at any time plus the then outstanding Letter of credit Obligations shall not
exceed the Revolving Credit Limit. .
3.2. LETTER OF CREDIT GENERAL CONDITIONS.
(a) As a condition precedent to Bank's obligation to issue any
Letter of Credit hereunder, the Borrower shall pay to the Bank an
issuance fees for each Letter of Credit equal to one and one-quarter
percent (1.25%) per annum and shall promptly pay, upon request, such
other fees, commissions, costs and any out-of-pocket expenses charged or
incurred by the Bank with respect to any Letter of Credit.
(b) The commitment by the Bank to issue Letters of Credit shall,
unless earlier terminated in accordance with the terms of the Agreement,
automatically terminate on the Revolving Expiration Date and no Letter
of Credit shall expire, and no draft under a Letter of Credit shall be
payable on a date which is after the Revolving Expiration Date.
(c) Each Letter of Credit shall be in form and substance
satisfactory to the Bank and shall be in favor of beneficiaries
satisfactory to the Bank, provided that the Bank may refuse to issue a
Letter of Credit due to the nature of the transaction or its terms or in
connection with any transaction where the Bank, due to the beneficiary
or the nationality or residence of the beneficiary, would be prohibited
by any applicable law, regulation or order from issuing such Letter of
Credit.
(d) Prior to the issuance of each Letter of Credit, but in no
event later than 10:00 a.m. (California time) on the day such Letter of
Credit is to be issued (which shall be a Business Day), the Borrower
shall deliver to the Bank the Bank's standard form of application for
issuance of a standby letter of credit with proper insertions, duly
executed by Borrower.
3.3. DRAWINGS: Upon receipt from any beneficiary under a Letter of
Credit of a demand for payment under such Letter of Credit (each a "Drawing"),
the Bank shall promptly notify the Borrower. Each Drawing shall be payable in
full by the Borrower on the date thereof, without demand or notice of any kind.
If the Borrower desires to repay a Drawing from the proceeds of an Advance, the
Borrower may request an Advance in accordance with the terms and conditions of
this Agreement and, if disbursed on the date of such Drawing, shall be applied
in payment of such obligation by the Borrower. If any Drawing shall not be paid
when due in accordance with the terms of this Agreement, the Borrower shall
reimburse the Bank for each Drawing together with interest thereon until paid at
the Default Interest Rate. The obligation of the Borrower to reimburse the Bank
for Drawings shall be absolute, irrevocable, and unconditional under any and all
circumstances whatsoever and irrespective of any set-off, counterclaim or
defense to payment which the Borrower may have or have had against the Bank
(except such as may arise out of the Bank's gross negligence or willful
misconduct) or any other person, including, without limitation, and set-off,
counterclaim or defense based upon or arising out of:
(a) any lack of validity or enforceability of this Agreement or
any of the other Loan Docuents;
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(b) any amendment or waiver of or consent to departure from the
terms of any Letter of Credit;
(c) the existence of any claim, set-off, defense or other right
which the Borrower or any other person may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any person for
whom any such beneficiary or any such transferee may be acting); or
(d) any allegation that any demand, statement or any other
document presented under any Letter of Credit is forged, fraudulent,
invalid or insufficient in any respect, or any statement therein being
untrue or inaccurate in any respect whatsoever or any variations in
punctuation, capitalization, spelling or format of the drafts or any
statements presented in connection with any Drawing. .
3.4. RELEASE OF DOCUMENTS. The Bank shall not be obligated to release
any documents accompanying a Drawing under a Letter of Credit until such time as
the Borrower has paid the full amount of such Drawing. No past or future custom
or practice of releasing documents prior to receiving such payment shall operate
as a waiver of the Bank's right under this Section.
4. TERM LOAN
4.1. PURPOSE/LIMIT. The Bank agrees to make term advances (each a "Term
Advance") to the Borrower, upon the Borrower's request therefor made during the
Funding Period (the "Term Loan") provided that the aggregate amount of such Term
Advances outstanding at any time shall not exceed the Term Credit Limit. Any
sums repaid under the Term Loan may be reborrowed during the Funding Period only
as provided in Section 4.4.
4.2. PURPOSE. Term Advances shall be used (a) to finance the purchase of
Equipment and for working capital purposes and (b) to reimburse the Borrower for
Equipment purchased by the Borrower within four (4) months prior to the date of
this Agreement.
4.3. REIMBURSEMENTS. With respect to Term Advances made for purposes
described in Section 4.2(b), the Borrower shall submit to the Bank with a
schedule of Equipment purchased together with copies of invoices and/or bills of
sale evidencing the purchase and indicating the purchase price of each item and
the item's description (including, as applicable, motor number, vehicle
identification number, etc.). The Borrower shall grant the Bank a security
interest in each item of Equipment for which the Borrower is receiving
reimbursement. The proceeds of any such Term Advance shall be credited to the
Borrower's demand deposit account.
4.4. ACQUISITION TERM ADVANCES. Advances made for purposes described in
Section 4.2(a) shall be made according to the following procedures:
(a) The Borrower shall submit to the Bank an original Request for
Term Advance (each an "Term Advance Request") in the form attached as
Exhibit "A", completed and executed by the Borrower, together with
copies of invoices and/or bills of sale evidencing the purchase of
Equipment and indicating the purchase price of each item and the item's
description (including, as applicable, motor number, vehicle
identification number, etc.).
(b) The Borrower shall grant the Bank a security interest in each
item of Equipment being purchased with the proceeds of a Term Advance,
which security interest shall be a purchase money security interest.
(c) The Borrower shall provide the Bank with evidence
satisfactory to the Bank that the Bank's security interest in each item
of Equipment is, or before the Borrower receives possession of such
item, will be, perfected.
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(d) The proceeds of each Term Advance shall, unless otherwise
agreed by the Bank, be paid directly to the seller of the Equipment
being acquired.
4.5. INTEREST. At Borrower's option, interest shall accrue from the date
of each Term Advance at a variable rate per annum equivalent to the Variable
Rate (each Term Advance so made a "Variable Rate Term Advance") or the
applicable Fixed Rate (each Advance so made a "Fixed Rate Term Advance").
EACH FIXED RATE TERM ADVANCE IS SUBJECT TO THE PREPAYMENT
PROHIBITIONS AND PREPAYMENT FEES ENUMERATED IN SECTION 5 BELOW.
(a) NOTICE OF BORROWING. Subject to Section 4.3 during the
Funding Period, upon telephonic notice which shall be received by the
Bank at or before 10:00 a.m. (California time) on a Business Day, the
Borrower may request a Term Advance by requesting:
(1) A Variable Rate Term Advance. A Variable Rate Term
Advance may be made on the day notice is received by the Bank;
provided, however, that if the Bank shall not have received
notice at or before 10:00 a.m. on the day such Advance is
requested to be made, such Variable Rate Term Advance may be
made, at the Bank's option, on the next Business Day.
(2) A Fixed Rate Term Advance. The Borrower may elect
that an Advance be made as a Fixed Rate Term Advance by
requesting the Bank to provide a quote as to the rate which
would apply for a designated Interest Period (the "Fixed Rate")
and, concurrently with receiving such quote, give the Bank
irrevocable notice of the Borrower's acceptance of the rate
quoted provided such notice shall be given to the Bank not more
than two (2) Business Days prior to but not later than 10:00
a.m. (California time) on the day (which shall be a Business
Day) on which the Borrower requests such Fixed Rate Advance to
be made.
(b) NOTICE OF ELECTION TO ADJUST INTEREST RATE. Upon written
notice to the Bank, the Borrower may elect:
(1) Conversion of a Variable Rate Term Advance. That
interest on a Variable Rate Term Advance be adjusted to accrue
at the Fixed Rate by requesting the Bank to provide a quote as
to the rate which would apply for a designated Interest Period
(the "Fixed Rate") and, concurrently with receiving such quote,
give the Bank irrevocable notice of the Borrower's acceptance of
the rate quoted provided such notice shall be given to the Bank
not more than two (2) Business Days prior to but not later than
10:00 a.m. (California time) on the day (which shall be a
Business Day) on which the Borrower requests such Variable Rate
Term Advance be converted to a Fixed Rate Term Advance.
(2) Conversion or Continuation of a Fixed Rate Term
Advance. That interest on a Fixed Rate Term Advance, effective
on the last day of the current Interest Period pertaining to
such Fixed Rate Term Advance, (i) continue to accrue at a Fixed
Rate by requesting the Bank to provide a quote as to the Fixed
Rate which would apply for a designated Interest Period and,
concurrently with receiving such quote, give the Bank
irrevocable notice of the Borrower's acceptance of the rate
quoted provided such notice shall be given to the Bank not more
than two (2) Business Days prior to but not later than 10:00
a.m. (California time) on the last day of the then expiring
Interest Period, (ii) be adjusted to commence to accrue at the
Variable Rate. If the Bank shall not have received notice as
prescribed herein of the Borrower's election that interest on
any Fixed Rate Term Advance shall continue to accrue at the
Fixed Rate, the Borrower shall be deemed to have elected that
interest thereon shall be adjusted to accrue at the Variable
Rate upon the expiration of the Interest Period pertaining to
such Fixed Rate Term Advance.
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(c) CONFIRMATION. Bank may, at its option, confirm in writing the
terms of any Fixed Rate Term Advance which confirmation shall be
considered to be correct and conclusively binding on the Borrower unless
the Borrower notifies the Bank to the contrary within 5 days after the
Borrower's receipt of any such confirmation which it deems to be
incorrect.
(d) CALCULATION OF INTEREST. Interest at the Variable Rate shall
be adjusted concurrently with any change in the Reference Rate. Interest
at both the Variable Rate and the Fixed Rate shall be computed on the
basis of 360 days per year, but charged on the actual number of days
elapsed.
(e) PAYMENT OF INTEREST. The Borrower hereby promises and agrees
to pay interest, with respect to both Variable Term Advances and Fixed
Rate Term Advances, on the last day of each month commencing on the
first such day to occur after the date of this Agreement. If interest is
not paid as it becomes due, it may be added to, become and be treated as
a part of the principal, and shall thereafter bear like interest.
4.6. PRINCIPAL. Unless sooner due in accordance with the terms of this
Agreement, the Borrower hereby promises and agrees to pay to the Bank as of the
last day of each calendar quarter such amounts as are necessary such that the
outstanding principal balance of the Term Loan does not exceed the then
applicable Term Credit Limit. To the extent any such payment is required to be
applied against a Fixed Rate Term Advance, such payment shall be subject to
Section 5 below. On the Term Expiration Date, the then remaining principal
balance of the Term Loan and all accrued and unpaid interest shall be due and
payable.
4.7. FUNDING. Unless earlier terminated in accordance with the terms of
this Agreement, the Bank's commitment to make Term Advances to the Borrower
hereunder shall automatically expire on the last day f the Funding Period and
the Bank shall not be obligated to make any further Term Advance thereafter.
4.8. LATE FEE. If any payment of interest or principal, or any portion
thereof, is not paid within ten (10) calendar days after it is due, a late
payment charge equal to five percent (5%) of such past due payment may be
assessed and shall be immediately payable.
4.9. TERM ACCOUNT. The Bank shall maintain on its books a record of
account in which the Bank shall make entries for each Term Advance and such
other debits and credits as shall be appropriate in connection with each (the
"Term Account"). The Bank shall provide the Borrower with a monthly statement of
the Borrower's Term Account, which statement shall be considered to be correct
and conclusively binding on the Borrower unless the Borrower notifies the Bank
to the contrary within 30 days after the Borrower's receipt of any such
statement which it deems to be incorrect.
5. PREPAYMENT; INDEMNITY
5.1. PROHIBITION AGAINST PREPAYMENT. Notwithstanding anything to the
contrary in this Agreement, no prepayment shall be made on any Fixed Rate
Advance or Fixed Rate Term Advance except by reason of conversion pursuant to
Section 5.4, by reason of a required reduction in the aggregate principal amount
of Term Advances pursuant to Section 4.7, or by reason of acceleration pursuant
to Section 11.2 hereof.
5.2. PREPAYMENT FEE. Bank expects to incur or will incur certain
financial obligations in order to offer Borrower Fixed Rate Advances and Fixed
Rate Term Advances. In the event Borrower is required to prepay a Fixed Rate
Advance or Fixed Rate Term Advance before the end of the applicable Interest
Period, the Bank may incur certain costs and expenses which are a direct result
of Borrower's Prepayment(s). Such expenses would be difficult and costly to
determine at the time of occurrence. The parties agree that the prepayment fees
(each a "Prepayment Fee") described herein are reasonably approximate to the
Bank's actual damages as they can best be determined as of the date hereof.
1997 CREDIT AGREEMENT -- Page 11
12
(a) PREPAYMENT FEE. In the event Borrower is required to prepay
all or a portion of a Fixed Rate Advance or a Fixed Rate Term Advance,
the Borrower shall pay Bank concurrently with any such Prepayment and as
compensation for the damages Bank is reasonably expected to incur, a
Prepayment Fee equal to the Lost Opportunity Rate times the Prepayment
Term times the amount of the Prepayment.
(b) UNAVAILABLE INDEX. In the event any index or rate described
herein cannot be determined on any date the same is to be determined,
the Bank shall make a good faith estimate such index or rate which
estimate shall be binding upon the parties. Absent manifest error, all
calculations made by Bank as to any index, rate or time period described
herein or the amount of any Prepayment Fee shall be conclusive and
binding upon all parties.
5.3. INDEMNIFICATION FOR COSTS. During any period of time in which a
Fixed Rate Advance or Fixed Rate Term Advance is outstanding, the Borrower
shall, upon Bank's request, promptly pay to and reimburse the Bank for all costs
incurred and payments made by Bank by reason of any future assessment, reserve,
deposit or similar requirements or any surcharge, tax or fee imposed upon Bank
or as a result of Bank's compliance with any directive or requirement of any
regulatory authority pertaining or relating to funds used by Bank in quoting and
determining the Fixed Rate. The Fixed Rate applicable to any Fixed Rate Advance
or Fixed Rate Term Advance for any Interest Period shall be automatically
adjusted during such Interest Period to reflect any change in the applicable
assessment, reserve or similar requirement provided, however, that any failure
or delay of the Bank to so adjust the Fixed Rate in any instance shall not be
deemed a waiver of the right to adjust the Fixed Rate for the same or any later
instance.
5.4. CONVERSION FROM FIXED RATE TO REFERENCE RATE. In the event that
Bank shall at any time determine that the accrual of interest on the basis of
the Fixed Rate is or has become unlawful or infeasible by reason of Bank's
compliance with any new law, rule, regulation, guideline or order, or any new
interpretation of any present law, rule, regulation, guideline or order, then
Bank shall give telephonic notice thereof (confirmed in writing) to the
Borrower, in which event any Fixed Rate Advance or Fixed Rate Term Advance shall
no longer be deemed to be a Fixed Rate Advance or Fixed Rate Term Advance and
interest shall thereupon immediately accrue at the Variable Rate, provided,
however, that in such event, the Prepayment Fee shall nonetheless be payable. .
6. OTHER LOAN TERMS
6.1. COLLATERAL. To secure payment and performance of all the
Borrower's Obligations under this Agreement and all other liabilities, loans,
guarantees, covenants and duties owed by the Borrower to the Bank, whether or
not evidenced by this or by any other agreement, absolute or contingent, due or
to become due, now existing or hereafter and howsoever created, the Borrower
hereby grants the Bank a security interest in and to (the "Collateral"):
(a) all accounts, deposit accounts, accounts receivable,
contract rights, chattel paper, instruments, documents, general
intangibles and all rights to payment of every kind now existing or
hereafter arising;
(b) all inventory, goods held for sale or lease or to be
furnished under contract of service, or goods so leased or furnished,
raw materials, components parts, work in progress and other materials
used or consumed in the Borrower's business, now or at any time
hereafter owned or acquired by the Borrower ("Inventory") , wherever
located, and all products thereof, whether in the possession of the
Borrower, any warehouseman, any bailee or any other person and whether
located at Borrower's places of business or elsewhere;
(c) all warehouse and other receipts, bills of sale, bills of
lading and other documents of every kind (whether or not negotiable) in
which Borrower now has or at any time hereafter acquires any interest,
and all additions and accessions thereto, including without limitation,
all bills
1997 CREDIT AGREEMENT -- Page 12
13
of lading concerning any other Collateral subject hereto and all
warehouse and other receipts concerning any such other Collateral which
is in the possession or custody of the Borrower, any bailee or any other
person for any purpose.
(d) all money and property heretofore, now or hereafter
delivered to or deposited with, or otherwise coming into the possession,
custody or control of the Bank, in any manner of for any purpose
whatsoever during the existence if this Agreement and whether held in a
general or special account or deposit for safekeeping or otherwise;
(e) all right, title and interest of the Borrower under
licenses, guarantees, warranties, management agreements, marketing or
sales agreements, escrow contracts, indemnity agreements, insurance
policies, service agreements, maintenance agreements and other similar
contracts of every kind in which the Borrower now has or at any time
hereafter shall have an interest;
(f) all goods, tools, machinery, furnishings, furniture,
equipment and fixtures of every kind now owned or hereafter acquired by
the Borrower and financed with the proceeds of a Term Advance (including
the Initial Term Advance) and all appliances and parts therefore, and
all improvements, replacements, accessions and additions thereto,
whether located on any property owned or leased by the Borrower or
elsewhere, including without limitation, any of the foregoing now or at
any time hereafter located at or installed on the land or in the
improvements at any of the real property owned or leased by the
Borrower, and all such goods after they have been severed and removed
from any of said and removed from said real property ("Equipment"); and
(g) all trademarks and trademark applications, trade names,
trade secrets, business names, patents and patent applications,
licenses, copyrights and copyright applications, software, registrations
and franchise rights of the Borrower, and, in each case, all goodwill
associated therewith, and all books, records, client lists and account
information, ledger cards, files, correspondence, computer programs,
tapes, disks and related data processing software that at any time
evidence or contain information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or realization
thereupon;
together with whatever is receivable or received when any of the foregoing or
the proceeds thereof are sold, leased, collected, exchanged or otherwise
disposed of, whether such disposition is voluntary or involuntary, including
without limitation, all rights to payment, including returned premiums with
respect to any insurance relating to any of the foregoing, and all rights to
payment with respect to any cause of action affecting or relating to any of the
foregoing (hereinafter called "Proceeds"). The Bank's security interest in the
Collateral shall be a continuing lien and shall include the proceeds and
products of the Collateral including, but not limited to, the proceeds of any
insurance thereon.
6.2. GUARANTEE. All of Borrower's Obligations and the full and timely
performance by Borrower hereunder shall be unconditionally guaranteed in
writing, in form and substance satisfactory to Bank (the "Guarantee"), by each
Guarantor.
6.3. NATURE AND PLACE OF PAYMENTS. All payments made on account of the
Obligations shall be made without setoff or counterclaim in lawful money of the
United States of America in either immediately available or next day available
funds, free and clear of and without deduction for any taxes, fees or other
charges of any nature whatsoever imposed by any taxing authority (other than
California and United States income tax payable by the Bank), and must be
received by Bank by 2:00 p.m. (San Francisco time) on the day of payment, it
being expressly agreed and understood that if payment is received by the Bank
after 2:00 p.m. (San Francisco time), such payment will be considered to have
been made been made on the next succeeding Business Day and interest thereon
shall be payable at the then applicable rate during such extension. If any
payment required to be made by the Borrower hereunder becomes due and payable on
a day other than a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and interest thereon shall be payable at the then
applicable rate during
1997 CREDIT AGREEMENT -- Page 13
14
such extension. All payments required to be made hereunder shall be made to the
office of the Bank designated for the receipt of notices in Section 12.3 or such
other office as Bank shall from time to time designate.
6.4. OTHER AGREEMENTS. The Borrower and the Bank agree that:
(a) the 1996 Agreement is hereby superseded in its entirety by
this Agreement and that each Advance, Letter of Credit and Term Advance
outstanding or issued under the 1996 Agreement be deemed to be,
respectively, an Advance, Letter of Credit or Term Advance hereunder as
of the date of such Advance, Letter of credit or Term Advance was made
or issued as if this Agreement were in effect as of such date;
(b) the covenants and agreements, if any, contained in the 1993
Note and 1995 Agreement are superseded in their entirety by this
Agreement, provided that interest and parincip0al shall continue to
accrue and be payable as provided in the 1993 Note and 1995 Agreement,
respectively. .
7. CONDITIONS PRECEDENT
7.1. CONDITIONS PRECEDENT TO FIRST ADVANCE. Prior to making the first
Advance hereunder, the Borrower shall deliver or cause to be delivered to the
Bank, in form and substance satisfactory to the Bank:
(a) LOAN DOCUMENTS. This Agreement and all other documents,
instruments and agreements required or necessary to consummate the
transactions contemplated under this Agreement (collectively the "Loan
Documents"), all fully executed.
(b) EVIDENCE OF AUTHORITY. Evidence that the execution and
delivery of the Loan Documents have been duly authorized by all
necessary corporate action.
(c) GUARANTEES. The Guarantees described in Sections 6.2, duly
executed by each Guarantor together with such evidence that the
execution and delivery of such agreements by the respective Guarantor
has been duly authorized by all necessary corporate action.
(d) MISCELLANEOUS DOCUMENTS. Such other documents and opinions as
the Bank may require with respect to the transactions described in this
Agreement.
7.2. CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of the Bank to
make any Advance or Term Advance hereunder is subject to the further conditions
precedent that, as of the date of such Advance or Term Advance and after the
making thereof:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in Section 8 hereof and in any other document,
instrument, agreement or certificate delivered to the Bank hereunder are
true and correct.
(b) EVENT OF DEFAULT. No event has occurred and is continuing
which constitutes, or, with the lapse of time or giving of notice or
both, would constitute an Event of Default as defined in Section 11.1
hereof.
(c) SECURITY INTEREST. The Bank's security interest in the
Collateral has been duly authorized, created and perfected of first
priority.
For the purposes hereof, the Borrower's acceptance of the proceeds of
any Advance and the Term Loan shall be deemed to constitute the Borrower's
representation and warranty that the statements set forth in this Section 7.2
above are true and correct.
1997 CREDIT AGREEMENT -- Page 14
15
7.3. CONDITIONS PRECEDENT TO EQUIPMENT TERM ADVANCES. The obligation of
the Bank to make, during the Funding Period, any Equipment Term Advance (other
than the Initial Term Advance) hereunder is subject to the further conditions
precedent that:
(a) ADVANCE REQUEST. The Borrower shall have delivered to the
Bank a completed and executed Advance Request together with the required
accompanying documents.
(b) PURCHASE MONEY SECURITY INTEREST. The Bank shall have be
satisfied, in its sole judgment, that its security interest in the
Equipment being purchased with the proceeds of such Term Advance is a
purchase money security interest.
8. REPRESENTATIONS AND WARRANTIES
The Borrower hereby makes the following representations and warranties
to the Bank, which representations and warranties are continuing:
8.1. STATUS. That the Borrower:
(a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of Utah;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its
business and to execute, deliver, and perform its obligations under, the
Loan Documents;
(c) is duly qualified as a foreign corporation, licensed and in
good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires
such qualification; and
(d) is in compliance with all applicable laws and regulations;
except, in each case referred to in clause (b) or clause (c), to the
extent that the failure to do so could not reasonably be expected to
have a material adverse effect.
8.2. AUTHORITY. The execution, delivery and performance by the Borrower
of this Agreement and any instrument, document or agreement required hereunder
have been duly authorized and do not and will not: (i) violate, in any material
respect, any provision of any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect having
application to the Borrower; (ii) result in a breach of or constitute a default
under any material indenture or loan or credit agreement or other material
agreement, lease or instrument to which the Borrower is a party or by which it
or its properties may be bound or affected; or (iii) require any consent or
approval of its stockholders or violate any provision of its articles of
incorporation or by-laws.
8.3. GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
governmental authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Borrower of
this Agreement or any other Loan Document.
8.4. LEGAL EFFECT. This Agreement has been duly executed and delivered
on behalf of the Borrower and constitutes, and any instrument, document or
agreement required hereunder when delivered hereunder will constitute, legal,
valid and binding obligations of the Borrower enforceable against the Borrower
in accordance with their respective terms subject to insolvency laws and
equitable principles effecting creditors generally.
8.5. PLACE OF BUSINESS. Borrower regularly does business only in the
states of Utah, Montana, Texas, Wyoming, Idaho, Colorado, New Mexico, Arizona,
California, Washington, Oregon and
1997 CREDIT AGREEMENT -- Page 15
16
Nevada. The Borrower will notify the Bank in writing prior to undertaking
regular business operations in any other state.
8.6. COLLATERAL. With respect to all of the Collateral, (i) the Borrower
is the sole owner of the Collateral (or, in the case of after-acquired
Collateral, at the time the Borrower acquires rights in the Collateral, will be
the sole owner thereof); (ii) all information heretofore, herein or hereafter
supplied to Bank by or on behalf of the Borrower with respect to the Collateral
is accurate and complete; and (iii) except for security interests in favor of
Bank, no person has (or, in the case of after-acquired Collateral, at the time
the Borrower acquires rights therein, will have) any right, title, claim or
interest (by way of security interest or other lien or otherwise) in, against or
to the Collateral.
8.7. PURCHASE MONEY SECURITY INTEREST. That the Bank's security interest
in Equipment purchased with the proceeds of a Term Advance will be a purchase
money security interest.
8.8. FINANCIAL STATEMENTS. All financial statements, information and
other data which may have been or which may hereafter be submitted by the
Borrower to the Bank are true, accurate and correct, with respect to year end
financial statements, have been or will be prepared in accordance with GAAP
consistently applied, and fairly represent the Borrower's financial condition
or, as applicable, the other information disclosed therein. Since the most
recent submission of any such financial statement, information or other data to
the Bank, the Borrower represents and warrants that no material adverse change
in the Borrower's financial condition has occurred which has not been fully
disclosed to the Bank in writing.
8.9. FICTITIOUS TRADE STYLES. Borrower is not, at present, doing
business under or using any trade style or fictitious name in connection with
its business operations. The Borrower shall notify the Bank not less than 30
days prior to using any other fictitious trade style at any future date,
indicating the trade style and state(s) of its use.
8.10. LITIGATION. Except as have been disclosed to the Bank in writing,
there are no actions, suits or proceedings pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or the Borrower's
properties before any court or administrative agency which, if determined
adversely to the Borrower, would have a material adverse effect on the
Borrower's financial condition or operations or the Collateral.
8.11. ERISA. If the Borrower has a pension, profit sharing or retirement
plan subject to ERISA, such plan has been and will continue to be funded in
accordance with its terms and otherwise complies with and continues to comply
with the requirements of ERISA.
8.12. TITLE TO ASSETS: The Borrower has good and marketable title to all
of its assets (including, but not limited to, the Collateral) and the same are
not subject to any security interest, encumbrance, lien or claim of any third
person except for Permitted Liens.
8.13. TAXES. The Borrower has filed all tax returns required to be filed
and paid all taxes shown thereon to be due, including interest and penalties,
other than taxes which are currently payable without penalty or interest or
those which are being duly contested in good faith.
8.14. ENVIRONMENTAL MATTERS. The operations of the Borrower complies,
and during the term of this Agreement will at all times comply, in all respects
with all Environmental Laws; the Borrower has obtained all licenses, permits,
authorizations and registrations required under any Environmental Law
("Environmental Permits") and necessary for its Ordinary Course of Business, all
such Environmental Permits are in good standing, and the Borrower is in
compliance with all material terms and conditions of such Environmental Permits;
neither the Borrower nor any of its present property or operations is subject to
any outstanding written order from or agreement with any governmental authority
nor subject to any judicial or docketed administrative proceeding, respecting
any Environmental Law, Environmental Claim or Hazardous Material; there are no
Hazardous Materials or other conditions or circumstances existing, or arising
from operations prior to the date of this Agreement, with respect to any
property of the Borrower
1997 CREDIT AGREEMENT -- Page 16
17
that would reasonably be expected to give rise to Environmental Claims;
provided, however, that with respect to property leased from an unrelated third
party, the foregoing representation is made to the best knowledge of the
Borrower. In addition, (i) the Borrower does not have any underground storage
tanks (x) that are not properly registered or permitted under applicable
Environmental Laws, or (y) that are leaking or disposing of Hazardous Materials
off-site, and (ii) the Borrower has notified all of their employees of the
existence, if any, of any health hazard arising from the conditions of their
employment and have met all notification requirements under Title III of CERCLA
and all other Environmental Laws.
9. FINANCIAL CONDITION; REPORTING
9.1. REPORTING AND CERTIFICATION REQUIREMENTS. The Borrower promises
and agrees, during the term of this Agreement and until full payment of all of
Borrower's Obligations hereunder, to deliver or cause to be delivered to the
Bank in form and detail satisfactory to the Bank:
(a) as soon as available but not later than 120 days after the
end of each of the Borrower's fiscal years, the CPA audited consolidated
and consolidating balance sheet of the Borrower as of the end of such
fiscal year and the related statements of income, shareholders' equity
and cash flows for such fiscal year, certified by the Borrower as being
complete and correct and fairly presenting, in accordance with GAAP, the
financial position and the results of operations of the Borrower;
(b) as soon as available, but not later than 30 days after the
end of each of the Borrower's fiscal quarters, a copy of the balance
sheet of the Borrower as of the end of such quarter and the related
statements of income and cash flows for the period commencing on the
first day of the fiscal year and ending on the last day of such quarter,
prepared and certified by the Borrower as being complete and correct and
fairly presenting the financial position and the results of operations
of the Borrower;
(c) as soon as available but not later than 30 days after the
end of each of the Borrower's fiscal quarters, an aging of receivables
and payables as of the end of such quarter;
(d) as soon as available but not later than 120 days after the
end of each of Guarantor's fiscal years, a copy of such Guarantor's
balance sheet as of the end of such fiscal year and the related
statements of income and shareholders' equity for such fiscal year,
certified by the Borrower as being complete and correct and fairly
presenting, in accordance with GAAP, the financial position and the
results of operations of the respective Guarantor;
(e) Promptly upon the Bank's request, such other information
pertaining to the Borrower or the Collateral as the Bank may reasonably
request.
9.2. FINANCIAL CONDITION. The Borrower promises and agrees, during the
term of this Agreement and until full payment of all of Borrower's Obligations
hereunder, the Borrower will maintain:
(a) A minimum Effective Tangible Net Worth of at least
$21,000,000 such minimum Effective Tangible New Worth to increased as of
the end of each fiscal year by not less than 75% of net, after-tax
income for the year then ending.
(b) A ratio of Debt to Effective Tangible Net Worth of not more
than 2.0 to 1.
(c) As of each fiscal year end, a ratio of (i) net, after tax
income plus non-cash expenditures (depreciation and amortization) for
the year then ending to (ii) the current portion long term debt, and as
of each June 30, a ratio of (i) net, after tax income plus non-cash
expenditures (depreciation and amortization) for each of the previous
four fiscal quarters to (ii) the current portion long term debt of not
less than 1.50 to 1.
(d) A net, after tax profit of not less than $1.00 at the end of
each fiscal year of the Borrower.
1997 CREDIT AGREEMENT -- Page 17
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9.3. ACCOUNTING RECORDS: The Borrower will maintain adequate books and
records in accordance with GAAP consistently applied and in a manner otherwise
acceptable to the Bank, and, at any reasonable time and from time to time,
permit the Bank or any representative thereof to examine and make copies of the
records and visit the properties of the Borrower and discuss the business and
operations of the Borrower with any employee or representative thereof. If the
Borrower shall maintain any records (including, but not limited to, computer
generated records or computer programs for the generation of such records) in
the possession of a third party, the Borrower hereby agrees to notify such third
party to permit the Bank free access to such records at all reasonable times and
to provide the Bank with copies of any records which it may request, all at the
Borrower's expense, the amount of which shall be payable immediately upon
demand. In addition, the Bank may, at any reasonable time and from time to time,
conduct inspections and audits of the Collateral and the Borrower's accounts
payable, the cost and expenses of which shall be paid by the Borrower to the
Bank upon demand.
10. OTHER COVENANTS
The Borrower covenants and agrees that, during the term of this
Agreement, and so long thereafter as the Borrower is indebted to the Bank under
this Agreement, the Borrower shall, unless the Bank otherwise consents in
writing:
10.1. PRESERVATION OF EXISTENCE; COMPLIANCE WITH APPLICABLE LAWS.
Maintain and preserve its existence and all rights and privileges now enjoyed;
not liquidate or dissolve, merge or consolidate with or into, or acquire any
other business organization; and conduct its business and operations in
accordance with all applicable laws, rules and regulations.
10.2. MAINTENANCE OF INSURANCE. Maintain insurance in such amounts and
covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which the
Borrower operates and maintain such other insurance and coverages as may be
required by the Bank. All such insurance shall be in form and amount and with
companies satisfactory to the Bank. With respect to insurance covering Equipment
(or which is reimbursed to the Borrower by the Initial Advance), such insurance
(to the extent the Borrower has not "self insured" with respect to such
Equipment) shall name the Bank as loss payee pursuant to a loss payable
endorsement satisfactory to the Bank and shall not be altered or canceled except
upon 10 days' prior written notice to the Bank. Upon the Bank's request, the
Borrower shall furnish the Bank with the original policy or binder of all such
insurance.
10.3. LOCATION AND MAINTENANCE OF EQUIPMENT. Except as occurring in the
Ordinary Course of Business, the Equipment shall at all times be in the Debtor's
physical possession and shall not be held for sale or lease, shall be titled in
the State of Utah (if a certificate of title is issued therefor). The Borrower
shall not secrete, abandon or remove, or permit the removal of, the Equipment,
or any part thereof, from the location(s) shown above or remove or permit to be
removed any accessories now or hereafter placed upon the Equipment. The Borrower
shall, at the Borrower's sole cost and expense, keep and maintain the Equipment
in a good state of repair and shall not destroy, misuse, abuse, illegally use or
be negligent in the care of the Equipment or any part thereof. The Borrower
shall not remove, destroy, obliterate, change, cover, paint, deface or alter the
name plates, serial numbers, labels or other distinguishing numbers or
identification marks placed upon the Equipment or any part thereof by or on
behalf of the manufacturer, any dealer or rebuilder thereof, or the Bank. The
Borrower shall not be released from any liability to the Bank hereunder because
of any injury to or loss or destruction of the Equipment. The Borrower shall
allow the Bank and its representatives free access to and the right to inspect
the Equipment at all times and shall comply with the terms and conditions of any
leases covering the real property on which the Equipment is located and any
orders, ordinances, laws, regulations or rules of any federal, state or
municipal agency or authority having
1997 CREDIT AGREEMENT -- Page 18
19
jurisdiction of such real property or the conduct of the business of the persons
having control or possession of the Equipment.
10.4. EQUIPMENT SCHEDULES. Upon the Bank's request, the Borrower shall
promptly provide the Bank with a complete and accurate description of the
Equipment including, as applicable, the make, model, identification number and
serial number of each item of Equipment. In addition, the Borrower shall
immediately notify the Bank of the acquisition of any new or additional
Equipment or the replacement of any existing Equipment and shall supply the Bank
with a complete description of any such additional or replacement Equipment.
10.5. INVENTORY. Borrower's Inventory is now and shall at all times
hereafter be of good and merchantable quality and free from defects; is not now
and shall not at any time hereafter be stored with a bailee, warehouseman or
similar party without the Bank's prior written consent; shall at all times be in
the Borrower's physical possession; shall not be held by any other party on
consignment, sale on approval, or sale or return; and, except as occurring in
the Ordinary Course of Business. The Borrower shall keep correct and accurate
records itemizing and describing the kind, type, quality and quantity of
inventory, the Borrower's cost therefor and selling price thereof, and the daily
withdrawals therefrom and additions thereto, all of which records shall be
available to the Bank or any representative thereof upon demand for inspection
and copying thereof at any reasonable time. At any reasonable time and from time
to time, the Borrower will allow Bank to, upon demand, inspect and examine
inventory and to check and test the same as to quality, quantity, value and
condition and the Borrower agrees to reimburse the Bank for the Bank's
reasonable costs and expenses in so doing.
10.6. PAYMENT OF OBLIGATIONS AND TAXES. Make timely payment of all
assessments and taxes and all of its liabilities and obligations including, but
not limited to, trade payables, unless the same are being contested in good
faith by appropriate proceedings with the appropriate court or regulatory
agency. For purposes hereof, the Borrower's issuance of a check, draft or
similar instrument without delivery to the intended payee shall not constitute
payment.
10.7. LOANS: Not make any loans or advances or extend credit to any
third person, including, but not limited to, directors, officers, shareholders,
partners, employees, affiliated entities and subsidiaries of the Borrower,
except for (a) credit extended in the Ordinary Course of Business, (b) credit
extended to UTE Trucking and Leasing, LLC., and/or Motor Cargo Industries not
exceeding $3,000,000.00 in the aggregate outstanding at in time and (c) loans
not exceeding, in the aggregate, $250,000
10.8. PAYMENT OF DIVIDENDS. Not declare or pay any dividends on any
class of stock now or hereafter outstanding except dividends payable solely in
the Borrower's capital stock and Permitted Dividends. Borrower may declare or
pay Permitted Dividends only if
(a) on a year to date basis, as of the end of the most recent fiscal
quarter to the date of such declaration and as of the end of the most recent
fiscal quarter to the date of payment of such dividend,
(i) the ratio of Borrower's current assets less the amount of the
non-stock dividend to current liabilities would not be less than 1.10 to
1.0; and
(ii) the Borrower's ratio of (1) net, after tax income plus non-cash
expenditures (depreciation and amortization) for the twelve month period
then ended less the amount of the non-stock dividend to (2) the current
portion long term debt would not be less than 1.50 to 1; and
(b) after giving effect to the payment of any such Permitted Dividend,
the Borrower is otherwise in full compliance with all of the terms and
provisions of this Agreement.
10.9. REDEMPTION OR REPURCHASE OF STOCK: Not redeem or repurchase any
class of the Borrower's stock now or hereafter outstanding in an aggregate
amount exceeding twenty percent (20%) of the number of shares issued and
outstanding as of the date of this Agreement.
10.10. LIENS AND ENCUMBRANCES: Not create, assume or permit to exist any
security interest, encumbrance, mortgage, deed of trust, or other lien
(including, but not limited to, a lien of attachment,
1997 CREDIT AGREEMENT -- Page 19
20
judgment or execution) affecting any of the Borrower's properties, or execute or
allow to be filed any financing statement or continuation thereof affecting any
of such properties, except for (a) Permitted Liens, and (b) liens securing
Indebtedness not exceeding that outstanding as of the date of this Agreement
increasing by $250,000 during each of the Borrower's fiscal years.
10.11. SELL OR TRANSFER ASSETS. Not, after the date hereof, sell,
contract for sale, convey, transfer, assign, lease or sublet, any of its assets
(including, but not limited to, the Collateral and any and all patents,
trademarks, trade styles and trade names) except in the Ordinary Course Business
and, then, only for full, fair and reasonable consideration.
10.12. CHANGE IN NATURE OF BUSINESS. Not make any material change in its
financial structure or the nature of its business as existing or conducted as of
the date hereof.
10.13. COMPENSATION OF EMPLOYEES. Compensate its employees for services
rendered at an hourly rate at least equal to the minimum hourly rate prescribed
by any applicable federal or state law or regulation.
10.14. NOTICES. Give prompt written notice to the Bank of:
(a) any and all Event(s) of Default and each event or occurrence
which, but for the giving of notice or the lapse of time, or both, would
be an Event of Default;
(b) any and all litigation, arbitration or administrative
proceedings to which the Borrower is a party and in which the claim or
liability exceeds $250,000 or which materially adversely affects the
Collateral taken as a whole;
(c) any other matter which has resulted in, or might result in, a
material adverse change in the Collateral or the financial condition or
affairs of the Borrower; and
(d) upon, but in no event later than 10 days after, becoming
aware of (i) any enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened against the
Borrower or any of its subsidiaries or any of their respective
properties pursuant to any applicable Environmental Laws, (ii) all other
Environmental Claims, and (iii) any environmental or similar condition
on any real property adjoining or in the vicinity of the property of the
Borrower or any subsidiary that could reasonably be anticipated to cause
such property or any part thereof to be subject to any restrictions on
the ownership, occupancy, transferability or use of such property under
any Environmental Laws, in each case where the cost of the remedial
action(s) or the amount of the Environmental Claim(s) exceed, in the
aggregate $250,000.
10.15. ENVIRONMENTAL LAWS. The Borrower shall conduct its operations and
keep and maintain all of its property in compliance with all Environmental Laws
and, upon the written request of the Bank, the Borrower shall submit to the
Bank, at the Borrower's sole cost and expense, at reasonable intervals, a report
providing an update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any notice or report
required pursuant to Subsection (d) of the immediate preceding Section.
10.16. FURTHER ASSURANCES. Execute and deliver all instruments, and
perform such acts, as the Bank may reasonably deem necessary or desirable to
confirm and secure to the Bank all rights and remedies conferred upon them by
this Agreement and all other documents related hereto.
11. DEFAULT
11.1. EVENTS OF DEFAULT. Any one or more of the following described
events shall constitute an event of default (an "Event of Default") under this
Agreement:
(a) NON-PAYMENT. The Borrower shall fail to pay any payment of
principal or interest or any other sum referred to in this Agreement
within 20 days of when due.
1997 CREDIT AGREEMENT -- Page 20
21
(b) PERFORMANCE UNDER THIS AND OTHER AGREEMENTS. The Borrower
shall fail in any material respect to perform or observe any term,
covenant or agreement contained in this Agreement, in any Loan Document,
or in any document instrument or agreement evidencing or relating to any
other Indebtedness of the Borrower to the Bank, and any such failure
(exclusive of the payment of money to the Bank under this Agreement or
under any other document, instrument or agreement, which failure shall
constitute and be an immediate Event of Default if not paid when due or
when demanded to be due) shall continue for more than 30 days after
written notice from the Bank to the Borrower of the existence and
character of such failure.
(c) OTHER INDEBTEDNESS. The Borrower (i) fails to make any
payment in respect of any Indebtedness having an aggregate principal
amount (including underway committed or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $100,000.00 when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) and
such failure continues after the applicable grace or notice period, if
any, specified in the document relating thereto on the date of such
failure; or (ii) fails to perform or observe any other condition or
covenant, or any other event shall occur or condition exist,
(irrespective of whether such non-performance or non-observance shall be
waived or otherwise excused by the holder or holders of such
Indebtedness) under any agreement or instrument relating to any such
Indebtedness, if the effect of such failure, event or condition is to
cause, or to permit the holder or holders of such Indebtedness or
beneficiary or beneficiaries of such Indebtedness (or a trustee or agent
on behalf of such holder or holders or beneficiary or beneficiaries) to
cause such Indebtedness to be declared to be due and payable prior to
its stated maturity, or cash collateral in respect thereof to be
demanded.
(d) REPRESENTATIONS AND WARRANTIES; FINANCIAL STATEMENTS. Any
representation or warranty made by the Borrower under or in connection
with this Agreement or any financial statement given by the Borrower
shall prove to have been incorrect in any material respect when made or
given or when deemed to have been made or given.
(e) INSOLVENCY. The Borrower shall: (i) become insolvent or be
unable to pay its debts as they mature; (ii) make an assignment for the
benefit of creditors or to an agent authorized to liquidate any
substantial amount of its properties or assets; (iii) file a voluntary
petition in bankruptcy or seeking reorganization or to effect a plan or
other arrangement with creditors; (iv) file an answer admitting the
material allegations of an involuntary petition relating to bankruptcy
or reorganization or join in any such petition; (v) become or be
adjudicated a bankrupt; (vi) apply for or consent to the appointment of,
or consent that an order be made, appointing any receiver, custodian or
trustee for itself or any of its properties, assets or affairs; or (vii)
any receiver, custodian or trustee shall have been appointed for all or
a substantial part of its properties, assets or affairs and shall not be
discharged within 30 days after the date of such appointment.
(f) EXECUTION. One or more writs of execution or attachment or
any judgment lien involving in the aggregate a liability or potential
liability (not fully covered by independent third party insurance) as to
any single or related series of transactions, incidents or conditions,
of $100,000 or more, shall be issued against a the Collateral and shall
not be discharged or bonded against or released within 30 days after the
issuance or attachment of such writ or lien.
(g) IMPAIRMENT OF COLLATERAL. There shall occur any material
deterioration or impairment of all or any part of the Collateral or any
decline or depreciation in the value or market price of the Collateral
which causes the Collateral, in the sole and absolute judgment of the
Bank, to become unacceptable as to character or value.
(h) REVOCATION OR LIMITATION OF GUARANTY. Any Guaranty shall be
revoked or limited or its enforceability or validity shall be contested
by any Guarantor, by operation of law, legal proceeding or otherwise or
any individual who is a Guarantor shall die, become incompetent or
1997 CREDIT AGREEMENT -- Page 21
22
insane, or is placed under a conservatorship and a new Guarantor or
substitute performance acceptable to the Bank is not provided within
thirty (30) days.
(i) SUSPENSION. The Borrower shall voluntarily suspend the
transaction of business or allow to be suspended, terminated, revoked or
expired any permit, license or approval of any governmental body
necessary to conduct the Borrower's business as now conducted.
(j) CHANGE IN OWNERSHIP. There shall occur a sale, transfer,
disposition or encumbrance (whether voluntary or involuntary), or an
agreement shall be entered into to do so, with respect to more than 10%
of the issued and outstanding capital stock of the Borrower.
11.2. REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default,
the Bank may, at its sole election, without demand and upon only such notice as
may be required by law:
(a) ACCELERATION. Declare any or all of the Borrower's
indebtedness owing to the Bank, whether under this Agreement or under
any other document, instrument or agreement, immediately due and
payable, whether or not otherwise due and payable.
(b) CEASE EXTENDING CREDIT. Cease making Advances or otherwise
extending credit to or for the account of the Borrower under this
Agreement or under any other agreement now existing or hereafter entered
into between the Borrower and the Bank.
(c) TERMINATION. Terminate this Agreement as to any future
obligation of the Bank without affecting the Borrower's obligations to
the Bank or the Bank's rights and remedies under this Agreement or under
any other document, instrument or agreement.
(d) SEGREGATE COLLECTIONS. Require the Borrower to segregate all
collections and proceeds of the Collateral so that they are capable of
identification and to deliver such collections and proceeds to the Bank,
in kind, without commingling, at such times and in such manner as
required by the Bank.
(e) RECORDS OF COLLATERAL. Require the Borrower to periodically
deliver to the Bank records and schedules showing the status, condition
and location of the Collateral and such contracts or other matters which
affect the Collateral. In connection herewith, the Bank may conduct such
audits or other examination of such records, including, but not limited
to, verification of balances owing by any account debtor of the
Borrower, as the Bank, in its sole and absolute discretion, deems
necessary.
(f) NOTIFICATION OF ACCOUNT DEBTORS.
(1) Notify any or all of the Borrower's account debtors,
buyers or transferees of the Collateral or other persons of the
Bank's interest in the Collateral and the proceeds thereof and
instruct such person(s) to thereafter make any payment due the
Borrower directly to the Bank.
(2) The Borrower hereby irrevocably constitutes and
appoints the Bank as its attorney-in-fact to (i) endorse the
Borrower's name on any notes, acceptances, checks, drafts, money
orders or other evidence of payment that may come into the Bank's
possession; (ii) sign the Borrower's name on any invoice or xxxx
of lading relating to any of the Collateral; (iii) notify post
office authorities to change the address for delivery of mail
addressed to the Borrower to such address as the Bank may
designate and take possession of and open mail addressed to the
Borrower and remove therefrom proceeds of and payments on the
Collateral; and (iv) demand, receive and enforce payment and give
receipts, releases and satisfactions for and xxx for all money
payable to the Borrower. All of the preceding may be done either
in the name of the Bank or in the name of the Borrower with the
same force and effect as the Borrower could have done had this
Security Agreement not been entered into.
1997 CREDIT AGREEMENT -- Page 22
23
(g) COMPROMISE. Grant extensions, compromise claims and settle
any account for less than the amount owing thereunder, all without
notice to the Borrower or any obligor on or any Guarantor of the
Indebtedness.
(h) PROTECTION OF SECURITY INTEREST IN COLLATERAL. Make such
payments and do such acts as the Bank, in its sole judgment, considers
necessary and reasonable to protect its security interest in the
Collateral. The Borrower hereby irrevocably authorizes the Bank to pay,
purchase, contest or compromise any encumbrance, lien or claim which the
Bank, in its sole judgment, deems to be prior or superior to its
security interest. Further, the Borrower hereby agrees to pay to the
Bank, upon demand therefor, all expenses and expenditures (including
reasonable and necessary attorneys' fees) incurred in connection with
the foregoing.
(i) FORECLOSURE. Apply, set off, collect or sell, only upon such
demands or notices as are required by law, the whole or any part of the
Collateral, in such order and manner as the Bank may elect. Any such
sale may be made by way of one or more sales and may be made at a public
or private sale at the Bank's place of business, at any broker's board
or securities exchange, or elsewhere. Any such sale may be for cash or
upon credit or for future delivery as such price as the Bank may deem to
be commercially reasonable. The Bank may be the purchaser of any or all
of the Collateral at any sale and shall thereafter own such Collateral
in its own right, free of any claim of the Borrower or right of
redemption. Any deficiency which exists after the disposition or
liquidation of the Collateral shall be a continuing liability of any
obligor or guarantor of the Obligations and shall be immediately paid to
the Bank.
(j) APPLICATION OF PROCEEDS. All amounts received by the Bank as
proceeds from the disposition or liquidation of the Collateral shall be
applied as follows: first, to prepayment penalties, if any; next, to the
costs and expenses of collection, including court costs and reasonable
attorneys' fees, whether or not suit is commenced by the Bank; next, to
those costs and expenses incurred by the Bank in protecting, preserving,
enforcing, collecting, selling or disposing of the Collateral; next, to
the payment of accrued and unpaid interest on all of the Obligations;
next, to the payment of the outstanding principal balance of the
Obligations; and last, to the payment of any other indebtedness owed by
the Borrower to the Bank. Any excess Collateral or excess proceeds
existing after the disposition or liquidation of the Collateral will be
returned or paid by the Bank to the Borrower.
(k) NON-EXCLUSIVITY OF REMEDIES. Exercise one or more of the
Bank's rights set forth herein or seek such other rights or pursue such
other remedies as may be provided by law, in equity or in any other
agreement now existing or hereafter entered into between the Borrower
and the Bank, or otherwise. .
12. MISCELLANEOUS PROVISIONS
12.1. AMOUNTS PAYABLE ON DEMAND. If the Borrower fails to pay on demand
any amount so payable under this Agreement, the Bank may, at its option and
without any obligation to do so and without waiving any default occasioned by
the Borrower's failure to pay such amount, create an Advance in an amount equal
to the amount so payable, which Advance shall thereafter bear interest as a
Variable Rate Advance.
12.2. DEFAULT INTEREST RATE. The Borrower shall pay to the Bank interest
on any indebtedness or amount payable under this Agreement, from the date that
such indebtedness or amount became due or was demanded to be due until paid in
full, at the Default Interest Rate.
12.3. NOTICES. Any notices required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given either (a)
upon actual receipt or five (5) days after
1997 CREDIT AGREEMENT -- Page 23
24
deposit in the United States mail, registered or certified mail, postage
prepaid, return receipt requested; or (b) upon actual receipt if sent via
reputable overnight courier. All notices shall be addressed as follows:
If to Bank: If to Borrower:
Sanwa Bank California Motor Cargo
San Francisco Commercial Banking Center X.X. Xxx 0000
000 Xxxxxx Xxxxxx Xxxx Xxxx Xxxx, Xxxx 00000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 Attn: Xxxx X. Xxxxxxx
Attn: Xxxxxxx X. Xxxxxxxxx
or such other address as any party from time to time specify in writing to all
other parties.
12.4. RELIANCE. Each warranty, representation, covenant and agreement
contained in this Agreement shall be conclusively presumed to have been relied
upon by the Bank regardless of any investigation made or information possessed
by the Bank and shall be cumulative and in addition to any other warranties,
representations, covenants or agreements which the Borrower shall now or
hereafter give, or cause to be given, to the Bank.
12.5. WAIVER OF JURY TRIAL. THE BORROWER AND THE BANK EACH WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE
BORROWER AND THE BANK EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
12.6. ATTORNEY'S FEES. The Borrower agrees to pay or reimburse Bank
within five Business Days after demand for (i) all costs and expenses incurred
by Bank in connection with the development, preparation, delivery,
administration and execution of any amendment, supplement, waiver or
modification to (in each case, whether or not consummated), this Agreement, any
Loan Document and any other documents prepared in connection therewith, and the
consummation of the transactions contemplated hereby and thereby, including the
reasonable attorney fees and costs incurred by Bank with respect thereto; and
(ii) all costs and expenses incurred by the Bank in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
(including in connection with any restructuring regarding the Obligations and
including in any insolvency proceeding or appellate proceeding) under this
Agreement, any other Loan Document, and any such other documents, including
attorney fees incurred by the Bank; and (iii) in the event of any action in
relation to this Agreement or any document, instrument or agreement executed
with respect to, evidencing or securing the Obligations, the prevailing party,
in addition to all other sums to which it may be entitled, shall be entitled to
reasonable attorneys' fees.
12.7. WAIVER. Neither the failure nor delay by the Bank in exercising
any right hereunder or under any document, instrument or agreement mentioned
herein shall operate as a waiver thereof, nor shall any single or partial
exercise of any right hereunder or under any document, instrument or agreement
mentioned herein preclude other or further exercise thereof or the exercise of
any other right;
1997 CREDIT AGREEMENT -- Page 24
25
nor shall any waiver of any right or default hereunder or under any other
document, instrument or agreement mentioned herein constitute a waiver of any
other right or default or constitute a waiver of any other default of the same
or any other term or provision.
12.8. CONFLICTING PROVISIONS. To the extent that any of the terms or
provisions contained in this Agreement are inconsistent with those contained in
any other document, instrument or agreement executed pursuant hereto, the terms
and provisions contained herein shall control. Otherwise, such provisions shall
be considered cumulative.
12.9. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the Borrower and the Bank and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the Bank's prior
written consent. The Bank may sell, assign or grant participations in all or any
portion of its rights and benefits hereunder. The Borrower agrees that, in
connection with any such sale, grant or assignment, the Bank may deliver to the
prospective buyer, participant or assignee financial statements and other
relevant information relating to the Borrower.
12.10. AMENDMENT. This Agreement may be amended only by instrument in
writing singed by the Bank and the Borrower.
12.11. JURISDICTION. THIS AGREEMENT, ANY NOTES ISSUED HEREUNDER, AND ANY
DOCUMENTS, INSTRUMENTS OR AGREEMENTS MENTIONED OR REFERRED TO HEREIN SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF CALIFORNIA
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES, TO THE JURISDICTION OF WHOSE
COURTS THE PARTIES HEREBY SUBMIT.
12.12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and each set of counterparts signed by all the parties shall
constitute one original.
12.13. SEVERABILITY. If any provision of this Agreement shall be
unenforceable for any reason, then the remaining provisions of this Agreement
shall be enforced without regard to such provision.
12.14. HEADINGS. The headings set forth herein are solely for the
purpose of identification and have no legal significance.
12.15. ENTIRE AGREEMENT. This Agreement and the Loan Documents shall
constitute the entire and complete understanding of the parties with respect to
the transactions contemplated hereunder. All previous conversations, memoranda
and writings between the parties or pertaining to the transactions contemplated
hereunder that are not incorporated or referenced in this Agreement or the Loan
Documents are superseded hereby.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first hereinabove written.
SANWA BANK CALIFORNIA MOTOR CARGO
a Utah corporation
By:______________________________________ By:________________________________________
Xxxxxxx X. Xxxxxxxxx, Vice President Xxxx X. Xxxxxxx, Vice President, Finance
1997 CREDIT AGREEMENT -- Page 25
26
EXHIBIT "A"
REQUEST FOR A TERM ADVANCE
Reference is made to that certain 1997 Credit Agreement dated as of September
______, 1997 (the "Agreement") among SANWA BANK CALIFORNIA ("Bank") and MOTOR
CARGO (the "Borrower"). Capitalized terms used herein and not defined herein
shall have the meaning given such terms in the Agreement.
Pursuant to Section 4 of the Agreement the Borrower hereby requests the Bank
create a Term Advance in the amount of $_____________________________________.
Such Term Advance is for the purchase of the equipment described as follows:
======================================================================================================
Manufacturer Year & Model Manufacturer's United States
Serial No. Registry No.
======================================================================================================
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
The Borrower hereby grants the Bank a security interest in each of the
foregoing.
The Bank is to directed to pay the proceeds of the Term Advance to the seller of
the equipment as follows (check only one):
[ ] By cashier's check to:
--------------------------------------------------------------------------------
[ ] By wire transfer to:
--------------------------------------------------------------------------------
(wire transfer instruction attached)
Attached are (check as applicable):
[ ] UCC-1 Financing Statement describing the Equipment suitable for
filing in each state where the Equipment is to be located.
[x] Copies of purchase invoices.
[ ] Evidence that the Bank will be shown as lienholder on each
certificate of title.
MOTOR CARGO
Dated: __________________ By: ______________________________________
___________________________________________
(name/title)
1997 CREDIT AGREEMENT -- Page 26
