Exhibit 10.34
ADVISED REVOLVING LINE OF CREDIT AGREEMENT
$30,000,000.00 Facility
Dated as of November 5, 1998
by and between
AMSOUTH BANK
and
XXXXXXX XXXXXX & COMPANY
CAROLINA PACIFIC DISTRIBUTORS, INC.
TRANSIT LEASING, INC.
SERVICE EXPRESS, INC.
RAINBOW TRUCKING SERVICES, INC.
TRANSPORTATION RESOURCES AND MANAGEMENT, INC.
VENTURE LOGISTICS, LLC.
CERTIFIED TRANSPORT, LLC.
K.J. TRANSPORTATION, INC.
DIVERSIFIED TRUCKING CORP.
NORTHSTAR TRANSPORTATION, INC.
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS.....................................................2
Section 1.1. Capital Expenditures.............................2
Section 1.2. Capitalization...................................2
Section 1.3. Current Assets...................................2
Section 1.4. Current Liabilities..............................2
Section 1.5. Debt.............................................2
Section 1.6. Event of Default.................................3
Section 1.7. Generally Accepted Accounting Principles.........3
Section 1.8. Interest Expense.................................3
Section 1.9. Liabilities......................................3
Section 1.10. LIBOR Reserve Requirement........................3
Section 1.11. Loan Documents...................................3
Section 1.12. Net Cash Flow. ..................................3
Section 1.13. Net Income Available for Debt Service............4
Section 1.14. Net Income Available for Interest Payments.......4
Section 1.15. Net Worth........................................4
Section 1.16. Permitted Contests...............................4
Section 1.17. Qualified Investments............................4
Section 1.18. Receivables......................................5
Section 1.19. Reserve Adjusted LIBOR Rate......................5
Section 1.20. Tangible Net Worth...............................5
Section 1.21. Total Liabilities................................5
ARTICLE II - AMOUNT AND TERMS OF LOAN.......................................6
Section 2.1. Amount...........................................6
Section 2.2. Note.............................................6
Section 2.3. Interest and Principal...........................6
Section 2.4. Increased Costs, Illegality, Etc.................6
Section 2.5. Funding Limitations..............................7
ARTICLES III - SECURITY AND GUARANTY........................................8
Section 3.1. Security Interest................................8
Section 3.2. Guaranty.........................................8
Section 3.3. Security Documents...............................8
Section 3.4. Filing and Recording.............................9
ARTICLE IV - BORROWER'S AND GUARANTOR=S REPRESENTATIONS AND WARRANTIES......9
Section 4.1. Organization and Standing of Xxxxxxx Xxxxxx......9
Section 4.2. Organization and Standing of Carolina Pacific....9
Section 4.3. Organization and Standing of Transit Leasing.....10
Section 4.4. Organization and Standing of Service Express.....10
Section 4.5. Organization and Standing of Rainbow Trucking....10
Section 4.6. Organization and Standing of Transportation
Resources........................................10
Section 4.7. Organization and Standing of Venture Logistics...10
Section 4.8. Organization and Standing of Certified Transport.11
Section 4.9. Organization and Standing of K.J. Transportation.11
Section 4.10. Organization and Standing of Diversified
Trucking.........................................11
Section 4.11. Organization and Standing of Northstar
Transportation...................................11
Section 4.12. Organization and Standing of Guarantor...........11
Section 4.13. Corporate Power and Authority....................12
Section 4.14. Valid and Binding Obligations....................12
Section 4.15. Consent or Filing................................12
Section 4.16. Financial Condition of the Borrower..............12
Section 4.17. Litigation. .....................................13
Section 4.18. Disclosure and No Untrue Statements. ............13
Section 4.19. Title to Collateral..............................13
Section 4.20. Payment of Taxes. ...............................13
Section 4.21. Agreement or Contract Restrictions. .............13
Section 4.22. Patents, Trademarks, Etc. .......................14
Section 4.23. Investment Company Act; Regulation...............14
Section 4.24. Labor Matters. ..................................14
Section 4.25. ERISA Requirement. ..............................14
Section 4.26. Compliance With Environmental Requirements. .....15
Section 4.27. Use of Credit. ..................................15
ARTICLE V - CONDITIONS PRECEDENT............................................16
Section 5.1. Documents and Instruments........................16
Section 5.2. Correctness of Warranties........................16
Section 5.3. Certificates of Resolution.......................16
Section 5.4. Expenses of Lender...............................16
Section 5.5. Supporting Documents. ...........................17
Section 5.6. Opinion of the Borrower's Counsel. ..............17
ARTICLE VI - BORROWER'S AND GUARANTOR=S AFFIRMATIVE COVENANTS...............17
Section 6.1. Corporate Existence and Qualification............17
Section 6.2. Financial Statements.............................18
Section 6.3. Executive Officer's Certificates.................18
Section 6.4. Taxes and Claims.................................19
Section 6.5. Pay Indebtedness to Lender and Perform Other
Covenants........................................19
Section 6.6. Litigation.......................................19
Section 6.7. Right of Inspection; Discussions. ...............19
Section 6.8. Notices. .......................................19
Section 6.9. ERISA Benefit Plans. ............................20
Section 6.10. Insurance........................................20
Section 6.11. Main Bank of Account.............................21
Section 6.12. Net Worth Requirement............................21
Section 6.13. Leverage Ratio...................................21
Section 6.14. Interest Coverage Ratio..........................21
Section 6.15. Lockbox and Accounts Receivable..................21
Section 6.16. Field Audits.....................................24
Section 6.17. Collateral Reporting.............................24
Section 6.18. Observance of Laws. .............................24
Section 6.19. Subsidiaries.....................................25
Section 6.20. Capitalization Ratio.............................25
ARTICLE VII - BORROWER'S NEGATIVE COVENANTS.................................25
Section 7.1. Type of Business.................................25
Section 7.2. Change in Ownership or Management................25
Section 7.3. Acquisitions and Mergers.........................25
Section 7.4. Capital Expenditures.............................25
Section 7.5. Guaranty.........................................26
Section 7.6. Investment and Loans.............................26
Section 7.7. Disposition or Encumbrance of Receivables........26
Section 7.8. Sale-Leasebacks..................................26
Section 7.9. Leases...........................................26
Section 7.10. Liens............................................26
Section 7.11. Take or Pay Contracts............................27
Section 7.12. Other Special Covenants..........................27
ARTICLE VIII - EVENTS OF DEFAULT............................................28
Section 8.1. Events...........................................28
(a) Payment of Obligations to Lender. ...............28
(b) Representation or Warranty. .....................28
(c) Covenants. ......................................28
(d) The Borrower's Liquidation; Dissolution;
Bankruptcy; Etc. ................................28
(e) Order of Dissolution. ...........................29
(f) Reports and Certificates. .......................29
(g) Judgments. ......................................29
(h) Liens Imposed by Law. ...........................29
(i) Corporate Existence. ............................29
(j) .................................................29
Section 8.2. Rights and Remedies Cumulative...................30
Section 8.3. Rights and Remedies Not Waived...................30
Section 8.4. Waiver of Default................................30
ARTICLE IX - MISCELLANEOUS..................................................30
Section 9.1. Course of Dealing; Amendments; Waiver. ..........30
Section 9.2. Lien; Setoff By Lender...........................31
Section 9.3. Liability of Lender to Third Parties.............31
Section 9.4. Waivers..........................................31
Section 9.5. Assignment and Participation.....................32
Section 9.6. Funds Not Assignable.............................32
Section 9.7. Indemnity........................................32
Section 9.8. Termination by the Borrower......................32
Section 9.9. Arbitration. ...................................32
Section 9.10. Notices..........................................33
Section 9.11. Controlling Agreement............................33
Section 9.12. Titles...........................................33
Section 9.13. Venue and Jurisdiction. .........................33
Section 9.14. Governing Law. ..................................34
Section 9.15. Legal or Governmental Limitations. ..............34
Section 9.16. Counterparts. ...................................34
Section 9.17. Addition of Subsidiaries.........................34
Section 9.18. Waiver of Trial By Jury..........................35
Section 9.19. Confidentiality..................................35
ADVISED REVOLVING LINE OF CREDIT AGREEMENT
THIS AGREEMENT dated as of the 5th day of November, 1998, by and
between AMSOUTH BANK, a bank organized under the laws of Alabama, whose mailing
address is Post Office Xxx 000000, Xxxxxxx, Xxxxxxx 00000 (the "Lender"), and
XXXXXXX XXXXXX & COMPANY, INC., a Florida corporation, whose address is P. O.
Xxx 0000, Xxxxxxxxx, Xxxxxxx 00000-0000 (ACarroll Xxxxxx@) and CAROLINA PACIFIC
DISTRIBUTORS, INC., a North Carolina corporation, whose address is 0000 Xxxxxxx
Xxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxx Xxxxxxxx 00000 (ACarolina Pacific@) and
TRANSIT LEASING, INC., an Indiana corporation f/k/a CAPITOL WAREHOUSE, INC., a
Kentucky corporation, whose address is 000 X. Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx
00000 (ATransit Leasing@) and SERVICE EXPRESS, INC., an Alabama corporation,
whose address is X.X. Xxx 0000, Xxxxxxxxxx, Xxxxxxx 00000 (AService Express@)
and RAINBOW TRUCKING SERVICES, INC., an Indiana corporation, whose address is
000 Xxxxxxxx Xxxxxx, Xxxxxxxxxxxxxx, Xxxxxxx 00000 (ARainbow Trucking@) and
TRANSPORTATION RESOURCES AND MANAGEMENT, INC., an Indiana corporation, whose
address is 0000 XX Xxxxxxx 00 X, Xxxxx 0, Xxxx Xxxxx, Xxxxxxx 00000
(ATransportation Resources@) and VENTURE LOGISTICS, LLC., an Indiana limited
liability company, whose address is 0000 X. Xxxxxxxx Xxxx, Xxxxxxxxxxxx,
Xxxxxxx 00000 (AVenture Logistics@) and CERTIFIED TRANSPORT, LLC., an Indiana
limited liability company, whose address is 0000 X. Xxxxxxxx Xxxx,
Xxxxxxxxxxxx, Xxxxxxx 00000 (ACertified Transport@) and K.J. TRANSPORTATION,
INC., a New York corporation, whose address is 0000 Xxxxxxx Xxxx, Xxxxxxxxxx,
Xxx Xxxx 00000 (AK.J. Transportation@) and DIVERSIFIED TRUCKING CORP., an
Alabama corporation, whose address is 000 Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx
00000 (ADiversified Trucking@) and NORTHSTAR TRANSPORTATION, INC., an Alabama
corporation, whose address is 000 Xxxxxxxxx Xxxx, Xxxxxx, Xxxxxxx 00000
(ANorthstar Transportation@) and any and all other subsidiaries of Transit
Group, Inc., a Florida corporation (together herein referred to as the
ASubsidiaries@or individually as the ASubsidiary@) which subsequently enter
into a Joinder to Advised Revolving Line of Credit Agreement and Joinder to
Security Agreement (Xxxxxxx Xxxxxx, Carolina Pacific, Transit Leasing, Service
Express, Rainbow Trucking, Transportation Resources, Venture Logistics,
Certified Transport, K.J. Transportation, Diversified Trucking, Northstar
Transportation and Subsidiaries are together hereinafter referred to as the
"Borrower" and individually referred to as a ACo-Borrower@; references
applicable to Borrower shall also be applicable to each Co-Borrower), and
TRANSIT GROUP, INC., a Florida corporation, whose address is Overlook III, 0000
Xxxxx Xxxxx Xxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000 (the AGuarantor@).
W I T N E S S E T H:
WHEREAS, the Borrower has requested the Lender to lend to Borrower for
the purpose of supporting working capital needs and acquisitions; and
WHEREAS, this Agreement modifies and restates that certain Advised
Revolving Line of Credit Agreement dated as of December 18, 1997 by and between
Lender, Borrower and Guarantor; and
WHEREAS, the Guarantor will derive a benefit from such loan and
therefore has agreed to guarantee the debt of Borrower to Lender and enter into
this Agreement; and
WHEREAS, subject to the continued acceptability of the collateral
referred to herein and subject to the compliance by the Borrower and Guarantor
with all of the terms and conditions hereof, the Lender is willing to make such
loan on the terms and conditions and on the security hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises, conditions,
representations and warranties hereinafter set forth and for other good and
valuable consideration, the parties hereto have mutually agreed as follows:
ARTICLE I - DEFINITIONS
Section 1.1. Capital Expenditures.
Capital Expenditures means any expenditures for fixed assets or that
is properly chargeable to capital account in accordance with generally accepted
accounting principles.
Section 1.2. Capitalization.
Capitalization means Net Worth plus Debt.
Section 1.3. Current Assets.
Current Assets means assets that, in accordance with generally
accepted accounting principles, are current assets; provided, however, that (1)
inventories shall be taken into account on the basis of cost or current market
value, whichever is lower, or, to the extent that such inventories are required
for delivery under then-existing contracts, the applicable contract price, (2)
current assets shall not include any intangible assets or any securities that
are not readily marketable, (3) securities included as current assets shall be
taken into account at the current market price thereof, and (4) current assets
shall not include any amounts due from or owed by any shareholder, partner,
member (as applicable) or affiliate of the Guarantor, the Co-Borrowers or any
of its Subsidiaries.
Section 1.4. Current Liabilities.
Current Liabilities means, as of the date of determination, all Debt
maturing on demand or within one year from, and that is not renewable at the
option of the obligor to a date later than one year after, the date as of which
such determination is made and all other items (including taxes accrued as
estimated) that, in accordance with generally accepted accounting principles,
would be included as current liabilities.
Section 1.5. Debt.
Debt of any person means (1) all indebtedness, whether or not
represented by bonds, debentures, notes or other securities, for the repayment
of borrowed money, (2) all deferred indebtedness for the payment of the
purchase price of property or assets purchased, except trade accounts payable,
(3) all capitalized lease obligations, (4) all indebtedness secured by any Lien
on any property of such person, whether or not indebtedness secured thereby has
been assumed, (5) all obligations with respect to any conditional sale contract
or title retention agreement, (6) all indebtedness and obligations arising
under acceptance facilities or in connection with surety or similar bonds, and
the outstanding amount of all letters of credit issued for the account of such
person, and (7) all obligations with respect to interest rate swap agreements.
Section 1.6. Event of Default.
AEvent of Default@ means any of the events specified in Section 8.1
hereof.
Section 1.7. Generally Accepted Accounting Principles.
"Generally Accepted Accounting Principles" means those principles of
accounting set forth in Opinions of the Financial Accounting Standards Board of
the American Institute of Certified Public Accountants or which have other
substantial authoritative support and are applicable in the circumstances as of
the date of any report required herein or as of the date of an application of
such principles as required herein.
Section 1.8. Interest Expense.
Interest Expense means interest payable on Debt during the period in
question.
Section 1.9. Liabilities.
Liabilities means all Debt and all other items (including taxes
accrued as estimated) that, in accordance with generally accepted accounting
principles, would be included in determining total liabilities as shown on the
liabilities side of a balance sheet.
Section 1.10. LIBOR Reserve Requirement.
"LIBOR Reserve Requirement" means, for any day, the rate at which
reserves (including, without limitation, any marginal, supplemental, or
emergency reserves) are required to be maintained by member banks of the
Federal Reserve System on such day against Eurocurrency liabilities, expressed
as a decimal.
Section 1.11. Loan Documents.
"Loan Documents" means and includes the Note, this Agreement, the
corporate resolution, and any and all other documents executed in connection
with this loan accommodation.
Section 1.12. Net Cash Flow.
Net Cash Flow for any period means net income (or the net deficit, if
expenses and charges exceed revenues and other proper income credits) for such
period, plus amounts that have been deducted for (1) depreciation and (2)
amortization in determining net income for such period.
Section 1.13. Net Income Available for Debt Service.
Net Income Available for Debt Service for any period means net income
(or the net deficit, if expenses and charges exceed revenues and other proper
income credits) for such period, plus amounts that have been deducted for (1)
depreciation, (2) amortization and (3) Interest Expense in determining net
income for such period.
Section 1.14. Net Income Available for Interest Payments.
Net Income Available for Interest Payments means net income (or the
net deficit, if expenses and charges exceed revenues and other proper income
credits) for such period plus amounts that have been deducted for (1) Interest
Expense, (2) income and profit taxes, and (3) amortization of debt discount in
determining net income for such period.
Section 1.15. Net Worth.
Net Worth means the sum of the amounts set forth on the balance sheet
as shareholders= equity (including the par or stated value of all outstanding
capital stock, retained earnings, additional paid-in capital, capital surplus
and earned surplus).
Section 1.16. Permitted Contests.
Permitted Contests means litigation or administrative proceedings
pursued by Borrower in good faith regarding taxes or construction liens.
Section 1.17. Qualified Investments.
Qualified Investments means:
(1) direct obligations of, or obligations the payment
of which is guaranteed by the United States of America (AFederal Securities@),
(2) an interest in any trust or fund that invests solely
in Federal Securities,
(3) a certificate of deposit issued by, or other
interest-bearing deposit with, any bank organized under the laws of the United
States of America or any state thereof, provided that (A) such bank has
capital, surplus and undivided profits of not less that $50,000,000, (B) such
deposit is insured by the Federal Deposit Insurance Corporation, or (C) such
deposit is collaterally secured by such bank by pledging Federal Securities
having a market value (exclusive of accrued interest) not less than the face
amount of such deposit (less the amount of such deposit insured by the Federal
Deposit Insurance Corporation), and
(4) a purchase agreement with respect to Federal Securities,
provided that the Federal Securities subject to such repurchase agreement are
held by or under the control of the Co-borrowers free and clear of third-party
Liens.
Section 1.18. Receivables.
"Receivables" means and includes all present and future accounts,
commissions, contract rights, lease payment, chattel paper, instruments, cash,
deposits, accounts, documents, and tax refunds payable to Borrower, license
fees and proceeds, royalties, insurance proceeds and general intangibles and
all forms of obligations owing, together with all documents or instruments of
title representing the same and rights in any merchandise or goods which the
same represent, together with all right, title, security and guarantees, with
respect to each of the Receivables, including any right of stoppage in transit,
whether the same are now or hereafter owned. "Receivables" also specifically
include all rights of Borrower under any patent license agreement, technical
assistance contract, product supply contract, or similar agreement and includes
all trade names, trademarks, license agreements and all records pertaining to
the accounts, debtors, and collateral and all computer software pertaining to
the Receivables of Borrower.
Section 1.19. Reserve Adjusted LIBOR Rate.
"Reserve Adjusted LIBOR Rate" means, for any AInterest Period@ (as
defined in the Note), an interest rate per annum obtained by dividing (i) the
rate quoted on the Telerate page 3750 as of 11:00 a.m. London time, on the day
that is two London banking days prior to the first day of the Interest Period,
in an amount substantially equal to the ALIBOR-Based Rate@ (as defined in the
Note) and with a term substantially equal to such Interest Period, by (ii) an
amount equal to 1 minus the LIBOR Reserve Requirement for such Interest Period.
In the event the rate quoted by Telerate is discontinued or the rate otherwise
cannot be identified, the Lender shall determine the LIBOR-Based Rate on the
basis of quotes by major banks in the London interbank Eurodollar market for
dollar deposits in an amount substantially equal to and for a term
substantially equal to the Interest Period selected.
Section 1.20. Tangible Net Worth.
Tangible Net Worth means the sum of the amounts set forth on the
balance sheet as shareholders= equity (including the par or stated value of all
outstanding capital stock, retained earnings, additional paid-in capital,
capital surplus and earned surplus), less the sum of (1) any amount of any
write-up of assets, (2) goodwill, (3) patents, trademarks, copyrights,
leasehold improvements not recoverable at the expiration of a lease, and
deferred charges (including unamortized debt, discount and expense,
organization expenses, experimental and developmental expenses, but excluding
prepaid expenses), (4) any amounts at which shares of capital stock of such
person appear on the asset side of the balance sheet and (A) any amounts due
from or owed by any shareholder or affiliate.
Section 1.21. Total Liabilities.
Total Liabilities means all Debt and all other items (including taxes
accrued as estimated) that, in accordance with generally accepted accounting
principles, would be included in determining total liabilities as shown on the
liabilities side of a balance sheet.
ARTICLE II - AMOUNT AND TERMS OF LOAN
Section 2.1. Amount.
The Lender agrees, on the terms and conditions of this Agreement, to
lend to Borrower in an aggregate principal amount not to exceed THIRTY MILLION
DOLLARS ($30,000,000.00) (hereinafter sometimes referred to as the ALoan@ or
XXxxx of Credit@).
Section 2.2. Note.
The obligation to repay the loan is evidenced by a revolving credit
note in the principal sum of THIRTY MILLION DOLLARS ($30,000,000.00) (the
"Note" or ARevolving Credit Note@). Under the Loan, the Borrower may, subject
to the terms, conditions herein set forth and subject to the approval of an
officer of Lender, borrow from Lender, at such time and in such amounts not
exceeding the total amount of THIRTY MILLION DOLLARS ($30,000,000.00).
Section 2.3. Interest and Principal.
The interest on and principal of the Note shall be paid in accordance
with the terms and conditions more particularly set forth in the Note.
Section 2.4. Increased Costs, Illegality, Etc.
(a) If either (i) the introduction of or any change in any
law or regulation or in the interpretation or administration of any law or
regulation by any court or administrative or governmental authority charged
with the interpretation or administration thereof from the date hereof or (ii)
the compliance with any guideline enacted after the date hereof or request from
any such governmental authority, including, without limitation, any central
bank (whether or not having the force of law), which is not caused by an act or
omission of Lender, including without limitation, its failure to maintain
adequate capital, (x) subjects Lender or any corporation controlling Lender to
any tax of any kind whatsoever with respect to this Agreement, or changes the
basis of taxation of payments to Lender of principal, commissions, fees,
interest, or any other amount payable hereunder (except for (A) taxes on or
measured by the overall net income of Lender or branch, office, or agency
through which Lender is acting for purposes of this Agreement or (B) changes in
the rate of such taxes); (y) imposes, modifies, or holds applicable any
reserve, special deposit, compulsory loan, or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
advances or loans by, or other credit or commitment therefor extended by, or
any other acquisition of funds by, any office of Lender which are not otherwise
included in any determination of the Reserve Adjusted LIBOR Rate or other
interest payable hereunder; or (z) imposes on Lender or the corporation
controlling Lender any other condition, and as a result there shall be any
increase in the cost to Lender of agreeing to make or making, funding, or
maintaining advances by an amount deemed by Lender to be material, then the
Borrower shall from time to time, upon demand by Lender, pay directly to Lender
additional amounts sufficient to compensate Lender for such increased cost. A
certificate as to the amount of such increased cost, submitted to the Borrower
by Lender, shall be conclusive and binding for all purposes, absent manifest
error.
(b) If Lender determines that compliance with any law or
regulation or with any guideline or request from any central bank or other
governmental authority subsequent to the date hereof (whether or not having the
force of law) concerning capital adequacy or otherwise has or would have the
effect of reducing the rate of return on the capital of Lender or the
corporation controlling Lender as a consequence of, or with reference to, the
facilities hereunder, by an amount deemed by Lender to be material, the
Borrower shall from time to time, upon demand by Lender, pay to Lender
additional amounts sufficient to compensate Lender or such other corporation
for such reduction. A certificate as to such amounts, submitted to the Borrower
by Lender, shall be conclusive and binding for all purposes, absent manifest
error.
(c) In the event the LIBOR Reserve Requirement increases
subsequent to the date hereof, the interest rate applicable to the Note shall
be the Reserve Adjusted LIBOR Rate.
Section 2.5. Funding Limitations.
Until May 1, 2000, the maximum principal amount that may be
outstanding from time to time under the Line of Credit shall not exceed the
lesser of the following: (a) THIRTY MILLION DOLLARS ($30,000,000.00); or (b)
eighty-five percent (85%) of the Co-Borrower=s Eligible Receivables. After May
1, 2000, the maximum principal amount that may be outstanding from time to time
under the Line of Credit shall not exceed the lesser of the following: (a)
THIRTY MILLION DOLLARS ($30,000,000.00); or (b) fifty percent (50%) of the
Co-Borrower=s Eligible Receivables. Eligible Receivables shall not include any
Ineligible Receivables including, but not limited to, those Receivables
described below. For purposes of determining the funding limitations, each
Co-Borrower=s borrowing base of Eligible Receivables shall be determined
separately and funding eligibility will be determined separately and accounts
receivable from one Co-Borrower may not be used to calculate the borrowing base
for another Co-Borrower. The monies disbursed under the Line of Credit will be
disbursed based on such Co-Borrower=s borrowing base and disbursements may be
made based on verbal or written request to Lender in Lender=s sole discretion.
The Lender shall have the right, in the good faith exercise of its
sole discretion, to deem any specific Receivables ineligible for the purpose of
calculating the maximum principal amount that may be outstanding from time to
time under the Note, including but not limited to the following types of
Receivables: (1) invoices aged ninety (90) days or more past invoice date; (2)
accounts that have over thirty-five percent (35%) of the total balance aged
ninety (90) days or more past invoice date; (3) Receivables due from any
government agency to the extent that such Receivables exceed 15% of the
Borrowers= aggregate Eligible Receivables; and (4) credit balances aged ninety
(90) days or more past invoice date; (5) accounts owed by foreign corporations
which are not fully insured under the current credit insurance policy; (6)
accounts owed by or due from affiliates, related parties, stockholders, or
employees; (7) accounts that could be subject to the right of offset, including
but not limited to contra accounts; (8) invoices issued for services rendered
prior to the actual rendering of the services (i.e., pre-billed invoices); (9)
post dated invoices; (10) any Receivables due from any entity to the extent
that such Receivables exceed 15% of the Borrowers= aggregate Eligible
Receivables; and (11) any Receivables resulting from any transaction not in the
ordinary course of business. Lender shall have no obligation to fund if an
Event of Default exists.
ARTICLES III - SECURITY AND GUARANTY
As security for the full and timely payment of the principal and
interest under the Note and for any and all other indebtedness or liability of
the Borrower to the Lender, whether now existing or hereafter arising (all of
which indebtedness is hereby referred to as AIndebtedness@), the Borrower
grants and/or agrees to the following:
Section 3.1. Security Interest.
The Borrower hereby grants the Lender and shall cause to be granted to
the Lender a first prior and exclusive lien and security interest in and a
continuing first lien upon the following property (all of which is herein
referred to collectively as the "Collateral"):
(a) All "Receivables", as defined in Section 1.18 hereof, of
Borrower; and
(b) All proceeds, products and accessions of and to all of the
foregoing.
Section 3.2. Guaranty.
The Borrower shall cause to be duly executed and delivered to the
Lender the unlimited guaranty of the Guarantor, whereby the Guarantor
guarantees the Borrower's obligations under the Note, this Agreement and the
Security Documents as hereinafter defined. The Guarantor, by its execution of
this Agreement, agrees that any and all loans, indebtedness or other liability
of the Borrower to the Guarantor shall at all times be subordinate to the
indebtedness of the Borrower to the Lender.
Section 3.3. Security Documents.
The Borrower, in order to describe the terms and conditions under
which the Collateral will be held by the Lender, shall execute and deliver to
the Lender, in form and substance satisfactory to the Lender, any and all
security agreements, financing statements, and any other documents relating to
any security as the Lender shall require from time to time (all herein together
with the Note and this Agreement referred to collectively as the "Security
Documents"). Concurrent with the execution of the Note, the Borrower shall
deliver to the Lender executed Security Documents covering the items described
in Sections 3.1 and 3.2 in form and substance satisfactory to the Lender.
Section 3.4. Filing and Recording.
The Borrower shall, at its cost and expense, cause all instruments and
documents given as security pursuant to this Agreement to be duly recorded
and/or filed in all places necessary, in the opinion of the Lender, to perfect
and protect the security interest of the Lender in the property covered
thereby. The Borrower hereby authorizes the Lender to file any financing
statement in respect of any security interest created pursuant to this
Agreement which may at any time be required or which, in the opinion of the
Lender, may at any time be desirable, although the same may have been executed
only by the Lender, or, at the option of the Lender, to sign such financing
statement on behalf of the Borrower and file the same, and the Borrower hereby
irrevocably designates the Lender, its agents, representatives and designees as
agents and attorneys-in-fact for the Borrower for this purpose. In the event
that any recording or refiling thereof (or the filing of any statements of
continuation or assignment of any financing statement) is required to protect
and preserve security interest, the Borrower shall, at its cost and expense,
cause the same to be re-recorded and/or refiled at the time and in the manner
requested by the Lender.
ARTICLE IV - BORROWER'S AND GUARANTOR=S REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Agreement, the Borrower and
Guarantor make the following representations and warranties which shall be
deemed to be continuous representations and warranties so long as any credit
hereunder remains available or any indebtedness of the Borrower to the Lender
remains unpaid:
Section 4.1. Organization and Standing of Xxxxxxx Xxxxxx.
Xxxxxxx Xxxxxx is a corporation duly organized and existing under the
laws of the State of Florida and is duly qualified to do business in the State
of Florida and in each jurisdiction where the failure to be so qualified would
have a material adverse effect on Borrower. To the best of Xxxxxxx Xxxxxx=s
knowledge and belief, it is in material compliance with all applicable laws and
regulations governing the conduct of its business and governing consummation of
the transactions and its principal place of business is located in the State of
Florida.
Section 4.2. Organization and Standing of Carolina Pacific.
Carolina Pacific is a corporation duly organized and existing under
the laws of the State of North Carolina and is duly qualified to do business in
the State of North Carolina and in each jurisdiction where the failure to be so
qualified would have a material adverse effect on Borrower. To the best of
Carolina Pacific=s knowledge and belief, it is in material compliance with all
applicable laws and regulations governing the conduct of its business and
governing consummation of the transactions and its principal place of business
is located in the State of North Carolina.
Section 4.3. Organization and Standing of Transit Leasing.
Transit Leasing is a corporation duly organized and existing under the
laws of the State of Indiana and is duly qualified to do business in the State
of Indiana and in each jurisdiction where the failure to be so qualified would
have a material adverse effect on Borrower. To the best of Transit Leasing=s
knowledge and belief, it is in material compliance with all applicable laws and
regulations governing the conduct of its business and governing consummation of
the transactions and its principal place of business is located in the State of
Indiana.
Section 4.4. Organization and Standing of Service Express.
Service Express is a corporation duly organized and existing under the
laws of the State of Alabama and is duly qualified to do business in the State
of Alabama and in each jurisdiction where the failure to be so qualified would
have a material adverse effect on Borrower. To the best of Service Express=
knowledge and belief, it is in material compliance with all applicable laws and
regulations governing the conduct of its business and governing consummation of
the transactions and its principal place of business is located in the State of
Alabama.
Section 4.5. Organization and Standing of Rainbow Trucking.
Rainbow Trucking is a corporation duly organized and existing under
the laws of the State of Indiana and is duly qualified to do business in the
State of Indiana and in each jurisdiction where the failure to be so qualified
would have a material adverse effect on Borrower. To the best of Rainbow
Trucking=s knowledge and belief, it is in material compliance with all
applicable laws and regulations governing the conduct of its business and
governing consummation of the transactions and its principal place of business
is located in the State of Indiana.
Section 4.6. Organization and Standing of Transportation
Resources.
Transportation Resources is a corporation duly organized and existing
under the laws of the State of Indiana and is duly qualified to do business in
the State of Indiana and in each jurisdiction where the failure to be so
qualified would have a material adverse effect on Borrower. To the best of
Transportation Resources= knowledge and belief, it is in material compliance
with all applicable laws and regulations governing the conduct of its business
and governing consummation of the transactions and its principal place of
business is located in the State of Indiana.
Section 4.7. Organization and Standing of Venture Logistics.
Venture Logistics is a limited liability company duly organized and
existing under the laws of the State of Indiana and is duly qualified to do
business in the State of Indiana and in each jurisdiction where the failure to
be so qualified would have a material adverse effect on Borrower. To the best
of Venture Logistics= knowledge and belief, it is in material compliance with
all applicable laws and regulations governing the conduct of its business and
governing consummation of the transactions and its principal place of business
is located in the State of Indiana.
Section 4.8. Organization and Standing of Certified Transport.
Certified Transport is a limited liability company duly organized and
existing under the laws of the State of Indiana and is duly qualified to do
business in the State of Indiana and in each jurisdiction where the failure to
be so qualified would have a material adverse effect on Borrower. To the best
of Certified Transport=s knowledge and belief, it is in material compliance
with all applicable laws and regulations governing the conduct of its business
and governing consummation of the transactions and its principal place of
business is located in the State of Indiana.
Section 4.9. Organization and Standing of K.J. Transportation.
K.J. Transportation is a corporation duly organized and existing under
the laws of the State of New York and is duly qualified to do business in the
State of New York and in each jurisdiction where the failure to be so qualified
would have a material adverse effect on Borrower. To the best of K.J.
Transportation=s knowledge and belief, it is in material compliance with all
applicable laws and regulations governing the conduct of its business and
governing consummation of the transactions and its principal place of business
is located in the State of New York.
Section 4.10. Organization and Standing of Diversified Trucking.
Diversified Trucking is a corporation duly organized and existing
under the laws of the State of Alabama and is duly qualified to do business in
the State of Alabama and in each jurisdiction where the failure to be so
qualified would have a material adverse effect on Borrower. To the best of
Diversified Trucking=s knowledge and belief, it is in material compliance with
all applicable laws and regulations governing the conduct of its business and
governing consummation of the transactions and its principal place of business
is located in the State of Alabama.
Section 4.11. Organization and Standing of Northstar
Transportation.
Northstar Transporation is a corporation duly organized and existing
under the laws of the State of Alabama and is duly qualified to do business in
the State of Alabama and in each jurisdiction where the failure to be so
qualified would have a material adverse effect on Borrower. To the best of
Northstar Transportation=s knowledge and belief, it is in material compliance
with all applicable laws and regulations governing the conduct of its business
and governing consummation of the transactions and its principal place of
business is located in the State of Alabama.
Section 4.12. Organization and Standing of Guarantor.
The Guarantor is a corporation duly organized and existing under the
laws of the State of Florida and is duly qualified to do business in each
jurisdiction in which the conduct of its business requires such qualification,
including the State of Florida. To the best of the Guarantor=s knowledge and
belief, it is in compliance with all applicable laws and regulations governing
the conduct of its business and governing consummation of the transactions
contemplated hereby.
Section 4.13. Corporate Power and Authority.
The execution, delivery and performance of this Agreement and any
Security Documents by the Borrower and Guarantor are within its corporate
powers and have been duly authorized by all necessary corporate and shareholder
action, are not in contravention of law or the terms of their respective
Articles of Incorporation or By-Laws or any amendment thereto, or any
indenture, agreement or undertaking to which they are a party or by which they
are bound, except such obligations which will be fully satisfied at the initial
funding hereunder.
Section 4.14. Valid and Binding Obligations.
This Agreement, the Note, the Security Documents and any other
documents required hereunder, when executed and delivered by Borrower and
Guarantor will constitute the legal, valid and binding respective obligations
of the Borrower and Guarantor, subject to applicable bankruptcy and insolvency
laws and laws affecting creditors' rights and the enforcement thereof
generally.
Section 4.15. Consent or Filing.
No consent, approval or authorization of, or registration, declaration
or filing with any court, any governmental body or authority or other person or
entity is required in connection with the valid execution, delivery or
performance of this Agreement or any document required by this Agreement or in
connection with any of the transactions contemplated thereby, except the filing
of the financing statements contemplated hereunder.
Section 4.16. Financial Condition of the Borrower.
(a) The financial statements of the Borrower, a copy of which has been
furnished to the Lender, are materially correct, complete, and fairly present
the financial condition of the Borrower as at the date of the financial
statements and fairly present the results of the operations of the Borrower for
the period covered thereby.
(b) The Borrower has no material direct or contingent liabilities,
liabilities for taxes, long-term leases, or unusual forward or long-term
commitments as of the date of the Agreement which are not disclosed by,
provided for, or reserved against in the financial statements or referred to in
notes thereto, and at such date there are no material unrealized or anticipated
losses from any unfavorable commitments of the Borrower. The financial
statements furnished to the Lender have been prepared in accordance with
Generally Accepted Accounting Principles applied on a consistent basis
maintained throughout the period involved. There has been no material adverse
change in the business, properties or condition, financial or otherwise, of the
Borrower since the date of such financial statements.
Section 4.17. Litigation.
There is no suit or proceeding at law or in equity (including
proceedings, by or before any court, arbitrator, governmental or administrative
commission, board or bureau, or other administrative agency) pending, or to the
knowledge of the Borrower or Guarantor threatened, by or against or involving
the Borrower or Guarantor or against any of its properties, or existence which,
if adversely determined, would have a material adverse effect on the property,
assets, or business or on the condition, financial or otherwise, of the
Borrower.
Section 4.18. Disclosure and No Untrue Statements.
No representation or warranty made by the Borrower in the Loan
Documents or which will be made by the Borrower from time to time pursuant to
Officer=s Certificates (a) contains or will contain any material
misrepresentation or material untrue statement of fact; or (b) omits or will
omit to state any material fact necessary to make the statements therein not
misleading, unless otherwise disclosed in writing to the Lender. There is no
fact known to the Borrower or any of its executive financial officers which
materially and adversely affects the business, assets, properties, or
condition, financial or otherwise, of the Borrower.
Section 4.19. Title to Collateral.
The Borrower has good and marketable title to, and is the holder of
all of the interests in, all of the Collateral given as security to the Lender,
free and clear of all pledges, liens, security interests or other encumbrances.
The Borrower and Guarantor will warrant and defend the Collateral against the
claims and demands of all persons.
Section 4.20. Payment of Taxes.
The Borrower has filed or caused to be filed all federal, state, and
local tax returns which are required to be filed by it and has paid or caused
to be paid all taxes as shown on said returns or on any assessment received by
it, to the extent that such taxes have become due, except as otherwise
permitted by the provisions hereof, and no controversy in respect of additional
income taxes which could have a material adverse effect on the Borrower is
pending, or, to the knowledge of the Borrower, threatened, unless adequate
reserve has been made therefor. The Borrower has set up reserves which are
believed by its officers to be adequate for the payment of all taxes for which
a notice of assessment has been received and for the payment of such taxes for
the years that have not been audited by the respective tax authorities.
Section 4.21. Agreement or Contract Restrictions.
The Borrower is not a party to, nor is it bound by, any agreement,
contract, or instrument or subject to any charter or other corporate or
partnership restriction which materially adversely affects the business,
properties, assets, operations, or financial condition of the Borrower except
as disclosed in the financial statements and notes thereto described in Section
6.2 hereof. The Borrower is not in material default in the performance,
observance, or fulfillment of any obligations, covenants, or conditions
contained in any agreement or instrument to which it is a party, which would
have a material adverse affect on Borrower performing hereunder.
Section 4.22. Patents, Trademarks, Etc.
The Borrower owns, possesses, or has the right to use all necessary
patents, patent rights, licenses, trademarks, trademark rights, trade names,
trade name rights, and copyrights to conduct its business as now conducted,
without known conflict with any patent, patent right, license, trademark,
trademark right, trade name, trade name right, or copyright of any other person
or entity.
Section 4.23. Investment Company Act; Regulation.
(a) The Borrower is not an "investment company," an "affiliated
person" of any investment company," or a company "controlled" by an "investment
company," and the Borrower is not an "investment advisor" or an "affiliated
person" of an "investment advisor" (as each of the quoted terms is defined or
used in the Investment Company Act of 1940, as amended).
(b) The Borrower is not subject to regulation under any state or local
public utilities code or federal, state, or local statute or regulation
limiting the ability of the Borrower to incur indebtedness for money borrowed.
Section 4.24. Labor Matters.
There are no strikes or other labor disputes against the Borrower or
Guarantor pending or, to the Borrower's or Guarantor=s knowledge, threatened.
To the knowledge of Borrower, hours worked by and payment made to employees of
the Borrower have not been in violation of the Fair Labor Standards Act or any
other applicable law dealing with such matters. All material payments due from
the Borrower on account of employee health and welfare insurance have been paid
or accrued as a liability on its books.
Section 4.25. ERISA Requirement.
Except as previously disclosed to Lender in writing, the Borrower does
not have in force any written or oral bonus plan, stock option plan, employee
welfare, pension or profit sharing plan, or any other employee benefit
arrangement or understanding. In addition, the Borrower and any predecessor of
the Borrower is not now or was not formerly during the five year period
immediately preceding the effective date of this Agreement a participating
employer in any multi employer or "multiple employer" plans within the meaning
of Sections 4001 (1)(a)(3), 4063, and 4064 of ERISA. Each employee benefit plan
subject to the requirements of ERISA complies in all material respects with all
of the requirements of ERISA and those plans which are subject to being
"qualified" under Sections 401 (a) and 501 (a) of the Internal Revenue Code of
1986, as amended from time to time, have since their adoption been "qualified"
and have received favorable determination letters from the Internal Revenue
Service so holding. There is no matter known to Borrower which would adversely
affect the qualified tax exempt status of any such trust or plan, and except as
previously disclosed to the Lender, there are no deficiencies or liabilities
for any such plan or trust. No employee benefit plan sponsored by the Borrower
has engaged in a nonexempt "prohibited transaction" as defined in ERISA.
Section 4.26. Compliance With Environmental Requirements.
The Borrower warrants and represents to the Lender that to the best of
Borrower's knowledge, the real property owned by Borrower is now and at all
times hereafter will continue to be in full compliance with all federal, state
and local environmental laws and regulations as they now exist or are hereafter
enacted and/or amended, including, but not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, the Resource
Conservation and Recovery Act of 1976, as amended by the Used Oil Recycling Act
of 1980, and the Hazardous and Solid Waste Amendments of 1984, as amended. The
Borrower shall indemnify and hold the Lender harmless from and against any and
all damages, penalties, fines, claims, liens, suits, liabilities, costs
(including cleanup costs), judgments and expenses (including attorneys',
consultants' or experts' fees and expenses) of every kind and nature suffered
by or asserted against the Lender as a direct or indirect result of any
warranty or representation made by the Borrower in this paragraph being false
or untrue in any material respect or any requirement under any law, regulation
or ordinance, whether local, state or federal, which requires the elimination
or removal of any hazardous materials, substances, wastes or other
environmentally regulated substances. The Borrower's obligations hereunder
shall not be limited to any extent by the term of the indebtedness secured
hereby, and, as to any act or occurrence prior to payment in full and
satisfaction of the indebtedness which gives rise to liability hereunder, shall
continue, survive and remain in full force and effect notwithstanding payment
in full and satisfaction of the indebtedness.
Section 4.27. Use of Credit.
The Loan shall be used exclusively for the purpose of supporting
working capital needs and acquisitions. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying "margin
stock" (within the meaning of Regulation U, Regulation X or Regulation G of the
Board of Governors of the Federal Reserve System), and no part of the proceeds
of any advance hereunder will be used to purchase or carry any "margin stock,"
to extend credit to others for the purpose of purchasing or carrying any
"margin stock," or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of Regulation U, Regulation
X, or Regulation G. Neither the Borrower nor any person acting on behalf of the
Borrower has taken or will take any action which might cause the Note or any
other Loan Documents, including this Agreement, to violate Regulation U,
Regulation X, or Regulation G or any other regulation of the Board of Governors
of the Federal Reserve system or violate Section 8 of the Securities Exchange
Act of 1934 or any rule or regulation thereunder, in each case as now in effect
as the same may hereinafter be in effect. The Borrower owns no "margin stock"
except for that described in the financial statements referred to in Section
6.2 hereof and, as of the date hereof, the aggregate value of all "margin
stock" owned by the Borrower does not exceed twenty-five percent (25%) of the
value of all of the Borrower's assets. In connection with the Loan, the
Borrower will upon request of the Lender deliver to the Lender a statement in
conformity with the requirements of Federal Reserve Form U-1 referred to in
said Regulation.
ARTICLE V - CONDITIONS PRECEDENT
The effectiveness of this Agreement and the obligations of the Lender
to consummate any of the transactions contemplated hereby shall be subject to
the satisfaction of the following conditions precedent, at or prior to the time
of the funding of the loan or any part thereof:
Section 5.1. Documents and Instruments.
The Lender shall have received all the instruments, documents and
property contemplated to be delivered by the Borrower hereunder, and the same
shall be in full force and effect.
Section 5.2. Correctness of Warranties.
All representations and warranties contained herein or otherwise made
to the Lender in connection herewith shall be true and correct.
Section 5.3. Certificates of Resolution.
The Board of Directors of the Borrower and Guarantor and, if
shareholder approval is deemed necessary by any party, the shareholders of the
Borrower and Guarantor, shall have passed specific resolutions authorizing the
execution and delivery of all documents and the taking of all actions called
for by this Agreement, and the Borrower and Guarantor shall have furnished to
the Lender copies of such resolutions, certified by its Secretary.
Section 5.4. Expenses of Lender.
The Borrower promises to reimburse the Lender promptly for all
reasonable out-of-pocket expenses of every nature which the Lender may incur in
connection with this Agreement and the Note, the making of any loans provided
for herein or the collection of the Borrower's indebtedness, including, but not
limited to, any filing fees and documentary stamps. Such expenses shall be paid
at closing or in a reasonable time thereafter upon receipt of written invoices.
The Borrower shall also pay reasonable postclosing expenses incurred by the
Lender on behalf of the Borrower, including, but not limited to, preparation of
documents to terminate the loan and release the security therefor. Furthermore,
the Borrower shall be liable for post-closing collection expenses, including,
but not limited to, the collection of obligations of the Borrower hereunder,
including reasonable attorneys' fees, including appellate proceedings,
post-judgment proceedings and bankruptcy proceedings. In the event the Borrower
fails to pay such expenses within a reasonable time, the Lender may either (a)
disburse to itself under the terms of the Note any sums payable to Lender and
such disbursement shall be considered with like effect as if same had been made
to Borrower, or (b) pay such expenses on the Borrower's behalf and charge the
Borrower's account.
Section 5.5. Supporting Documents.
On or prior to the closing date, the Lender shall have received the
following documents satisfactory in form and substance to the Lender and
counsel for the Lender and, as requested by the Lender, certified by
appropriate corporate or governmental authorities:
(a) a certificate of good standing of each Borrower certified
by the Secretary of State, or other appropriate governmental authority, of the
state of incorporation;
(b) a copy of resolutions of the Board of Directors of the
Borrower authorizing the execution, delivery, and performance of the Loan
Documents and the borrowing thereunder, and specifying the officer or officers
of the Borrower authorized to execute the Loan Documents, accompanied by a
certificate from an appropriate officer that the resolutions are true and
complete, were duly adopted at a duly called meeting in which a quorum was
present and acting throughout, or were duly adopted by written action, and have
not been amended, annulled, rescinded, or revoked in any respect and remain in
full force and effect on the date of the certificate;
(c) an incumbency certificate containing the names and titles
of all duly elected officers and directors of the Borrower as of the date of
this Agreement, accompanied by a certificate from an appropriate officer that
the information is true and complete;
(d) such additional supporting documents as the Lender may
request.
Section 5.6. Opinion of the Borrower's Counsel.
On or prior to the closing date, and to the extent required by the
Lender at the time of any borrowing hereunder, the Lender shall have received
the favorable opinion of counsel for Borrower indicating that the execution,
delivery and performance of this Agreement by the Borrower are within its
corporate powers and authorized, in form and substance satisfactory to the
Lender.
ARTICLE VI - BORROWER'S AND GUARANTOR=S AFFIRMATIVE COVENANTS
The Borrower and Guarantor, jointly and severally, covenant and agree
that until the Note, together with interest and all other indebtedness to the
Lender under the terms of this Agreement, is paid in full, unless specifically
waived by the Lender in writing:
Section 6.1. Corporate Existence and Qualification.
The Borrower and Guarantor will do, or cause to be done, all things
necessary to preserve, renew and keep in full force and effect its corporate
existence, its material rights, licenses and permits and comply in all material
respects with all laws applicable to it, operate its business in a proper and
reasonable businesslike manner and substantially as presently operated or
proposed to be operated; and at all times maintain, preserve and protect all
franchises and trade names and preserve all property used or useful in the
conduct of its business, and keep the same in good repair, working order and
condition, and from time to time make, or cause to be made, all needful and
proper repairs, renewals, replacements, betterments and improvements thereto,
all as reasonably necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.
Section 6.2. Financial Statements.
Borrower and Guarantor will each keep their books of account in
accordance with generally accepted accounting practices applied on a consistent
basis and will furnish to Lender the following:
(a) Quarterly financial statements of each Co-Borrower and Guarantor
and subsidiaries including, at a minimum, a balance sheet, an income and
expense statement and a year-to-date financial statement presenting individual
as well as consolidating and consolidated financial information on each
Co-Borrower and Guarantor and its subsidiaries, submitted within forty-five
(45) days of the end of each fiscal quarter of each Co-Borrower and Guarantor
prepared by and certified as such by the chief financial officer of the
applicable Co-Borrower and Guarantor stating Athe undersigned hereby certifies
that the attached financial information is true and correct@ in all material
respects, subject to audit adjustments; and containing information required by
Lender; and
(b) Annual financial statements of each Co-Borrower and Guarantor
including, at a minimum, a balance sheet and an income and expense statement
presenting individual as well as consolidating and consolidated financial
information on the Borrower and Guarantor and its subsidiaries, submitted
within ninety (90) days from the end of each fiscal year end, prepared by and
certified as such by an independent certified public accountant acceptable to
Lender which may be satisfied by delivery of Guarantor=s Annual Report on Form
10-K as filed with the Securities and Exchange Commission; and
(c) Monthly accounts receivable agings for each Co-Borrower aged by
invoice date as of the end of each month, accounts payable agings for each
Co-Borrower as of the end of each month, daily updated accounts receivable
balances for each Co-Borrower and customer address listings as Lender may
request from time to time, all in form and substance satisfactory to Lender.
The Borrower and Guarantor also, with reasonable promptness, shall furnish to
the Lender such other data as the Lender may reasonably request.
Section 6.3. Executive Officer's Certificates.
The financial statements of Borrower and Guarantor, called for by
Section 6.2(a) and (b), shall be accompanied by a certificate of one of the
principal executive officers of each Co-Borrower and Guarantor stating that
there exists no Event of Default as defined in this Agreement and no event
which, with the giving of notice or passage of time, or both, would constitute
such an Event of Default, or, if this is not the case, that one or more
specified events of default or above-specified events have occurred.
Section 6.4. Taxes and Claims.
The Borrower and Guarantor shall properly pay and discharge: all
taxes, assessments and governmental charges upon or against any of them or
their assets prior to the date on which penalties attach thereto, unless and to
the extent that such taxes are being diligently contested in good faith and by
appropriate proceedings and appropriate reserves therefor have been
established.
Section 6.5. Pay Indebtedness to Lender and Perform Other Covenants.
The Borrower shall: (a) make full and timely payments of the principal
of and interest on the Note and all other indebtedness of the Borrower to the
Lender, whether now existing or hereafter arising; and (b) duly comply with all
the terms and covenants contained in each of the instruments and documents
given to the Lender pursuant to this Agreement or of the times and places and
in the manner set forth herein.
Section 6.6. Litigation.
The Borrower and Guarantor will promptly notify the Lender upon the
commencement of any action, suit, claim, counterclaim or proceeding against or
known investigation of the Borrower (except when the alleged liability is fully
covered by insurance): (a) the result of which could materially adversely
affect the business of the Borrower; or (b) which questions the validity of
this Agreement or any other document executed in connection herewith or any
action taken or to be taken pursuant to any of the foregoing.
Section 6.7. Right of Inspection; Discussions.
The Borrower will permit any person designated by the Lender, at the
Borrower's expense, to visit and inspect any of the property, books, records,
papers, and financial reports of the Borrower, including the making of any
copies thereof and abstracts therefrom, and to discuss its affairs, finances,
and accounts with its principal officers, all at such reasonable times and as
often as the Lender may reasonably request. The Borrower will also permit the
Lender, or its designated representative, to audit its financial and business
records. Without limiting the foregoing in any way, the Borrower also agrees to
allow the Lender and/or certified public accountants satisfactory to the Lender
to review the Borrower's financial statements, books, and records.
Section 6.8. Notices.
The Borrower will promptly give notice to the Lender of:
(a) the occurrence of any default or Event of Default (or
event which would constitute a default or Event of Default but for the
requirement that notice be given or time elapse or both) hereunder in which
case such notice shall specify the nature thereof, the period of existence
thereof, and the action that the Borrower proposes to take with respect
thereto;
(b) the occurrence of any material casualty to any property
of the Borrower or any other force majeure (including, without limitation, any
strike or other labor disturbance) materially affecting the operation or value
of the Borrower (specifying whether or not such casualty or force majeure is
covered by insurance); and
(c) the commencement or any material change in the nature or
status of any material litigation, dispute, investigation, of proceeding that
may involve a claim for damages, injunctive relief, enforcement, or other
relief pending, being instituted, or threatened by, against or involving the
Borrower, or any attachment, levy, execution, or other process being instituted
by or against any assets of the Borrower, or any other adverse change which
might materially impair the conduct of the Borrower's business or might
materially affect financially or otherwise its business, operations, assets,
properties, prospects, or condition.
Section 6.9. ERISA Benefit Plans.
The Borrower will comply with all requirements of ERISA applicable to
it and will not materially increase its liabilities under or violate the terms
of any present or future benefit plans maintained by it without the prior
approval of the Lender. The Borrower will furnish to the Lender as soon as
possible and in any event within 10 days after the Borrower or a duly appointed
administrator of a plan (as defined in ERISA) knows or has reason to know that
any reportable event, funding deficiency, or prohibited transaction (as defined
in ERISA) with respect to any plan has occurred, a statement of the chief
financial officer of the Borrower describing in reasonable detail such
reportable event, funding deficiency, or prohibited transaction and any action
which Borrower proposes to take with respect thereof, together with a copy of
the notice of such event given to the Pension Benefit Guaranty Corporation or
the Internal Revenue Service or a statement that said notice will be filed with
the annual report of the United States Department of Labor with respect to such
plan if such filing has been authorized.
Section 6.10. Insurance.
(a) The Borrower shall at all times maintain hazard, public liability
insurance and Workers Compensation policies insuring against all claims for
personal or bodily injury, death or property damage occurring upon, in or about
any property of the Borrower in amounts not less than $2,000,000.00 (with a
maximum deductible of $1,000.00) for injury or damage to any one person and
$2,000,000.00 (with a maximum deductible of $1,000.00) for injury or damage
from any one accident and $100,000.00 for property damage. Such insurance
coverage shall be in form and with existing carriers at current levels.
(b) The Borrower shall furnish to Lender evidence that such insurance
is in effect, upon request, at no cost to Lender, including, but not limited
to, such originals or copies as the Lender may request of policies,
certificates of insurance, riders and endorsements relating to such insurance
and proof of premium payments. The Lender shall be under no duty to examine
such certificates or to advise the Borrower in case the insurance is not in
compliance herewith. All such policies shall name Lender as an additional
insured.
(c) The Borrower shall maintain existing credit insurance with
existing carrier at a minimum level of $10,000,000 and shall provide at closing
a binder from the existing carrier with the Lender being named as Loss Payee
for such insurance.
Section 6.11. Main Bank of Account.
During the term of this Agreement and so long as the Borrower is
obligated to the Lender under the Note, AMSOUTH BANK, a bank organized under
the laws of Alabama, shall be the primary bank of account for the Borrower and
Guarantor other than Transit Leasing and Carolina Pacific. Failure of the
Borrower or Guarantor to comply with this provision shall constitute a default
under the terms of this Agreement, entitling the Lender to all remedies of
default hereunder.
Section 6.12. Net Worth Requirement.
The Guarantor shall maintain a Net Worth of not less than THIRTY-SEVEN
MILLION DOLLARS ($37,000,000.00) by the end of the 1998 fiscal year. The
Tangible Net Worth must not be less than a negative ($3,000,000) at the end of
the 1998 fiscal year end and a negative ($3,000,000) plus 25% of the net income
at the end of the 1999 fiscal year and all subsequent years and at all times
thereafter.
Section 6.13. Leverage Ratio.
The Guarantor shall not permit its ratio of Total Debt to Earnings
Before Interest, Taxes, Depreciation and Amortization (EBITDA) to be greater
than 3.50:1.00 for the 1998 fiscal year end and 3.00:1.00 for the 1999 fiscal
year end and at all times thereafter.
Section 6.14. Interest Coverage Ratio.
The Guarantor shall not permit its ratio of Earnings Before Interest,
Taxes and Amortization to Interest Expense for the 1998 fiscal year end to be
less than 1.50:1.00 and less than 2.00:1.00 for the fiscal year end 1999 and at
all times thereafter.
Section 6.15. Lockbox and Accounts Receivable.
The Borrower shall utilize Lender=s lockbox service located at Xxxx
Xxxxxx Xxx 000000, Xxxxxxx, Xxxxxxx 00000-0000, or such other place as the
Lender may designate in writing, in the collection of its accounts receivable
and may be charged a reasonable fee. Lockbox remittances, and collection
inadvertently remitted directly to the Borrower, and all other cash collections
including but not limited to collections from governmental agencies will be
deposited into a bank-owned collection account, where they will be held for one
business day prior to being used to paydown the Line of Credit. Should transfer
from collection account to paydown Line of Credit create an uncollected funds
position in collection account, interest charges for the uncollected funds will
be charged to account analysis. In no case, will bank incur loss on transfer of
funds from collection account to Line of Credit. All proceeds from Collateral
including collections of Receivables shall be applied directly to reduce
outstanding indebtedness on the Line of Credit.
(a) At any time, and from time to time, upon Lender=s written request,
at the Borrower=s expense, Borrower will promptly execute and deliver such
further agreements and documents and take such further action as Lender shall
reasonably deem necessary or desirable in obtaining the full benefits of this
Agreement and of the rights and powers herein granted.
(b) If any of Borrower=s Receivables shall arise out of contracts with
the United States of America or any state thereof or any political subdivision,
department, agency or instrumentality of such federal or state government,
Borrower will, if requested by Lender, in addition to the requirements and
conditions set forth above, execute any instruments and take any action
required by Lender in order that all monies due or to become due under such
contracts shall be assigned to Lender and notice thereof given to such federal
government under the Federal Assignment of Claims Act, or in the case of a
state statute or local ordinance analogous to said Claims Act, to such state
government, or the appropriate political subdivision, and Lender is hereby
expressly authorized as Borrower=s agent to execute any such instruments and to
take any such action.
(c) Lender shall have the right to endorse Borrower=s name on any and
all checks, drafts, or other forms of payment received whenever necessary to
collect the same, and Borrower will confirm Lender=s title thereto by executing
such instruments as Lender may from time to time require. At Lender=s request,
Borrower shall give notice of Lender=s security interest in Receivables to
Borrower=s debtors in such form and at such times as Lender may require, and
Lender may give such notice to Borrower=s debtors at any time or times and
collect the Receivables in Lender=s name. In the event that any expenses are
incurred by Lender in collecting Receivables, including the cost of maintaining
any lockbox and any reasonable legal fees, such shall be an obligation of
Borrower=s as is herein defined.
(d) Borrower agrees to repay and remain liable for the repayment of
all loans and advances made to or for the Borrower=s account and for all other
obligations. It is expressly agreed that any credits given as herein provided
shall be conditioned upon final payment to Lender in cash or solvent credits of
the item giving rise thereto and regarding any item that is not so paid, the
amount of any credit given shall be reversed, whether or not the item is
returned.
(e) As of the close of each calendar month, Lender shall render to
Borrower an accounting to Borrower as to the amount which Lender shall have
advanced to Borrower and as to the amount received for Borrower=s account, and
each account rendered shall be deemed acceptable to and binding upon us unless
Borrower submits to Lender in writing notice of any exception thereto within
ninety (90) days after the date thereof.
(f) Borrower will not issue or grant any discount, credit or allowance
as to Borrower=s Receivables other than that which is usual and normal in the
course of business unless such is shown on Borrower=s invoice and reported to
Lender as a deduction from the Receivables against which Lender shall make an
advance.
(g) Borrower shall immediately advise Lender of any disputes or claims
as to the Receivables which Borrower believes to be substantial, and adjust
them promptly at Borrower=s expense.
(h) Upon the happening of any Event of Default as hereinabove
provided, then and in any such events, Lender shall have the following rights,
in addition to Lender=s rights and remedies under this Agreement and at law all
of which shall be exercised in a commercially reasonable manner: (i) Lender
shall have the right to incur reasonable attorneys= fees and legal expenses and
any other necessary expenditures in the taking of possession, sale and/or
preservation of the Collateral, which Borrower does hereby agree to pay,
together with interest thereon from the date of such expenditures; (ii) Lender
shall then and at all times thereafter have the right, without notice to
Borrower, to collect, litigate, extend the time of payment of, compromise,
settle for cash, credit or otherwise, and upon any terms or conditions, all or
any part of the Receivables and thereby discharge and/or release the debtor and
all others who may be liable for the payment of such Receivables or any part
thereof; (iii) Lender may sell the Collateral, including Receivables or any in
which Lender may then have a security interest, in bulk or in separate lots, at
either public or private sale, without advertisement which is hereby waived,
and upon sending notice to Borrower ten (10) days prior to such sale or other
disposition, at such prices and upon such terms and conditions as Lender may
determine and Lender is hereby authorized to be a bidder and purchaser at any
such public sale and/or sales.
(i) Borrower shall be entitled to credit only for the actual amount of
the cash received by Lender as a result of its exercise of such rights, less
all Lender=s costs and expenses including collection and legal expenses,
storage, processing, transportation and sale. If there be a surplus remaining
after applying the net proceeds of any such collection of Receivables and/or
sales of the Collateral to Borrower=s obligations, Lender shall remit such
surplus to Borrower and if there be a deficiency, Borrower shall remain liable
to Lender therefor. The rights herein granted to Lender shall be in addition to
and not in lieu of all other rights to which Lender is entitled under this
Agreement or any supplement or amendment hereto, or at law; and resort to
security shall not be required at any time.
(j) Borrower hereby constitutes any person whom Lender may designate
as Borrower=s attorney-in-fact with power to send request for verification of
account to any debtor of Borrower and, (a) to receive, open and dispose of all
mail addressed to Borrower; (b) to endorse Borrower=s name on any notes
acceptances, checks, drafts, money orders or other evidences of payment or
collateral that may come into Lender=s possession; (c) in the event of default
by Borrower hereunder to sign Borrower=s name on any invoices relating to any
Receivables, or drafts against debtors, assignments and verifications of
accounts and notices to debtors; and (d) in the event of default by Borrower
hereunder to do all other acts and things necessary to carry out this
Agreement. All acts of such attorney-in-fact or designee shall not be liable
for any acts of commission or omission nor for any error of judgment or mistake
of fact or law other than gross negligence or willful misconduct. This power,
being coupled with an interest, is irrevocable while any obligation shall
remain unpaid.
(k) Borrower hereby irrevocably authorizes and directs any and all
accountants at any time acting for Borrower to give Lender any information it
may from time to time request concerning the financial affairs of Borrower and
to furnish Lender with copies of any and all statements, documents, records,
paper, etc. in their possession pertaining thereto. Borrower will maintain at
its own cost and expense complete records with respect to the Receivables,
including but not limited to records of payment received and all credits
granted with respect thereto, all adjustments thereof, and all other dealings
affecting any of the Receivables. Borrower agrees that Lender has a separate
security interest in all of the books and records pertaining to the Collateral
and Borrower does hereby assign the same to Lender. Following an Event of
Default, Borrower will deliver any such books and records to Lender or its
representative at any time upon Lender=s demand at Borrower=s cost. During any
periodic audits, Lender may inspect and make extracts from all of Borrower=s
books and records upon its premises.
(l) Borrower further agrees from time to time at Lender=s request to
deliver to Lender any or all original or other documents which form any part of
the Receivables including but not limited to all original contracts, orders,
invoices, bills of lading, and shipping receipts and Lender shall succeed to
all rights, remedies, securities and liens which Borrower may have with respect
to the Receivables, including guaranties of Receivables or other contracts of
suretyship with respect thereto, and Borrower shall deliver to Lender separate
written instruments confirming Lender=s security interest in (or assignments
of) any of the same.
Section 6.16. Field Audits.
Borrower agrees to quarterly asset based examinations of the
Borrower=s books, records and operations, at Borrower=s expense, by the Lender
or a representative of the Lender and reserves the right to require a
satisfactory field examination prior to funding (other than the initial funding
hereunder). The Lender also may conduct periodic verifications of accounts
receivable balances by both written and telephone communication methods.
Section 6.17. Collateral Reporting.
The Borrower shall provide the Lender with the following: (1) an
updated accounts receivable balance submitted on a daily basis in form and
substance acceptable to Lender; (2) an accounts receivable aging each month
aged by invoice date, as of the end of each month within ten (10) days after
the end of the month; (3) a customer address list the Lender will from time to
time require; and (4) an accounts payable aging each month, as of the end of
each month within twenty (20) days after the end of the month; and (5) any
other information that the Lender may from time to time require.
Section 6.18. Observance of Laws.
The Borrower will conform to and duly observe in all material respects
all laws, regulations, and other valid requirements of any governmental
authority with respect to the conduct of its business, including but not
limited to, applicable ERISA, environmental and transportation laws.
Section 6.19. Subsidiaries.
The Borrower and Guarantor shall cause each of its subsidiaries to
observe and perform each covenant and agreement. All computations required in
connection with such financial covenants shall be made for the Guarantor and
its subsidiaries on a combined or consolidated basis, after elimination of
intercompany items.
Section 6.20. Capitalization Ratio.
The Guarantor and its subsidiaries on a consolidated basis shall not
permit its ratio of Funded Debt to Capitalization to exceed 65.0% at any time.
ARTICLE VII - BORROWER'S NEGATIVE COVENANTS
Borrower covenants and agrees from the date hereof and until payment
in full of the principal of and interest on the Note, and all other
indebtedness to the Lender under this Agreement, unless the Lender shall
otherwise consent in writing, which will not be unreasonably withheld or
delayed, it will not, either directly or indirectly:
Section 7.1. Type of Business.
Engage in any business not authorized by Borrower's Articles of
Incorporation or by applicable law.
Section 7.2. Change in Ownership or Management.
The Guarantor shall not, either directly or indirectly, permit any
change in its senior management or in the management of its business, without
the prior written consent of the Lender.
Section 7.3. Acquisitions and Mergers.
The Borrower shall not merge or consolidate or transfer substantially
all of their assets (other than in a reorganization or other transaction in
which no change in control occurs and such organizations remain in the
transportation business) without the prior written approval of the Lender.
Section 7.4. Capital Expenditures.
The Guarantor and its subsidiaries may not make Capital Expenditures,
excluding expenditures for rolling stock, in an aggregate amount per fiscal
year in excess of ONE MILLION DOLLARS ($1,000,000.00), without the prior
written consent of the Lender.
Section 7.5. Guaranty.
The Guarantor and its subsidiaries will not guarantee or otherwise in
any way become responsible for obligations of any other person or entity,
whether by agreement to purchase the indebtedness of any other person, or
agreement for the furnishing to funds to any other person through the purchase
of goods, supply of services (or by way of stock purchase, contribution,
advance or loan) for the purpose of paying or discharging the indebtedness of
any other person, or otherwise, except those approved in writing by Lender.
Section 7.6. Investment and Loans.
The Borrower and Guarantor will not, directly or indirectly, acquire,
purchase or otherwise make any investment in or make any loans to acquire any
interest whatsoever in, any other person in an amount in excess of $1,000,000
in cash per acquisition or an aggregate amount of $5,000,000 in cash; except
(1) Qualified Investments, or (2) the stock of any existing subsidiaries
disclosed to the Lender in writing in the Loan application, or (3) upon
obtaining written consent of Lender, provided in each case that all such
organizations are in the transportation business.
Section 7.7. Disposition or Encumbrance of Receivables.
The Borrower will not sell, assign or discount, or grant or permit any
lien on any of its accounts or notes receivables, other than the discount of
such notes in the ordinary course of the Borrower=s business.
Section 7.8. Sale-Leasebacks.
Other than rolling stock, the Borrower will not sell or transfer any
property and lease it back for the same use.
Section 7.9. Leases.
The Borrower will not enter into any future lease (other than
capitalized leases that are otherwise permitted under this commitment or leases
for rolling stock), as lessee, if such lease (a) has an unexpired term
(including renewals at the option of the lessee) of more than seven years, (b)
provides for aggregate rental payments during any fiscal year in excess of
$100,000, or (c) if the rental payments thereunder, together with all other
such leases, would provide for aggregate rental payments during any fiscal year
in excess of $500,000, without prior written approval of the Lender.
Section 7.10. Liens.
The Borrower will not permit any lien on any of its properties or
assets, whether now owned or hereafter acquired, other than any liens mutually
agreed upon prior to closing and those listed below:
(a) liens in favor of Lender;
(b) existing liens identified in the Co-Borrower=s
application for this Loan, including any liens relating to the restructuring of
existing fixed asset and/or vehicle financing with another financial
institution;
(c) deposits under workmen=s compensation, unemployment
insurance and Social Security laws;
(d) liens imposed by law, such as carriers=, warehousemen=s
or mechanics= and materialmen=s liens, incurred in good faith in the ordinary
course of business and that are not delinquent or that are subject to Permitted
Contests;
(e) any lien arising out of any litigation, legal proceeding
or judgement that is subject to a Permitted Contest, and any pledges or
deposits to secure, or in lieu of, any surety, stay or appeal bond with respect
to any such litigation, legal proceeding or judgement;
(f) liens for taxes, assessments or other governmental
charges or levies that are not delinquent or that are subject to Permitted
Contests;
(g) liens created after the Loan closing to secure the
acquisition cost of vehicles and fixed assets for use in the ordinary course of
business, provided that (1) any such lien is confined to the fixed assets so
acquired; and (2) the indebtedness secured by such lien does not exceed the
purchase price or fair market value, whichever is less, of the fixed assets so
acquired at the time of their acquisition; and
(h) liens created by loans to shareholders secured by the
shareholders restricted stock, so long as each Co-Borrower and Guarantor are in
compliance with all financial covenants.
Section 7.11. Take or Pay Contracts.
The Borrower will not enter into any take or pay contract.
Section 7.12. Other Special Covenants.
The Borrower and Guarantor will not allow any modifications involving
the inclusion of Receivables of additional subsidiaries to be made to Eligible
Receivables in the event additional acquisitions are made, without the prior
written approval of Lender.
ARTICLE VIII - EVENTS OF DEFAULT
Section 8.1. Events.
In the event:
(a) Payment of Obligations to Lender.
The Borrower or Guarantor fails to make payment of any
principal, interest, or other amount due on any indebtedness owed the Lender
hereunder within ten (10) days of the due date thereof without further notice
or demand, or fails to make any other payment to the Lender as contemplated
hereunder either by the terms hereof or otherwise; or
(b) Representation or Warranty.
Any representation or warranty made or deemed made by the
Borrower or Guarantor herein or in any writing furnished in connection with or
pursuant to the loan application and loan commitment for the Loan or in
connection with or pursuant to any certificate delivered under the Loan
Documents shall be false in any material adverse respect on the date when made
or when deemed made; or
(c) Covenants.
The Borrower or Guarantor defaults in the performance or
observance of or breaches any agreement, covenant, term, or condition binding
on it contained in the Loan Documents for a period of thirty (30) days after
written demand (provided no written demand shall be required for breach of
Borrower=s obligations to notify Lender of events of defaults set forth herein
which require Borrower to notify Lender of same); or
(d) The Borrower's Liquidation; Dissolution; Bankruptcy; Etc.
Any liquidation or dissolution of the Borrower or Guarantor,
suspension of the business of the Borrower, or the filing or commencement by
the Borrower of a voluntary petition, case, proceeding, or other action seeking
reorganization, arrangement, readjustment of its debts, or any other relief
under any existing or future law of any jurisdiction, domestic or foreign,
state or federal, relating to bankruptcy, insolvency, reorganization or relief
of debtors, or any other action of the Borrower indicating its consent to,
approval of, or acquiescence in, any such petition, case, proceeding, or other
action seeking to have an order for relief entered with respect to it or its
debts; the application by the Borrower for, or the appointment, by consent or
acquiescence of, a receiver, trustee, custodian, or other similar official for
the Borrower or for all or a substantial part of its property; the making by
the Borrower of an assignment for the benefit of creditors; or the inability of
the Borrower or the admission by the Borrower in writing of its inability to
pay its debts as they mature; or
(e) Order of Dissolution.
Any order is entered in any proceedings against the Borrower
or Guarantor decreeing the dissolution or split-up of the Borrower or
Guarantor, and such order remains in effect for more than sixty (60) days; or
(f) Reports and Certificates.
Any report, certificate or financial statement delivered to
the Lender by the Borrower is at any time false or misleading in any material
adverse respect; or
(g) Judgments.
The rendition of a final uninsured judgment against the
Borrower for the payment of damages or money in excess of Five Hundred Thousand
Dollars ($500,000.00) if the same is not discharged, bonded off or transferred
to other security or if a writ of execution or similar process is issued with
respect thereto and is not stayed within the time allowed by law for filing
notice of appeal of the final judgment; or
(h) Liens Imposed by Law.
The violation of any law or any act or omission by the
Borrower that results in the imposition of a lien by operation of law on any of
its property, if the lien is not discharged, bonded off or transferred to other
security within sixty (60) days after it has attached and if the lien relates
to a claim for the payment of damages or money in excess of Five Hundred
Thousand Dollars ($500,000.00); or
(i) Corporate Existence.
Any act or omission (formal or informal) of the Borrower or
Guarantor or its officers, directors, shareholders, or partners leading to, or
resulting in, the termination, invalidation (partial or total), revocation,
suspension, interruption, or unenforceability of its existence, or the transfer
or disposition (whether by sale, lease, or otherwise) to any person of all or a
substantial part of its property; or
(j) Cross-Default.
The default by Borrower or Guarantor in any terms or
conditions of any obligation of Borrower or Guarantor owed to Lender; in
addition, the default by the Borrower or Guarantor of any of the terms or
conditions of the Note or Loan Documents shall constitute a default of those
other obligations of Borrower or Guarantor owed to Lender, and all credit
accommodations related thereto;
THEN:
In any of the above mentioned events, any holder of the Note executed
pursuant hereto with notice to Borrower may, at such holder's option, declare
the said Note to be fully due and payable and the same shall thereupon all
immediately become due and payable in their aggregate amounts and Lender, in
addition to any other remedy permitted by law, may, at its option, proceed to
protect and enforce its rights by an action at law or in equity or by any other
appropriate proceedings, whether for the specific performance of any covenant
or agreement contained in this Agreement, or in aid of the exercise of any
power granted in this Agreement, or proceed to enforce the payment of the Note
or to enforce any other legal, or equitable rights of Lender, including but not
limited to, the rights of Lender pursuant to the Florida Statutes and other
applicable law. The events of default and remedies after default set forth in
this Section 8.1 are intended to be in addition to the provisions in the Note
under the captions "Events of Default" and "Remedies After Default".
Section 8.2. Rights and Remedies Cumulative.
No right or remedy herein conferred upon the Lender is intended to be
exclusive of any other right or remedy contained herein, in the Note, Loan
Documents or in any instrument or document delivered in connection with or
pursuant to this Agreement, and every such right or remedy shall be cumulative
and shall be in addition to every other such right or remedy contained herein
and therein or now or hereafter existing at law or in equity or by statute or
otherwise.
Section 8.3. Rights and Remedies Not Waived.
No course of dealing between the Borrower and the Lender or any
failure or delay on the part of the Lender in exercising any rights or remedies
hereunder shall operate as a waiver of any rights or remedies of the Lender and
no single or partial exercise of any rights or remedies hereunder shall operate
as a waiver or preclude the exercise of any other rights or remedies hereunder.
Section 8.4. Waiver of Default.
The Lender at any time may waive any default or any Event of Default
which shall have occurred and any of its consequences, in which case the
parties hereto shall be restored to their former positions and rights and
obligations hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon, and no such
waiver shall be effective unless it is in a written document executed by a duly
authorized officer and then only to the extent specifically recited therein.
ARTICLE IX - MISCELLANEOUS
Section 9.1. Course of Dealing; Amendments; Waiver.
No course of dealing between the parties hereto shall be effective to
amend, modify, or change any provision of this Agreement or any other Loan
Document. No amendment or waiver of any provision of this Agreement or any
other Loan Document, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by Lender, unless otherwise specifically provided, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
Section 9.2. Lien; Setoff By Lender.
The Borrower hereby grants to the Lender a continuing lien for all
indebtedness and other liabilities of the Borrower to the Lender upon any and
all moneys, securities, and other property of the Borrower and the proceeds
thereof, now or hereafter held or received by or in transit to, the Lender from
or for the Borrower, whether for safekeeping, custody, pledge, transmission,
collection or otherwise, and also upon any and all deposits (general or
special) and credits of the Borrower with, and any and all claims of the
Borrower against the Lender at any time existing. Upon the occurrence of any
Event of Default, the Lender is hereby authorized at any time and from time to
time, without notice to the Borrower, to setoff, appropriate, and apply any or
all items hereinabove referred to against all indebtedness and other
liabilities of the Borrower to the Lender, whether under this Agreement or
otherwise, and whether now existing or hereafter arising.
Section 9.3. Liability of Lender to Third Parties.
The Lender shall in no event be responsible or liable to any person
other than the Borrower and Guarantor for its disbursement of or failure to
disburse the funds or any part thereof, and others shall not have any claim or
right against the Lender under this Agreement or the Lender's administration
thereof.
Section 9.4. Waivers.
Except as provided herein, the Borrower waives presentment, demand,
protest, notice of default, nonpayment, partial payments and all other notices
and formalities relating to this Agreement other than notices specifically
required hereunder. The Borrower consents to and waives notice of the granting
of indulgences or extensions of time of payment, the taking or releasing of
security, the addition or release of persons primarily or secondarily liable on
or with respect to liabilities of the Borrower to the Lender, all in such
manner and at such time or times as the Lender may deem advisable. No act or
omission of the Lender shall in any way impair or affect any of the
indebtedness or liabilities of the Borrower to the Lender or rights of the
Lender in any security. No delay by the Lender to exercise any right, power or
remedy hereunder or under any security agreement, and no indulgence given to
the Borrower in case of any default, shall impair any such right, power or
remedy or be construed as having created a course of dealing or performance
contrary to the specific provisions of this Agreement or as a waiver of any
default by the Borrower or any acquiescence therein or as a violation of any of
the terms or provisions of this Agreement. The Lender shall have the right at
all times to enforce the provisions of this Agreement and all other documents
executed in connection herewith in strict accordance with their terms,
notwithstanding any course of dealing or performance by the Lender in
refraining from so doing at any time and notwithstanding any custom in the
banking trade. No course of dealing between the Borrower and the Lender shall
operate as a waiver of any of the Lender's rights.
Section 9.5. Assignment and Participation.
This Loan may not be assigned by the Co-Borrowers without the Lender=s
prior written consent. At any time, either before or after the closing of this
Loan, the Lender may grant one or more participations of 49% or less in this
Loan to participants of its choice. Any such participant may exercise rights of
setoff and banker=s lien against the Co-Borrower with respect to its
participation as if it had made a direct loan to the Co-Borrower. The Lender
may divulge to any such participant any information the Lender may obtain with
respect to the Co-Borrower, the Guarantor or any Collateral in connection with
this Loan. Notwithstanding the foregoing, Lender may sell any or all of the
Loan if said Loan is in default.
Section 9.6. Funds Not Assignable.
The proceeds of the loan shall not be assigned by the Borrower nor
subject to the process of any court upon legal action by or against the
Borrower or by or against anyone claiming under or through Borrower, and for
the purpose of this Agreement, the funds shall remain and be considered the
money and property of the Lender until the Borrower is entitled to have them
disbursed as provided herein. Nothing herein contained shall be considered as
in anyway modifying, or subordinating the obligations previously given or to be
given by the Borrower as security for the loan and such obligations shall be
and remain in full force and effect, this Agreement being intended only as
additional security for the loan and to insure its use for the purposes
intended by the Lender and Borrower.
Section 9.7. Indemnity.
The Borrower agrees to indemnify and hold the Lender harmless from and
against all damages, claims, actions, causes of action, losses, costs,
expenses, liability, penalties and interest (including attorney=s fees and
expenses) directly or indirectly resulting from, occurring in connection with
or arising out of (a) any inaccurate representation or warranty made by or on
behalf of Borrower to Lender in connection with this Loan; (b) any breach by
the Borrower of any of its obligations under this Loan or the Loan Documents;
or (c) this Loan and the transactions contemplated by this Loan. This Section
9.7 shall survive the execution and delivery of the Loan Documents, the closing
of this Loan and the payment of this Loan in full.
Section 9.8. Termination by the Borrower.
The Borrower may terminate this Agreement in its entirety by giving at
least ten (10) days prior notice of its intention so to do and by payment in
full of all obligations hereunder outstanding on the date specified for
termination.
Section 9.9. Arbitration.
Any controversy, claim, dispute or disagreement arising out of the
commitment or this Loan will be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. Judgement
on any award rendered by the arbitrator(s) in any such arbitration may be
entered in any court having jurisdiction thereof. The Co-Borrowers and the
Lender specifically acknowledge and agree that this commitment involves a
Atransaction involving commerce@ under the Federal Arbitration Act. Any
arbitration shall take place in Orlando, Florida at the Lender=s election.
Section 9.10. Notices.
Any written notice, demand or request that is required to be made in
any of the Loan Documents shall be served in person, or by registered or
certified mail, return receipt requested, or by express mail or similar carrier
service, addressed to the party to be served at the address set forth in the
first paragraph hereof. The addresses stated herein may be changed as to the
applicable party by providing the other party with notice of such address
change in the manner provided in this paragraph. In the event that written
notice, demand or request is made as provided in this paragraph, then in the
event that such notice is returned to the sender by the United States postal
system or the courier service because of insufficient address or because the
party has moved or otherwise, other than for insufficient postage or payment to
the courier, such writing shall be deemed to have been received by the party to
whom it was addressed on the date that such writing was initially placed in the
United States postal system or deposited with the courier service with the
postage or cost thereof prepaid in full by the sender.
Section 9.11. Controlling Agreement.
In the event any provision of this Agreement is inconsistent with any
provision of any other document, whether heretofore executed, required or
executed pursuant to this Agreement or otherwise, the provisions of this
Agreement shall be controlling.
Section 9.12. Titles.
Titles to the sections of this Agreement are solely for the
convenience of the parties hereto and are not an aid in the interpretation of
this Agreement or any part thereof.
Section 9.13. Venue and Jurisdiction.
In any litigation in connection with or to enforce this Agreement or
any of the other Loan Documents, the Borrower irrevocably consents to and
confers personal jurisdiction on the courts of the State of Florida located in
Orange County or the United States courts located within the Middle District of
the State of Florida, expressly waives any objections as to venue in any of
such courts, and agrees that service of process may be made on the Borrower by
mailing a copy of the summons and complaint by registered or certified mail,
return receipt requested, to the address set forth herein below the name of the
Borrower on the signature page hereto (or otherwise expressly provided in
writing). Nothing contained herein shall, however, prevent the Lender from
bringing any action or exercising any rights within any other court in Florida
or from obtaining personal jurisdiction by any other means available by
applicable law.
Section 9.14. Governing Law.
The validity, interpretation, and enforcement of this Agreement, of
the rights and obligations of the parties hereto, and of the other documents
delivered in connection herewith shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Florida, excluding
those laws relating to the resolution of conflicts between laws of different
jurisdictions.
Section 9.15. Legal or Governmental Limitations.
Anything contained in this Agreement to the contrary notwithstanding,
the Lender shall not be obligated to extend credit or make any loans to the
Borrower in an amount in violation of any limitations or prohibitions provided
by any applicable statute or regulation.
Section 9.16. Counterparts.
This Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when so
executed and delivered shall be an original, and all of which together shall
constitute one instrument.
Section 9.17. Addition of Subsidiaries.
Additional Subsidiaries may join in this credit accommodation by:
a. executing and delivering to Lender with the consent
of Lender a Joinder to Advised Revolving Line of
Credit Agreement and Joinder to Security Agreement
in the form attached hereto as Exhibit AA@; and
b. executing and delivering to Lender an Allonge in
the form attached hereto as ExhibitAB@ whereas the
Subsidiary becomes a Maker on the Note; and
c. executing and delivering to Lender a UCC-1Financing
Statement perfecting the pledge of the Subsidiary=s
Collateral as security for the Note; and
d. executing and delivering to Lender a tax indemnity
agreement, out-of-state closing affidavit,
corporate borrowing resolution, certification
certificate and other documents or affidavits as
may be required by Lender; and
e. delivering to Lender an opinion of Subsidiary=s
counsel in form and content satisfactory to Lender.
No modifications involving the inclusion of Receivables of any
Additional Subsidiaries will be made to Eligible Receivables without the prior
written consent of the Lender and without each Additional Subsidiary executing
and delivering to Lender all documents listed above.
Section 9.18. Waiver of Trial By Jury.
The Borrower, the Guarantor and the Lender knowingly, voluntarily and
intentionally waive the right any of them may have to a trial by jury in
respect of any litigation based hereon, or arising out of, under or in
connection with the Loan Documents and any agreement contemplated to be
executed in conjunction therewith, or any course of conduct, course of dealing,
statements (whether verbal or written) or actions of any party. This provision
is a material inducement for the Lender entering into the loan evidenced by the
Loan Documents and this provision is in addition to and does not supercede the
parties agreement for arbitration contained herein.
Section 9.19. Confidentiality.
Lender acknowledges that Guarantor is a Reporting Company under the
Exchange Act of 1934, as amended, and agrees to keep confidential and not to
use in any manner other than in connection with this Agreement, any nonpublic
information obtained by the Lender in connection herewith.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
AMSOUTH BANK, a bank organized under
the laws of Alabama
By: /s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxxx,
Vice President
"Lender"
XXXXXXX XXXXXX & COMPANY, INC., a Florida
corporation
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx,
Chairman of the Board
CAROLINA PACIFIC DISTRIBUTORS, INC., a North
Carolina corporation
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx,
Chairman of the Board
TRANSIT LEASING, INC., an Indiana corporation f/k/a
CAPITOL WAREHOUSE, INC., a Kentucky corporation
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx,
Chairman of the Board
SERVICE EXPRESS, INC., an Alabama corporation
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx,
Chairman of the Board
RAINBOW TRUCKING SERVICES, INC., an Indiana
corporation
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx,
Chairman of the Board
TRANSPORTATION RESOURCES AND MANAGEMENT, INC., an
Indiana corporation
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx,
Chairman of the Board
VENTURE LOGISTICS, LLC, an Indiana limited
liability company
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx,
Manager
CERTIFIED TRANSPORT, LLC, an Indiana limited
liability company
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx,
Manager
K.J. TRANSPORTATION, INC., a New York corporation
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx,
Chairman of the Board
DIVERSIFIED TRUCKING CORP, an Alabama corporation
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx,
Chairman of the Board
NORTHSTAR TRANSPORTATION, INC., an Alabama
corporation
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx,
Chairman of the Board
........ "Borrower"
TRANSIT GROUP, INC., a Florida corporation
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx,
President and Chief Executive Officer
"Guarantor"
