Exhibit (b)(4)
EXECUTION COPY
LOAN AND SECURITY AGREEMENT
BY AND BETWEEN
XXXX BROS. TRANSPORTATION INC.
AND
LASALLE BANK NATIONAL ASSOCIATION
DATED SEPTEMBER 13, 2004
TABLE OF CONTENTS
Section 1. DEFINITIONS.................................................................................... 1
1.1 Defined Terms.................................................................................. 1
1.2 Accounting Terms...............................................................................20
1.3 Other Terms Defined in UCC.....................................................................20
1.4 Other Interpretive Provisions..................................................................20
Section 2. COMMITMENT OF THE BANK.........................................................................21
2.1 Revolving Loans................................................................................21
2.2 Term Loan......................................................................................22
2.3 Mandatory Prepayment of Loans..................................................................24
2.4 Additional LIBOR Loan Provisions...............................................................24
2.5 Interest and Fee Computation; Collection of Funds..............................................26
2.6 Late Charge....................................................................................26
2.7 Letters of Credit..............................................................................26
2.8 Taxes..........................................................................................27
2.9 All Loans to Constitute Single Obligation......................................................28
Section 3. CONDITIONS OF BORROWING........................................................................28
3.1 Loan Documents.................................................................................28
3.2 Borrowing Base Certificate.....................................................................31
3.3 Event of Default...............................................................................31
3.4 Material Adverse Effect........................................................................31
3.5 Litigation.....................................................................................31
3.6 Representations and Warranties.................................................................31
3.7 Payment of Fees and Expenses...................................................................31
3.8 Consummation of Going Private Transaction......................................................32
Section 4. NOTES EVIDENCING LOANS.........................................................................32
4.1. Revolving Note.................................................................................32
4.2. Term Note......................................................................................32
Section 5. MANNER OF BORROWING............................................................................32
5.1. Borrowing Procedures...........................................................................32
5.2. LIBOR Conversion and Continuation Procedures...................................................33
5.3. Letters of Credit..............................................................................33
5.4. Automatic Debit................................................................................34
5.5. Discretionary Disbursements....................................................................34
Section 6. SECURITY FOR THE OBLIGATIONS...................................................................34
6.1. Security for Obligations.......................................................................34
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6.2. Other Collateral...............................................................................34
6.3. Possession and Transfer of Collateral..........................................................35
6.4. Financing Statements...........................................................................35
6.5. [Reserved].....................................................................................35
6.6. Preservation of the Collateral.................................................................35
6.7. Other Actions as to any and all Collateral.....................................................36
6.8. Lockbox Arrangement............................................................................36
6.9. Letter-of-Credit Rights........................................................................37
6.10. Commercial Tort Claims.........................................................................37
6.11. Electronic Chattel Paper and Transferable Records..............................................37
Section 7. REPRESENTATIONS AND WARRANTIES.................................................................37
7.1. Borrower Organization and Name.................................................................38
7.2. Authorization..................................................................................38
7.3. Validity and Binding Nature....................................................................38
7.4. Consent; Absence of Breach.....................................................................38
7.5. Ownership of Properties; Liens.................................................................39
7.6. Equity Ownership...............................................................................39
7.7. Intellectual Property..........................................................................39
7.8. Financial Statements...........................................................................39
7.9 Litigation and Contingent Liabilities..........................................................39
7.10. Event of Default...............................................................................40
7.11. Adverse Circumstances..........................................................................40
7.12. Environmental Laws and Hazardous Substances....................................................40
7.13. Solvency, etc..................................................................................40
7.14. ERISA Obligations..............................................................................41
7.15. Labor Relations................................................................................41
7.16. Security Interest..............................................................................41
7.17. Lending Relationship...........................................................................41
7.18. Business Loan..................................................................................41
7.19. Taxes 42
7.20. [Reserved].....................................................................................42
7.21. Governmental Regulation........................................................................42
7.22. Bank Accounts; Letters of Credit...............................................................42
7.23. Place of Business..............................................................................42
7.24. Complete Information...........................................................................42
7.25. Subordinated Debt..............................................................................43
Section 8. AFFIRMATIVE COVENANTS..........................................................................43
8.1. Compliance with Bank Regulatory Requirements; Increased Costs..................................43
8.2. Borrower Existence.............................................................................43
8.3. Compliance With Laws...........................................................................43
8.4. Payment of Taxes and Liabilities...............................................................44
8.5. Maintain Property..............................................................................44
8.6. Maintain Insurance.............................................................................44
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8.7. ERISA Liabilities; Employee Plans..............................................................45
8.8. Financial Statements...........................................................................45
8.9. Supplemental Financial Statements..............................................................46
8.10. Borrowing Base Certificate.....................................................................46
8.11. Aged Accounts Schedule.........................................................................46
8.12. Covenant Compliance Certificate................................................................46
8.13. Field Audits...................................................................................47
8.14. Other Reports..................................................................................47
8.15. Property Records...............................................................................47
8.16. Intellectual Property..........................................................................47
8.17. Notice of Proceedings..........................................................................47
8.18. Notice of Event of Default or Material Adverse Effect..........................................47
8.19. Environmental Matters..........................................................................47
8.20. Further Assurances.............................................................................48
8.21. Banking Relationship...........................................................................48
8.22. Non-Utilization Fee............................................................................48
8.23. Post-Closing Covenants.........................................................................48
Section 9. NEGATIVE COVENANTS.............................................................................48
9.1 Debt...........................................................................................48
9.2. Encumbrances...................................................................................49
9.3. Investments....................................................................................49
9.4. Transfer; Merger; Sales........................................................................50
9.5. Issuance of Capital Securities.................................................................50
9.6. Distributions..................................................................................50
9.7. Transactions with Affiliates...................................................................51
9.8. Unconditional Purchase Obligations.............................................................51
9.9. Cancellation of Debt...........................................................................51
9.10. Inconsistent Agreements........................................................................52
9.11. Use of Proceeds................................................................................52
9.12. Bank Accounts..................................................................................52
9.13. Business Activities; Change of Legal Status and Organizational Documents.......................52
Section 10. FINANCIAL COVENANTS............................................................................52
10.1. Tangible Net Worth.............................................................................52
10.2. Total Funded Debt to EBITDA....................................................................52
10.3. Fixed Charge Coverage..........................................................................53
10.4. Capital Expenditures...........................................................................53
Section 11. EVENTS OF DEFAULT..............................................................................53
11.1. Nonpayment of Obligations......................................................................53
11.2. Misrepresentation..............................................................................53
11.3. Nonperformance.................................................................................53
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11.4. Default under Loan Documents...................................................................53
11.5. Default under Other Debt.......................................................................53
11.6. Other Material Obligations.....................................................................54
11.7. Bankruptcy, Insolvency, etc....................................................................54
11.8. Judgments......................................................................................54
11.9. Change in Control..............................................................................54
11.10. Collateral Impairment..........................................................................54
11.11. Material Adverse Effect........................................................................54
11.12. Guaranty 55
11.13. Subordinated Debt..............................................................................55
Section 12. REMEDIES.......................................................................................55
12.1. Possession and Assembly of Collateral..........................................................55
12.2. Sale of Collateral.............................................................................55
12.3. Standards for Exercising Remedies..............................................................56
12.4. UCC and Offset Rights..........................................................................57
12.5. Additional Remedies............................................................................57
12.6. Attorney-in-Fact...............................................................................58
12.7. No Marshaling..................................................................................58
12.8. Application of Proceeds........................................................................59
12.9. No Waiver......................................................................................59
12.10. Letters of Credit..............................................................................59
Section 13. MISCELLANEOUS..................................................................................60
13.1. Obligations Absolute...........................................................................60
13.2. Entire Agreement...............................................................................60
13.3. Amendments; Waivers............................................................................60
13.4. [Reserved].....................................................................................60
13.5. FORUM SELECTION AND CONSENT TO JURISDICTION....................................................61
13.6. WAIVER OF JURY TRIAL...........................................................................61
13.7. Assignability..................................................................................61
13.8. Confirmations..................................................................................62
13.9. Confidentiality................................................................................62
13.10. Binding Effect.................................................................................62
13.11. Governing Law..................................................................................62
13.12. Enforceability.................................................................................62
13.13. Survival of Borrower Representations...........................................................62
13.14. Extensions of Bank's Commitment................................................................63
13.15. Time of Essence................................................................................63
13.16. Counterparts; Facsimile Signatures.............................................................63
13.17. Notices 63
13.18. Release of Claims Against Bank.................................................................64
13.19. Costs, Fees and Expenses.......................................................................64
13.20. Indemnification................................................................................65
13.21. Revival and Reinstatement of Obligations.......................................................65
13.22. Customer Identification - USA Patriot Act Notice...............................................65
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LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT, dated as of September 13, 2004 (this
"Agreement"), is executed by and between XXXX BROS. TRANSPORTATION INC., a
Delaware corporation (the "Borrower"), which has its chief executive office
located at 0000 Xxxxxxx 00, Xxxxxxx, Xxxxxxx 00000 and LASALLE BANK NATIONAL
ASSOCIATION, a national banking association (the "Bank"), whose address is 000
Xxxxx Xx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
R E C I T A L S:
A. The Borrower desires to borrow funds and obtain other
financial accommodations from the Bank.
B. Pursuant to the Borrower's request, the Bank is willing to
extend such financial accommodations to the Borrower under the terms and
conditions set forth herein.
NOW THEREFORE, in consideration of the premises, and the mutual
covenants and agreements set forth herein, the Borrower agrees to borrow from
the Bank, and the Bank agrees to lend to the Borrower, subject to and upon the
following terms and conditions:
A G R E E M E N T S:
Section 1. DEFINITIONS.
1.1. Defined Terms. For the purposes of this Agreement, the
following capitalized words and phrases shall have the meanings set forth below.
"Affiliate" of any Person shall mean (a) any other Person which,
directly or indirectly, controls or is controlled by or is under common control
with such Person, (b) any officer or director of such Person, and (c) with
respect to the Bank, any entity administered or managed by the Bank, or an
Affiliate or investment advisor thereof and which is engaged in making,
purchasing, holding or otherwise investing in commercial loans. A Person shall
be deemed to be "controlled by" any other Person if such Person possesses,
directly or indirectly, power to direct or cause the direction of the management
and policies of such Person whether by contract, ownership of voting securities,
membership interests or otherwise.
"AmSouth Bank Credit Agreement" shall mean that certain Amended and
Restated Credit Agreement, dated as of May 1, 2001, between Borrower and WTI
(formerly known as Xxxxxxx Transport, Inc.) as co-borrowers and AmSouth Bank, as
lender.
"Applicable Letter of Credit Fee Rate" and "Applicable Non-Utilization
Fee Rate" shall mean the rate per annum to determine the Letter of Credit Fee
and the Letter of Credit Non-Utilization Fee, respectively, as determined by the
ratio of Modified Funded Debt to EBITDA of the Borrower and its Subsidiaries for
the prior fiscal quarter, as set forth below:
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Ratio of Modified Funded Debt Applicable Letter of Applicable
to EBITDA Credit Fee Rate Non-Utilization Fee Rate
----------------------------------------- --------------------------- --------------------------
Greater than or equal to
3.00 to 1:00 2.25% 0.375%
Greater than or equal to 2.50 to 1.00;
less than 3.00 to 1.00 2.00% 0.375%
Greater than or equal to 2.00 to 1.00;
less than 2.50 to 1.00 1.75% 0.25%
Less than 2.00 to 1:00 1.50% 0.25%
As of the date hereof, the Applicable Letter of Credit Fee Rate is 1.75% and the
Applicable Non-Utilization Fee Rate is 0.25%.
"Applicable Margin" shall mean the rate per annum added to the Base
Rate and/or LIBOR to determine the Revolving Interest Rate as determined by the
ratio of Modified Funded Debt to EBITDA of the Borrower and its Subsidiaries for
the prior fiscal quarter, effective as of any Interest Rate Change Date, as set
forth below:
Ratio of Modified Funded Debt Applicable Margin for Applicable Margin for
to EBITDA Base Rate Loans LIBOR Loans
----------------------------------------- --------------------------- --------------------------
Greater than or equal to
3.00 to 1:00 1.00% 2.75%
Greater than or equal to 2.50 to 1.00;
less than 3.00 to 1.00 0.75% 2.50%
Greater than or equal to 2.00 to 1.00;
less than 2.50 to 1.00 0.50% 2.25%
Less than 2.00 to 1:00 0.25% 2.00%
The Applicable Margin as of the date hereof is 0.50% for Base Rate Loans and
2.25% for LIBOR Loans.
"Asset Disposition" shall mean the sale, lease, assignment or
other transfer for value (each a "Disposition") by the Borrower or any
Subsidiary to any Person (other than the Borrower or any Subsidiary) of any
asset or right of the Borrower or any Subsidiary (including, the loss,
destruction or damage of any thereof or any actual or threatened (in writing to
the Borrower or such Subsidiary) condemnation, confiscation, requisition,
seizure or taking thereof), other than the Disposition by the Borrower or any
Subsidiary of any asset which is to be replaced, and is in fact replaced, within
ninety (90) days with another asset performing the same or a similar function.
"Bank Product Agreements" shall mean those certain agreements
entered into from time to time by the Borrower or any Subsidiary with the Bank
or any Affiliate of the Bank concerning Bank Products.
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"Bank Product Obligations" shall mean all obligations,
liabilities, contingent reimbursement obligations, fees, and expenses owing by
the Borrower or any Subsidiary to the Bank or any Affiliate of the Bank pursuant
to or evidenced by the Bank Product Agreements and irrespective of whether for
the payment of money, whether direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising.
"Bank Products" shall mean any service or facility extended to
the Borrower or any Subsidiary by the Bank or any Affiliate of the Bank,
including: (a) credit cards, (b) credit card processing services, (c) debit
cards, (d) purchase cards, (e) ACH Transactions, (f) cash management, including
controlled disbursement, accounts or services, or (g) Hedging Agreements.
"Bankruptcy Code" shall mean the United States Bankruptcy
Code, as now existing or hereafter amended.
"Base Rate" shall mean, at any time, the greater of (i) the
Prime Rate at such time or (ii) the Federal Funds Rate at such time plus
one-half percent (0.5%) per annum.
"Base Rate Loan" or "Base Rate Loans" shall mean that portion,
and collectively, those portions of the aggregate outstanding principal balance
of the Loans that bear interest at the Base Rate plus the Applicable Margin.
"Borrowing Base Amount" shall mean, at any time, an amount
equal to the lesser of (i) the Revolving Loan Commitment and (ii) the sum of:
(a) eighty-five percent (85%) of the net amount (after
deduction of such reserves and allowances as the Bank deems proper and
necessary) at such time of all Eligible Accounts, plus
(b) the lesser of (i) an amount equal to fifty percent
(50%) of the net amount (after deduction of such reserves and
allowances as the Bank deems proper and necessary) at such time of all
Eligible Unbilled Accounts and (ii) Seven Hundred Fifty Thousand and
00/100 Dollars ($750,000.00), plus
(c) the lesser of (i) an amount equal to eighty-five
percent (85%) of the Net Orderly Liquidation Value of all Eligible
Rolling Stock Revolving Loan Collateral at such time plus such portion,
if any, of the Net Orderly Liquidation Value of the Rolling Stock Term
Loan Collateral that the Bank determines, in its sole discretion,
exceeds the amount necessary to adequately secure the Term Loan
outstanding at such time, and (ii) Four Million and 00/100 Dollars
($4,000,000.00).
"Borrowing Base Certificate" shall mean a certificate to be
signed by the Borrower certifying to the accuracy of the Borrowing Base Amount,
which certificate shall be substantially in the form attached hereto as Exhibit
3.2 and otherwise satisfactory to the Bank.
"Xxxx Logistics" shall mean Xxxx Logistics, Inc., a Delaware
corporation.
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"Xxxx Subordinated Debt" shall mean, at any time, the
outstanding principal amount at such time of the loan from Borrower to Xxxxxxx
Xxxx under and pursuant to the Xxxx Subordinated Debt Agreement in the original
principal amount of $4,600,000.00.
"Xxxx Subordinated Debt Agreement" shall mean that certain
Term Loan Agreement, dated as of September 13, 2004, between Xxxxxxx Xxxx, as
lender, and the Borrower, as borrower
"Xxxx Subordination Agreement" shall have the meaning set
forth in Section 3.1 hereof.
"Business Day" shall mean any day other than a Saturday,
Sunday or a legal holiday on which banks are authorized or required to be closed
for the conduct of commercial banking business in Chicago, Illinois.
"Capital Expenditures" shall mean all expenditures (including
Capitalized Lease Obligations) which, in accordance with GAAP, would be required
to be capitalized and shown on the consolidated balance sheet of the Borrower,
but excluding expenditures made in connection with the replacement, substitution
or restoration of assets to the extent financed (i) from insurance proceeds (or
other similar recoveries) paid on account of the loss of or damage to the assets
being replaced or restored or (ii) with awards of compensation arising from the
taking by eminent domain or condemnation of the assets being replaced.
"Capital Lease" shall mean, as to any Person, a lease of any
interest in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, by such Person, as lessee, that is, or should be, in
accordance with Financial Accounting Standards Board Statement No. 13, as
amended from time to time, or, if such statement is not then in effect, such
statement of GAAP as may be applicable, recorded as a "capital lease" on the
financial statements of such Person prepared in accordance with GAAP.
"Capital Securities" shall mean, with respect to any Person,
all shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's capital, whether now outstanding
or issued or acquired after the date hereof, including common shares, preferred
shares, membership interests in a limited liability company, limited or general
partnership interests in a partnership or any other equivalent of such ownership
interest.
"Capitalized Lease Obligations" shall mean, as to any Person,
all rental obligations of such Person, as lessee under a Capital Lease which are
or will be required to be capitalized on the books of such Person.
"Cash Equivalent Investment" shall mean, at any time, (a) any
evidence of Debt, maturing not more than one year after such time, issued or
guaranteed by the United States government or any agency thereof, (b) commercial
paper, maturing not more than one year from the date of issue, or corporate
demand notes, in each case (unless issued by the Bank or its holding company)
rated at least A-l by Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. or P-l by Xxxxx'x Investors Service, Inc., (c) any
certificate of deposit, time deposit or banker's acceptance, maturing not more
than one year after such time, or any overnight Federal Funds transaction that
is issued or sold by the Bank or its holding
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company (or by a commercial banking institution that is a member of the Federal
Reserve System and has a combined capital and surplus and undivided profits of
not less than $500,000,000), (d) any repurchase agreement entered into with the
Bank, or other commercial banking institution of the nature referred to in
clause (c), which (i) is secured by a fully perfected security interest in any
obligation of the type described in any of clauses (a) through (c) above, and
(ii) has a market value at the time such repurchase agreement is entered into of
not less than 100% of the repurchase obligation of the Bank, or other commercial
banking institution, thereunder, (e) money market accounts or mutual funds which
invest exclusively in assets satisfying the foregoing requirements, and (f)
other short term liquid investments approved in writing by the Bank.
"Change in Control" shall mean the occurrence of any of the
following events: (a) Xxxxxxx Xxxx, Xxxxxxx X. Xxxx, Xxxx X. Xxxxxx, Xxxxx
Xxxxxx and Xxxxxx Xxxxxxx (f/k/a Xxxxxx X. Xxxxx), collectively, shall cease to
own and control, directly or indirectly, at least 75% of the outstanding Capital
Securities of the Borrower; (b) the Borrower shall cease to, directly or
indirectly, own and control 100% of each class of the outstanding Capital
Securities of each Subsidiary Guarantor; (c) the granting by any of Xxxxxxx
Xxxx, Xxxxxxx X. Xxxx, Xxxx X. Xxxxxx, Xxxxx Xxxxxx or Xxxxxx Xxxxxxx, directly
or indirectly, of a security interest in his or her, as applicable, ownership
interest in the Borrower, which could result in Xxxxxxx Xxxx, Xxxxxxx X. Xxxx,
Xxxx X. Xxxxxx, Xxxxx Xxxxxx and Xxxxxx Xxxxxxx, collectively, ceasing to own
and control, directly or indirectly, at least 75% of the outstanding Capital
Securities of the Borrower; (d) the sale, transfer, conveyance, lease or other
disposition by the Borrower of all or any substantial part of its assets; or (e)
either Xxxxxxx X. Xxxxxx ceases to be employed by Borrower as Chief Financial
Officer and Chief Operating Officer or Xxxxx Xxxxxx ceases to be employed by
Borrower as a corporate officer, in each case without a replacement reasonably
acceptable to the Bank being hired within 90 days to serve in such capacity. For
the purpose hereof, the terms "control" or "controlling" shall mean the
possession of the power to direct, or cause the direction of, the management and
policies of the Borrower by contract or voting of securities or ownership
interests.
"Closing Date" shall mean the date of this Agreement.
"Collateral" shall have the meaning set forth in Section 6.1
hereof.
"Contingent Liability" and "Contingent Liabilities" shall
mean, respectively, each obligation and liability of the Borrower or any of its
Subsidiaries and all such obligations and liabilities of the Borrower or any of
its Subsidiaries incurred pursuant to any agreement, undertaking or arrangement
by which the Borrower: (a) guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) the
indebtedness, dividend, obligation or other liability of any other Person in any
manner (other than by endorsement of instruments in the course of collection),
including any indebtedness, dividend or other obligation which may be issued or
incurred at some future time; (b) guarantees the payment of dividends or other
distributions upon the shares or ownership interest of any other Person; (c)
undertakes or agrees (whether contingently or otherwise): (i) to purchase,
repurchase, or otherwise acquire any indebtedness, obligation or liability of
any other Person or any property or assets constituting security therefor,
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(ii) to advance or provide funds for the payment or discharge of any
indebtedness, obligation or liability of any other Person (whether in the form
of loans, advances, stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, working capital or other financial
condition of any other Person, or (iii) to make payment to any other Person
other than for value received; (d) agrees to lease property or to purchase
securities, property or services from such other Person with the purpose or
intent of assuring the owner of such indebtedness or obligation of the ability
of such other Person to make payment of the indebtedness or obligation; (e) to
induce the issuance of, or in connection with the issuance of, any letter of
credit for the benefit of such other Person; or (f) undertakes or agrees
otherwise to assure a creditor against loss. The amount of any Contingent
Liability shall (subject to any limitation set forth herein) be deemed to be the
outstanding principal amount (or maximum permitted principal amount, if larger)
of the indebtedness, obligation or other liability guaranteed or supported
thereby.
"Custodial Agreement" shall mean a Custodial Agreement dated
as of or prior to the date of this Agreement, executed by each of Borrower and
WTI, in the form prepared by and acceptable to the Bank.
"Debt" shall mean, as to any Person, without duplication, (a)
all indebtedness of such Person; (b) all borrowed money of such Person
(including principal, interest, fees and charges), whether or not evidenced by
bonds, debentures, notes or similar instruments; (c) all obligations to pay the
deferred purchase price of property or services; (d) all obligations, contingent
or otherwise, with respect to the maximum face amount of all letters of credit
(whether or not drawn), bankers' acceptances and similar obligations issued for
the account of such Person (including the Letters of Credit), and all unpaid
drawings in respect of such letters of credit, bankers' acceptances and similar
obligations; (e) all indebtedness secured by any Lien on any property owned by
such Person, whether or not such indebtedness has been assumed by such Person
(provided, however, if such Person has not assumed or otherwise become liable in
respect of such indebtedness, such indebtedness shall be deemed to be in an
amount equal to the fair market value of the property subject to such Lien at
the time of determination); (f) the aggregate amount of all Capitalized Lease
Obligations of such Person; (g) all Contingent Liabilities of such Person,
whether or not reflected on its balance sheet; (h) all Hedging Obligations of
such Person; (i) all Debt of any partnership of which such Person is a general
partner; and (j) all monetary obligations of such Person under (i) a so-called
synthetic, off-balance sheet or tax retention lease, or (ii) an agreement for
the use or possession of property creating obligations that do not appear on the
balance sheet of such Person but which, upon the insolvency or bankruptcy of
such Person, would be characterized as the indebtedness of such Person (without
regard to accounting treatment). Notwithstanding the foregoing, Debt shall not
include trade payables and accrued expenses incurred by such Person in
accordance with customary practices and in the ordinary course of business of
such Person.
"Default Rate" shall mean a per annum rate of interest equal
to the Base Rate plus two percent (2.0%).
"Depreciation" shall mean the total amounts added to
depreciation, amortization, obsolescence, valuation and other proper reserves,
as reflected on the Borrower's consolidated financial statements and determined
in accordance with GAAP.
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"EBITDA" shall mean, for any period, the sum for such period
of: (i) Net Income, plus (ii) Interest Charges, plus (iii) consolidated federal
and state income taxes of the Borrower and its Subsidiaries, plus (iv)
Depreciation, plus (v) non-cash management compensation expense of the Borrower
and its Subsidiaries, plus (vi) all other non-cash charges of the Borrower and
its Subsidiaries, in each case to the extent included in determining Net Income
for such period.
"EBITDAR" shall mean, for any period, the sum for such period
of: (i) EBITDA for such period, plus (ii) to the extent deducted in determining
such EBIDTA, Operating Lease Expense for such period.
"Eligible Account" and "Eligible Accounts" shall mean each
Account and all such Accounts (exclusive of sales, excise or other similar
taxes) owing to the Borrower or any Subsidiary Guarantor which meets each of the
following requirements:
(a) it is genuine in all respects and has arisen in the
ordinary course of the Borrower's business from the performance of
services by the Borrower or the applicable Subsidiary Guarantor, which
services have been fully performed, acknowledged and accepted by the
Account Debtor;
(b) it is subject to a perfected, first priority Lien in
favor of the Bank and is not subject to any other assignment, claim or
Lien;
(c) it is the valid, legally enforceable and
unconditional obligation of the Account Debtor with respect thereto,
and is not subject to the fulfillment of any condition whatsoever or
any counterclaim, credit (except as provided in subsection (g) of this
definition), allowance, rebate or adjustment by the Account Debtor with
respect thereto, or to any claim by such Account Debtor denying
liability thereunder in whole or in part and the Account Debtor has not
refused to accept and/or has not returned or offered to return any of
the Goods or services which are the subject of such Account;
(d) the Account Debtor with respect thereto is a resident
or citizen of, and is located within, the United States, unless the
sale of goods or services giving rise to such Account is on letter of
credit, banker's acceptance or other credit support terms reasonably
satisfactory to the Bank;
(e) it is not an Account arising from a "sale on
approval", "sale or return", "consignment", "guaranteed sale" or "xxxx
and hold", or are subject to any other repurchase or return agreement;
(f) it has not arisen out of contracts with the United
States or any department, agency or instrumentality thereof, unless the
Borrower has assigned its right to payment of such Account to the Bank
pursuant to the Assignment of Claims Act of 1940, and evidence
(satisfactory to the Bank) of such assignment has been delivered to the
Bank, or any state, county, city or other governmental body, or any
department, agency or instrumentality thereof;
7
(g) if the Borrower maintains a credit limit for an
Account Debtor, the aggregate dollar amount of Accounts due from such
Account Debtor, including such Account, does not exceed such credit
limit;
(h) if the Account is evidenced by chattel paper or an
instrument, the originals of such chattel paper or instrument shall
have been endorsed and/or assigned and delivered to the Bank or, in the
case of electronic chattel paper, shall be in the control of the Bank,
in each case in a manner satisfactory to the Bank;
(i) (A) such Account is evidenced by an invoice delivered
to the related Account Debtor (other than USG) and is not more than (i)
sixty (60) days past the due date thereof, or (ii) ninety (90) days
past the original invoice date thereof, in each case according to the
original terms of sale; or
(B) such Account is evidenced by an invoice delivered
to the related Account Debtor (where such related Account Debtor is
USG) and is not more than (i) thirty (30) days past the due date
thereof, or (ii) forty-five (45) days past the original invoice date
thereof, in each case according to the original terms of sale;
(j) it is not an Account with respect to an Account
Debtor that is located in any jurisdiction which has adopted a statute
or other requirement with respect to which any Person that obtains
business from within such jurisdiction must file a notice of business
activities report or make any other required filings in a timely manner
in order to enforce its claims in such jurisdiction's courts unless (i)
such notice of business activities report has been duly and timely
filed or the Borrower or the applicable Subsidiary is exempt from
filing such report and has provided the Bank with satisfactory evidence
of such exemption or (ii) the failure to make such filings may be cured
retroactively by the Borrower or the applicable Subsidiary for a
nominal fee;
(k) the Account Debtor with respect thereto is not the
Borrower or an Affiliate of the Borrower;
(l) such Account does not arise out of a contract or
order which, by its terms, forbids or makes void or unenforceable the
assignment thereof by the Borrower or any Subsidiary to the Bank and is
not unassignable to the Bank for any other reason;
(m) there is no bankruptcy, insolvency or liquidation
proceeding pending by or against the Account Debtor with respect
thereto (unless such Account Debtor is USG, provided, however, that (1)
the proceeding against USG has not been converted to a liquidation
under Chapter 7 of the Bankruptcy Code and (2) USG debtor-in-possession
or other financing acceptable to the Bank then in place), nor has the
Account Debtor suspended business, made a general assignment for the
benefit of creditors or failed to pay its debts generally as they come
due, and/or no condition or event has occurred having a material
adverse effect on the Account Debtor which would require the Accounts
of such Account Debtor to be deemed uncollectible in accordance with
GAAP;
8
(n) it is not owed by an Account Debtor with respect to
which twenty five percent (25.00%) or more of the aggregate amount of
outstanding Accounts owed at such time by such Account Debtor is
classified as ineligible under clause (j) of this definition;
(o) if the aggregate amount of all Accounts owed by the
Account Debtor thereon exceeds twenty five percent (25.00%) of the
aggregate amount of all Accounts at such time, then all Accounts owed
by such Account Debtor in excess of such amount shall be deemed
ineligible; and
(p) it does not violate the negative covenants and does
satisfy the affirmative covenants of the Borrower contained in this
Agreement, and it is otherwise not unacceptable to the Bank for any
other reason.
An Account which is at any time an Eligible Account, but which subsequently
fails to meet any of the foregoing requirements, shall forthwith cease to be an
Eligible Account. Further, with respect to any Account, if the Bank at any time
hereafter determine in its discretion that the prospect of payment or
performance by the Account Debtor with respect thereto is materially impaired
for any reason whatsoever, such Account shall cease to be an Eligible Account
after notice of such determination is given to the Borrower.
"Eligible Rolling Stock Revolving Loan Collateral" shall mean
all Rolling Stock Revolving Loan Collateral which meets each of the following
requirements.
(a) it is subject to a perfected, first priority Lien in
favor of the Bank and is not subject to any other assignment, claim or
Lien and is not Rolling Stock Term Loan Collateral;
(b) it is fully operational, as determined in the sole
and absolute discretion of the Bank;
(c) it is in the possession and control of the Borrower
or any Subsidiary Guarantor;
(d) it is not subject to any agreement or license which
would restrict the Bank's ability to sell or otherwise dispose of such
Rolling Stock;
(e) it is located in the United States;
(f) the Bank shall not have determined in its reasonable
discretion that it is unacceptable due to age, type, category, quality,
quantity and/or any other reason whatsoever.
Rolling Stock that is at any time Eligible Rolling Stock Revolving Loan
Collateral but which subsequently fails to meet any of the foregoing
requirements shall forthwith cease to be Eligible Rolling Stock Revolving Loan
Collateral.
9
"Eligible Unbilled Account" and "Eligible Unbilled Accounts"
shall mean, at any time, each Account and all such Accounts (exclusive of sales,
excise or other similar taxes) owing to the Borrower or any Subsidiary Guarantor
which meets each of the requirements set forth within the definition of
"Eligible Accounts" set forth above except that such Accounts are not evidenced
by an invoice delivered to the related Account Debtor; provided, however, that
no such Account shall constitute an Eligible Unbilled Account if such Account
was, or in accordance with GAAP should have been, recorded on the books of
Borrower more than ten (10) days prior to such time.
"Employee Plan" includes any pension, stock bonus, employee
stock ownership plan, retirement, profit sharing, deferred compensation, stock
option, bonus or other incentive plan, whether qualified or nonqualified, or any
disability, medical, dental or other health plan, life insurance or other death
benefit plan, vacation benefit plan, severance plan or other employee benefit
plan or arrangement, including those pension, profit-sharing and retirement
plans of the Borrower described from time to time in the financial statements of
the Borrower and any pension plan, welfare plan, Defined Benefit Pension Plans
(as defined in ERISA) or any multi-employer plan, maintained or administered by
the Borrower or to which the Borrower is a party or may have any liability or by
which the Borrower is bound.
"Environmental Laws" shall mean all present or future federal,
state or local laws, statutes, common law duties, rules, regulations, ordinances
and codes, together with all administrative or judicial orders, consent
agreements, directed duties, requests, licenses, authorizations and permits of,
and agreements with, any governmental authority, in each case relating to any
matter arising out of or relating to public health and safety, or pollution or
protection of the environment or workplace, including any of the foregoing
relating to the presence, use, production, generation, handling, transport,
treatment, storage, disposal, distribution, discharge, emission, release,
threatened release, control or cleanup of any Hazardous Substance.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"Event of Default" shall mean any of the events or conditions
which are set forth in Section 11 hereof.
"Federal Funds Rate" shall mean a fluctuating interest rate
per annum equal, on each day, to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Bank from three Federal funds brokers of recognized standing
selected by the Bank. The Bank's determination of such rate shall be binding and
conclusive absent manifest error.
"Funded Debt" shall mean all obligations of the Borrower and
its Subsidiaries for borrowed money, including, without limitation, the Term
Loan, advances under the Revolving
10
Loan, all Capitalized Lease Obligations and Operating Lease Expenses, whether
short-term or long-term, and including all Letter of Credit Obligations and
Subordinated Debt.
"GAAP" shall mean generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of the
date of determination, provided, however, that interim financial statements or
reports shall be deemed in compliance with GAAP despite the absence of footnotes
and fiscal year-end adjustments as required by GAAP.
"Going Private Transaction" shall mean, collectively, the
transactions contemplated by the Merger Agreement, pursuant to which Xxxxxxx
Xxxx and certain Xxxx family members would, on or about the Closing Date, become
the sole shareholders of the Borrower.
"Guaranty" shall have the meaning set forth in Section 3.1
hereof.
"Hazardous Substances" shall mean (a) any petroleum or
petroleum products, radioactive materials, asbestos in any form that is or could
become friable, urea formaldehyde foam insulation, dielectric fluid containing
levels of polychlorinated biphenyls, radon gas and mold; (b) any chemicals,
materials, pollutant or substances defined as or included in the definition of
"hazardous substances", "hazardous waste", "hazardous materials", "extremely
hazardous substances", "restricted hazardous waste", "toxic substances", "toxic
pollutants", "contaminants", "pollutants" or words of similar import, under any
applicable Environmental Law; and (c) any other chemical, material or substance,
the exposure to, or release of which is prohibited, limited or regulated by any
governmental authority or for which any duty or standard of care is imposed
pursuant to, any Environmental Law.
"Hedging Agreement" shall mean any interest rate, currency or
commodity swap agreement, cap agreement or collar agreement, and any other
agreement or arrangement designed to protect a Person against fluctuations in
interest rates, currency exchange rates or commodity prices.
"Hedging Obligation" shall mean, with respect to any Person,
any liability of such Person under any Hedging Agreement.
"Indemnified Party" and "Indemnified Parties" shall mean,
respectively, each of the Bank and any parent corporation, Affiliate or
Subsidiary of the Bank, and each of their respective officers, directors,
employees, attorneys and agents, and all of such parties and entities.
"Intellectual Property" shall mean the collective reference to
all rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including copyrights, patents, service marks and trademarks, and all
registrations and applications for registration therefor and all licensees
thereof, trade names, domain names, technology, know-how and processes, and all
rights to xxx at law or in equity for
11
any infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.
"Interest Charges" shall mean, on a consolidated basis for the
Borrower and its Subsidiaries for any period, the sum of: (a) all interest,
charges and related expenses payable with respect to that fiscal period to a
lender in connection with borrowed money or the deferred purchase price of
assets that are treated as interest in accordance with GAAP, plus (b) the
portion of Capitalized Lease Obligations with respect to that fiscal period that
should be treated as interest in accordance with GAAP, plus (c) all charges paid
or payable (without duplication) during that period with respect to any Hedging
Agreements.
"Interest Period" shall mean successive one, two or three
month periods, beginning and ending as provided in this Agreement.
"Interest Rate Change Date" shall mean the date two (2)
Business Days after the delivery to the Bank of the quarterly or year-end
financial statements of the Borrower, which initial Change Date shall occur
after the delivery to the Bank of the financial statements of the Borrower for
the fiscal quarter ending December 31, 2004.
"Investment" shall mean, with respect to any Person, any
investment in another Person, whether by acquisition of any debt or equity
security, by making any loan or advance, by becoming obligated with respect to a
Contingent Liability in respect of obligations of such other Person (other than
travel and similar advances to employees in the ordinary course of business).
"Lease Purchase Agreements" shall mean written agreements
between the Borrower and operators of Rolling Stock pursuant to which such
operators lease tractors owned by the Borrower, the terms of which leases
include an option for the operator to purchase the leased tractor at the end of
the lease term at a nominal option price.
"Letter of Credit" and "Letters of Credit" shall mean,
respectively, a standby letter of credit and all such standby letters of credit
issued by the Bank, in its sole discretion, upon the execution and delivery by
the Borrower and the acceptance by the Bank of the Master Letter of Credit
Agreement and a Letter of Credit Application, as set forth in Section 2.7 of
this Agreement.
"Letter of Credit Application" shall mean, with respect to any
request for the issuance of a Letter of Credit, a letter of credit application
in the form being used by the Bank at the time of such request for the type of
Letter of Credit requested.
"Letter of Credit Commitment" shall mean, at any time, an
amount equal to Eight Million Five Hundred Thousand and 00/100 Dollars
($8,500,000.00).
"Letter of Credit Fee" shall have the meaning set forth in
Section 5.3 hereof.
"Letter of Credit Obligations" shall mean, at any time, an
amount equal to the aggregate of the original face amounts of all Letters of
Credit minus the sum of (i) the amount of any reductions in the original face
amount of any Letter of Credit which did not result from a draw thereunder, (ii)
the amount of any payments made by the Bank with respect to any draws
12
made under a Letter of Credit for which the Borrower has reimbursed the Bank,
(iii) the amount of any payments made by the Bank with respect to any draws made
under a Letter of Credit which have been converted to a Revolving Loan as set
forth in Section 2.7, and (iv) the portion of any issued but expired Letter of
Credit which has not been drawn by the beneficiary thereunder. For purposes of
determining the outstanding Letter of Credit Obligations at any time, the Bank's
acceptance of a draft drawn on the Bank pursuant to a Letter of Credit shall
constitute a draw on the applicable Letter of Credit at the time of such
acceptance.
"Liabilities" shall mean at all times all liabilities of the
Borrower or its Subsidiaries that would be shown as such on a consolidated
balance sheet of the Borrower prepared in accordance with GAAP.
"LIBOR" shall mean a rate of interest equal to (a) the per
annum rate of interest at which United States dollar deposits for a period equal
to the relevant Interest Period are offered in the London Interbank Eurodollar
market at 11:00 a.m. (London time) two Business Days prior to the commencement
of such Interest Period (or three Business Days prior to the commencement of
such Interest Period if banks in London, England were not open and dealing in
offshore United States dollars on such second preceding Business Day), as
displayed in the Bloomberg Financial Markets system (or other authoritative
source selected by the Bank in its sole discretion), divided by (b) a number
determined by subtracting from 1.00 the then stated maximum reserve percentage
for determining reserves to be maintained by member banks of the Federal Reserve
System for Eurocurrency funding or liabilities as defined in Regulation D (or
any successor category of liabilities under Regulation D), or as LIBOR is
otherwise determined by the Bank in its sole and absolute discretion. The Bank's
determination of LIBOR shall be conclusive, absent manifest error.
"LIBOR Loan" or "LIBOR Loans" shall mean that portion, and
collectively those portions, of the aggregate outstanding principal balance of
the Loans that bear interest at the LIBOR Rate.
"LIBOR Rate" shall mean a per annum rate of interest equal to
LIBOR for the relevant Interest Period, plus the Applicable Margin, which LIBOR
Rate shall remain fixed during such Interest Period.
"Lien" shall mean, with respect to any Person, any interest
granted by such Person in any real or personal property, asset or other right
owned or being purchased or acquired by such Person (including an interest in
respect of a Capital Lease) which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, title retention
lien, charge or other security interest of any kind, whether arising by
contract, as a matter of law, by judicial process or otherwise.
"Loans" shall mean, collectively, all Revolving Loans and the
Term Loan made by the Bank to the Borrower and all Letter of Credit Obligations,
under and pursuant to this Agreement.
"Loan Documents" shall mean each of the agreements, documents,
instruments and certificates set forth in Section 3.1 hereof, and any and all
such other instruments,
13
documents, certificates and agreements from time to time executed and delivered
by the Borrower, the Subsidiary Guarantors or any of their respective
Subsidiaries for the benefit of the Bank pursuant to any of the foregoing, and
all amendments, restatements, supplements and other modifications thereto.
"Lockbox Agreement" shall mean a Master Cash Management
Service Agreement and Supplement to the Master Cash Management Service Agreement
Re: Wholesale Lockbox and Lockbox Related Services, in the form prepared by and
acceptable to the Bank.
"Master Letter of Credit Agreement" shall have the meaning set
forth in Section 2.7 hereof.
"Material Adverse Effect" shall mean (a) a material adverse
change in, or a material adverse effect upon, the assets, business, properties,
prospects, condition (financial or otherwise) or results of operations of the
Borrower and its Subsidiaries taken as a whole, (b) a material impairment of the
ability of the Borrower and its Subsidiaries to perform any of the Obligations
under any of the Loan Documents, or (c) a material adverse effect on (i) any
substantial portion of the Collateral, (ii) the legality, validity, binding
effect or enforceability against the Borrower and its Subsidiaries of any of the
Loan Documents, (iii) the perfection or priority of any Lien granted to the Bank
under any Loan Document, or (iv) the rights or remedies of the Bank under any
Loan Document.
"Merger Agreement" shall mean that certain Agreement and Plan
of Merger, dated as of December 31, 2003 by and between BBT Acquisition
Corporation and the Borrower, as amended through the Closing Date.
"Modified Funded Debt" shall mean Funded Debt minus Xxxx
Subordinated Debt minus Letter of Credit Obligations.
"Mortgaged Property" shall mean any real property owned by
Borrower or a Subsidiary that from time to time secures the Obligations.
"Net Cash Proceeds" shall mean:
(a) with respect to any Asset Disposition, the aggregate
cash proceeds (including cash proceeds received pursuant to policies of
insurance or by way of deferred payment of principal pursuant to a
note, installment receivable or otherwise, but only as and when
received) received by the Borrower pursuant to such Asset Disposition
net of (i) the direct costs relating to such sale, transfer or other
disposition (including sales commissions and legal, accounting and
investment banking fees), (ii) taxes paid or reasonably estimated by
the Borrower to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements), and (iii) amounts required to be applied to the
repayment of any Debt secured by a Lien on the asset subject to such
Asset Disposition (other than the Loans);
(b) with respect to any issuance of Capital Securities,
the aggregate cash proceeds received by the Borrower pursuant to such
issuance, net of the direct costs relating to such issuance (including
sales and underwriters' commissions; and
14
(c) with respect to any issuance of Debt, the aggregate
cash proceeds received by the Borrower pursuant to such issuance, net
of the direct costs of such issuance (including up-front, underwriters'
and placement fees).
"Net Gain from the Sale of Rolling Stock" shall mean the
difference between (A) the gross proceeds generated from the Disposition of
Rolling Stock less all reasonable and customary fees and expenses associated
with such Disposition (including any brokerage commissions) and (B) the book
value of such Rolling Stock.
"Net Income" shall mean, with respect to the Borrower and its
Subsidiaries for any period, the consolidated net income (or loss) of the
Borrower and its Subsidiaries for such period as determined in accordance with
GAAP, excluding any gains from Asset Dispositions (including from dispositions
of Rolling Stock), any extraordinary gains and any gains from discontinued
operations.
"Net Orderly Liquidation Value" shall mean, (i) with respect
to Rolling Stock Term Loan Collateral, the net orderly liquidation value (after
deduction of such reserves and allowances as the Bank deems proper and
necessary) of such Rolling Stock Term Loan Collateral as is evidenced by a
written appraisal report or reports of Xxxxxx and Xxxxxx or such other qualified
equipment appraiser as is acceptable to Bank, such reports to be dated not
earlier than sixty (60) days immediately preceding the Closing Date, and (ii)
with respect to the Eligible Rolling Stock Revolving Loan Collateral, the net
orderly liquidation value (after deduction of such reserves and allowances as
the Bank deems proper and necessary) of such Eligible Rolling Stock Revolving
Loan Collateral as is evidenced by a written appraisal report or reports of
Xxxxxx and Xxxxxx or such other qualified equipment appraiser as is acceptable
to Bank, such reports to be dated not earlier than ninety (90) days immediately
preceding the date of the Borrowing Base Certificate on which such Net Orderly
Liquidation Value is specified for purposes of determining the Borrowing Base
Amount as of such date. The Net Orderly Liquidation Value of (a) Rolling Stock
Term Loan Collateral shall be deemed to be zero for each item of Rolling Stock
that is not the subject of an appraisal report dated not earlier than sixty (60)
days immediately preceding the Closing Date, and (b) Eligible Rolling Stock
Revolving Loan Collateral shall be deemed to be zero for each item of Rolling
Stock that is not the subject of an appraisal report dated on or after the
ninetieth (90th) day immediately preceding the applicable Borrowing Base
Certificate.
"Non-Excluded Taxes" shall have the meaning set forth in
Section 2.8(a) hereof.
"Non-Utilization Fee" shall have the meaning set forth in
Section 8.22 hereof.
"Note" and "Notes" shall mean, respectively, each of and
together, the Revolving Note and the Term Note.
"Obligations" shall mean the Loans, as evidenced by any Note,
all interest accrued thereon (including interest which would be payable as
post-petition in connection with any bankruptcy or similar proceeding, whether
or not permitted as a claim thereunder), any fees due the Bank hereunder, any
expenses incurred by the Bank hereunder and any and all other liabilities and
obligations of the Borrower to the Bank under this Agreement and any other Loan
15
Document, including any reimbursement obligations of the Borrower in respect of
Letters of Credit and surety bonds, all Hedging Obligations of the Borrower
which are owed to the Bank or any Affiliate of the Bank, all Bank Product
Obligations of the Borrower and all obligations of the Subsidiary Guarantors
under the Guarantees, all in each case howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing,
or due or to become due, together with any and all renewals or extensions
thereof.
"Obligor" shall mean the Borrower, and each Subsidiary of the
Borrower, accommodation endorser, third party pledgor, or any other party liable
with respect to the Obligations.
"Operating Lease" shall mean any lease of property, whether
personal or real, by Borrower or any of its Subsidiaries as lessee which is not
a Capital Lease.
"Operating Lease Expense" shall mean, on a consolidated basis
for the Borrower and its Subsidiaries for the period in question, the aggregate
amount of rental and other expenses incurred in respect of Operating Leases
during such period, all determined in accordance with GAAP.
"Organizational Identification Number" means, with respect to
Borrower and each Subsidiary, the organizational identification number assigned
to Borrower or such Subsidiary by the applicable governmental unit or agency of
the jurisdiction of its organization.
"Other Taxes" shall mean any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from the execution, delivery, enforcement or registration of,
or otherwise with respect to, this Agreement or any of the other Loan Documents.
"Permitted Liens" shall mean (a) Liens for Taxes, assessments
or other governmental charges not at the time delinquent or thereafter payable
without penalty or being contested in good faith by appropriate proceedings and,
in each case, for which it maintains adequate reserves in accordance with GAAP
and in respect of which no Lien has been filed; (b) Liens arising in the
ordinary course of business (such as (i) Liens of carriers, warehousemen,
mechanics and materialmen and other similar Liens imposed by law, and (ii) Liens
in the form of deposits or pledges incurred in connection with worker's
compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA) or in connection with surety bonds, bids,
performance bonds and similar obligations) for sums not overdue or being
contested in good faith by appropriate proceedings and not involving any
advances or borrowed money or the deferred purchase price of property or
services, which do not in the aggregate materially detract from the value of the
property or assets of the Borrower or materially impair the use thereof in the
operation of the Borrower's business and, in each case, for which it maintains
adequate reserves in accordance with GAAP and in respect of which no Lien has
been filed; (c) Liens described on Schedule 9.2 as of the Closing Date; (d)
attachments, appeal bonds, judgments and other similar Liens, for sums not
exceeding Five Hundred Thousand and 00/100 Dollars ($500,000) arising in
connection with court proceedings, provided the execution or other enforcement
of such Liens is effectively stayed and the claims secured thereby are being
actively contested in good faith and by appropriate proceedings and to the
16
extent such judgments or awards do not constitute an Event of Default under
Section 11.8 hereof; (e) easements, rights of way, restrictions, minor defects
or irregularities in title and other similar Liens not interfering in any
material respect with the ordinary conduct of the business of the Borrower or
any of its Subsidiaries; (f) subject to the limitation set forth in Section
9.1(g), Liens arising in connection with Capitalized Lease Obligations (and
attaching only to the property being leased); (g) subject to the limitation set
forth in Section 9.1(h), Liens that constitute purchase money security interests
on any property securing Debt incurred for the purpose of financing all or any
part of the cost of acquiring such property, provided that any such Lien
attaches to such property within twenty (20) days of the acquisition thereof and
attaches solely to the property so acquired; (h) provided such Liens are
released on or before the date that is twenty (20) Business Days after the
Closing Date, Liens securing the Debt permitted pursuant Section 9.1(i); (i)
Liens that constitute a security interest in Rolling Stock that is not Rolling
Stock Collateral; and (j) Liens granted to the Bank hereunder and under the Loan
Documents.
"Person" shall mean any natural person, partnership, limited
liability company, corporation, trust, joint venture, joint stock company,
association, unincorporated organization, government or agency or political
subdivision thereof, or other entity, whether acting in an individual, fiduciary
or other capacity.
"Prime Rate" shall mean the floating per annum rate of
interest which at any time, and from time to time, shall be most recently
announced by the Bank as its Prime Rate, which is not intended to be the Bank's
lowest or most favorable rate of interest at any one time. The effective date of
any change in the Prime Rate shall for purposes hereof be the date the Prime
Rate is changed by the Bank. The Bank shall not be obligated to give notice of
any change in the Prime Rate.
"Regulatory Change" shall mean the introduction of, or any
change in any applicable law, treaty, rule, regulation or guideline or in the
interpretation or administration thereof by any governmental authority or any
central bank or other fiscal, monetary or other authority having jurisdiction
over the Bank or its lending office.
"Revolving Interest Rate" shall mean a floating per annum rate
of interest equal to, at the Borrower's option from time to time, either (i) the
Base Rate plus the Applicable Margin, or (ii) the LIBOR Rate plus the Applicable
Margin.
"Revolving Loan" and "Revolving Loans" shall mean,
respectively, each direct advance and the aggregate of all such direct advances
made by the Bank to the Borrower under and pursuant to this Agreement, as set
forth in Section 2.1 of this Agreement.
"Revolving Loan Availability" shall mean, at any time, an
amount equal to the lesser of (a) the Revolving Loan Commitment minus the Letter
of Credit Obligations, or (b) the Borrowing Base Amount minus the Letter of
Credit Obligations.
"Revolving Loan Commitment" shall mean Twelve Million and
00/100 Dollars ($12,000,000.00).
"Revolving Loan Maturity Date" shall mean September 13, 2007,
unless extended by the Bank pursuant to any modification, extension or renewal
note executed by the
17
Borrower and accepted by the Bank in its sole and absolute discretion in
substitution for the Revolving Note.
"Revolving Note" shall mean a revolving note in the form
prepared by and acceptable to the Bank, dated as of the date hereof, in the
amount of the Revolving Loan Commitment and maturing on the Revolving Loan
Maturity Date, duly executed by the Borrower and payable to the order of the
Bank, together with any and all renewal, extension, modification or replacement
notes executed by the Borrower and delivered to the Bank and given in
substitution therefor.
"Rolling Stock" shall mean all tractors and trailers owned by
the Borrower or any Subsidiary Guarantor.
"Rolling Stock Collateral" shall mean, at any time, the
Rolling Stock Revolving Loan Collateral at such time and the Rolling Stock Term
Loan Collateral at such time.
"Rolling Stock Revolving Loan Collateral" shall mean the
Rolling Stock set forth in Schedule 6.1(b) attached hereto, as such Schedule may
be amended, substituted, replaced or otherwise modified from time to time
pursuant to this Agreement. .
"Rolling Stock Term Loan Collateral" shall mean the Rolling
Stock set forth in Schedule 6.1(c) attached hereto, as such Schedule may be
amended, substituted, replaced or otherwise modified from time to time pursuant
to this Agreement.
"Security Agreement" shall have the meaning set forth in
Section 3.1 hereof.
"Senior Debt" shall mean all Debt of the Borrower and its
Subsidiaries other than Subordinated Debt.
"Stock Pledge Agreement" shall have the meaning set forth in
Section 3.1 hereof.
"Subordinated Debt" shall mean that portion of the Debt of the
Borrower which is subordinated to the Obligations in a manner satisfactory to
the Bank, including right and time of payment of principal and interest.
"Subsidiary" and "Subsidiaries" shall mean, respectively, with
respect to any Person, each and all such corporations, partnerships, limited
partnerships, limited liability companies, limited liability partnerships, joint
ventures or other entities of which or in which such Person owns, directly or
indirectly, such number of outstanding Capital Securities as have more than
fifty percent (50.00%) of the ordinary voting power for the election of
directors or other managers of such corporation, partnership, limited liability
company or other entity. Unless the context otherwise requires, each reference
to Subsidiaries herein shall be a reference to Subsidiaries of the Borrower.
"Subsidiary Guarantor" and "Subsidiary Guarantors" shall mean,
respectively, each and all Subsidiaries of Borrower that from time to time
executes a Guaranty and a Security Agreement. As of the date hereof, the
Subsidiary Guarantors are WTI and Xxxx Logistics.
18
"Tangible Assets" shall mean the total of all assets appearing
on a consolidated balance sheet of the Borrower prepared in accordance with GAAP
(with Inventory, if any, being valued at the lower of cost or market), after
deducting all proper reserves (including reserves for Depreciation) minus the
sum of (i) goodwill, patents, trademarks, prepaid expenses, deposits, deferred
charges and other personal property which is classified as intangible property
in accordance with GAAP, (ii) any amounts due from shareholders, Affiliates,
officers or employees of the Borrower, and (iii) any amounts due from officers
or employees of any Subsidiary.
"Tangible Net Worth" shall mean at any time the total of
Tangible Assets minus Liabilities plus Subordinated Debt.
"Taxes" shall mean any and all present and future taxes,
duties, levies, imposts, deductions, assessments, charges or withholdings, and
any and all liabilities (including interest and penalties and other additions to
taxes) with respect to the foregoing.
"Term Interest Rate" shall mean a floating per annum rate of
interest equal to the Base Rate.
"Term Loan" shall mean the direct advance made by the Bank to
the Borrower in the form of a Term Loan under and pursuant to this Agreement, as
set forth in Section 2.2 of this Agreement.
"Term Loan Commitment" shall mean Three Million Five Hundred
Thousand and 00/100 Dollars ($3,500,000.00).
"Term Loan Maturity Date" shall mean March 13, 2006, unless
extended by the Bank pursuant to any modification, extension or renewal note
executed by the Borrower and accepted by the Bank in its sole and absolute
discretion in substitution for the Term Note.
"Term Note" shall mean a term note in the form prepared by and
acceptable to the Bank, dated as of the date hereof, in the amount of the Term
Loan Commitment and maturing on the Term Loan Maturity Date, duly executed by
the Borrower and payable to the order of the Bank, together with any and all
renewal, extension, modification or replacement notes executed by the Borrower
and delivered to the Bank and given in substitution therefor.
"Total Debt" shall mean all Debt of the Borrower and its
Subsidiaries, determined on a consolidated basis, excluding (i) Contingent
Liabilities (except to the extent constituting Contingent Liabilities in respect
of the Debt of a Person other than the Borrower or any Subsidiaries), (ii)
Hedging Obligations and (iii) Debt of the Borrower to Subsidiaries and Debt of
Subsidiaries to the Borrower or to other Subsidiaries.
"UCC" shall mean the Uniform Commercial Code in effect in the
state of Illinois from time to time.
"Unmatured Event of Default" shall mean any event which, with
the giving of notice, the passage of time or both, would constitute an Event of
Default.
19
"USG" shall mean USG Corporation (a/k/a United States Gypsum
Company).
"Voidable Transfer" shall have the meaning set forth in
Section 13.21 hereof.
"Wholly-Owned Subsidiary" shall mean any Subsidiary of which
or in which the Borrower owns, directly or indirectly, one hundred percent
(100%) of the Capital Securities of such Subsidiary.
"Working Capital" shall mean the total of cash on hand, cash
equivalents, marketable securities, Accounts minus adequate reserves for
doubtful Accounts, and readily salable Inventory, if any, at the lower of cost
or market value, minus the total of all liabilities payable within one year, all
as determined in accordance with GAAP.
"WTI" shall mean WTI Transport, Inc., an Alabama corporation.
1.2. Accounting Terms. Any accounting terms used in this Agreement
which are not specifically defined herein shall have the meanings customarily
given them in accordance with GAAP. Calculations and determinations of financial
and accounting terms used and not otherwise specifically defined hereunder and
the preparation of financial statements to be furnished to the Bank pursuant
hereto shall be made and prepared, both as to classification of items and as to
amount, in accordance with sound accounting practices and GAAP as used in the
preparation of the financial statements of the Borrower on the date of this
Agreement. If any changes in accounting principles or practices from those used
in the preparation of the financial statements are hereafter occasioned by the
promulgation of rules, regulations, pronouncements and opinions by or required
by the Financial Accounting Standards Board or the American Institute of
Certified Public Accountants (or any successor thereto or agencies with similar
functions), which results in a material change in the method of accounting in
the financial statements required to be furnished to the Bank hereunder or in
the calculation of financial covenants, standards or terms contained in this
Agreement, the parties hereto agree to enter into good faith negotiations to
amend such provisions so as equitably to reflect such changes to the end that
the criteria for evaluating the financial condition and performance of the
Borrower will be the same after such changes as they were before such changes;
and if the parties fail to agree on the amendment of such provisions, the
Borrower will furnish financial statements in accordance with such changes, but
shall provide calculations for all financial covenants, perform all financial
covenants and otherwise observe all financial standards and terms in accordance
with applicable accounting principles and practices in effect immediately prior
to such changes. Calculations with respect to financial covenants required to be
stated in accordance with applicable accounting principles and practices in
effect immediately prior to such changes shall be reviewed and certified by the
Borrower's accountants.
1.3. Other Terms Defined in UCC. All other capitalized words and
phrases used herein and not otherwise specifically defined herein shall have the
respective meanings assigned to such terms in the UCC, to the extent the same
are used or defined therein.
1.4. Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable
to the singular and plural forms of the defined terms. Whenever the
context so requires, the neuter gender
20
includes the masculine and feminine, the single number includes the
plural, and vice versa, and in particular the word "Borrower" shall be
so construed.
(b) Section and Schedule references are to this Agreement
unless otherwise specified. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular
provision of this Agreement
(c) The term "including" is not limiting, and means
"including, without limitation".
(d) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from
and including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including".
(e) Unless otherwise expressly provided herein, (i)
references to agreements (including this Agreement and the other Loan
Documents) and other contractual instruments shall be deemed to include
all subsequent amendments, restatements, supplements and other
modifications thereto, but only to the extent such amendments,
restatements, supplements and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or
regulation shall be construed as including all statutory and regulatory
provisions amending, replacing, supplementing or interpreting such
statute or regulation.
(f) To the extent any of the provisions of the other Loan
Documents are inconsistent with the terms of this Agreement, the
provisions of this Agreement shall govern.
(g) This Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the
same or similar matters. All such limitations, tests and measurements
are cumulative and each shall be performed in accordance with its
terms.
Section 2. COMMITMENT OF THE BANK.
2.1. Revolving Loans.
(a) Revolving Loan Commitment. Subject to the terms and
conditions of this Agreement and the other Loan Documents, and in
reliance upon the representations and warranties of the Borrower set
forth herein and in the other Loan Documents, the Bank agrees to make
such Revolving Loans at such times as the Borrower may from time to
time request until, but not including, the Revolving Loan Maturity
Date, and in such amounts as the Borrower may from time to time
request, provided, however, that the aggregate principal balance of all
Revolving Loans outstanding at any time shall not exceed the Revolving
Loan Availability. Revolving Loans made by the Bank may be repaid and,
subject to the terms and conditions hereof, borrowed again up to, but
not including the Revolving Loan Maturity Date unless the Revolving
Loans are otherwise accelerated, terminated or extended as provided in
this Agreement. The Revolving Loans
21
shall be used by the Borrower for the purposes of (i) refinancing
existing Debt of Borrower and (ii) financing working capital
requirements and general corporate purposes of Borrower.
(b) Revolving Loan Interest and Payments. Except as
otherwise provided in this Section 2.1(b), the principal amount of the
Revolving Loans outstanding from time to time shall bear interest at
the applicable Revolving Interest Rate. Accrued and unpaid interest on
the unpaid principal balance of all Revolving Loans outstanding from
time to time which are Base Rate Loans, shall be due and payable
monthly, in arrears, commencing on September 30, 2004 and continuing on
the last Business Day of each calendar month thereafter, and on the
Revolving Loan Maturity Date. Accrued and unpaid interest on the unpaid
principal balance of all Revolving Loans outstanding from time to time
which are LIBOR Loans shall be payable on the last Business Day of each
Interest Period, commencing on the first such date to occur after the
date hereof, on the date of any principal repayment of a LIBOR Loan and
on the Revolving Loan Maturity Date. Any amount of principal or
interest on the Revolving Loans which is not paid when due, whether at
stated maturity, by acceleration or otherwise, shall bear interest
payable on demand at the Default Rate.
(c) Revolving Loan Principal Payments.
(i) Revolving Loan Mandatory Payments. All
Revolving Loans hereunder shall be repaid by the Borrower on
the Revolving Loan Maturity Date, unless payable sooner
pursuant to the provisions of this Agreement, including,
without limitation, this Section 2.1(c)(i) and Section 2.3. In
the event the aggregate outstanding principal balance of all
Revolving Loans and Letter of Credit Obligations hereunder
exceeds the Revolving Loan Availability, the Borrower shall,
without notice or demand of any kind, immediately make such
repayments of the Revolving Loans or take such other actions
as are satisfactory to the Bank as shall be necessary to
eliminate such excess. Also, if the Borrower chooses not to
convert any Revolving Loan which is a LIBOR Loan to a Base
Rate Loan as provided in Section 2.4(b) and Section 2.4(c),
then such Revolving Loan shall immediately be due and payable
on the last Business Day of the then existing Interest Period
or on such earlier date as required by law, all without
further demand, presentment, protest or notice of any kind,
all of which are hereby waived by the Borrower.
(ii) Optional Prepayments. The Borrower may from
time to time prepay, without penalty or premium (but subject
to, in the case of Revolving Loans that are Libor Loans,
Section 2.4 hereof), the Revolving Loans, in whole or in part,
provided that the Borrower shall pay to the Bank, in addition
to the principal amount being repaid, all accrued and unpaid
interest thereon through the date of such prepayment.
2.2. Term Loan.
22
(a) Term Loan Commitment. Subject to the terms and
conditions of this Agreement and the other Loan Documents, and in
reliance upon the representations and warranties of the Borrower set
forth herein and in the other Loan Documents, the Bank agrees to make a
Term Loan equal to the Term Loan Commitment. The Term Loan shall be
available to the Borrower in a single principal advance on such date as
the conditions set forth in Section 3 shall have been satisfied. The
Term Loan may be used by the Borrower either to fund, in part, the
Going Private Transaction, to refinance existing Debt of Borrower
and/or for general corporate purposes. Subject to Section 2.2(e)
hereof, the Term Loan may be prepaid in whole or in part at any time
without penalty or premium, but shall be due in full on the Term Loan
Maturity Date, unless the credit extended under the Term Loan is
otherwise accelerated, terminated or extended as provided in this
Agreement.
(b) Term Loan Interest Payments. Except as otherwise
provided in this Section 2.2(b), the principal amount of the Term Loan
outstanding from time to time shall bear interest at the applicable
Term Interest Rate. Accrued and unpaid interest on the principal
balance of the Term Loan outstanding from time to time shall be due and
payable monthly, in arrears, commencing on September 30, 2004 and
continuing on the last Business Day of each calendar month thereafter,
and on the Term Loan Maturity Date. Any amount of principal or interest
on the Term Loan which is not paid when due, whether at stated
maturity, by acceleration or otherwise, shall bear interest payable on
demand at the Default Rate.
(c) Term Loan Principal Payments. The outstanding
principal balance of the Term Loan shall be repaid in seventeen (17)
equal principal installments each in the amount of One Hundred
Ninety-Four Thousand Four Hundred Forty-Four and 00/100 Dollars
($194,444.44), together with an additional amount representing accrued
and unpaid interest on the principal amount of the Term Loan
outstanding as set forth in Section 2.2(b), above, beginning on October
29, 2004 and continuing on the last Business Day of each month
thereafter through February 28, 2006, with a final payment of all
outstanding principal and accrued interest due on the Term Loan
Maturity Date. Principal amounts repaid on the Term Note may not be
borrowed again.
(d) Term Loan Mandatory Prepayment. The Borrower shall
prepay the outstanding principal amount of the Term Loan as provided in
Section 2.3 hereof.
(e) Term Loan Optional Prepayments. The Borrower may
voluntarily prepay, without penalty or premium, the principal balance
of the Term Loan, in whole or in part, at any time on or after the date
hereof, subject to the following conditions:
(i) Not less than thirty (30) days prior to the
date upon which the Borrower desires to make such prepayment,
the Borrower shall deliver to the Bank written notice of its
intention to prepay the Term Loan, which notice shall be
irrevocable and state the prepayment amount and the prepayment
date (the "Term Loan Prepayment Date");
23
(ii) The Borrower shall pay to the Bank, in
addition to the principal amount of the Term Loan being
prepaid, all accrued and unpaid interest thereon through the
date of such prepayment; and
(iii) Each prepayment of the Term Loan shall be
applied to the scheduled installments of the Term Loan in
inverse order of maturity.
2.3. Mandatory Prepayment of Loans. The Borrower shall immediately
notify the Bank in writing upon the receipt by the Borrower or by any of its
Subsidiaries of any Net Cash Proceeds from any Asset Disposition or from any
issuance of Capital Securities and immediately prepay the outstanding principal
amount of the Loans in the following amounts:
(i) with respect to each such Asset Disposition,
in an amount equal to 100% of such Net Cash Proceeds, with
such Net Cash Proceeds to be applied to the outstanding
principal amount of the Term Loan and/or the Revolving Loans
outstanding as the Bank shall, in its sole discretion, elect;
and
(ii) with respect to each such issuance of
Capital Securities (excluding (A) any issuance of Capital
Securities pursuant to any employee or director option
program, benefit plan or compensation program, and (B) any
issuance by a Subsidiary to the Borrower or another
Subsidiary), in an amount equal to 100% of such Net Cash
Proceeds, with such Net Cash Proceeds to be applied to the
outstanding principal amount of the Term Loan and/or the
Revolving Loans outstanding as the Bank shall, in its sole
discretion, elect;
provided, however, that the Revolving Commitment Amount shall not be reduced for
any prepayments pursuant to this Section 2.3 that are applied to Revolving Loans
Outstanding.
2.4. Additional LIBOR Loan Provisions.
(a) LIBOR Loan Prepayments. Notwithstanding anything to
the contrary contained herein, the principal balance of any LIBOR Loan
may not be prepaid in whole or in part at any time. If, for any reason,
a LIBOR Loan is paid prior to the last Business Day of any Interest
Period, whether voluntary, involuntary, by reason of acceleration or
otherwise, each such prepayment of a LIBOR Loan will be accompanied by
the amount of accrued interest on the amount prepaid and any and all
costs, expenses, penalties and charges incurred by the Bank as a result
of the early termination or breakage of a LIBOR Loan, plus the amount,
if any, by which (i) the additional interest which would have been
payable during the Interest Period on the LIBOR Loan prepaid had it not
been prepaid, exceeds (ii) the interest which would have been
recoverable by the Bank by placing the amount prepaid on deposit in the
domestic certificate of deposit market, the Eurodollar deposit market,
or other appropriate money market selected by the Bank, for a period
starting on the date on which it was prepaid and ending on the last day
of the Interest Period for such LIBOR Loan. The amount of any such loss
or expense payable by the Borrower to the Bank under this section shall
be determined in the Bank's sole discretion based upon the assumption
that the Bank funded its loan commitment for LIBOR Loans in the London
Interbank Eurodollar market and using any reasonable attribution or
24
averaging methods which the Bank deems appropriate and practical,
provided, however, that the Bank is not obligated to accept a deposit
in the London Interbank Eurodollar market in order to charge interest
on a LIBOR Loan at the LIBOR Rate.
(b) LIBOR Unavailability. If the Bank determines in good
faith (which determination shall be conclusive, absent manifest error)
prior to the commencement of any Interest Period that (i) the making or
maintenance of any LIBOR Loan would violate any applicable law, rule,
regulation or directive, whether or not having the force of law, (ii)
United States dollar deposits in the principal amount, and for periods
equal to the Interest Period for funding any LIBOR Loan are not
available in the London Interbank Eurodollar market in the ordinary
course of business, (iii) by reason of circumstances affecting the
London Interbank Eurodollar market, adequate and fair means do not
exist for ascertaining the LIBOR Rate to be applicable to the relevant
LIBOR Loan, or (iv) the LIBOR Rate does not accurately reflect the cost
to the Bank of a LIBOR Loan, the Bank shall promptly notify the
Borrower thereof and, so long as the foregoing conditions continue,
none of the Loans may be advanced as a LIBOR Loan thereafter. In
addition, at the Borrower's option, each existing LIBOR Loan shall be
immediately (i) converted to a Base Rate Loan on the last Business Day
of the then existing Interest Period, or (ii) due and payable on the
last Business Day of the then existing Interest Period, without further
demand, presentment, protest or notice of any kind, all of which are
hereby waived by the Borrower.
(c) Regulatory Change. In addition, if, after the date
hereof, a Regulatory Change shall, in the reasonable determination of
the Bank, make it unlawful for the Bank to make or maintain the LIBOR
Loans, then the Bank shall promptly notify the Borrower and none of the
Loans may be advanced as a LIBOR Loan thereafter. In addition, at the
Borrower's option, each existing LIBOR Loan shall be immediately (i)
converted to a Base Rate Loan on the last Business Day of the then
existing Interest Period or on such earlier date as required by law, or
(ii) due and payable on the last Business Day of the then existing
Interest Period or on such earlier date as required by law, all without
further demand, presentment, protest or notice of any kind, all of
which are hereby waived by the Borrower.
(d) LIBOR Indemnity. If any Regulatory Change, or
compliance by the Bank or any Person controlling the Bank with any
request or directive of any governmental authority, central bank or
comparable agency (whether or not having the force of law) shall (a)
impose, modify or deem applicable any assessment, reserve, special
deposit or similar requirement against assets held by, or deposits in
or for the account of or loans by, or any other acquisition of funds or
disbursements by, the Bank; (b) subject the Bank or any LIBOR Loan to
any tax, duty, charge, stamp tax or fee or change the basis of taxation
of payments to the Bank of principal or interest due from the Borrower
to the Bank hereunder (other than a change in the taxation of the
overall net income of the Bank); or (c) impose on the Bank any other
condition regarding such LIBOR Loan or the Bank's funding thereof, and
the Bank shall determine (which determination shall be conclusive,
absent manifest error) that the result of the foregoing is to increase
the cost to, or to impose a cost on, the Bank or such controlling
Person of making or maintaining such LIBOR Loan or to reduce the amount
of principal or interest received by the Bank
25
hereunder, then the Borrower shall pay to the Bank or such controlling
Person, on demand, such additional amounts as the Bank shall, from time
to time, determine are sufficient to compensate and indemnify the Bank
for such increased cost or reduced amount.
2.5. Interest and Fee Computation; Collection of Funds. Except as
otherwise set forth herein, all interest and fees shall be calculated on the
basis of a year consisting of 360 days and shall be paid for the actual number
of days elapsed. Principal payments submitted in funds not immediately available
shall continue to bear interest until collected. If any payment to be made by
the Borrower hereunder or under any Note shall become due on a day other than a
Business Day, such payment shall be made on the next succeeding Business Day and
such extension of time shall be included in computing any interest in respect of
such payment. Notwithstanding anything to the contrary contained herein, the
final payment due under any of the Loans must be made by wire transfer or other
immediately available funds. All payments made by the Borrower hereunder or
under any of the Loan Documents shall be made without setoff, counterclaim, or
other defense. To the extent permitted by applicable law, all payments hereunder
or under any of the Loan Documents (including any payment of principal,
interest, or fees) to, or for the benefit, of any Person shall be made by the
Borrower free and clear of, and without deduction or withholding for, or account
of, any taxes now or hereinafter imposed by any taxing authority.
2.6. Late Charge. If any payment of interest or principal due
hereunder is not made within ten (10) days after such payment is due in
accordance with the terms hereof, then, in addition to the payment of the amount
so due, the Borrower shall pay to the Bank a "late charge" of five cents for
each whole dollar so overdue to defray part of the cost of collection and
handling such late payment. The Borrower agrees that the damages to be sustained
by the Bank for the detriment caused by any late payment are extremely difficult
and impractical to ascertain, and that the amount of five cents for each one
dollar due is a reasonable estimate of such damages, does not constitute
interest, and is not a penalty.
2.7. Letters of Credit. Subject to the terms and conditions of this
Agreement and upon (i) the execution by the Borrower and the Bank of a Master
Letter of Credit Agreement in form and substance acceptable to the Bank
(together with all amendments, modifications and restatements thereof, the
"Master Letter of Credit Agreement"), and (ii) the execution and delivery by the
Borrower, and the acceptance by the Bank, in its sole and absolute discretion,
of a Letter of Credit Application, the Bank agrees to issue for the account of
the Borrower such Letters of Credit in the standard form of the Bank and
otherwise in form and substance acceptable to the Bank, from time to time during
the term of this Agreement, provided that the Letter of Credit Obligations may
not at any time exceed the Letter of Credit Commitment and provided further,
that no Letter of Credit shall have an expiration date later than the Revolving
Loan Maturity Date. The amount of any payments made by the Bank with respect to
draws made by a beneficiary under a Letter of Credit for which the Borrower has
failed to reimburse the Bank upon the earlier of (i) the Bank's demand for
repayment, or (ii) five (5) days from the date of such payment to such
beneficiary by the Bank, shall be deemed to have been converted to a Revolving
Loan as of the date such payment was made by the Bank to such beneficiary. Upon
the occurrence of an Event of a Default and at the option of the Bank, all
Letter of Credit Obligations shall be converted to Revolving Loans consisting of
Base Rate Loans, all without
26
demand, presentment, protest or notice of any kind, all of which are hereby
waived by the Borrower. To the extent the provisions of the Master Letter of
Credit Agreement differ from, or are inconsistent with, the terms of this
Agreement, the provisions of this Agreement shall govern.
2.8. Taxes.
(a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp
or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any governmental authority, excluding net income taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on the
Bank as a result of a present or former connection between the Bank and
the jurisdiction of the governmental authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Bank having executed,
delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings (collectively, "Non-Excluded Taxes") or Other Taxes are
required to be withheld from any amounts payable to the Bank hereunder,
the amounts so payable to the Bank shall be increased to the extent
necessary to yield to the Bank (after payment of all Non-Excluded Taxes
and Other Taxes) interest or any such other amounts payable hereunder
at the rates or in the amounts specified in this Agreement, provided,
however, that the Borrower shall not be required to increase any such
amounts payable to the Bank with respect to any Non-Excluded Taxes that
are attributable to the Bank's failure to comply with the requirements
of subsection 2.8(c).
(b) The Borrower shall pay any Other Taxes to the
relevant governmental authority in accordance with applicable law.
(c) At the request of the Borrower and at the Borrower's
sole cost, the Bank shall take reasonable steps to (i) contest its
liability for any Non-Excluded Taxes or Other Taxes that have not been
paid, or (ii) seek a refund of any Non-Excluded Taxes or Other Taxes
that have been paid.
(d) Whenever any Non-Excluded Taxes or Other Taxes are
payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Bank a certified copy of an original
official receipt received by the Borrower showing payment thereof. If
the Borrower fails to pay any Non-Excluded Taxes or Other Taxes when
due to the appropriate taxing authority or fails to remit to the Bank
the required receipts or other required documentary evidence or if any
governmental authority seeks to collect a Non-Excluded Tax or Other Tax
directly from the Bank for any other reason, the Borrower shall
indemnify the Bank on an after-tax basis for any incremental taxes,
interest or penalties that may become payable by the Bank.
(e) The agreements in this Section shall survive the
satisfaction and payment of the Obligations and the termination of this
Agreement.
27
2.9. All Loans to Constitute Single Obligation. The Loans shall
constitute one general obligation of the Borrower, and shall be secured by
Bank's priority security interest in and Lien upon all of the Collateral and by
all other security interests, Liens, claims and encumbrances heretofore, now or
at any time or times hereafter granted by the Borrower and/or any Subsidiary to
Bank.
Section 3. CONDITIONS OF BORROWING.
Notwithstanding any other provision of this Agreement, the Bank shall
not be required to disburse, make or continue all or any portion of the Loans,
if any of the following conditions shall have occurred.
3.1. Loan Documents. The Borrower shall have failed to execute and
deliver to the Bank any of the following Loan Documents, all of which must be
satisfactory to the Bank and the Bank's counsel in form, substance and
execution:
(a) Loan Agreement. This Agreement duly executed by the
Borrower, together with financing statements, motor vehicle title lien
applications and such other documents as the Bank may reasonably
require.
(b) Revolving Note. The Revolving Note duly executed by
the Borrower.
(c) Term Note. The Term Note duly executed by the
Borrower.
(d) Master Letter of Credit Agreement. The Master Letter
of Credit Agreement, duly executed by the Borrower.
(e) Guarantees. A Continuing Unconditional Guaranty dated
as of the date of this Agreement for each Subsidiary Guarantor,
executed by such Subsidiary Guarantor to and for the benefit of the
Bank, each in the form prepared by and acceptable to the Bank (each a
"Guaranty").
(f) Security Agreements. A Security Agreement dated as of
the date of this Agreement for each Subsidiary Guarantor, executed by
such Subsidiary Guarantor to and for the benefit of the Bank, pursuant
to which such Subsidiary grants a first perfected security interest in
all of its Accounts and its Rolling Stock Collateral, if any, in favor
of the Bank in order to secure its obligations to the Bank under its
Guaranty (each a "Security Agreement"), together with financing
statements and such other documents as the Bank may reasonably require.
(g) Motor Vehicle Security Agreement. A motor vehicle
security agreement or agreements, each dated as of the date of this
Agreement, pursuant to which the Borrower or the Borrower and one or
both of the Subsidiary Guarantors grants to the Bank a first perfected
security interest in such of their motor vehicles as is required by the
Bank in order to secure the Obligations (collectively, the "Motor
Vehicle Security Agreement"), together with financing statements, motor
vehicle title lien applications and such other documents as the Bank
may reasonably require.
28
(h) Stock Pledge Agreement. A Pledge Agreement dated as
of the date of this Agreement, executed by the Borrower, pursuant to
which the Borrower pledges to the Bank as security for the Obligations
100% of the Capital Securities of each Subsidiary Guarantor and
otherwise in the form prepared by and acceptable to the Bank (the
"Stock Pledge Agreement").
(i) Xxxx Subordination Agreement. A Subordination
Agreement dated as of the date of this Agreement, executed by Xxxxxxx
Xxxx, as holder of Subordinated Debt, in the form prepared by and
acceptable to the Bank (the "Xxxx Subordination Agreement").
(j) Search Results; Lien Terminations. Copies of UCC
search reports dated such a date as is reasonably acceptable to the
Bank, listing all effective financing statements which name the
Borrower and any of its Subsidiaries, under their respective present
names and any previous names, as debtors, together with (i) copies of
such financing statements, (ii) payoff letters evidencing repayment in
full of all existing Debt to be repaid with the Loans, the termination
of all agreements relating thereto and the release of all Liens granted
in connection therewith, with UCC or other appropriate termination
statements and documents effective to evidence the foregoing (other
than Permitted Liens), and (iii) such other UCC termination statements
as the Bank may reasonably request.
(k) Organizational and Authorization Document. Copies of:
(i) the Certificate of Incorporation, including
any amendments thereto, of each of the Borrower and its
Subsidiaries, certified by the Secretary of State of the state
of its respective incorporation;
(ii) the Bylaws, including any amendments
thereto, of each of the Borrower and its Subsidiaries,
certified by its respective Secretary;
(iii) resolutions of the board of directors of
each of the Borrower and its Subsidiaries approving and
authorizing its execution, delivery and performance of the
Loan Documents to which it is party and the transactions
contemplated thereby;
(iv) signature and incumbency certificates of the
officers of each of the Borrower and its Subsidiaries
executing any of the Loan Documents, each of which the
Borrower hereby certifies to be true and complete, and in full
force and effect without modification, it being understood
that the Bank may conclusively rely on each such document and
certificate until formally advised by the Borrower of any
changes therein; and
(v) good standing certificates for (i) the
Borrower in the states of Delaware, Alabama, Ohio,
Mississippi, North Carolina, Kentucky, Virginia, Maine,
Georgia, Florida, Indiana, Maryland, Pennsylvania and
Wisconsin, (ii) Xxxx Logistics in the states of Delaware and
Alabama, and (iii) WTI in the states
29
of Alabama and Georgia, in each case, issued by the applicable
Secretary of State within thirty (30) days prior to the
Closing Date.
(l) Insurance. Evidence satisfactory to the Bank of the
existence of insurance required to be maintained pursuant to Section
8.6, together with evidence that the Bank has been named as a lender's
loss payee and as an additional insured on all related insurance
policies.
(m) Financial Statements. (i) Audited consolidated
financial statements of the Borrower and its Subsidiaries for the
fiscal years of the Borrower ending on December 31, 2001, December 31,
2002 and December 31, 2003, and unaudited interim consolidated
financial statements of the Borrower and its Subsidiaries for each
fiscal month and quarter ended after December 31, 2003, such financial
statements to include consolidated balance sheets, consolidated
statements of income and retained earnings, consolidated statements of
cash flows for the fiscal year or other period then ended, (ii) a pro
forma consolidated balance sheet of the Borrower and its Subsidiaries
dated as of September 10, 2004 adjusted to give effect to the
refinancing contemplated hereby as if such transactions had occurred on
such date, which pro forma consolidated balance sheet shall be in form
and substance satisfactory to the Bank, and (iii) projected
consolidated income statements, balance sheets and cash flow statements
giving effect to the Loans and the use of the proceeds thereof for each
fiscal quarter of Borrower ending after the Closing Date through the
fiscal quarter of Borrower ending December 31, 2006.
(n) Evidence of Solvency. A consolidated balance sheet of
the Borrower and its Subsidiaries dated as of the date hereof prepared
by the Borrower and certified as being true, correct and complete in
all material respects by the President or Chief Financial Officer of
the Borrower, which balance sheet shall evidence that immediately
following the consummation of the Going Private Transaction, the making
of the initial Loans and issuance of any Letters of Credit hereunder,
the repayment of any Debt in connection with the advance of such Loans,
and the payment of all fees and expenses incurred in connection with
the closing of this Agreement, the Borrower and its Subsidiaries shall
be solvent and shall have the ability to repay their debts and satisfy
their other obligations as and when such debts and obligations shall
become due and will be able to otherwise comply with the financial
covenants set forth herein, and the Borrower shall provide to the Bank
such other information as the Bank may reasonably request in order to
confirm the tax, business and other assumptions made in the preparation
by the Borrower of such balance sheet.
(o) Field Audits. Completion by the Bank of its field
audits of the Borrower and its Subsidiaries with results of each such
field audit being satisfactory to the Bank.
(p) Legal Opinions. A legal opinion of Xxxxxxx Xxxxx Rose
& White LLP, outside counsel to the Borrower and each Subsidiary
Guarantor, in form and substance satisfactory to the Bank.
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(q) Merger Agreement. A copy of the executed Merger
Agreement (as amended through the Closing Date), the terms and
provisions of which shall be acceptable to the Bank.
(r) Custodial Agreement. The Custodial Agreement duly
executed by the Borrower and WTI.
(s) Additional Documents. Such other certificates,
financial statements, schedules, resolutions, opinions of counsel,
notes and other documents which are provided for hereunder or which the
Bank shall require.
3.2. Borrowing Base Certificate. With respect to disbursements of
Revolving Loans only, the Borrower shall have failed to execute and deliver to
the Bank a Borrowing Base Certificate in the form prepared by the Bank,
certified as accurate by the Borrower, evidencing Borrowing Base Availability of
not less than the amount of the Revolving Loan to be disbursed and otherwise
acceptable to the Bank in its sole discretion.
3.3. Event of Default. Any Event of Default, or Unmatured Event of
Default shall have occurred and be continuing.
3.4. Material Adverse Effect. The occurrence of any event having a
Material Adverse Effect.
3.5. Litigation. Any litigation or governmental proceeding shall
have been instituted against the Borrower or any of its officers or shareholders
which could reasonably be expected to have a Materially Adverse Effect (other
than the proceedings described on Schedule 7.9 as in effect on the Closing
Date).
3.6. Representations and Warranties. Any representation or warranty
of the Borrower contained herein or in any Loan Document shall be untrue or
incorrect in any material respect as of the date of any Loan as though made on
such date, except to the extent such representation or warranty expressly
relates to an earlier date.
3.7. Payment of Fees and Expenses. Borrower shall have failed to:
(a) Pay to the Bank all fees required to be paid at
Closing pursuant to that certain Fee Letter Agreement dated the date
hereof between the Bank and the Borrower;
(b) Pay to the Bank any collateral monitoring fee
required to have been paid on or before the Closing Date pursuant to
that certain Collateral Monitoring Fee Agreement, dated September 7,
2004, between Borrower and Bank; and
(c) Pay to or reimburse the Bank for all reasonable
costs, fees and expenses incurred through the Closing Date by the Bank
or for which the Bank becomes obligated in connection with the
negotiation, preparation or consummation of this Agreement, the other
Loan Documents and all other documents provided for herein or delivered
or to be delivered hereunder, including reasonable consultants' fees
and attorneys' fees plus costs and expenses of such consultants,
attorneys or of the Bank.
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3.8. Consummation of Going Private Transaction. The Bank shall not
have received evidence satisfactory to that Bank that the Going Private
Transaction has been or, concurrently with the closing of this Agreement, will
be consummated on substantially the terms provided in the Merger Agreement,
which evidence shall include a certificate of the President or Chief Financial
Officer of the Borrower that all of the conditions to each of the party's
obligations thereunder which are required to be satisfied as of or prior to
closing have been satisfied or effectively waived.
Section 4. NOTES EVIDENCING LOANS.
4.1. Revolving Note. The Revolving Loans and the Letter of Credit
Obligations shall be evidenced by the Revolving Note. At the time of the initial
disbursement of a Revolving Loan and at each time any additional Revolving Loan
shall be requested hereunder or a repayment made in whole or in part thereon, a
notation thereof shall be made on the books and records of the Bank. All amounts
recorded shall be, absent manifest error, conclusive and binding evidence of (i)
the principal amount of the Revolving Loans advanced hereunder and the amount of
all Letter of Credit Obligations, (ii) any accrued and unpaid interest owing on
the Revolving Loans, and (iii) all amounts repaid on the Revolving Loans or the
Letter of Credit Obligations. The failure to record any such amount or any error
in recording such amounts shall not, however, limit or otherwise affect the
obligations of the Borrower under the Revolving Note to repay the principal
amount of the Revolving Loans, together with all interest accruing thereon.
4.2. Term Note. The Term Loan shall be evidenced by the Term Note.
At the time of the disbursement of the Term Loan, or a repayment made in whole
or in part thereon, a notation thereof shall be made on the books and records of
the Bank. All amounts recorded shall be, absent demonstrable error, conclusive
and binding evidence of (i) the principal amount of the Term Loan advanced
hereunder, (ii) any accrued and unpaid interest owing on the Term Loan and (iii)
all amounts repaid on the Term Loan. The failure to record any such amount or
any error in recording such amounts shall not, however, limit or otherwise
affect the obligations of the Borrower under the Term Note to repay the
principal amount of the Term Loan, together with all interest accruing thereon.
Section 5. MANNER OF BORROWING.
5.1. Borrowing Procedures. The Term Loan shall be a Base Rate Loan.
Each Revolving Loan may be advanced either as a Base Rate Loan or a LIBOR Loan,
provided, however, that at any time, the Borrower may identify no more than
seven (7) advances of the Revolving Loans which may be LIBOR Loans. Each Loan
shall be made available to the Borrower upon any written, verbal, electronic,
telephonic or telecopy loan request which the Bank in good faith believes to
emanate from a properly authorized representative of the Borrower, whether or
not that is in fact the case. Each such request shall be effective upon receipt
by the Bank, shall be irrevocable, and shall specify the date, amount and type
of borrowing and, in the case of a LIBOR Loan, the initial Interest Period
therefor. The Borrower shall select Interest Periods so as not to require a
payment or prepayment of any LIBOR Loan during an Interest Period for such LIBOR
Loan. The final Interest Period must be such that its expiration occurs on or
before the Revolving Loan Maturity Date. A request for a Base Rate Loan must be
(i) received by the Bank no later than 11:00 a.m. Chicago, Illinois time, on the
day
32
it is to be funded, and (ii) in an amount not less than One Hundred Thousand and
00/100 Dollars ($100,000.00). A request for a LIBOR Loan must be (i) received by
the Bank no later than 11:00 a.m. Chicago, Illinois time, three days before the
day it is to be funded, and (ii) in an amount equal to One Hundred Thousand and
00/100 Dollars ($100,000.00) or a higher integral multiple of One Hundred
Thousand and 00/100 Dollars ($100,000.00). The proceeds of each Loan shall be
made available at the office of the Bank by credit to the account of the
Borrower or by other means requested by the Borrower and acceptable to the Bank.
The Borrower does hereby irrevocably confirm, ratify and approve all such
advances by the Bank and does hereby indemnify the Bank against losses and
expenses (including court costs, attorneys' and paralegals' fees) and shall hold
the Bank harmless with respect thereto.
5.2. LIBOR Conversion and Continuation Procedures. Upon notice to
the Bank as set forth above, the Borrower may, subject to the terms and
conditions of this Agreement, (a) elect, as of any Business Day, to convert any
Base Rate Loan into a LIBOR Loan; or (b) elect, as of the last day of the
applicable Interest Period, to continue any LIBOR Loan having an Interest Period
expiring on such day for a new Interest Period, or to convert any such LIBOR
Loan into a Base Rate Loan. Such notice shall, in the case of a conversion into
a Base Rate Loan, be given before 11:00 a.m., Chicago time, on the proposed date
of such conversion, and in the case of conversion into, or continuation of,
LIBOR Loans, be given before 11:00 a.m., Chicago time, at least three Business
Days prior to the proposed date of such conversion or continuation, specifying
in each case: (i) the proposed date of conversion or continuation; (ii) the
aggregate amount of Loans to be converted or continued; (iii) the type of Loans
resulting from the proposed conversion or continuation; and (iv) in the case of
conversion into, or continuation of, LIBOR Loans, the duration of the requested
Interest Period therefor. Each Interest Period occurring after the initial
Interest Period of any LIBOR Loan shall commence on the day on which the
preceding Interest Period for such LIBOR Loan expires. Whenever the last day of
any Interest Period would otherwise occur on a day other than a Business Day,
the last day of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, however, that if such extension would cause
the last day of such Interest Period to occur in the next following calendar
month, then the last day of such Interest Period shall occur on the immediately
preceding Business Day. Whenever an Interest Period would otherwise end on a day
of a month for which there is no numerically corresponding day in the calendar
month, such Interest Period shall end on the last Business Day of such calendar
month. If upon the expiration of any Interest Period applicable to a LIBOR Loan,
the Borrower has failed to select timely a new Interest Period to be applicable
to such LIBOR Loan, the Borrower shall be deemed to have elected to convert such
LIBOR Loan to a Base Rate Loan effective on the last day of such Interest
Period, without demand, presentment, protest or notice of any kind, all of which
are hereby waived by the Borrower. Any conversion of a LIBOR Loan on a day other
than the last day of an Interest Period therefor shall be subject to Section
2.4(a).
5.3. Letters of Credit. All Letters of Credit shall bear such
application, issuance, renewal, negotiation and other fees and charges, and bear
such interest as charged by the Bank or otherwise payable pursuant to the Master
Letter of Credit Agreement. In addition to the foregoing, all standby Letters of
Credit issued under and pursuant to this Agreement shall bear, and the Borrower
hereby agrees to pay, an annual issuance fee (the "Letter of Credit Fee") equal
to Applicable Letter of Credit Fee Rate times the face amount of such standby
Letter of Credit, payable by the Borrower monthly, in arrears, on the last
Business Day of each calendar month
33
until (i) such Letter of Credit has expired or has been returned to the Bank, or
(ii) the Bank has paid the beneficiary thereunder the full face amount of such
Letter of Credit.
5.4. Automatic Debit. In order to effectuate the timely payment of
any of the Obligations when due, the Borrower hereby authorizes and directs the
Bank, at the Bank's option, to (a) debit the amount of the Obligations to any
ordinary deposit account of the Borrower, or (b) make a Revolving Loan hereunder
to pay the amount of the Obligations.
5.5. Discretionary Disbursements. The Bank, in its sole and
absolute discretion, may immediately upon notice to the Borrower, disburse any
or all proceeds of the Loans made or available to the Borrower pursuant to this
Agreement to pay any fees, costs, expenses or other amounts required to be paid
by the Borrower hereunder and not so paid. All monies so disbursed shall be a
part of the Obligations, payable by the Borrower on demand from the Bank.
Section 6. SECURITY FOR THE OBLIGATIONS.
6.1. Security for Obligations. As security for the payment and
performance of the Obligations, the Borrower does hereby pledge, assign,
transfer, deliver and grant to the Bank, for its own benefit and as agent for
its Affiliates, a continuing and unconditional first priority security interest
(subject, however, to any Liens described in clause (h) of the definition of
Permitted Liens and permitted pursuant to Section 9.2 hereof) in and to any and
all of the following described property of the Borrower, wheresoever located and
whether now existing or hereafter arising or acquired (all of which property,
along with the products and proceeds therefrom, are individually and
collectively referred to as the "Collateral"):
(a) All Accounts;
(b) The Rolling Stock Revolving Loan Collateral;
(c) The Rolling Stock Term Loan Collateral;
(d) All chattel paper (whether tangible or electronic),
documents, instruments (including, without limitation, promissory notes
and rights to payment evidenced by chattel paper which relate to either
the Accounts or the Rolling Stock), and commercial tort claims relating
to either the Accounts or the Rolling Stock;
(e) All Proceeds (whether Cash Proceeds or Noncash
Proceeds) of the foregoing property; and
(f) All books, records, reports, memoranda, recorded data
and data compilations, in any form and of any kind or nature,
including, without limitation: corporate business records; customer
lists; writings; plans; specifications; schematics; computer hardware,
software and programs, printouts and any other computer materials and
records related to the foregoing.
6.2. Other Collateral. In addition, the Obligations are secured by
the Motor Vehicle Security Agreement, the Guarantees and the Security Agreements
and may from time to time be secured by a mortgage or deed of trust.
34
6.3. Possession and Transfer of Collateral. Unless an Event of
Default exists hereunder, the Borrower shall be entitled to possession or use of
the Collateral. The cancellation or surrender of any Note, upon payment or
otherwise, shall not affect the right of the Bank to retain the Collateral for
any other of the Obligations. The Borrower shall not sell, assign (by operation
of law or otherwise), license, lease or otherwise dispose of, or grant any
option (other than pursuant to Lease Purchase Agreements for not more than 77
tractors included in Schedule 6.1(c)) with respect to any of the Collateral.
6.4. Financing Statements. The Borrower shall, at the Bank's
request, at any time and from time to time, execute and deliver to the Bank such
financing statements, amendments and other documents and do such acts as the
Bank deems necessary in order to establish and maintain valid, attached and
perfected first priority security interests in the Collateral in favor of the
Bank, free and clear of all Liens and claims and rights of third parties
whatsoever, except Permitted Liens. The Borrower hereby irrevocably authorizes
the Bank at any time, and from time to time, to file in any jurisdiction any
initial financing statements and amendments thereto without the signature of the
Borrower that (a) indicate the Collateral (i) is comprised of all assets of the
Borrower or words of similar effect, regardless of whether any particular asset
comprising a part of the Collateral falls within the scope of Article 9 of the
Uniform Commercial Code of the jurisdiction wherein such financing statement or
amendment is filed, or (ii) as being of an equal or lesser scope or within
greater detail as the grant of the security interest set forth herein, and (b)
contain any other information required by Section 5 of Article 9 of the Uniform
Commercial Code of the jurisdiction wherein such financing statement or
amendment is filed regarding the sufficiency or filing office acceptance of any
financing statement or amendment, including (i) whether the Borrower is an
organization, the type of organization and any Organizational Identification
Number issued to the Borrower, and (ii) in the case of a financing statement
filed as a fixture filing, a sufficient description of the real property to
which the Collateral relates. The Borrower hereby agrees that a photocopy or
other reproduction of this Agreement is sufficient for filing as a financing
statement and the Borrower authorizes the Bank to file this Agreement as a
financing statement in any jurisdiction. The Borrower agrees to furnish any such
information to the Bank promptly upon request. The Borrower further ratifies and
affirms its authorization for any financing statements and/or amendments
thereto, executed and filed by the Bank in any jurisdiction prior to the date of
this Agreement. In addition, the Borrower shall make appropriate entries on its
books and records disclosing the Bank's security interests in the Collateral.
6.5. [Reserved]
6.6. Preservation of the Collateral. The Bank may, but is not
required, to take such actions from time to time as the Bank deems appropriate
to maintain or protect the Collateral. The Bank shall have exercised reasonable
care in the custody and preservation of the Collateral if the Bank takes such
action as the Borrower shall reasonably request in writing which is not
inconsistent with the Bank's status as a secured party, but the failure of the
Bank to comply with any such request shall not be deemed a failure to exercise
reasonable care; provided, however, the Bank's responsibility for the
safekeeping of the Collateral shall (i) be deemed reasonable if such Collateral
is accorded treatment substantially equal to that which the Bank accords its own
property, and (ii) not extend to matters beyond the control of the Bank,
including acts of God, war, insurrection, riot or governmental actions. In
addition, any failure of the Bank to preserve
35
or protect any rights with respect to the Collateral against prior or third
parties, or to do any act with respect to preservation of the Collateral, not so
requested by the Borrower, shall not be deemed a failure to exercise reasonable
care in the custody or preservation of the Collateral. The Borrower shall have
the sole responsibility for taking such action as may be necessary, from time to
time, to preserve all rights of the Borrower and the Bank in the Collateral
against prior or third parties. Without limiting the generality of the
foregoing, where Collateral consists in whole or in part of securities, the
Borrower represents to, and covenants with, the Bank that the Borrower has made
arrangements for keeping informed of changes or potential changes affecting the
securities (including rights to convert or subscribe, payment of dividends,
reorganization or other exchanges, tender offers and voting rights), and the
Borrower agrees that the Bank shall have no responsibility or liability for
informing the Borrower of any such or other changes or potential changes or for
taking any action or omitting to take any action with respect thereto.
6.7. Other Actions as to any and all Collateral. The Borrower
further agrees to take any other action reasonably requested by the Bank to
ensure the attachment, perfection and first priority of, and the ability of the
Bank to enforce, the Bank's security interest in any and all of the Collateral,
including, without limitation, taking all actions required by the UCC in effect
from time to time or by other law, as applicable in any relevant UCC
jurisdiction, or by other law as applicable in any foreign jurisdiction. The
Borrower further agrees to indemnify and hold the Bank harmless against claims
of any Persons not a party to this Agreement concerning disputes arising over
the Collateral.
6.8. Lockbox Arrangement. The Borrower shall, within ninety (90)
days after the Closing Date, direct all of its Account Debtors to make all
payments on the Accounts directly to a post office box (the "Lockbox")
designated by, and under the exclusive control of, the Bank. Pursuant to the
Lockbox Agreement, the Borrower shall establish the Lockbox and an account (the
"Lockbox Account") in the Borrower's name with the Bank into which all payments
received in the Lockbox shall be deposited, and into which the Borrower will
immediately deposit all payments made for the performance of services by the
Borrower, and received by the Borrower in the identical form in which such
payments were made, whether by cash or check. If the Borrower, a Subsidiary or
any director, officer, employee, agent or the Borrower or any Subsidiary, or any
other Person acting for or in concert with the Borrower shall receive any
monies, checks, notes, drafts or other payments relating to or as proceeds of
Accounts or other Collateral, the Borrower and each such Person shall receive
all such items in trust for, and as the sole and exclusive property of, the Bank
and, immediately upon receipt thereof, shall remit the same (or cause the same
to be remitted) in kind to the Lockbox Account. The Borrower agrees that all
payments made to such Lockbox and Lockbox Account or otherwise received by the
Bank, whether in respect of the Accounts or as proceeds of other Collateral or
otherwise, will be applied on account of the Revolving Loans in accordance with
Section 12.8 of this Agreement. The Borrower agrees to pay all fees, costs and
expenses which the Bank incurs in connection with opening and maintaining the
Lockbox and the Lockbox Account and depositing for collection by the Bank any
check or other item of payment received by the Bank on account of the
Obligations. All of such fees, costs and expenses shall constitute Obligations
hereunder, shall be payable to the Bank by the Borrower upon demand, and, until
paid, shall bear interest at the Default Rate. All checks, drafts, instruments
and other items of payment or proceeds of Collateral shall be endorsed by the
Borrower to the Bank, and, if that endorsement of any such item shall not be
made for any reason, the Bank is hereby irrevocably authorized to endorse the
36
same on the Borrower's behalf. For the purpose of this section, the Borrower
irrevocably hereby makes, constitutes and appoints the Bank (and all Persons
designated by the Bank for that purpose) as the Borrower's true and lawful
attorney and agent-in-fact (i) to endorse the Borrower's name upon such items of
payment and/or proceeds of Collateral and upon any chattel paper, document,
instrument, invoice or similar document or agreement relating to any Account of
the Borrower or goods pertaining thereto; (ii) to take control in any manner of
any item of payment or proceeds thereof; and (iii) to have access to any lock
box or postal box into which any of the Borrower's mail is deposited, and open
and process all mail addressed to the Borrower and deposited therein.
6.9. Letter-of-Credit Rights. If the Borrower at any time is a
beneficiary under a letter of credit now or hereafter issued in favor of the
Borrower, the Borrower shall promptly notify the Bank thereof and, at the
request and option of the Bank, the Borrower shall, pursuant to an agreement in
form and substance satisfactory to the Bank, either (i) arrange for the issuer
and any confirmer of such letter of credit to consent to an assignment to the
Bank of the proceeds of any drawing under the letter of credit, or (ii) arrange
for the Bank to become the transferee beneficiary of the letter of credit, with
the Bank agreeing, in each case, that the proceeds of any drawing under the
letter to credit are to be applied as provided in this Agreement.
6.10. Commercial Tort Claims. If the Borrower shall at any time hold
or acquire a Commercial Tort Claim relating to the Collateral, the Borrower
shall immediately notify the Bank in writing signed by the Borrower of the
details thereof and grant to the Bank in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Agreement, in
each case in form and substance satisfactory to the Bank, and shall execute any
amendments hereto deemed reasonably necessary by the Bank to perfect its
security interest in such Commercial Tort Claim.
6.11. Electronic Chattel Paper and Transferable Records. If the
Borrower at any time holds or acquires an interest in any electronic chattel
paper or any "transferable record", as that term is defined in Section 201 of
the federal Electronic Signatures in Global and National Commerce Act, or in
Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction, relating to the Accounts, the Borrower shall promptly
notify the Bank thereof and, at the request of the Bank, shall take such action
as the Bank may reasonably request to vest in the Bank control under Section
9-105 of the UCC of such electronic chattel paper or control under Section 201
of the federal Electronic Signatures in Global and National Commerce Act or, as
the case may be, Section 16 of the Uniform Electronic Transactions Act, as so in
effect in such jurisdiction, of such transferable record. The Bank agrees with
the Borrower that the Bank will arrange, pursuant to procedures satisfactory to
the Bank and so long as such procedures will not result in the Bank's loss of
control, for the Borrower to make alterations to such electronic chattel paper
or transferable record permitted under Section 9-105 of the UCC or, as the case
may be, Section 201 of the federal Electronic Signatures in Global and National
Commerce Act or Section 16 of the Uniform Electronic Transactions Act for a
party in control to make without loss of control.
37
Section 7. REPRESENTATIONS AND WARRANTIES.
To induce the Bank to make the Loans, the Borrower makes the following
representations and warranties to the Bank, each of which shall survive the
execution and delivery of this Agreement:
7.1. Borrower Organization and Name. Each of the Borrower and Xxxx
Logistics is a corporation duly organized, existing and in good standing under
the laws of the State of Delaware and WTI is a corporation duly organized,
existing and in good standing under the laws of the State of Alabama, each with
full and adequate power to carry on and conduct its business as presently
conducted. The Borrower and each Subsidiary is duly licensed or qualified in all
foreign jurisdictions wherein the nature of its activities require such
qualification or licensing, except for such jurisdictions where the failure to
so qualify would not have a Material Adverse Effect. The Organizational
Identification Number of Borrower is 2380101. The exact legal name of the
Borrower is as set forth in the first paragraph of this Agreement, and the
Borrower currently does not conduct, nor has it during the last five (5) years
conducted, business under any other name or trade name.
7.2. Authorization. Each of the Borrower and each Subsidiary
Guarantor has full right, power and authority to enter into this Agreement, to
make the borrowings and execute and deliver the Loan Documents to which it is a
party as provided herein and to perform all of its duties and obligations under
this Agreement and the other Loan Documents to which it is a party. The
execution and delivery of this Agreement and the other Loan Documents will not,
nor will the observance or performance of any of the matters and things herein
or therein set forth, violate or contravene any provision of law or of the
certificate of incorporation or bylaws of any of the Borrower or the Subsidiary
Guarantors. All necessary and appropriate action has been taken on the part of
the Borrower to authorize the execution and delivery of this Agreement and the
Loan Documents.
7.3. Validity and Binding Nature. This Agreement and the other Loan
Documents are the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower and, to the extent it is a party thereto, each
Subsidiary Guarantor in accordance with their terms, subject to bankruptcy,
insolvency and similar laws affecting the enforceability of creditors' rights
generally and to general principles of equity.
7.4. Consent; Absence of Breach. The execution, delivery and
performance of this Agreement, the other Loan Documents and any other documents
or instruments to be executed and delivered by the Borrower or any Subsidiary in
connection with the Loans, and the borrowings by the Borrower hereunder, do not
and will not (a) require any consent, approval, authorization of, or filings
with, notice to or other act by or in respect of, any governmental authority or
any other Person (other than any consent or approval which has been obtained and
is in full force and effect); (b) conflict with (i) any provision of law or any
applicable regulation, order, writ, injunction or decree of any court or
governmental authority, (ii) the certificate of incorporation or bylaws of the
Borrower or any of its Subsidiaries, or (iii) any material agreement, indenture,
instrument or other document, or any judgment, order or decree, which is binding
upon the Borrower or any of its Subsidiaries or any of /their respective
properties or assets; or (c) require, or result in, the creation or imposition
of any Lien on any asset of Borrower or any of its Subsidiaries, other than
Liens in favor of the Bank created pursuant to this Agreement and the other Loan
Documents.
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7.5. Ownership of Properties; Liens. The Borrower and each of its
Subsidiaries is the sole owner of all of its properties and assets, real and
personal, tangible and intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights), free and clear of all
Liens, charges and claims (including infringement claims with respect to
patents, trademarks, service marks, copyrights and the like), other than
Permitted Liens. Each item of Rolling Stock Collateral listed on Schedule 6.1(c)
as in effect on the Closing Date is owned by either the Borrower or WTI and,
except for not more than 77 tractors included in Schedule 6.1(c), the Rolling
Stock Collateral is not subject to a Lease Purchase Agreement.
7.6. Equity Ownership. All issued and outstanding Capital
Securities of the Borrower and each of its Subsidiaries are duly authorized and
validly issued, fully paid, non-assessable, and free and clear of all Liens
other than those in favor of the Bank, if any, and such securities were issued
in compliance with all applicable state and federal laws concerning the issuance
of securities. Upon consummation of the Merger Agreement, there will be no
pre-emptive or other outstanding rights, options, warrants, conversion rights or
other similar agreements or understandings for the purchase or acquisition of
any Capital Securities of the Borrower or any of its Subsidiaries (other than in
favor of Borrower). Except for WTI and Xxxx Logistics, the Borrower has no
Subsidiaries.
7.7. Intellectual Property. The Borrower and its Subsidiaries own
and possess or have a license or other right to use all Intellectual Property,
as are necessary for the conduct of the their business, without any infringement
upon rights of others which could reasonably be expected to have a Material
Adverse Effect, and no material claim has been asserted and is pending by any
Person challenging or questioning the use of any Intellectual Property or the
validity or effectiveness of any Intellectual Property nor does the Borrower
know of any valid basis for any such claim.
7.8. Financial Statements. All financial statements submitted to
the Bank have been prepared in accordance with sound accounting practices and
GAAP on a basis, except as otherwise noted therein, consistent with the previous
fiscal year and present fairly the financial condition of the Borrower and the
results of the operations for the Borrower as of such date and for the periods
indicated. Since the date of the most recent financial statement submitted by
the Borrower to the Bank, there has been no change in the financial condition or
in the assets or liabilities of the Borrower or its Subsidiaries having a
Material Adverse Effect.
7.9. Litigation and Contingent Liabilities. There is no litigation,
arbitration proceeding, demand, charge, claim, petition or governmental
investigation or proceeding pending or, to the knowledge of the Borrower,
threatened, against the Borrower or any Subsidiary, which, if adversely
determined, might reasonably be expected to have a Material Adverse Effect,
except as set forth in Schedule 7.9. Other than any liability incident to such
litigation or proceedings, the Borrower has no material guarantee obligations,
contingent liabilities, liabilities for taxes, or any long-term leases or
unusual forward or long-term commitments, including any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, that are not fully-reflected or fully reserved for in the most
recent audited financial statements delivered pursuant to subsection 8.8(a) or
fully-reflected or fully reserved for in the most recent quarterly financial
statements delivered pursuant to subsection 8.8(b) and not permitted by Section
9.1.
39
7.10. Event of Default. No Event of Default or Unmatured Event of
Default exists or would result from the incurrence by the Borrower or the
Subsidiary Guarantors of any of the Obligations hereunder or under any of the
other Loan Documents to which they are a party, and neither the Borrower nor any
Subsidiary Guarantor is in default (without regard to grace or cure periods)
under any other contract or agreement to which it is a party, the effect of
which would have a Material Adverse Effect.
7.11. Adverse Circumstances. No condition, circumstance, event,
agreement, document, instrument, restriction, litigation or proceeding (or
threatened litigation or proceeding or basis therefor) exists which (a) would
have a Material Adverse Effect, or (b) would constitute an Event of Default or
an Unmatured Event of Default.
7.12. Environmental Laws and Hazardous Substances. Neither the
Borrower nor any of its Subsidiaries has generated, used, stored, treated,
transported, manufactured, handled, produced or disposed of any Hazardous
Substances, on or off any of their premises (whether or not owned by it) in any
manner which at any time violates any Environmental Law or any license, permit,
certificate, approval or similar authorization thereunder. The Borrower will,
and will cause each of its Subsidiaries to, comply in all material respects with
all Environmental Laws and will obtain all licenses, permits certificates,
approvals and similar authorizations thereunder. There has been no
investigation, proceeding, complaint, order, directive, claim, citation or
notice by any governmental authority or any other Person, nor is any pending or,
to the best of the Borrower's knowledge, threatened, and the Borrower shall
immediately notify the Bank upon becoming aware of any such investigation,
proceeding, complaint, order, directive, claim, citation or notice, and shall
take prompt and appropriate actions to respond thereto, with respect to any
non-compliance with, or violation of, the requirements of any Environmental Law
by the Borrower or any of its Subsidiaries or the release, spill or discharge,
threatened or actual, of any Hazardous Material or the generation, use, storage,
treatment, transportation, manufacture, handling, production or disposal of any
Hazardous Material or any other environmental, health or safety matter, which
affects the Borrower or any of its Subsidiaries or their businesses, operations
or assets or any properties at which the Borrower or its Subsidiaries have
transported, stored or disposed of any Hazardous Substances. Neither the
Borrower nor any of its Subsidiaries has material liability, contingent or
otherwise, in connection with a release, spill or discharge, threatened or
actual, of any Hazardous Substances or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous
Material. The Borrower further agrees to allow the Bank or its agent access to
the properties of the Borrower and its Subsidiaries to confirm compliance with
all Environmental Laws, and the Borrower shall, following determination by the
Bank that there is non-compliance, or any condition which requires any action by
or on behalf of the Borrower in order to avoid any non-compliance, with any
Environmental Law, at the Borrower's sole expense, cause an independent
environmental engineer acceptable to the Bank to conduct such tests of the
relevant site as are appropriate, and prepare and deliver a report setting forth
the result of such tests, a proposed plan for remediation and an estimate of the
costs thereof.
7.13. Solvency, etc. As of the date hereof, and immediately prior to
and after giving effect to the issuance of each Letter of Credit and each Loan
hereunder and the use of the proceeds thereof, (a) the fair value of the
Borrower's and each Subsidiary's assets is greater than the amount of its
liabilities (including disputed, contingent and unliquidated liabilities) as
such
40
value is established and liabilities evaluated as required under the Section 548
of the Bankruptcy Code, (b) the present fair saleable value of the Borrower's
and each Subsidiary's assets is not less than the amount that will be required
to pay the probable liability on its debts as they become absolute and matured,
(c) the Borrower and each Subsidiary is able to realize upon its assets and pay
its debts and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business, (d) neither the
Borrower nor any Subsidiary intends to, and does not believe that it will, incur
debts or liabilities beyond its ability to pay as such debts and liabilities
mature, and (e) neither the Borrower nor any Subsidiary is engaged in business
or a transaction, and is not about to engage in business or a transaction, for
which its property would constitute unreasonably small capital.
7.14. ERISA Obligations. All Employee Plans of the Borrower and its
Subsidiaries meet the minimum funding standards of Section 302 of ERISA and 412
of the Internal Revenue Code where applicable, and each such Employee Plan that
is intended to be qualified within the meaning of Section 401 of the Internal
Revenue Code of 1986 is qualified. No withdrawal liability has been incurred
under any such Employee Plans and no "Reportable Event" or "Prohibited
Transaction" (as such terms are defined in ERISA), has occurred with respect to
any such Employee Plans, unless approved by the appropriate governmental
agencies. The Borrower and each of its Subsidiaries has promptly paid and
discharged all obligations and liabilities arising under the Employee Retirement
Income Security Act of 1974 ("ERISA") of a character which if unpaid or
unperformed might result in the imposition of a Lien against any of their
respective properties or assets.
7.15. Labor Relations. Except as could not reasonably be expected to
have a Material Adverse Effect, (i) there are no strikes, lockouts or other
labor disputes against the Borrower or any Subsidiary or, to the best knowledge
of the Borrower, threatened, (ii) hours worked by and payment made to employees
of the Borrower or any Subsidiary have not been in violation of the Fair Labor
Standards Act or any other applicable law, and (iii) no unfair labor practice
complaint is pending against the Borrower or any Subsidiary or, to the best
knowledge of the Borrower, threatened before any governmental authority.
7.16. Security Interest. This Agreement creates a valid security
interest in favor of the Bank in the Collateral and, when properly perfected by
filing in the appropriate jurisdictions shall, except as otherwise expressly
provided herein, constitute a valid, perfected, first-priority security interest
in such Collateral.
7.17. Lending Relationship. The relationship hereby created between
the Borrower and the Bank is and has been conducted on an open and arm's length
basis in which no fiduciary relationship exists, and the Borrower has not relied
and is not relying on any such fiduciary relationship in executing this
Agreement and in consummating the Loans. The Bank represents that it will
receive any Note payable to its order as evidence of a bank loan.
7.18. Business Loan. The Loans, including interest rate, fees and
charges as contemplated hereby, (i) are loans within the purview of 815 ILCS
205/4(1)(a) or (c), as amended from time to time, (ii) are an exempted
transaction under the Truth In Lending Act, 12 U.S.C. 1601 et seq., as amended
from time to time, and (iii) do not, and when disbursed shall not, violate the
provisions of the Illinois usury laws, any consumer credit laws or the usury
laws
41
of any state which may have jurisdiction over this transaction, the Borrower or
any property securing the Loans.
7.19. Taxes. The Borrower and each of its Subsidiaries has timely
filed all tax returns and reports required by law to have been filed by it and
has paid all taxes, governmental charges and assessments due and payable with
respect to such returns, except any such taxes or charges which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books, are insured against or bonded over to the satisfaction of the Bank and
the contesting of such payment does not create a Lien on the Collateral which is
not a Permitted Lien. Except as set forth in Schedule 7.19, there is no
controversy or objection pending or, to the knowledge of the Borrower,
threatened in respect of any tax returns of the Borrower or its Subsidiaries.
The Borrower has made adequate reserves on its books and records in accordance
with GAAP for all taxes that have accrued but which are not yet due and payable.
7.20. [Reserved].
7.21. Governmental Regulation. The Borrower and each of its
Subsidiaries is not and, after giving effect to any loan, will not be, subject
to regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the ICC Termination Act of 1995 or the Investment Company Act of 1940
or to any federal or state statute or regulation limiting its ability to incur
indebtedness for borrowed money.
7.22. Bank Accounts; Letters of Credit. Schedule 7.22 lists all
deposit and other bank accounts of the Borrower and any of its Subsidiaries
that, as of the Closing Date, are not located at the Bank and all letters of
credit (other than Letters of Credit) issued for or on behalf of the Borrower or
any of its Subsidiaries and outstanding on the Closing Date. As of and after the
date that is ninety (90) days immediately after the Closing Date, except as
otherwise indicated on Schedule 7.22 or permitted pursuant to Section 9.12
hereof, neither the Borrower nor any of its Subsidiaries will have any deposit
or other bank accounts other than those located at the Bank.
7.23. Place of Business. The principal place of business and books
and records of the Borrower is set forth in the preamble to this Agreement, and
the location of all Collateral, if other than at such principal place of
business, is as set forth on Schedule 7.23 attached hereto and made a part
hereof, and the Borrower shall promptly notify the Bank of any change in such
location.
7.24. Complete Information. This Agreement and all financial
statements, schedules, certificates, confirmations, agreements, contracts, and
other materials and information heretofore or contemporaneously herewith
furnished in writing by the Borrower to the Bank for purposes of, or in
connection with, this Agreement and the transactions contemplated hereby is, and
all written information hereafter furnished by or on behalf of the Borrower to
the Bank pursuant hereto or in connection herewith will be, true and accurate in
every material respect on the date as of which such information is dated or
certified, and none of such information is or will be incomplete by omitting to
state any material fact necessary to make such information not misleading in
light of the circumstances under which made (it being recognized by the Bank
that any projections and forecasts provided by the Borrower are based on good
faith estimates and
42
assumptions believed by the Borrower to be reasonable as of the date of the
applicable projections or assumptions and that actual results during the period
or periods covered by any such projections and forecasts may differ from
projected or forecasted results).
7.25. Subordinated Debt. The subordination provisions of the Xxxx
Subordinated Debt are enforceable against the holders of the Xxxx Subordinated
Debt by the Bank. The Obligations constitute Senior Debt entitled to the
benefits of the subordination provisions contained in the Xxxx Subordination
Agreement. The Borrower acknowledges that the Bank is entering into this
Agreement and is making the Loans in reliance upon the subordination provisions
of the Xxxx Subordination Agreement and this Section 7.25.
Section 8. AFFIRMATIVE COVENANTS.
8.1. Compliance with Bank Regulatory Requirements; Increased Costs.
If the Bank shall reasonably determine that any Regulatory Change, or compliance
by the Bank or any Person controlling the Bank with any request or directive
(whether or not having the force of law) of any governmental authority, central
bank or comparable agency has or would have the effect of reducing the rate of
return on the Bank's or such controlling Person's capital as a consequence of
the Bank's obligations hereunder or under any Letter of Credit to a level below
that which the Bank or such controlling Person could have achieved but for such
Regulatory Change or compliance (taking into consideration the Bank's or such
controlling Person's policies with respect to capital adequacy) by an amount
deemed by the Bank or such controlling Person to be material or would otherwise
reduce the amount of any sum received or receivable by the Bank under this
Agreement or under any Note with respect thereto, then from time to time, upon
demand by the Bank (which demand shall be accompanied by a statement setting
forth the basis for such demand and a calculation of the amount thereof in
reasonable detail), the Borrower shall pay directly to the Bank or such
controlling Person such additional amount as will compensate the Bank for such
increased cost or such reduction, so long as such amounts have accrued on or
after the day which is one hundred eighty days (180) days prior to the date on
which the Bank first made demand therefor.
8.2. Borrower Existence. The Borrower shall at all times preserve
and maintain, and shall cause each of its Subsidiaries to at all times preserve
and maintain, (a) its existence and good standing in the jurisdiction of its
organization, and (b) its qualification to do business and good standing in each
jurisdiction where the nature of its business makes such qualification necessary
(other than such jurisdictions in which the failure to be qualified or in good
standing could not reasonably be expected to have a Material Adverse Effect),
and shall at all times continue as a going concern in the business which it is
presently conducting. If the Borrower or any Subsidiary does not have an
Organizational Identification Number and later obtains one, the Borrower shall
promptly notify the Bank of such Organizational Identification Number.
8.3. Compliance With Laws. The Borrower shall use the proceeds of
the Loans to fund the Going Private Transaction, for working capital and other
general corporate or business purposes not in contravention of any requirements
of law and not in violation of this Agreement, and shall comply, and cause each
Subsidiary to comply, in all respects, including the conduct of its business and
operations and the use of its properties and assets, with all applicable laws,
rules, regulations, decrees, orders, judgments, licenses and permits, except
where failure to comply
43
could not reasonably be expected to have a Material Adverse Effect. In addition,
and without limiting the foregoing sentence, the Borrower shall (a) ensure, and
cause each Subsidiary to ensure, that no person who owns a controlling interest
in or otherwise controls the Borrower or any Subsidiary is or shall be listed on
the Specially Designated Nationals and Blocked Person List or other similar
lists maintained by the Office of Foreign Assets Control ("OFAC"), the
Department of the Treasury or included in any Executive Orders, (b) not use or
permit the use of the proceeds of the Loans to violate any of the foreign asset
control regulations of OFAC or any enabling statute or Executive Order relating
thereto, and (c) comply, and cause each Subsidiary to comply, with all
applicable Bank Secrecy Act ("BSA") laws and regulations, as amended.
8.4. Payment of Taxes and Liabilities. The Borrower shall pay, and
cause each Subsidiary to pay, and discharge, prior to delinquency and before
penalties accrue thereon, all property and other taxes, and all governmental
charges or levies against it or any of the Collateral, as well as claims of any
kind which, if unpaid, could become a Lien on any of its property; provided that
the foregoing shall not require the Borrower or any Subsidiary to pay any such
tax or charge so long as it shall contest the validity thereof in good faith by
appropriate proceedings and shall set aside on its books adequate reserves with
respect thereto in accordance with GAAP and, in the case of a claim which could
become a Lien on any of the Collateral, such contest proceedings stay the
foreclosure of such Lien or the sale of any portion of the Collateral to satisfy
such claim.
8.5. Maintain Property. The Borrower shall at all times maintain,
preserve and keep, and shall cause each of its Subsidiaries at all times to
maintain, preserve and keep, its plant, properties and Equipment, including all
Rolling Stock, in good repair, working order and condition, normal wear and tear
excepted, and shall from time to time make all needful and proper repairs,
renewals, replacements, and additions thereto so that at all times the
efficiency thereof shall be fully preserved and maintained. The Borrower shall
permit the Bank to examine and inspect such plant, properties and Equipment,
including any Rolling Stock, at all reasonable times.
8.6. Maintain Insurance. The Borrower shall at all times maintain,
and cause each Subsidiary to maintain, with insurance companies reasonably
acceptable to the Bank, such insurance coverage as may be required by any law or
governmental regulation or court decree or order applicable to it and such other
insurance, to such extent and against such hazards and liabilities, including
employers', public and professional liability risks, as is customarily
maintained by companies similarly situated, and shall have insured amounts no
less than, and deductibles no higher than, are reasonably acceptable to the
Bank. The Borrower shall furnish to the Bank a certificate setting forth in
reasonable detail the nature and extent of all insurance maintained by the
Borrower, which shall be reasonably acceptable in all respects to the Bank. The
Borrower shall cause each issuer of an insurance policy to provide the Bank with
an endorsement (i) showing the Bank as loss payee with respect to each policy of
property or casualty insurance; and (ii) providing that thirty (30) days notice
will be given to the Bank prior to any cancellation of, material reduction or
change in coverage provided by or other material modification to such policy.
The Borrower shall execute and deliver to the Bank a collateral assignment, in
form and substance satisfactory to the Bank, of each business interruption
insurance policy maintained by the Borrower.
44
In the event the Borrower either fails to provide the Bank with
evidence of the insurance coverage required by this Section 8.6 or at any time
hereafter shall fail to obtain or maintain any of the policies of insurance
required above, or to pay any premium in whole or in part relating thereto, then
the Bank, without waiving or releasing any obligation or default by the Borrower
hereunder, may at any time (but shall be under no obligation to so act), obtain
and maintain such policies of insurance and pay such premiums and take any other
action with respect thereto, which the Bank deems advisable. This insurance
coverage (a) may, but need not, protect the Borrower's interests in such
property, including the Collateral, and (b) may not pay any claim made by, or
against, the Borrower in connection with such property, including the
Collateral. The Borrower may later cancel any such insurance purchased by the
Bank, but only after providing the Bank with evidence that the Borrower has
obtained the insurance coverage required by this Section. If the Bank purchases
insurance for the Collateral, the Borrower will be responsible for the costs of
that insurance, including interest and any other charges that may be imposed
with the placement of the insurance, until the effective date of the
cancellation or expiration of the insurance. The costs of the insurance may be
added to the principal amount of the Loans owing hereunder. The costs of the
insurance may be more than the cost of the insurance the Borrower may be able to
obtain on its own.
8.7. ERISA Liabilities; Employee Plans. The Borrower shall (i) keep
in full force and effect any and all Employee Plans which are presently in
existence or may, from time to time, come into existence under ERISA, and not
withdraw from any such Employee Plans, unless such withdrawal can be effected or
such Employee Plans can be terminated without liability to the Borrower; (ii)
make contributions to all of such Employee Plans in a timely manner and in a
sufficient amount to comply with the standards of ERISA; including the minimum
funding standards of ERISA; (iii) comply with all material requirements of ERISA
which relate to such Employee Plans; (iv) notify the Bank immediately upon
receipt by the Borrower of any notice concerning the imposition of any
withdrawal liability or of the institution of any proceeding or other action
which may result in the termination of any such Employee Plans or the
appointment of a trustee to administer such Employee Plans; (v) promptly advise
the Bank of the occurrence of any "Reportable Event" or "Prohibited Transaction"
(as such terms are defined in ERISA), with respect to any such Employee Plans;
and (vi) amend any Employee Plan that is intended to be qualified within the
meaning of Section 401 of the Internal Revenue Code of 1986 to the extent
necessary to keep the Employee Plan qualified, and to cause the Employee Plan to
be administered and operated in a manner that does not cause the Employee Plan
to lose its qualified status.
8.8. Financial Statements. The Borrower shall at all times maintain
a standard and modern system of accounting, on the accrual basis of accounting
and in all respects in accordance with GAAP, and shall furnish to the Bank or
its authorized representatives such information regarding the business affairs,
operations and financial condition of the Borrower and its Subsidiaries,
including:
(a) promptly when available, and in any event, within one
hundred twenty (120) days after the close of each of its fiscal years,
a copy of (i) the annual audited consolidated financial statements of
the Borrower and its Subsidiaries, including consolidated balance
sheet, consolidated statement of income and retained earnings,
consolidated statement of cash flows for the fiscal year then ended and
such other
45
information (including nonfinancial information) as the Bank may
reasonably request, in reasonable detail, prepared and certified
without adverse reference to going concern value and without
qualification by an independent auditor of recognized standing,
selected by the Borrower and reasonably acceptable to the Bank; and
(b) promptly when available, and in any event, within
forty five (45) days following the end of each fiscal quarter, a copy
of the consolidated financial statements of the Borrower and its
Subsidiaries regarding such fiscal quarter, including consolidated
balance sheet, consolidated statement of income and retained earnings,
consolidated statement of cash flows for the fiscal quarter then ended
and such other information (including nonfinancial information) as the
Bank may request, in reasonable detail, prepared and certified as true
and correct by the Borrower's treasurer or chief financial officer; and
(c) within ten (10) days after the filing due date (as
such date may be extended in accordance with properly granted
extensions) each year, a signed copy of the complete income tax returns
filed with the Internal Revenue Service by the Borrower.
No change with respect to such accounting principles shall be made by the
Borrower without giving prior notification to the Bank. The Borrower represents
and warrants to the Bank that the financial statements delivered to the Bank at
or prior to the execution and delivery of this Agreement and to be delivered at
all times thereafter accurately reflect and will accurately reflect the
financial condition of the Borrower and its Subsidiaries taken as a whole. The
Bank shall have the right at all times during business hours to inspect the
books and records of the Borrower and make extracts therefrom.
8.9. Supplemental Financial Statements. The Borrower shall
immediately upon receipt thereof, provide to the Bank copies of interim and
supplemental reports if any, submitted to the Borrower by independent
accountants in connection with any interim audit or review of the books of the
Borrower.
8.10. Borrowing Base Certificate. The Borrower shall, (a) within ten
(10) days after the end of each month, and (b) at any time the Borrower shall
request a Loan hereunder, deliver to the Bank a Borrowing Base Certificate dated
as of the last Business Day of such month, certified as true and correct by an
authorized representative of the Borrower and acceptable to the Bank in its sole
and absolute discretion, provided, however, at any time an Event of Default
exists, the Bank may require the Borrower to deliver Borrowing Base Certificates
more frequently.
8.11. Aged Accounts Schedule. The Borrower shall, within thirty (30)
days after the end of each month, deliver to the Bank an aged schedule of the
Accounts of the Borrower and its Subsidiaries, listing the name and amount due
from each Account Debtor and showing the aggregate amounts due from (a) 0-30
days, (b) 31-60 days, (c) 61-90 days and (d) more than 90 days, and certified as
accurate by the Borrower's treasurer or chief financial officer.
8.12. Covenant Compliance Certificate. The Borrower shall,
contemporaneously with the furnishing of the financial statements pursuant to
Section 8.8, deliver to the Bank a duly completed compliance certificate, dated
the date of such financial statements and certified as true
46
and correct by an appropriate officer of the Borrower, containing a computation
of each of the financial covenants set forth in Section 10 and stating that the
Borrower has not become aware of any Event of Default or Unmatured Event of
Default that has occurred and is continuing or, if there is any such Event of
Default or Unmatured Event of Default describing it and the steps, if any, being
taken to cure it, which compliance certificate shall be substantially in the
form attached hereto as Exhibit 8.12.
8.13. Field Audits. The Borrower shall permit the Bank to inspect,
or cause to be inspected, the tangible assets and/or other business operations
of the Borrower and each Subsidiary, to perform, or cause to be performed,
appraisals of the Equipment (including Rolling Stock) of the Borrower and each
Subsidiary, and to inspect, audit, check and make copies of, and extracts from,
the books, records, computer data, computer programs, journals, orders,
receipts, correspondence and other data relating to the Collateral, the results
of which must be satisfactory to the Bank in the Bank's sole and absolute
discretion. All such inspections or audits by the Bank shall be at the
Borrower's sole expense; provided, however, that so long as no Event of Default
or Unmatured Event of Default exists, the Borrower shall not be required to
reimburse the Bank for (i) physical inspections of Rolling Stock more frequently
than once each fiscal year or (ii) other inspections or audits more frequently
than once each fiscal quarter.
8.14. Other Reports. The Borrower shall, within such period of time
as the Bank may specify, deliver to the Bank such other schedules and reports as
the Bank may reasonably require.
8.15. Property Records. The Borrower shall keep, and shall cause
each of its Subsidiaries to keep, full and accurate books and records relating
to all its property and assets, including the Collateral and any Mortgaged
Property, and shall xxxx such books and records to indicate the Bank's Lien in
any such property or assets.
8.16. Intellectual Property. The Borrower shall maintain, preserve
and renew, and shall cause each Subsidiary to maintain, preserve and renew, all
Intellectual Property necessary for the conduct of its business as and where the
same is currently located as heretofore or as hereafter conducted by it.
8.17. Notice of Proceedings. The Borrower, promptly upon becoming
aware, shall give written notice to the Bank of any litigation, arbitration or
governmental investigation or proceeding not previously disclosed by the
Borrower to the Bank which has been instituted or, to the knowledge of the
Borrower, is threatened against the Borrower or any of its Subsidiaries or to
which any of their respective properties is subject which might reasonably be
expected to have a Material Adverse Effect.
8.18. Notice of Event of Default or Material Adverse Effect. The
Borrower shall, immediately after the commencement thereof, give notice to the
Bank in writing of the occurrence of any Event of Default or any Unmatured Event
of Default, or the occurrence of any condition or event having a Material
Adverse Effect.
8.19. Environmental Matters. If any release or threatened release or
other disposal of Hazardous Substances shall occur or shall have occurred on any
real property or any other assets
47
of the Borrower or any of its Subsidiaries, the Borrower shall, or shall cause
the applicable Subsidiary to, cause the prompt containment and removal of such
Hazardous Substances and the remediation of such real property or other assets
as necessary to comply with all Environmental Laws and to preserve the value of
such real property or other assets. Without limiting the generality of the
foregoing, the Borrower shall, and shall cause each Subsidiary to, comply with
any Federal or state judicial or administrative order requiring the performance
at any real property of the Borrower or any Subsidiary of activities in response
to the release or threatened release of a Hazardous Substance. To the extent
that the transportation of Hazardous Substances is permitted by this Agreement,
the Borrower shall, and shall cause its Subsidiaries to, dispose of such
Hazardous Substances, or of any other wastes, only at licensed disposal
facilities operating in compliance with Environmental Laws.
8.20. Further Assurances. The Borrower shall take, and cause each
Subsidiary to take, such actions as are necessary or as the Bank may reasonably
request from time to time to ensure that the Bank has and retains a first
priority, perfected security interest in all the Collateral and that all
Obligations under the Loan Documents are secured by all the Collateral, in each
case as the Bank may determine, including (a) the execution and delivery of
security agreements, pledge agreements, mortgages, deeds of trust, financing
statements and other documents, and the filing or recording of any of the
foregoing, and (b) the delivery of certificated securities and other collateral
with respect to which perfection is obtained by possession.
8.21. Banking Relationship. The Borrower covenants and agrees, at
all times during the term of this Agreement, to utilize the Bank as its primary
bank of account and depository for all financial services, including all
receipts, disbursements, cash management and related service.
8.22. Non-Utilization Fee. The Borrower agrees to pay to the Bank a
non-utilization fee ("Non-Utilization Fee") equal to the total of (a) the
Revolving Loan Commitment, minus (b) the sum of (i) the daily average of the
aggregate principal amount of all Revolving Loans outstanding, plus (ii) the
daily average of the aggregate amount of the Letter of Credit Obligations
multiplied by the Applicable Non-Utilization Fee Rate, which non- utilization
fee shall be (A) calculated on the basis of a year consisting of 360 days, (B)
paid for the actual number of days elapsed, and (C) payable monthly in arrears
on the last Business Day of each month, commencing on the last Business Day of
September, 2004, and on the Revolving Loan Maturity Date.
8.23. Post-Closing Covenants. Without limiting Borrower's
obligations under Section 8.20 hereof, the Borrower shall cause each of the
conditions specified in Schedule 8.23 hereof to be fully satisfied on or before
the date specified for each such condition.
Section 9. NEGATIVE COVENANTS.
9.1. Debt. Neither the Borrower nor any of its Subsidiaries shall,
either directly or indirectly, create, assume, incur or have outstanding any
Debt (including purchase money indebtedness), or become liable, whether as
endorser, guarantor, surety or otherwise, for any debt or obligation of any
other Person, except:
(a) the Obligations under this Agreement and the other
Loan Documents;
48
(b) obligations for Taxes, assessments, municipal or
other governmental charges;
(c) obligations for accounts payable, other than for
money borrowed, incurred in the ordinary course of business;
(d) Debt of the Borrower to any Subsidiary Guarantor or
of any Subsidiary Guarantor to Borrower;
(e) Subordinated Debt;
(f) Hedging Obligations incurred in favor of the Bank or
an Affiliate thereof for bona fide hedging purposes and not for
speculation;
(g) Capitalized Lease Obligations, provided that the
aggregate amount of all such Debt outstanding at any time, combined
with obligations of the Borrower and its Subsidiaries for Operating
Lease Expenses at such time, shall not exceed Five Million and 00/100
Dollars ($5,000,000.00) in the aggregate;
(h) Debt for Capital Expenditures incurred after the date
of this Agreement not to exceed Twenty-Three Million and 00/100 Dollars
($23,000,000.00) in the aggregate in any one fiscal year;
(i) provided such Debt is indefeasibly paid and
terminated on or before the date that is twenty (20) Business Days
after the Closing Date, the "Revolving Loans" and the "Letter of Credit
Borrowings" as such terms are defined in the AmSouth Bank Credit
Agreement; and
(j) Debt described on Schedule 9.1(i) and any extension,
renewal or refinancing thereof so long as the principal amount thereof
is not increased.
9.2. Encumbrances. The Borrower shall not, and shall not permit any
of its Subsidiaries to, either directly or indirectly, create, assume, incur or
suffer or permit to exist any Lien or charge of any kind or character, other
than Permitted Liens, upon any of its assets, whether owned at the date hereof
or hereafter acquired.
9.3. Investments. The Borrower shall not, and shall not permit any
of its Subsidiaries to, either directly or indirectly, make or have outstanding
any Investment, except:
(a) contributions by the Borrower to the capital of any
Subsidiary Guarantor, or by any Subsidiary Guarantor to the capital of
any other Subsidiary Guarantor;
(b) Investments constituting Debt permitted by Section
9.1;
(c) Contingent Liabilities constituting Debt permitted by
Section 9.1 or Liens permitted by Section 9.2;
(d) Cash Equivalent Investments;
49
(e) subject to Section 9.12 , bank deposits in the
ordinary course of business;
(f) Investments in securities of Account Debtors received
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such account debtors; and
(g) Investments listed on Schedule 9.3 as of the Closing
Date.
provided, however, that (i) any Investment which when made complies with the
requirements of the definition of the term "Cash Equivalent Investment" may
continue to be held notwithstanding that such Investment if made thereafter
would not comply with such requirements; and (ii) no Investment otherwise
permitted by subsections (b) or (c) shall be permitted to be made if,
immediately before or after giving effect thereto, any Event of Default or
Unmatured Event of Default exists.
9.4. Transfer; Merger; Sales. The Borrower shall not, and shall not
permit any Subsidiary to, whether in one transaction or a series of related
transactions, (a) be a party to any merger or consolidation, or purchase or
otherwise acquire all or substantially all of the assets or any Capital
Securities of any class of, or any partnership or joint venture interest in, any
other Person, except for (i) any such merger, consolidation, sale, transfer,
conveyance, lease or assignment of or by any Subsidiary Guarantor into the
Borrower or into any other Subsidiary Guarantor; (ii) any such purchase or other
acquisition by the Borrower or any Subsidiary Guarantor of the assets or equity
interests of any Subsidiary Guarantor, (b) sell, transfer, convey or lease all
or any substantial part of its assets (other than pursuant to Lease Purchase
Agreements with respect to tractors either listed on Schedule 6.1(c) or that are
not Rolling Stock Collateral) or Capital Securities (including the sale of
Capital Securities of any Subsidiary), or (c) sell or assign, with or without
recourse, any Collateral or other property or assets of the Borrower or any of
its Subsidiaries securing the Obligations.
9.5. Issuance of Capital Securities. The Borrower shall not, and
shall not permit any Subsidiary to, issue any Capital Securities other than (a)
any issuance of shares of the Borrower's common Capital Securities pursuant to
any employee or director option program, benefit plan or compensation program,
or (b) any issuance of Capital Securities by a Subsidiary to the Borrower or
another Subsidiary in accordance with Section 9.6.
9.6. Distributions.
(a) The Borrower shall not, and shall not permit any
Subsidiary to, (a) make any distribution or dividend (other than stock
dividends), whether in cash or otherwise, to any of its equityholders,
(b) purchase or redeem any of its equity interests or any warrants,
options or other rights in respect thereof, (c) pay any management fees
or similar fees to any of its equityholders or any Affiliate thereof,
(d) pay or prepay interest on, principal of, premium, if any,
redemption, conversion, exchange, purchase, retirement, defeasance,
sinking fund or any other payment in respect of any Subordinated Debt,
or (e) set aside funds for any of the foregoing.
(b) Notwithstanding anything in Section 9.6(a) to the
contrary, (i) any Subsidiary may pay dividends or make other
distributions to the Borrower, (ii) so long as no Event
50
of Default or Unmatured Event of Default exists or would result
therefrom and, immediately thereafter, there is Revolving Loan
Availability of not less than $750,000.00, the Borrower may make
payments in respect of the Xxxx Subordinated Debt to the extent
permitted under the Xxxx Subordination Agreement, and (iii) as provided
in Section 9.6(c) hereof.
(c) If the Borrower were to deliver to the Bank evidence
satisfactory to the Bank that the Borrower has validly elected to be
taxed as a Subchapter S Corporation under the United States Internal
Revenue Code, with respect to each fiscal year of Borrower for which
such election has been granted and is in effect, the Borrower may make
quarterly distributions to each of its shareholders in an amount not
greater than the quarterly estimated income tax payments required to be
made by each such shareholder based upon the income of such shareholder
accruing due to such election and based upon the operations of the
Borrower and the resulting federal tax liability of such shareholder.
In the event that the aggregate amount of such quarterly distributions
to any shareholder for estimated federal income tax payments in any tax
year is less than the actual annual federal income tax liability of
such shareholder in such tax year based upon the income of such
shareholder accruing due to such election, the Borrower may make an
additional distribution to such shareholder in the amount of such
deficit with the first quarterly distribution for the immediately
following calendar year. In the event that the aggregate amount of such
quarterly distributions to any shareholder for estimated federal income
tax payments for any year exceeds the actual annual federal income tax
liability of such shareholder for such year based upon the income of
such shareholder accruing due to such election, the failure of such
shareholder, within thirty (30) days after the earlier of determination
of such shareholder's annual federal income tax liability for such year
and June 30 of the year immediately following such tax year, to make a
contribution of capital to the Borrower in the amount of such excess
shall be an Event of Default under this Agreement.
9.7. Transactions with Affiliates. Except as set forth in Schedule
9.7, the Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction with any
of its Affiliates or with any director, officer or employee of the Borrower or
any of its Subsidiaries other than transactions in the ordinary course of, and
pursuant to the reasonable requirements of, the business of the Borrower and
upon fair and reasonable terms which are fully disclosed to the Bank and are no
less favorable to the Borrower or such Subsidiary than would be obtained in a
comparable arm's length transaction with a Person that is not an Affiliate of
the Borrower or such Subsidiary.
9.8. Unconditional Purchase Obligations. The Borrower shall not,
and shall not permit any Subsidiary to, enter into or be a party to any contract
for the purchase of materials, supplies or other property or services if such
contract requires that payment be made by it regardless of whether delivery is
ever made of such materials, supplies or other property or services.
9.9. Cancellation of Debt. The Borrower shall not, and shall not
permit any Subsidiary to, cancel any claim or debt owing to it, except for
reasonable consideration or in the ordinary course of business.
51
9.10. Inconsistent Agreements. The Borrower shall not, and shall not
permit any Subsidiary to, enter into any agreement containing any provision
which would (a) be violated or breached by any borrowing by the Borrower
hereunder or by the performance by the Borrower or any Subsidiary of any of its
Obligations hereunder or under any other Loan Document, (b) prohibit the
Borrower or any Subsidiary from granting to the Bank a Lien on any of its assets
or (c) create or permit to exist or become effective any encumbrance or
restriction on the ability of any Subsidiary to (i) pay dividends or make other
distributions to the Borrower or any other Subsidiary, or pay any Debt owed to
the Borrower or any other Subsidiary, (ii) make loans or advances to the
Borrower or any other Subsidiary, or (iii) transfer any of its assets or
properties to the Borrower or any other Subsidiary, other than (A) customary
restrictions and conditions contained in agreements relating to the sale of all
or a substantial part of the assets of any Subsidiary pending such sale,
provided that such restrictions and conditions apply only to the Subsidiary to
be sold and such sale is permitted hereunder, (B) restrictions or conditions
imposed by any agreement relating to purchase money Debt, Capital Leases and
other secured Debt permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Debt, and (C)
customary provisions in leases and other contracts restricting the assignment
thereof.
9.11. Use of Proceeds. Neither the Borrower nor any of its
Subsidiaries or Affiliates shall use any portion of the proceeds of the Loans,
either directly or indirectly, for the purpose of purchasing any securities
underwritten by ABN AMRO Incorporated, an Affiliate of the Bank.
9.12. Bank Accounts. The Borrower shall not establish, and shall not
permit its Subsidiaries to establish, any new deposit or other bank accounts,
other than deposit accounts or other bank accounts established at or with the
Bank or payroll or other operating accounts solely for the purpose of covering
checks issued to third parties, or amend or terminate the Lockbox or the Lockbox
Agreement, without the prior written consent of the Bank.
9.13. Business Activities; Change of Legal Status and Organizational
Documents. The Borrower shall not, and shall not permit any Subsidiary to, (a)
engage in any line of business other than the businesses engaged in on the date
hereof and businesses reasonably related thereto, (b) change its name, its
Organizational Identification Number, if it has one, its type of organization,
its jurisdiction of organization or other legal structure, or (b) permit its
charter, bylaws or other organizational documents to be amended or modified in
any way which could reasonably be expected to materially adversely affect the
interests of the Bank, except that the Borrower may amend its organizational
documents as contemplated by the Merger Agreement.
Section 10. FINANCIAL COVENANTS.
10.1. Tangible Net Worth. As of the end of each of its fiscal
quarters commencing with the fiscal quarter ending December 31, 2004, the
Borrower and its Subsidiaries shall maintain consolidated Tangible Net Worth in
an amount not less than Seven Million and 00/100 Dollars ($7,000,000.00).
10.2. Total Modified Funded Debt to EBITDA. As of the end of each of
its fiscal quarters commencing with the fiscal quarter ending December 31, 2004,
the Borrower and its Subsidiaries shall maintain a ratio of (a) the sum of
consolidated Modified Funded Debt to (b)
52
consolidated EBITDA for the twelve month period ending on the last day of such
fiscal quarter plus any Net Gain from the Sale of Rolling Stock for the twelve
month period ending on the last day of such fiscal quarter, of not greater than
3.00 to 1.00
10.3. Fixed Charge Coverage. As of the end of each of its fiscal
quarters commencing with the fiscal quarter ending December 31, 2004, the
Borrower and its Subsidiaries shall maintain a ratio of (a) the total for the
twelve month period ending on the last day of such fiscal quarter of EBITDA plus
Net Gain from the Sale of Rolling Stock minus the sum of all income taxes paid
in cash by the Borrower and its Subsidiaries and all Capital Expenditures which
are not financed with Funded Debt, to (b) the sum of (i) Interest Charges for
such twelve month period plus (ii) an amount equal to 22.5% of the sum of Funded
Debt minus Letter of Credit Obligations as of the last day of such fiscal
quarter, of not less than 1.00 to 1.00.
10.4. Capital Expenditures. The Borrower and its Subsidiaries shall
not, individually or collectively, incur Capital Expenditures (other than to
acquire trucks and trailers in the ordinary course of their business) in an
amount greater than Seven Hundred Fifty Thousand ($750,000.00) in the aggregate
during any fiscal year.
Section 11. EVENTS OF DEFAULT.
The Borrower, without notice or demand of any kind, shall be in default
under this Agreement upon the occurrence of any of the following events (each an
"Event of Default").
11.1. Nonpayment of Obligations. Any amount due and owing on any
Note or any of the Obligations, whether by its terms or as otherwise provided
herein, is not paid when due.
11.2. Misrepresentation. Any oral or written warranty,
representation, certificate or statement of any Obligor in this Agreement, the
other Loan Documents or any other agreement with the Bank shall be false in any
material respect when made or at any time thereafter, or if any financial data
or any other information now or hereafter furnished to the Bank by or on behalf
of any Obligor shall prove to be false, inaccurate or misleading in any material
respect.
11.3. Nonperformance. Any failure to perform or default in the
performance of any covenant, condition or agreement contained in this Agreement
(other than for the payment of Obligations) and, if capable of being cured, such
failure to perform or default in performance continues for a period of thirty
(30) days after the Borrower receives notice or knowledge from any source of
such failure to perform or default in performance, or in the other Loan
Documents or any other agreement with the Bank and such failure to perform or
default in performance continues beyond any applicable grace or cure period.
11.4. Default under Loan Documents. Any "Event of Default" (as
defined therein) shall occur under any of the other Loan Documents or the Xxxx
Subordinated Debt Agreement.
11.5. Default under Other Debt. Any default by any Obligor in the
payment of any Debt for any other obligation beyond any period of grace provided
with respect thereto or in the performance of any other term, condition or
covenant contained in any agreement (including any capital or operating lease or
any agreement in connection with the deferred purchase price of property) under
which any such obligation is created, the effect of which default is to cause or
53
permit the holder of such obligation (or the other party to such other
agreement) to cause such obligation to become due prior to its stated maturity
or terminate such other agreement.
11.6. Other Material Obligations. Any default in the payment when
due, or in the performance or observance of, any material obligation of, or
condition agreed to by, any Obligor with respect to any material purchase or
lease of goods or services where such default, singly or in the aggregate with
all other such defaults, might reasonably be expected to have a Material Adverse
Effect.
11.7. Bankruptcy, Insolvency, etc. Any Obligor becomes insolvent or
generally fails to pay, or admits in writing its inability or refusal to pay,
debts as they become due; or any Obligor applies for, consents to, or acquiesces
in the appointment of a trustee, receiver or other custodian for such Obligor or
any property thereof, or makes a general assignment for the benefit of
creditors; or, in the absence of such application, consent or acquiescence, a
trustee, receiver or other custodian is appointed for any Obligor or for a
substantial part of the property of any thereof and is not discharged within
sixty (60) days; or any bankruptcy, reorganization, debt arrangement, or other
case or proceeding under any bankruptcy or insolvency law, or any dissolution or
liquidation proceeding, is commenced in respect of any Obligor, and if such case
or proceeding is not commenced by such Obligor, it is consented to or acquiesced
in by such Obligor, or remains undismissed for sixty (60) days; or any Obligor
takes any action to authorize, or in furtherance of, any of the foregoing.
11.8. Judgments. The entry of any final judgment, decree, levy,
attachment, garnishment or other process, or the filing of any Lien against any
Obligor which is not fully covered by insurance and which judgment or other
process could reasonably be expected to have a Material Adverse Effect. .
11.9. Change in Control. The occurrence of any Change in Control.
11.10. Collateral Impairment. The entry of any judgment, decree,
levy, attachment, garnishment or other process, or the filing of any Lien
against, any of the Collateral or any collateral under any of the Security
Agreements and such judgment or other process shall not have been, within thirty
(30) days from the entry thereof, (i) bonded over to the satisfaction of the
Bank and appealed, (ii) vacated, or (iii) discharged, or the loss, theft,
destruction, seizure or forfeiture, or the occurrence of any material
deterioration or impairment of any of the Collateral or any of the collateral
under any of the Security Agreements, or any material decline or depreciation in
the value or market price thereof (whether actual or reasonably anticipated),
which, in each case, causes the Collateral, in the sole opinion of the Bank
acting in good faith, to become unsatisfactory as to value or character, or
which causes the Bank to reasonably believe that it is insecure and that the
likelihood for repayment of the Obligations is or will soon be materially
impaired, time being of the essence. The cause of such deterioration,
impairment, decline or depreciation shall include, but is not limited to, the
failure by the Borrower to do any act deemed reasonably necessary by the Bank to
preserve and maintain the value and collectability of the Collateral.
11.11. Material Adverse Effect. The occurrence of any development,
condition or event which has, or would reasonably be expected to have, a
Material Adverse Effect.
54
11.12. Guaranty. There is discontinuance by any of the Guarantors of
any of the Guarantees, or any of the Guarantors shall contest the validity of
such Guaranty.
11.13. Subordinated Debt. The subordination provisions of the Xxxx
Subordinated Debt Agreement or the Xxxx Subordination Agreement, or of any other
Subordinated Debt, shall for any reason be revoked or invalid or otherwise cease
to be in full force and effect. The Borrower shall contest in any manner, or any
other holder thereof shall contest in any judicial proceeding, the validity or
enforceability of the Subordinated Debt or deny that it has any further
liability or obligation thereunder, or the Obligations shall for any reason not
have the priority contemplated by the subordination provisions of the
Subordinated Debt.
Section 12. REMEDIES.
Upon the occurrence of an Event of Default, the Bank shall have all
rights, powers and remedies set forth in the Loan Documents, in any written
agreement or instrument (other than this Agreement or the Loan Documents)
relating to any of the Obligations or any security therefor, as a secured party
under the UCC or as otherwise provided at law or in equity. Without limiting the
generality of the foregoing, the Bank may, at its option upon the occurrence of
an Event of Default, declare its commitments to the Borrower to be terminated
and all Obligations to be immediately due and payable, provided, however, that
upon the occurrence of an Event of Default under Section 11.7, all commitments
of the Bank to the Borrower shall immediately terminate and all Obligations
shall be automatically due and payable, all without demand, notice or further
action of any kind required on the part of the Bank. The Borrower hereby waives
any and all presentment, demand, notice of dishonor, protest, and all other
notices and demands in connection with the enforcement of Bank's rights under
the Loan Documents, and hereby consents to, and waives notice of release, with
or without consideration, of any of the Borrower, any of the Guarantors or any
of the Collateral, notwithstanding anything contained herein or in the Loan
Documents to the contrary. In addition to the foregoing:
12.1. Possession and Assembly of Collateral. The Bank may, without
notice, demand or legal process of any kind, take possession of any or all of
the Collateral (in addition to Collateral of which the Bank already has
possession), wherever it may be found, and for that purpose may pursue the same
wherever it may be found, and may at any time enter into any of the Borrower's
premises where any of the Collateral may be or is supposed to be, and search
for, take possession of, remove, keep and store any of the Collateral until the
same shall be sold or otherwise disposed of and the Bank shall have the right to
store and conduct a sale of the same in any of the Borrower's premises without
cost to the Bank. At the Bank's request, the Borrower will, at the Borrower's
sole expense, assemble the Collateral and make it available to the Bank at a
place or places to be designated by the Bank which is reasonably convenient to
the Bank and the Borrower.
12.2. Sale of Collateral. The Bank may sell any or all of the
Collateral at public or private sale, upon such terms and conditions as the Bank
may deem proper, and the Bank may purchase any or all of the Collateral at any
such sale. The Borrower acknowledges that the Bank may be unable to effect a
public sale of all or any portion of the Collateral because of certain legal
and/or practical restrictions and provisions which may be applicable to the
Collateral and, therefore, may be compelled to resort to one or more private
sales to a restricted group of
55
offerees and purchasers. The Borrower consents to any such private sale so made
even though at places and upon terms less favorable than if the Collateral were
sold at public sale. The Bank shall have no obligation to clean-up or otherwise
prepare the Collateral for sale. The Bank may apply the net proceeds, after
deducting all costs, expenses, attorneys' and paralegals' fees incurred or paid
at any time in the collection, protection and sale of the Collateral and the
Obligations, to the payment of any Note and/or any of the other Obligations,
returning the excess proceeds, if any, to the Borrower. The Borrower shall
remain liable for any amount remaining unpaid after such application, with
interest at the Default Rate. Any notification of intended disposition of the
Collateral required by law shall be conclusively deemed reasonably and properly
given if given by the Bank at least ten (10) calendar days before the date of
such disposition. The Borrower hereby confirms, approves and ratifies all acts
and deeds of the Bank relating to the foregoing, and each part thereof, and
expressly waives any and all claims of any nature, kind or description which it
has or may hereafter have against the Bank or its representatives, by reason of
taking, selling or collecting any portion of the Collateral. The Borrower
consents to releases of the Collateral at any time (including prior to default)
and to sales of the Collateral in groups, parcels or portions, or as an
entirety, as the Bank shall deem appropriate. The Borrower expressly absolves
the Bank from any loss or decline in market value of any Collateral by reason of
delay in the enforcement or assertion or nonenforcement of any rights or
remedies under this Agreement.
12.3. Standards for Exercising Remedies. To the extent that
applicable law imposes duties on the Bank to exercise remedies in a commercially
reasonable manner, the Borrower acknowledges and agrees that it is not
commercially unreasonable for the Bank (a) to fail to incur expenses reasonably
deemed significant by the Bank to prepare Collateral for disposition or
otherwise to complete raw material or work-in-process into finished goods or
other finished products for disposition, (b) to fail to obtain third party
consents for access to Collateral to be disposed of, or to obtain or, if not
required by other law, to fail to obtain governmental or third party consents
for the collection or disposition of Collateral to be collected or disposed of,
(c) to fail to exercise collection remedies against Account Debtors or other
Persons obligated on Collateral or to remove liens or encumbrances on or any
adverse claims against Collateral, (d) to exercise collection remedies against
Account Debtors and other Persons obligated on Collateral directly or through
the use of collection agencies and other collection specialists, (e) to
advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (f) to
contact other Persons, whether or not in the same business as the Borrower, for
expressions of interest in acquiring all or any portion of the Collateral, (g)
to hire one or more professional auctioneers to assist in the disposition of
Collateral, whether or not the collateral is of a specialized nature, (h) to
dispose of Collateral by utilizing internet sites that provide for the auction
of assets of the types included in the Collateral or that have the reasonable
capability of doing so, or that match buyers and sellers of assets, (i) to
dispose of assets in wholesale rather than retail markets, (j) to disclaim
disposition warranties, including any warranties of title, (k) to purchase
insurance or credit enhancements to insure the Bank against risks of loss,
collection or disposition of Collateral or to provide to the Bank a guaranteed
return from the collection or disposition of Collateral, or (l) to the extent
deemed appropriate by the Bank, to obtain the services of other brokers,
investment bankers, consultants and other professionals to assist the Bank in
the collection or disposition of any of the Collateral. The Borrower
acknowledges that the purpose of this section is to provide non-exhaustive
indications of what actions or omissions by the Bank would not be commercially
unreasonable in
56
the Bank's exercise of remedies against the Collateral and that other actions or
omissions by the Bank shall not be deemed commercially unreasonable solely on
account of not being indicated in this section. Without limitation upon the
foregoing, nothing contained in this section shall be construed to grant any
rights to the Borrower or to impose any duties on the Bank that would not have
been granted or imposed by this Agreement or by applicable law in the absence of
this section.
12.4. UCC and Offset Rights. The Bank may exercise, from time to
time, any and all rights and remedies available to it under the UCC or under any
other applicable law in addition to, and not in lieu of, any rights and remedies
expressly granted in this Agreement or in any other agreements between any
Obligor and the Bank, and may, without demand or notice of any kind, appropriate
and apply toward the payment of such of the Obligations, whether matured or
unmatured, including costs of collection and attorneys' and paralegals' fees,
and in such order of application as the Bank may, from time to time, elect, any
indebtedness of the Bank to any Obligor, however created or arising, including
balances, credits, deposits, accounts or moneys of such Obligor in the
possession, control or custody of, or in transit to the Bank. The Borrower, on
behalf of itself and each Obligor, hereby waives the benefit of any law that
would otherwise restrict or limit the Bank in the exercise of its right, which
is hereby acknowledged, to appropriate at any time hereafter any such
indebtedness owing from the Bank to any Obligor.
12.5. Additional Remedies. The Bank shall have the right and power
to:
(a) instruct the Borrower, at its own expense, to notify
any parties obligated on any of the Collateral, including any Account
Debtors, to make payment directly to the Bank of any amounts due or to
become due thereunder, or the Bank may directly notify such obligors of
the security interest of the Bank, and/or of the assignment to the Bank
of the Collateral and direct such obligors to make payment to the Bank
of any amounts due or to become due with respect thereto, and
thereafter, collect any such amounts due on the Collateral directly
from such Persons obligated thereon;
(b) enforce collection of any of the Collateral,
including any Accounts, by suit or otherwise, or make any compromise or
settlement with respect to any of the Collateral, or surrender, release
or exchange all or any part thereof, or compromise, extend or renew for
any period (whether or not longer than the original period) any
indebtedness thereunder;
(c) take possession or control of any proceeds and
products of any of the Collateral, including the proceeds of insurance
thereon;
(d) extend, renew or modify for one or more periods
(whether or not longer than the original period) any Note, any other of
the Obligations, any obligation of any nature of any other obligor with
respect to any Note or any of the Obligations;
(e) grant releases, compromises or indulgences with
respect to any Note, any of the Obligations, any extension or renewal
of any of the Obligations, any security therefor, or to any other
obligor with respect to any Note or any of the Obligations;
57
(f) transfer the whole or any part of securities which
may constitute Collateral into the name of the Bank or the Bank's
nominee without disclosing, if the Bank so desires, that such
securities so transferred are subject to the security interest of the
Bank, and any corporation, association, or any of the managers or
trustees of any trust issuing any of such securities, or any transfer
agent, shall not be bound to inquire, in the event that the Bank or
such nominee makes any further transfer of such securities, or any
portion thereof, as to whether the Bank or such nominee has the right
to make such further transfer, and shall not be liable for transferring
the same;
(g) make an election with respect to the Collateral under
Section 1111 of the Bankruptcy Code or take action under Section 364 or
any other section of the Bankruptcy Code; provided, however, that any
such action of the Bank as set forth herein shall not, in any manner
whatsoever, impair or affect the liability of the Borrower hereunder,
nor prejudice, waive, nor be construed to impair, affect, prejudice or
waive the Bank's rights and remedies at law, in equity or by statute,
nor release, discharge, nor be construed to release or discharge, the
Borrower, any guarantor or other Person liable to the Bank for the
Obligations; and
(h) at any time, and from time to time, accept additions
to, releases, reductions, exchanges or substitution of the Collateral,
without in any way altering, impairing, diminishing or affecting the
provisions of this Agreement, the Loan Documents, or any of the other
Obligations, or the Bank's rights hereunder, under any Note or under
any of the other Obligations.
The Borrower hereby ratifies and confirms whatever the Bank may do with respect
to the Collateral and agrees that the Bank shall not be liable for any error of
judgment or mistakes of fact or law with respect to actions taken in connection
with the Collateral.
12.6. Attorney-in-Fact. The Borrower hereby irrevocably makes,
constitutes and appoints the Bank (and any officer of the Bank or any Person
designated by the Bank for that purpose) as the Borrower's true and lawful proxy
and attorney-in-fact (and agent-in-fact) in the Borrower's name, place and
stead, with full power of substitution, to (i) take such actions as are
permitted in this Agreement, (ii) execute such financing statements and other
documents and to do such other acts as the Bank may require to perfect and
preserve the Bank's security interest in, and to enforce such interests in the
Collateral, and (iii) carry out any remedy provided for in this Agreement,
including endorsing the Borrower's name to checks, drafts, instruments and other
items of payment, and proceeds of the Collateral, executing change of address
forms with the postmaster of the United States Post Office serving the address
of the Borrower, changing the address of the Borrower to that of the Bank,
opening all envelopes addressed to the Borrower and applying any payments
contained therein to the Obligations. The Borrower hereby acknowledges that the
constitution and appointment of such proxy and attorney-in-fact are coupled with
an interest and are irrevocable. The Borrower hereby ratifies and confirms all
that such attorney-in-fact may do or cause to be done by virtue of any provision
of this Agreement.
12.7. No Marshaling. The Bank shall not be required to marshal any
present or future collateral security (including this Agreement and the
Collateral) for, or other assurances of payment of, the Obligations or any of
them or to resort to such collateral security or other
58
assurances of payment in any particular order. To the extent that it lawfully
may, the Borrower hereby agrees that it will not invoke any law relating to the
marshaling of collateral which might cause delay in or impede the enforcement of
the Bank's rights under this Agreement or under any other instrument creating or
evidencing any of the Obligations or under which any of the Obligations is
outstanding or by which any of the Obligations is secured or payment thereof is
otherwise assured, and, to the extent that it lawfully may, the Borrower hereby
irrevocably waives the benefits of all such laws.
12.8. Application of Proceeds. The Bank will within three (3)
Business Days after receipt of cash or solvent credits from collection of items
of payment, proceeds of Collateral or any other source, apply the whole or any
part thereof against the Obligations secured hereby. The Bank shall further have
the exclusive right to determine how, when and what application of such payments
and such credits shall be made on the Obligations, and such determination shall
be conclusive upon the Borrower. Any proceeds of any disposition by the Bank of
all or any part of the Collateral may be first applied by the Bank to the
payment of expenses incurred by the Bank in connection with the Collateral,
including attorneys' fees and legal expenses as provided for in Section 13
hereof.
12.9. No Waiver. No Event of Default shall be waived by the Bank
except in writing. No failure or delay on the part of the Bank in exercising any
right, power or remedy hereunder shall operate as a waiver of the exercise of
the same or any other right at any other time; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder.
There shall be no obligation on the part of the Bank to exercise any remedy
available to the Bank in any order. The remedies provided for herein are
cumulative and not exclusive of any remedies provided at law or in equity. The
Borrower agrees that in the event that the Borrower fails to perform, observe or
discharge any of its Obligations or liabilities under this Agreement or any
other agreements with the Bank, no remedy of law will provide adequate relief to
the Bank, and further agrees that the Bank shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages.
12.10. Letters of Credit. With respect to all Letters of Credit for
which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this Section 12, the Borrower shall at such time
deposit in a cash collateral account opened by the Bank an amount equal to the
Letter of Credit Obligations then outstanding. Amounts held in such cash
collateral account shall be applied by the Bank to the payment of drafts drawn
under such Letters of Credit, and the unused portion thereof after all such
Letters of Credit shall have expired or been fully drawn upon, if any, shall be
applied to repay the Obligations, in such order of application as the Bank may,
in its sole discretion, from time to time elect. After all such Letters of
Credit shall have expired or been fully drawn upon, all commitments to make
Loans hereunder have terminated and all other Obligations have been indefeasibly
satisfied and paid in full in cash, the balance, if any, in such cash collateral
account shall be returned to the Borrower or such other Person as may be
lawfully entitled thereto.
59
Section 13. MISCELLANEOUS.
13.1. Obligations Absolute. None of the following shall affect the
Obligations of the Borrower to the Bank under this Agreement or the Bank's
rights with respect to the Collateral:
(a) acceptance or retention by the Bank of other property
or any interest in property as security for the Obligations;
(b) release by the Bank of any of the Borrower, any of
the Guarantors or all or any part of the Collateral or of any party
liable with respect to the Obligations;
(c) release, extension, renewal, modification or
substitution by the Bank of any Note, or any note evidencing any of the
Obligations, or the compromise of the liability of any of the
Guarantors or other guarantor of the Obligations; or
(d) failure of the Bank to resort to any other security
or to pursue the Borrower or any other obligor liable for any of the
Obligations before resorting to remedies against the Collateral.
13.2. Entire Agreement. This Agreement and the other Loan Documents
(i) are valid, binding and enforceable against the Borrower and the Bank in
accordance with their respective provisions and no conditions exist as to their
legal effectiveness; (ii) constitute the entire agreement between the parties
with respect to the subject matter hereof and thereof; and (iii) are the final
expression of the intentions of the Borrower and the Bank. No promises, either
expressed or implied, exist between the Borrower and the Bank, unless contained
herein or therein. This Agreement, together with the other Loan Documents,
supersedes all negotiations, representations, warranties, commitments, term
sheets, discussions, negotiations, offers or contracts (of any kind or nature,
whether oral or written) prior to or contemporaneous with the execution hereof
with respect to any matter, directly or indirectly related to the terms of this
Agreement and the other Loan Documents. This Agreement and the other Loan
Documents are the result of negotiations among the Bank, the Borrower and the
other parties thereto, and have been reviewed (or have had the opportunity to be
reviewed) by counsel to all such parties, and are the products of all parties.
Accordingly, this Agreement and the other Loan Documents shall not be construed
more strictly against the Bank merely because of the Bank's involvement in their
preparation.
13.3. Amendments; Waivers. No delay on the part of the Bank in the
exercise of any right, power or remedy shall operate as a waiver thereof, nor
shall any single or partial exercise by the Bank of any right, power or remedy
preclude other or further exercise thereof, or the exercise of any other right,
power or remedy. No amendment, modification or waiver of, or consent with
respect to, any provision of this Agreement or the other Loan Documents shall in
any event be effective unless the same shall be in writing and acknowledged by
the Bank, and then any such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
13.4. [Reserved].
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13.5. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL BE
DEEMED OR OPERATE TO PRECLUDE THE BANK FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. THE BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. THE
BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
13.6. WAIVER OF JURY TRIAL. THE BANK AND THE BORROWER, AFTER
CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE IRREVOCABLY, ANY RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT, ANY OF THE OTHER OBLIGATIONS, THE
COLLATERAL, OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR
ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE
FOREGOING, OR ANY COURSE OF CONDUCT OR COURSE OF DEALING IN WHICH THE BANK AND
THE BORROWER ARE ADVERSE PARTIES, AND EACH AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE BANK GRANTING ANY FINANCIAL ACCOMMODATION TO
THE BORROWER.
13.7. Assignability. The Bank may at any time assign the Bank's
rights in this Agreement, the other Loan Documents, the Obligations, or any part
thereof and transfer the Bank's rights in any or all of the Collateral, and the
Bank thereafter shall be relieved from all liability with respect to such
Collateral. In addition, the Bank may at any time sell one or more
participations in the Loans. The Borrower may not sell or assign this Agreement,
or any other agreement with the Bank or any portion thereof, either voluntarily
or by operation of law, without the prior written consent of the Bank. This
Agreement shall be binding upon the Bank and the Borrower and their respective
legal representatives and successors. All references herein to the Borrower
shall be deemed to include any successors, whether immediate or remote. In the
case of a joint venture or partnership, the term "Borrower" shall be deemed to
include all joint venturers or partners thereof, who shall be jointly and
severally liable hereunder.
61
13.8. Confirmations. The Borrower and the Bank agree from time to
time, upon written request received by it from the other, to confirm to the
other in writing the aggregate unpaid principal amount of the Loans then
outstanding under such Note.
13.9. Confidentiality. The Bank agrees to use commercially
reasonable efforts (equivalent to the efforts the Bank applies to maintain the
confidentiality of its own confidential information) to maintain as confidential
all information provided to them by the Borrower and designated as confidential,
except that the Bank may disclose such information (a) to Persons employed or
engaged by the Bank in evaluating, approving, structuring or administering the
Loans; (b) to any assignee or participant or potential assignee or participant
that has agreed to comply with the covenant contained in this Section 13.9 (and
any such assignee or participant or potential assignee or participant may
disclose such information to Persons employed or engaged by them as described in
clause (a) above); (c) as required or requested by any federal or state
regulatory authority or examiner, or any insurance industry association, or as
reasonably believed by the Bank to be compelled by any court decree, subpoena or
legal or administrative order or process; (d) as, on the advice of the Bank's
counsel, is required by law; (e) in connection with the exercise of any right or
remedy under the Loan Documents or in connection with any litigation to which
the Bank is a party; (f) to any nationally recognized rating agency that
requires access to information about the Bank's investment portfolio in
connection with ratings issued with respect to the Bank; (g) to any Affiliate of
the Bank who may provide Bank Products to the Borrower or any Subsidiary, or (h)
that ceases to be confidential through no fault of the Bank.
13.10. Binding Effect. This Agreement shall become effective upon
execution by the Borrower and the Bank. If this Agreement is not dated or
contains any blanks when executed by the Borrower, the Bank is hereby
authorized, without notice to the Borrower, to date this Agreement as of the
date when it was executed by the Borrower, and to complete any such blanks
according to the terms upon which this Agreement is executed.
13.11. Governing Law. This Agreement, the Loan Documents and any Note
shall be delivered and accepted in and shall be deemed to be contracts made
under and governed by the internal laws of the State of Illinois (but giving
effect to federal laws applicable to national banks) applicable to contracts
made and to be performed entirely within such state, without regard to conflict
of laws principles.
13.12. Enforceability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by,
unenforceable or invalid under any jurisdiction, such provision shall as to such
jurisdiction, be severable and be ineffective to the extent of such prohibition
or invalidity, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
13.13. Survival of Borrower Representations. All covenants,
agreements, representations and warranties made by the Borrower herein shall,
notwithstanding any investigation by the Bank, be deemed material and relied
upon by the Bank and shall survive the making and execution of this Agreement
and the Loan Documents and the issuance of any Note, and shall be deemed to be
continuing representations and warranties until such time as the
62
Borrower has fulfilled all of its Obligations to the Bank, and the Bank has been
indefeasibly paid in full in cash. The Bank, in extending financial
accommodations to the Borrower, is expressly acting and relying on the aforesaid
representations and warranties.
13.14. Extensions of Bank's Commitment. This Agreement shall secure
and govern the terms of (i) any extensions or renewals of the Bank's commitment
hereunder, and (ii) any replacement note executed by the Borrower and accepted
by the Bank in its sole and absolute discretion in substitution for any Note.
13.15. Time of Essence. Time is of the essence in making payments of
all amounts due the Bank under this Agreement and in the performance and
observance by the Borrower of each covenant, agreement, provision and term of
this Agreement.
13.16. Counterparts; Facsimile Signatures. This Agreement may be
executed in any number of counterparts and by the different parties hereto on
separate counterparts and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same Agreement. Receipt of an executed signature page to this Agreement by
facsimile or other electronic transmission shall constitute effective delivery
thereof. Electronic records of executed Loan Documents maintained by the Bank
shall deemed to be originals thereof.
13.17. Notices. Except as otherwise provided herein, the Borrower
waives all notices and demands in connection with the enforcement of the Bank's
rights hereunder. All notices, requests, demands and other communications
provided for hereunder shall be in writing and addressed as follows:
If to the Borrower: Xxxx Bros. Transportation Inc.
0000 Xxxxxxx 00
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopy: (000) 000-0000
If to the Bank: LaSalle Bank National Association
000 Xxxxx Xx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Commercial Lending Division
Telecopy: ______________________
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party complying as to delivery with the terms
of this subsection. All notices addressed as above shall be deemed to have been
properly given (i) if served in person, upon acceptance or refusal of delivery;
(ii) if mailed by certified or registered mail, return receipt requested,
postage prepaid, on the third (3rd) day following the day such notice is
deposited in any post office station or letter box; or (iii) if sent by
recognized overnight courier, on the first (1st) day following the day such
notice is delivered to such carrier. No notice to or demand on the Borrower in
any case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances.
63
13.18. Release of Claims Against Bank. In consideration of the Bank
making the Loans, the Borrower and all other Obligors do each hereby release and
discharge the Bank of and from any and all claims, harm, injury, and damage of
any and every kind, known or unknown, legal or equitable, which any Obligor may
have against the Bank from the date of their respective first contact with the
Bank until the date of this Loan Agreement, including any claim arising from any
reports (environmental reports, surveys, appraisals, etc.) prepared by any
parties hired or recommended by the Bank. The Borrower and all other Obligors
confirm to Bank that they have reviewed the effect of this release with
competent legal counsel of their choice, or have been afforded the opportunity
to do so, prior to execution of this Agreement and the Loan Documents and do
each acknowledge and agree that the Bank is relying upon this release in
extending the Loans to the Borrower.
13.19. Costs, Fees and Expenses. The Borrower shall pay or reimburse
the Bank for all reasonable costs, fees and expenses incurred by the Bank or for
which the Bank becomes obligated in connection with the negotiation,
preparation, consummation, collection of the Obligations or enforcement of this
Agreement, the other Loan Documents and all other documents provided for herein
or delivered or to be delivered hereunder or in connection herewith (including
any amendment, supplement or waiver to any Loan Document), or in connection with
the perfection of security interests granted herein of in the other Loan
Documents, or during any workout, restructuring or negotiations in respect
thereof, including reasonable consultants' fees and attorneys' fees and time
charges of counsel to the Bank, which shall also include attorneys' fees and
time charges of attorneys who may be employees of the Bank or any Affiliate of
the Bank and, in connection with activities undertaken by non-attorney employees
of the Bank to perfect security interests granted herein or in the other Loan
Documents, reasonable time charges of such employees of the Bank, plus costs and
expenses of such attorneys or of the Bank; search fees, costs and expenses; and
all taxes payable in connection with this Agreement or the other Loan Documents,
whether or not the transaction contemplated hereby shall be consummated. In
furtherance of the foregoing, the Borrower shall pay any and all stamp and other
taxes, UCC search fees, filing fees and other costs and expenses in connection
with the execution and delivery of this Agreement, any Note and the other Loan
Documents to be delivered hereunder, and agrees to save and hold the Bank
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such costs and expenses. That
portion of the Obligations consisting of costs, expenses or advances to be
reimbursed by the Borrower to the Bank pursuant to this Agreement or the other
Loan Documents which are not paid on or prior to the date hereof shall be
payable by the Borrower to the Bank on demand. If at any time or times hereafter
the Bank: (a) employs counsel for advice or other representation (i) with
respect to this Agreement or the other Loan Documents, (ii) to represent the
Bank in any litigation, contest, dispute, suit or proceeding or to commence,
defend, or intervene or to take any other action in or with respect to any
litigation, contest, dispute, suit, or proceeding (whether instituted by the
Bank, the Borrower, or any other Person) in any way or respect relating to this
Agreement, the other Loan Documents or the Borrower's business or affairs, or
(iii) to enforce any rights of the Bank against the Borrower or any other Person
that may be obligated to the Bank by virtue of this Agreement or the other Loan
Documents; (b) takes any action to protect, collect, sell, liquidate, or
otherwise dispose of any of the Collateral; and/or (c) attempts to or enforces
any of the Bank's rights or remedies under the Agreement or the other Loan
Documents, the costs and expenses incurred by the Bank in any
64
manner or way with respect to the foregoing, shall be part of the Obligations,
payable by the Borrower to the Bank on demand.
13.20. Indemnification The Borrower agrees to defend (with counsel
satisfactory to the Bank), protect, indemnify, exonerate and hold harmless each
Indemnified Party from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and
distributions of any kind or nature (including the disbursements and the
reasonable fees of counsel for each Indemnified Party thereto, which shall also
include, without limitation, reasonable attorneys' fees and time charges of
attorneys who may be employees of any Indemnified Party), which may be imposed
on, incurred by, or asserted against, any Indemnified Party (whether direct,
indirect or consequential and whether based on any federal, state or local laws
or regulations, including securities laws, Environmental Laws, commercial laws
and regulations, under common law or in equity, or based on contract or
otherwise) in any manner relating to or arising out of this Agreement or any of
the Loan Documents, or any act, event or transaction related or attendant
thereto, the preparation, execution and delivery of this Agreement and the Loan
Documents, including the making or issuance and management of the Loans, the use
or intended use of the proceeds of the Loans, the enforcement of the Bank's
rights and remedies under this Agreement, the Loan Documents, any Note, any
other instruments and documents delivered hereunder, or under any other
agreement between the Borrower and the Bank; provided, however, that the
Borrower shall not have any obligations hereunder to any Indemnified Party with
respect to matters determined by a court of competent jurisdiction by final and
nonappealable judgment to have been caused by or resulting from the willful
misconduct or gross negligence of such Indemnified Party. To the extent that the
undertaking to indemnify set forth in the preceding sentence may be
unenforceable because it violates any law or public policy, the Borrower shall
satisfy such undertaking to the maximum extent permitted by applicable law. Any
liability, obligation, loss, damage, penalty, cost or expense covered by this
indemnity shall be paid to each Indemnified Party on demand, and failing prompt
payment, together with interest thereon at the Default Rate from the date
incurred by each Indemnified Party until paid by the Borrower, shall be added to
the Obligations of the Borrower and be secured by the Collateral. The provisions
of this Section shall survive the satisfaction and payment of the other
Obligations and the termination of this Agreement.
13.21. Revival and Reinstatement of Obligations. If the incurrence or
payment of the Obligations by any Obligor or the transfer to the Bank of any
property should for any reason subsequently be declared to be void or voidable
under any state or federal law relating to creditors' rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (collectively, a "Voidable Transfer"), and if the Bank is required to
repay or restore, in whole or in part, any such Voidable Transfer, or elects to
do so upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the amount thereof that the Bank is required or elects to repay or
restore, and as to all reasonable costs, expenses, and attorneys fees of the
Bank, the Obligations shall automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been made.
13.22. Customer Identification - USA Patriot Act Notice. The Bank
hereby notifies the Borrower that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the
"Act"), and the Bank's policies and practices, the Bank is
65
required to obtain, verify and record certain information and documentation that
identifies the Borrower, which information includes the name and address of the
Borrower and such other information that will allow the Bank to identify the
Borrower in accordance with the Act.
{Remainder of page intentionally left blank; signature page follows}
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IN WITNESS WHEREOF, the Borrower and the Bank have executed this Loan
and Security Agreement as of the date first above written.
XXXX BROS. TRANSPORTATION INC.,
a Delaware corporation
By: /S/ XXXX X. XXXXXX
----------------------------------------
Name: Xxxx X. Xxxxxx
----------------------------------------
Title: President and Chief Executive Officer
----------------------------------------
Agreed and accepted:
LASALLE BANK NATIONAL ASSOCIATION,
a national banking association
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
67
