EXHIBIT 10.1
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT ("this Agreement") dated as
of May 1, 2001 but actually executed on June 18, 2001 is between XXXX XXXXXXXX
TRANSPORTATION, INC., a Delaware corporation ("Xxxx"), XXXXXXX TRANSPORT, INC.,
an Alabama corporation ("Xxxxxxx"; Xxxx and Xxxxxxx are together referred to as
the "Borrowers") and AMSOUTH BANK, an Alabama banking corporation (the
"Lender").
RECITALS
X. Xxxx and the Lender have heretofore entered into a Credit Agreement
dated as of April 1, 1994 (the "Original Credit Agreement") pursuant to which
the Lender agreed to make available to Xxxx a term loan and a line of credit.
X. Xxxx and the Lender wish to amend and restate the Original Credit
Agreement in its entirety, as hereinafter set forth, for the purposes, among
others, of adding Xxxxxxx as a borrower and modifying the terms of the term loan
and line of credit.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, and to
induce the Lender to extend credit to the Borrowers under this Agreement and the
other Credit Documents, the Borrowers agree with the Lender as follows:
ARTICLE 1
RULES OF CONSTRUCTION AND DEFINITIONS
SECTION 1.1 GENERAL RULES OF CONSTRUCTION. For the purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) Words of masculine, feminine or neuter gender include the
correlative words of other genders. Singular terms include the plural as well as
the singular, and vice versa.
(b) All references herein to designated "Articles," "Sections" and
other subdivisions or to lettered Exhibits are to the designated Articles,
Sections and subdivisions hereof and the Exhibits annexed hereto unless
expressly otherwise designated in context. All Article, Section, other
subdivision and Exhibit captions herein are used for reference only and do not
limit or describe the scope or intent of, or in any way affect, this Agreement.
(c) The terms "include," "including," and similar terms shall be
construed as if followed by the phrase "without being limited to."
(d) The terms "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, other subdivision or Exhibit.
(e) All Recitals set forth in, and all Exhibits to, this Agreement are
hereby incorporated in this Agreement by reference.
(f) No inference in favor of or against any party shall be drawn from
the fact that such party or such party's counsel has drafted any portion hereof.
(g) All references in this Agreement to a separate instrument are to
such separate instrument as the same may be amended or supplemented from time to
time pursuant to the applicable provisions thereof.
SECTION 1.2 DEFINITION. As used in this Agreement, the following terms
are defined as follows:
(a) ACTUAL/360 DAY BASIS means a method of computing interest and other
charges on the basis of an assumed year of 360 days for the actual number of
days elapsed, meaning that the interest accrued for each day will be computed by
multiplying the interest rate applicable on that day by the unpaid principal
balance on that day and dividing the result by 360.
(b) ADVANCE is defined in Section 2.3.
(c) AFFILIATE of any specified person means any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For purposes of this definition, "control"
when used with respect to any specified person means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
(d) APPLICATION is defined in Section 2.10(b).
(e) AUTHORIZED REPRESENTATIVE means the officer or officers of the
corporation that are duly authorized to act for the corporation in the specified
capacity under the Governing Documents of the corporation or applicable law.
(f) BORROWERS shall have the meaning attributed to that term in the
preamble to this Agreement.
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(g) BUSINESS DAY means any day, excluding Saturday and Sunday, on which
the Lender's main office in Birmingham, Alabama, is open to the public for
carrying on substantially all of its banking business.
(h) CLOSING DATE means June ____, 2001.
(i) CREDIT means, individually and collectively, all loans,
forbearances, renewals, extensions, advances, disbursements and other extensions
of credit now or hereafter made by the Lender to or for the account of the
Borrowers under this Agreement and the other Credit Documents, including the
Loans.
(j) CREDIT DOCUMENTS means this Agreement and the documents described
in Exhibit A and all other documents now or hereafter executed or delivered in
connection with the transactions contemplated thereby.
(k) DEBT of any person means (1) all indebtedness, whether or not
represented by bonds, debentures, notes or other securities, for the repayment
of borrowed money, (2) all deferred indebtedness for the payment of the purchase
price of property or assets purchased (including deferred taxes and accounts
payable arising in the ordinary course of business and not incurred through the
borrowing of money), (3) all capitalized lease obligations, (4) all indebtedness
secured by any Lien on any property of such person, whether or not indebtedness
secured thereby has been assumed, (5) all obligations with respect to any
conditional sale contract or title retention agreement, (6) all indebtedness and
obligations arising under acceptance facilities or in connection with surety or
similar bonds, and the outstanding amount of all letters of credit issued for
the account of such person, and (7) all obligations with respect to interest
rate swap agreements.
(l) DEFAULT RATE means a rate of interest equal to four percentage
points (400 basis points) in excess of the Prime Rate, or the maximum rate
permitted by law, whichever is less.
(m) ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
(n) EVENTS OF DEFAULT is defined in Section 6.1. An Event of Default
"exists" if an Event of Default has occurred and is continuing.
(o) GOVERNING DOCUMENTS means, with respect to any person that is not a
natural person, all organizational and governing documents applicable thereto.
(p) GOVERNMENTAL AUTHORITY means any national, state, county, municipal
or other government, domestic or foreign, and any agency, authority, department,
commission, bureau, board, court or other instrumentality thereof.
(q) GOVERNMENTAL REQUIREMENTS means all laws, rules, regulations,
ordinances, judgments, decrees, codes, orders, injunctions, notices and demand
letters of any Governmental Authority.
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(r) HAZARDOUS SUBSTANCES means all pollutants, effluents, contaminants,
emissions, toxic or hazardous wastes and other substances, the removal of which
is required or the manufacture, use, maintenance, handling, discharge or release
of which is regulated, restricted, prohibited or penalized by any Governmental
Requirement, or even if not so regulated, restricted, prohibited or penalized,
might pose a hazard to the health and safety of the public or the occupants of
the property on which it is located or the occupants of the property adjacent
thereto, including (1) asbestos or asbestos-containing materials, (2) urea
formaldehyde foam insulation, (3) polychlorinated biphenyls (PCBs), (4)
flammable explosives, (5) radon gas, (6) laboratory wastes, (7) experimental
products, including genetically engineered microbes and other recombinant DNA
products, (8) petroleum, crude oil, natural gas, natural gas liquid, liquefied
natural gas, other petroleum products and synthetic gas usable as fuel, (9)
radioactive materials and (10) any substance or mixture listed, defined or
otherwise determined by any Governmental Authority to be hazardous, toxic or
dangerous, or otherwise regulated, affected, controlled or giving rise to
liability under any Governmental Requirement.
(s) INTEREST DETERMINATION DATE means the first day of each month in
each year.
(t) LETTER OF CREDIT BORROWINGS means as of any date the maximum
aggregate amount that the Lender could be required to pay under drafts that
could properly be drawn in compliance with the terms of all Letters of Credit
outstanding on such date, other than drafts that have been drawn and paid.
(u) LETTER OF CREDIT OBLIGATIONS means (a) the Letter of Credit
Borrowings and (b) the Reimbursement Obligations and the Borrowers' other
obligations under this Agreement and the Applications with respect to drawings
made on Letters of Credit, including obligations with respect to all principal,
interest, fees and other charges related thereto.
(v) LETTERS OF CREDIT means the existing letters of credit described on
Exhibit C and all letters of credit hereafter issued by the Lender for the
account of the Borrowers.
(w) LIBOR-BASED RATE means the per annum rate of interest most recently
published in The Wall Street Journal or such other comparable financial
information reporting service used by the Lender as of the close of business on
the Closing Date and on each Interest Determination Date (being the rate quoted
for the immediately preceding Business Day) as the London Interbank Offered Rate
for U.S. dollar deposits having a term of three months plus the Margin. The
Lender shall determine the LIBOR-Based Rate on the Closing Date and on each
Interest Determination Date.
(x) LIEN means any mortgage, pledge, assignment, charge, encumbrance,
lien, security title, security interest or other preferential arrangement.
(y) LOANS means the Revolving Loan, the Term Loan, Letter of Credit
Borrowings and Reimbursement Obligations, and all extensions and renewals
thereof.
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(z) MARGIN means that percent per annum set forth below which shall be
the Margin set forth opposite the Total Funded Debt Ratio as determined based on
the most recent financial statements furnished to the Lender pursuant to Section
5.5 hereof:
Total
Funded Debt Ratio
(as set forth in Section 5.15(c)) Margin
--------------------------------- ------
(1) Less than 1.00 to 1.00 1.25%
(2) Greater than or equal to 1.00 to 1.00
but less than 1.50 to 1.00 1.50%
(3) Greater than or equal to 1.50 to 1.00
but less than 2.00 to 1.00 1.75%
(4) Greater than or equal to 2.00 to 1.00
but less than 2.25 to 1.00 2.00%
(5) Greater than or equal to 2.25 to 1.00
but less than 2.50 to 1.00 2.25%
(6) Greater than or equal to 2.50 to 1.00
but less than 2.75 to 1.00 2.50%
(7) Greater than or equal to 3.00 to 1.00 2.75%
The Total Funded Debt Ratio (as set forth in Section 5.15(c)) shall be
established by the Lender on the basis of the consolidated financial statements
of and schedules prepared by Xxxx delivered to the Lender pursuant to Section
5.5 of this Agreement and shall be calculated as set forth in Section 5.15
hereof. Notwithstanding the foregoing and during any period of time for which
the Margin may be set by the Lender pursuant to Section 6.1(f) hereof, the
Margin with respect to the Loans shall automatically become the highest values
provided for in the applicable pricing grid set forth above. From the Closing
Date until September 1, 2001, the Margin shall be 2.25%. Notwithstanding
anything to the contrary contained in this Agreement, if the Borrowers have
defaulted in the performance of the covenants set forth in Section 5.15 of this
Agreement as reported in the Compliance Certificate due on August 15, 2001, the
interest rate applicable to the Loans shall be the LIBOR-Based Rate plus 225
basis points (2.25%) for the period commencing September 1, 2001 until February
28, 2002. If the Borrowers have defaulted in the performance of the covenants
set forth in Section 5.15 of this Agreement as reported in the Compliance
Certificate due on February 15, 2002, the interest rate applicable to the Loans
shall be the Prime Rate minus 25 basis points (.25%) for the period commencing
March 1, 2002 until August 31, 2002. Any such change in the Margin shall be
effective without notice to the Borrowers and without any further action by the
Lender.
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(aa) MARGIN STOCK is defined in Regulation U of the Federal Reserve
Board, as amended.
(bb) MAXIMUM REVOLVING LOAN AMOUNT means $2,500,000.
(cc) NOTES is defined in Section 2.4.
(dd) OBLIGATIONS means (1) the Revolving Loan, the Term Loan, the
Letter of Credit Obligations and all other obligations and debts owing to the
Lender and arising under the terms of this Agreement, the Notes, the
Applications and the other Credit Documents, whether now or hereafter incurred,
existing or arising, including the Revolving Loan, the Term Loan, all Letter of
Credit Borrowings and Reimbursement Obligations with respect thereto; (2) any
sums expended by the Lender in exercising the rights and remedies described in
Section 6.2; (3) all accrued interest on the Revolving Loan, the Term Loan, and
Reimbursement Obligations, and all costs, fees, charges and expenses incurred
and payable in connection therewith, including fees payable under the terms of,
or in connection with, this Agreement; (4) all other obligations and debts owing
to the Lender arising in connection with, ancillary to, or in support of the
Revolving Loan, the Term Loan, and Letter of Credit Borrowings; (5) the payment
and performance of all other indebtedness, obligations and liabilities of the
Borrowers to the Lender (including obligations of performance) of every kind
whatsoever, arising directly between the Borrowers and the Lender or acquired
outright, as a participation or as collateral security from another person by
the Lender, direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter incurred, contracted or arising, joint or several,
liquidated or unliquidated, regardless of how they arise or by what agreement or
instrument they may be evidenced or whether they are evidenced by agreement or
instrument, and whether incurred as maker, endorser, surety, guarantor, general
partner, drawer, tort-feasor, account party with respect to a letter of credit,
indemnitor or otherwise; and (6) all renewals, extensions, modifications and
amendments of any of the foregoing, whether or not any renewal, extension,
modification or amendment agreement is executed in connection therewith.
(ee) OBLIGORS means the Borrowers, each other person, if any, executing
any Security Document as a grantor, and any other maker, endorser, surety,
guarantor or other person now or hereafter liable for the payment or
performance, in whole or in part, of any of the Obligations.
(ff) PERMITTED CONTEST means any appropriate proceeding conducted in
good faith by the Borrowers to contest any tax, assessment, charge, Lien or
similar claim, during the pendency of which proceeding the enforcement of such
tax, assessment, charge, Lien or claim is stayed; provided that the Borrowers
have set aside on their books or, if required by the Lender, deposited as cash
collateral with the Lender, adequate cash reserves to assure the payment of any
such tax, assessment, charge, Lien or claim.
(gg) PERMITTED ENCUMBRANCES means any Liens and other matters affecting
title to the Property that are described in Exhibit B.
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(hh) PERSON (whether or not capitalized) includes natural persons, sole
proprietorships, corporations, trusts, unincorporated organizations,
associations, companies, institutions, entities, joint ventures, partnerships,
limited liability companies and Governmental Authorities.
(ii) PRIME RATE means that rate of interest designated by the Lender
from time to time as its "prime rate," it being expressly understood and agreed
that the "prime rate" is merely an index rate used by the Lender to establish
lending rates and is not necessarily the Lender's most favorable lending rate,
and that changes in the "prime rate" are discretionary with the Lender.
(jj) PROPERTY means all property, real and personal, that is now or
hereafter conveyed or assigned to the Lender, or in which the Lender is now or
hereafter granted a Lien, as security for any of the Obligations.
(kk) REIMBURSEMENT OBLIGATION means at any time the obligation of the
Borrowers with respect to any Letter of Credit to reimburse the Lender for
amounts theretofore paid by the Lender pursuant to a drawing under such Letter
of Credit.
(ll) REVOLVING LOAN is defined in Section 2.3.
(mm) REVOLVING NOTE is defined in Section 2.4.
(nn) SECURITY DOCUMENTS means all Credit Documents that now or
hereafter grant or purport to grant to Lender any guaranty, collateral or other
security for any of the Obligations.
(oo) SOLVENT means, with respect to any person on a particular date,
that as of such date (1) the fair value of the property of such person is
greater than the total amount of liabilities (including contingent liabilities)
of such person, (2) the present fair salable value of the assets of such person
is not less than the amount that will be required to pay the probable liability
of such person on its debts as they become absolute and matured, (3) such person
is not engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such person's property would constitute an
unreasonably small capital, and (4) such person does not intend to, or believe
or reasonably should have believed that it will, incur debts beyond its ability
to repay as they become due.
(pp) SUBSIDIARY means (1) any corporation more than 50% of whose shares
of stock having general voting power under ordinary circumstances to elect a
majority of the board of directors, managers or trustees of such corporation
(irrespective of whether or not at the time stock of any other class or classes
has or might have voting power by reason of the happening of any contingency),
are owned or controlled directly or indirectly by the Borrowers, or (2) any
partnership or limited liability company, 50% or more of the partnership or
membership interests in which are owned or controlled, directly or indirectly,
by the Borrowers, and includes entities currently or hereafter falling within
the categories described above.
(qq) TERM LOAN is defined in Section 2.1.
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(rr) TERM NOTE is defined in Section 2.2.
(ss) TERMINATION DATE means the maturity date of the Revolving Loan
(which is initially July 6, 2001), as such date may be extended from time to
time pursuant to Section 2.7 or accelerated pursuant to Section 6.2.
SECTION 1.3 JOINT AND SEVERAL LIABILITY.
(a) Each Borrower, separately and severally, hereby appoints and
designates Xxxx as its agent and attorney-in-fact to act on behalf of it for all
purposes of the Credit Documents. Xxxx shall have authority to exercise on
behalf of each Borrower all rights and powers that Xxxx xxxxx necessary,
incidental or convenient in connection with the Credit Documents, including the
authority to execute and deliver certificates, documents, agreements and other
instruments referred to or provided for in the Credit Documents, request
Advances and Letters of Credit hereunder, receive all proceeds of Advances, give
all notices, approvals and consents required or requested from time to time by
the Lender and take any other actions and steps that each Borrower could take
for its own account in connection with the Credit Documents from time to time,
it being the intent of each Borrower to grant to Xxxx plenary power to act on
behalf of each Borrower in connection with and pursuant to the Credit Documents.
The appointment of Xxxx as agent and attorney-in-fact for each Borrower
hereunder shall be coupled with an interest and be irrevocable so long as any
Credit Document shall remain in effect. The Lender need not obtain any
Borrower's consent or approval for any act taken by Xxxx pursuant to any Credit
Document, and all such acts shall bind and obligate Xxxx and each Borrower,
jointly and severally. Each Borrower forever waives and releases any claim
(whether now or hereafter arising) against the Lender based on any claim of
Xxxx'x lack of authority to act on behalf of each Borrower in connection with
the Credit Documents.
(b) Each of the Borrowers, and by its acceptance of this Agreement, the
Lender hereby confirm that it is the intention of all such Persons that this
Agreement and the Obligations of each of the Borrowers hereunder not constitute
a fraudulent transfer or conveyance for purposes of the United States Federal
Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar Governmental Requirement covering the protection of
creditors' rights or the relief of debtors to the extent applicable to this
Agreement and the Obligations of each of the Borrowers hereunder. To effectuate
the foregoing intention, each of the Borrowers, the Lender hereby irrevocably
agrees that the Obligations and all of the other liabilities of each of the
Borrowers under this Agreement shall be limited to the maximum amount as will,
after giving effect to such maximum amount and all of the other contingent and
fixed liabilities of such Borrower that are relevant under such Governmental
Requirement, and after giving effect to any collections from, any rights to
receive contributions from, or any payment made by or on behalf of any of the
other Borrowers in respect of the Obligations of such other Borrower under this
Agreement, result in the Obligations and all of the other liabilities of each of
the Borrowers under this Agreement not constituting a fraudulent transfer or
conveyance.
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(c) Each Borrower (i) acknowledges that it has had full and complete
access to the underlying papers relating to the Obligations and all other papers
executed by any person in connection with the Obligations, has reviewed them and
is fully aware of the meaning and effect of their contents; (ii) is fully
informed of all circumstances that bear upon the risks of executing this
Agreement and the other Credit Documents that a diligent inquiry would reveal;
(iii) has adequate means to obtain from Xxxx on a continuing basis information
concerning Xxxx'x financial condition and is not depending on the Lender to
provide such information, now or in the future; and (iv) agrees that the Lender
shall have any obligation to advise or notify it or to provide it with any data
or information.
(d) Each Borrower hereby agrees that its obligations and liabilities
with respect to the Obligations are joint and several with Xxxx, continuing,
absolute and unconditional (subject to the provisions of subsection (b) of this
section). Without limiting the generality of the foregoing, the obligations and
liabilities of each Borrower with respect to the Obligations shall not be
released, discharged, impaired, modified or in any way affected by (i) the
invalidity or unenforceability of any Credit Document, (ii) the failure of the
Lender to give each Borrower a copy of any notice given to Xxxx, (iii) any
modification, amendment or supplement of any obligation, covenant or agreement
contained in any Credit Document, (iv) any compromise, settlement, release or
termination of any obligation, covenant or agreement in any Credit Document, (v)
any waiver of payment, performance or observance by or in favor of Xxxx of any
obligation, covenant or agreement under any Credit Document, (vi) any consent,
extension, indulgence or other action or inaction, or any exercise or
non-exercise of any right, remedy or privilege with respect to any Credit
Document, (vii) the extension of time for payment or performance of any of the
Obligations, or (viii) any other matter that might otherwise be raised in
avoidance of, or in defense against an action to enforce, the obligations of
each Borrower under this Agreement, the Notes or any other Credit Document.
(e) None of the Borrowers will exercise any rights that it may have or
acquire by way of subrogation under this Agreement or any of the other Credit
Documents or the Subrogation and Contribution Agreement referred to in
subsection (f) below, by any payment made hereunder or under any of the other
Credit Documents or otherwise, until all the Obligations have been paid in full
and this Agreement has been terminated and is no longer subject to
reinstatement. If any amount shall be paid to a Borrower on account of any such
subrogation rights at any time when all of the Obligations shall not have been
paid in full and this Agreement terminated, such amount shall be held in trust
for the benefit of the Lender and shall be paid forthwith to the Lender to be
credited and applied upon the Obligations, whether matured or unmatured, in
accordance with the terms of the Credit Documents.
(f) The Borrowers will not amend or waive any provision of the
Subrogation and Contribution Agreement dated the Closing Date entered into by
the Borrowers nor consent to any departure from such Subrogation and
Contribution Agreement, without having obtained the prior written consent of the
Lender to such amendment, waiver or consent.
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ARTICLE 2
CREDIT TO BE EXTENDED
UNDER THIS AGREEMENT
SECTION 2.1 TERM LOAN. The Lender has previously made available to the
Borrowers several term loans in the aggregate principal amount of $21,494,309.62
(collectively, the "Original Term Loans"). The Borrowers and the Lender now
agree to consolidate the Original Term Loan into one term loan in the principal
amount of $21,494,309.62 (the "Term Loan"), which has an outstanding principal
amount of $20,717,603.61 on the Closing Date.
SECTION 2.2 TERM NOTE. The Term Loan shall be evidenced by a promissory
note (the "Term Note"), payable to the order of the Lender, duly executed on
behalf of the Borrowers, dated the date of this Agreement, in the principal
amount of the Term Loan, and satisfactory in form and substance to the Lender.
The Term Note shall be payable as to principal in 35 consecutive monthly
installments, the first 34 of which shall be in the amount of $592,000 each and
shall be payable on the first day of each month in each year, beginning July 1,
2001 and continuing to and including April 1, 2004. The final installment shall
be in the unpaid principal amount owing thereunder and shall be due and payable
on May 1, 2004.
SECTION 2.3 REVOLVING LOAN. From the Closing Date to the Termination
Date, the Lender agrees, upon the terms and subject to the conditions of this
Agreement, to make a revolving loan (the "Revolving Loan") available to the
Borrowers, pursuant to which the Borrowers may from time to time borrow from the
Lender and repay and reborrow, such sums as may be needed by the Borrowers for
the purposes expressed in this Agreement, up to a maximum aggregate principal
amount at any one time outstanding not exceeding the Maximum Revolving Loan
Amount. Each advance to the Borrowers under the Revolving Loan (an "Advance")
will be made in accordance with the provisions of the automated Control
Account-Credit Line Service Agreement executed by the Borrowers in favor of the
Lender (the "Disbursement Agreement"). Not later than 2:00 p.m. Birmingham,
Alabama time on the date specified for the Advances, the Lender shall make
available the amount of the Advances to be made by it on such date to the
Borrowers by depositing the proceeds thereof into an account with the Lender in
the name of the Borrowers. The Advances shall bear interest as provided in
Section 2.5. The Lender's obligation to make Advances shall terminate, if not
sooner terminated pursuant to the provisions of this Agreement, on the
Termination Date. The Lender shall have no obligation to make Advances if an
Event of Default exists. The Lender may, at its option, without any request by
the Borrowers, make Advances to itself for the purpose of paying overdrafts that
the Borrowers may have from time to time with respect to any operating accounts
established by the Borrowers with the Lender.
SECTION 2.4 REVOLVING NOTE. All Advances shall be evidenced by a
certain master note (the "Revolving Note"), payable to the order of the Lender,
duly executed on behalf of the Borrowers, dated the date of this Agreement, in
the principal amount of $2,500,000 and satisfactory in form and substance to the
Lender. The Revolving Note shall be payable in full as to principal on the
Termination Date. The Revolving Note shall be valid
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and enforceable as to the aggregate amount of the Revolving Loan outstanding
from time to time, whether or not the full amount of the Revolving Loan is
actually advanced by the Lender to the Borrowers. The Term Note and the
Revolving Note are hereinafter sometimes together called the "Notes."
SECTION 2.5 INTEREST.
(a) The Notes shall bear interest from its date until payment in full
on the unpaid principal balance at the rate per annum equal to the LIBOR-Based
Rate. Such interest shall be payable monthly on the first day of each month in
each year, commencing on July 1, 2001, and upon payment in full. Interest will
be computed on an Actual/360 Day Basis.
(b) If an Event of Default exists, the Notes shall bear interest at the
Default Rate, until the earlier of (1) such time as all amounts due hereunder
are paid in full or (2) no such Event of Default exists.
(c) The Borrowers agree to pay to the Lender, on demand, a late charge
equal to five percent (5.0%) of any payment that is not paid within twelve (12)
days after it is due. The late charge shall never be less than $10.00 on each
payment. This provision shall not be deemed to excuse a late payment or be
deemed a waiver of any other right the Lender may have, including the right to
declare the entire unpaid principal and interest immediately due and payable and
the right to collect interest on any late payment at the Default Rate.
SECTION 2.6 PREPAYMENTS. The Borrowers may at any time prepay all or
any part of the Loans, without premium or penalty. Accrued interest to the date
of prepayment shall be paid on any partial prepayment of the Notes on the next
succeeding monthly interest payment date, and shall be paid on any full
prepayment of the Notes in connection with the termination of this Agreement on
the date of such prepayment.
SECTION 2.7 EXTENSION OF TERMINATION DATE. The Borrowers and the Lender
may from time to time extend the then-current Termination Date to any subsequent
termination date upon which the Borrowers and the Lender may agree by executing
a written extension agreement. Upon the execution of such an extension agreement
by the Borrowers and the Lender, the maturity date of the Revolving Loan shall
be extended to the agreed-upon termination date, and the agreed-upon termination
date shall become the new "Termination Date" for purposes of this Agreement.
SECTION 2.8 PLACE AND TIME OF PAYMENTS.
(a) All payments by the Borrowers to the Lender under this Agreement
and the other Credit Documents shall be made in lawful currency of the United
States and in immediately available funds to the Lender at its Main Office in
Birmingham, Alabama at the hand delivery address set forth in Section 7.1 or at
such other address within the continental United States as shall be specified by
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the Lender by notice to the Borrowers. Any payment received by the Lender after
2:00 p.m. (Birmingham, Alabama time) on a Business Day (or at any time on a day
that is not a Business Day) shall be deemed made by the Borrowers and received
by the Lender on the following Business Day.
(b) All amounts payable by the Borrowers to the Lender under this
Agreement or any of the other Credit Documents for which a payment date is
expressly set forth herein or therein shall be payable on the specified due date
without notice or demand by the Lender. All amounts payable by the Borrowers to
the Lender under this Agreement or the other Credit Documents for which no
payment date is expressly set forth herein or therein shall be payable ten days
after written demand by the Lender to the Borrowers. The Lender may, at its
option, send written notice or demand to the Borrowers of amounts payable on a
specified due date pursuant to this Agreement or the other Credit Documents, but
the failure to send such notice shall not affect or excuse the Borrowers'
obligation to make payment of the amounts due on the specified due date.
(c) Payments that are due on a day that is not a Business Day shall be
payable on the next succeeding Business Day, and any interest payable thereon
shall be payable for such extended time at the specified rate.
(d) Except as otherwise required by law, payments received by the
Lender shall be applied first to expenses, fees and charges, then to interest
and finally to principal.
SECTION 2.9 SECURITY. The security for the Obligations shall include
the guaranties, collateral and other security granted to the Lender under the
Security Documents described in Exhibit A. The Security Documents shall be valid
and binding as security for, the aggregate amount of the Obligations outstanding
from time to time, whether or not the full amount of the Credit is actually
advanced by the Lender to the Borrowers.
SECTION 2.10 LETTER OF CREDIT BORROWINGS.
(a) From and after the Closing Date to (but not including) the
Termination Date, the Lender may, at its sole discretion, upon the terms and
subject to the conditions of this Agreement, issue Letters of Credit from time
to time for the account of the Borrowers in such amounts as may be requested by
the Borrowers and as shall be approved by the Lender, up to a maximum aggregate
amount of Letter of Credit Borrowings at any one time outstanding that, when
added to the then outstanding Reimbursement Obligations does not exceed
$4,000,000, or the maximum amount approved by the Lender from time to time.
(b) Each request by the Borrowers for the issuance of a Letter of
Credit (an "Application") shall, if required by the Lender, be submitted to the
Lender, at least three Business Days prior to the date the Letter of Credit is
to be issued, shall be on the Lender's then standard application form for
letters of credit, shall obligate the Borrowers to reimburse the Lender on
demand for any amounts drawn under a Letter of Credit and such other sums as may
be provided for therein, and shall be executed by a duly authorized officer of
the Borrowers. In the event of any
12
conflict between the provisions of any Application and the provisions of this
Agreement, the provisions of this Agreement shall govern.
(c) Each Letter of Credit shall (i) be a letter of credit issued in the
ordinary course of the business of the Borrowers; (ii) expire by its terms on a
date acceptable to the Lender, in its sole discretion; (iii) be in an amount
that complies with paragraph (a) of this Section 2.10; and (iv) contain such
further provisions and conditions as may be requested by the Borrowers, provided
that such further provisions and conditions are standard and reasonable for
ordinary irrevocable letters of credit and are reasonably satisfactory to the
Lender.
(d) For each Letter of Credit the Lender issues and all renewals
thereof, the Lender shall receive from the Borrowers, a letter of credit fee
equal to the rate of one percent (1%) per annum of the stated amount of the
Letter of Credit being issued or renewed. Such fee shall be payable in advance
on the date of issuance or renewal, as the case may be, and shall not be
refundable under any circumstances.
(e) The Borrowers acknowledge that the Lender as issuer of the Letters
of Credit will be required by applicable rules and regulations of the Federal
Reserve Board to maintain reserves for its liability to honor draws made
pursuant to a Letter of Credit. The Borrowers agree to reimburse the Lender
promptly for all additional costs that it may hereafter incur solely by reason
of its acting as issuer of the Letters of Credit and its being required to
reserve for such liability, it being understood by the Borrowers that other
interest and fees payable under this Agreement do not include compensation of
the Lender for such reserves. The Lender shall furnish to the Borrowers, at the
time of its demand for payment of such additional costs, the computation of such
additional cost, which shall be conclusive absent manifest error, provided that
such computations are made on a reasonable basis.
(f) The Borrowers shall pay to the Lender administrative and other
fees, if any, in connection with the Letters of Credit in such amounts and at
such times as the Lender and the Borrowers shall agree from time to time.
(g) If a draft drawn under a Letter of Credit is presented to the
Lender and the Lender honors such draft, the Borrowers shall, immediately upon
demand of the Lender therefor, reimburse the Lender for the amount of such
draft, with interest thereon from the date such draft is honored by the Lender
to and including the date of reimbursement by the Borrowers to the Lender
therefor, at the LIBOR-Based Rate. If the Borrowers fail so to reimburse the
Lender, immediately upon demand therefor, for any amount due to the Lender on
account of a draft drawn under the Letter of Credit and honored by the Lender,
together with accrued interest thereon, by the close of business on the next
Business Day after such amount becomes due, the Lender may, at its sole
discretion, without exceeding the Maximum Revolving Loan Amount, and without
further notice to or demand upon the Borrowers, make an Advance to itself for
the purpose of paying such amount due to the Lender and interest thereon. Any
such Advance shall be treated as any other Advance hereunder for all purposes.
Interest on any such Advance will be at the LIBOR-Based Rate.
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(h) This Agreement shall not terminate so long as any Letter of Credit
is in effect; provided, however, no Letters of Credit shall be issued under this
Agreement after the Termination Date.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Each of the Borrowers represents and warrants to the Lender as follows:
SECTION 3.1 ORGANIZATION, POWERS, ETC.
(a) It is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization.
(b) It has the corporate power and authority to own its properties and
to carry on its business as now being conducted and is duly qualified or
registered to do business in every jurisdiction where the character of its
properties or the nature of its activities makes such qualification or
registration necessary.
(c) It has the corporate power to execute, deliver and perform any
Credit Documents to which it is a party.
(d) It has not done business under any other name, trade name or
otherwise, within the five years immediately preceding the Closing Date.
SECTION 3.2 AUTHORIZATION OF BORROWING, ETC. The execution, delivery
and performance of any Credit Documents to which it is a party (a) have been
duly authorized by all requisite corporate action (including any necessary
shareholder action), and (b) will not violate any Governmental Requirement, its
Governing Documents or any indenture, agreement or other instrument to which it
is a party, or by which it or any of its properties are bound, or be in conflict
with, result in a breach of or constitute a default under, any such indenture,
agreement or other instrument, or result in the creation or imposition of any
Lien, upon any of its properties except as contemplated by the Credit Documents.
SECTION 3.3 LITIGATION. There are no actions, suits or proceedings
(whether or not purportedly on its behalf) pending or, to the best of its
knowledge, threatened against or affecting it, by or before any Governmental
Authority, that involve any of the transactions contemplated by the Credit
Documents or the possibility of any judgment or liability that might reasonably
be expected to result in any material adverse change in its business,
operations,
14
properties or condition, financial or otherwise; and it is not, to the best of
its knowledge, in default with respect to any Governmental Requirement.
SECTION 3.4 AGREEMENTS. It is not a party to any agreement or
instrument, or subject to any restriction in its Governing Documents that
materially and adversely affects its business, operations, properties or
condition, financial or otherwise, and it is not in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which it is a party, which default
might reasonably be expected to have a material adverse effect upon its
business, operations, properties or condition, financial or otherwise.
SECTION 3.5 FEDERAL RESERVE BOARD REGULATIONS. It does not intend to
use any part of the proceeds of the Credit, and has not incurred any
indebtedness to be reduced, retired or purchased by it out of such proceeds, for
the purpose of purchasing or carrying any Margin Stock, and it does not own and
has no intention of acquiring any such Margin Stock.
SECTION 3.6 INVESTMENT COMPANY ACT. It is not an "investment company,"
or a company "controlled" by an "investment company," as such terms are defined
in the Investment Company Act of 1940, as amended.
SECTION 3.7 ERISA.
(a) The execution and delivery of this Agreement and the issuance and
delivery of the Notes as contemplated hereby will not involve any prohibited
transaction within the meaning of ERISA or Section 4975 of the Internal Revenue
Code, as amended.
(b) Based on ERISA and the regulations and published interpretations
thereunder, it is in compliance in all material respects with the applicable
provisions of ERISA.
(c) No "Reportable Event," as defined in Section 4043(b) of Title IV of
ERISA, has occurred with respect to any plan maintained by it.
SECTION 3.8 ENFORCEABILITY. Any Credit Documents to which it is a party
constitute its legal, valid and binding obligations, enforceable in accordance
with their terms.
SECTION 3.9 CONSENTS, REGISTRATIONS, APPROVALS, ETC. No registration
with or consent or approval of, or other action by, any Governmental Authority
is required for the execution, delivery and performance of any Credit Documents
to which it is a party.
SECTION 3.10 FINANCIAL CONDITION.
15
(a) Its financial statements that have been furnished to the Lender
were prepared in conformity with generally accepted accounting principles
consistently applied throughout the periods involved, are in accordance with its
books and records, are correct and complete and present fairly its financial
condition as of the date or dates indicated and for the periods involved in
accordance with generally accepted accounting principles applied on a consistent
basis.
(b) Since the date of the financial statements no material adverse
change in its financial condition, business or operations has occurred.
(c) It has no liability, direct or contingent, that is material in
amount and that is not reflected in the financial statements.
(d) It has good and marketable title to all its properties and assets
reflected on the financial statements except for properties and assets disposed
of since the date thereof as no longer used or useful in the conduct of its
business or disposed of in the ordinary course of its business.
(e) All such properties and assets are free and clear of all Liens,
except as otherwise permitted or required by the provisions of this Agreement
and the other Credit Documents.
SECTION 3.11 NO MISLEADING INFORMATION. To the best knowledge of the
Borrowers, neither this Agreement nor any of the other Credit Documents, nor any
certificate, written statement or other document furnished to the Lender by or
on behalf of the Borrowers in connection with the transactions contemplated
hereby contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading; and there is no fact known to the Borrowers that the
Borrowers have not disclosed to the Lender that materially adversely affects or,
so far as the Borrowers can now reasonably foresee, will materially adversely
affect the properties, or financial or other condition of the Borrowers or the
ability of the Borrowers to perform their obligations hereunder and under the
other Credit Documents.
SECTION 3.12 TAXES.
(a) It has filed or caused to be filed all tax returns that, to the
knowledge of its officers, are required to be filed with any Governmental
Authority, and it has paid or has caused to be paid all taxes as shown as due on
said returns or on any assessment received by it.
(b) It has reserves that are believed by its officers to be adequate
for the payment of additional taxes for years that have not been audited by the
respective tax authorities.
SECTION 3.13 PATENTS, TRADEMARKS. It owns, or possesses the right to
use, all the patents, trademarks, service marks, trade names, copyrights,
franchises, consents, authorizations and licenses and rights with respect to the
foregoing, necessary for the conduct of its business as now conducted and
proposed to be conducted, without any known conflict with the rights of others.
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SECTION 3.14 HAZARDOUS SUBSTANCES.
(a) It has never caused or permitted any Hazardous Substance to be
placed, held, located, released or disposed of in violation of any Governmental
Requirement on, under or at any real property legally or beneficially owned,
leased or operated by it, and such property has never been used by it or, to the
best of its knowledge, by any other person as a dump site or permanent or
temporary storage site for any Hazardous Substance, in violation of any
Governmental Requirement.
(b) To the best of its knowledge, it has no liabilities with respect to
Hazardous Substances, and no facts or circumstances exist that could give rise
to liabilities with respect to Hazardous Substances.
SECTION 3.15 SOLVENCY. The Borrowers are and will remain Solvent,
taking into account the transactions contemplated by the Credit Documents.
ARTICLE 4
CONDITIONS OF LENDING
The obligation of the Lender to lend hereunder is subject to the
following conditions precedent:
SECTION 4.1 REPRESENTATIONS AND WARRANTIES. On and as of the Closing
Date and any later date on which Credit is to be extended hereunder, the
representations and warranties set forth in Article 3 must be true and correct
with the same effect as though they had been made on and as of such date, except
to the extent that they expressly relate to an earlier date.
SECTION 4.2 NO DEFAULT. On and as of the Closing Date and any later
date on which Credit is to be extended hereunder, the Borrowers must be in
compliance with all the terms and provisions set forth in this Agreement on
their part to be observed or performed, and no Event of Default, nor any event
that upon notice or lapse of time or both would constitute an Event of Default,
may exist.
SECTION 4.3 AUTOMATIC REPRESENTATIONS AND WARRANTIES. The making of any
request for an Advance (or permitting any Advance to be made under the
Disbursement Agreement without a prior written disclosure to the Lender to the
contrary) shall constitute an automatic representation and warranty by the
Borrowers that the representations and warranties contained in Article 3 are
true and correct on and as of the date of such Advance and that no Event of
Default, nor any event that upon notice or lapse of time or both would
constitute an Event of Default, exists.
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SECTION 4.4 REQUIRED ITEMS. On and as of the Closing Date and any later
date on which Credit is to be extended hereunder, the Lender must have received
all financial statements, reports and other items required as of that date under
Article 2 and Article 5 of this Agreement.
SECTION 4.5 AUTHORIZED REPRESENTATIVE CERTIFICATES. On and as of the
Closing Date the Borrowers must have delivered to the Lender the following
certificates executed by the appropriate Authorized Representatives of the
Borrowers, each of which certificates must be of a current date and must be
satisfactory in form and substance to the Lender: (a) a certificate confirming
compliance by the Borrowers with the conditions precedent set forth in Sections
4.1 and 4.2; (b) a certificate certifying as in full force and effect
resolutions of the directors, shareholders, partners, members or other
appropriate persons under the Governing Documents and applicable law authorizing
the transactions contemplated by the Credit Documents and authorizing certain
Authorized Representatives of the Borrowers to execute the Credit Documents on
behalf of the Borrowers and to act on behalf of the Borrowers with respect to
the Credit Documents, including the authority to request disbursements of the
proceeds of the Credit and to direct the disposition of such proceeds; and (c) a
certificate certifying as true and correct, as amended, attached copies of the
Governing Documents of the Borrowers and the incumbency and signature of each
Authorized Representative of the Borrowers specified in said resolutions. The
Lender may conclusively rely on the certified resolutions described in Section
4.5(b) as to all actions on behalf of the Borrowers by the Authorized
Representatives specified therein until the Lender receives further duly adopted
resolutions cancelling or amending the prior resolutions.
SECTION 4.6 OTHER SUPPORTING DOCUMENTS. The Lender must receive on or
before the Closing Date the following, each of which must be satisfactory to the
Lender in form and content, (a) such legal opinions, certificates, proceedings,
instruments and other documents as the Lender or its counsel may reasonably
request to evidence (1) compliance by the Borrowers and all other parties to the
Credit Documents with legal requirements, (2) the truth and accuracy as of the
Closing Date of the respective representations thereof contained in the Credit
Documents, and (3) the due performance or satisfaction by such parties at or
prior to the Closing Date of all agreements then required to be performed and
all conditions then required to be satisfied by them pursuant to the Credit
Documents, and (b) such additional supporting documents as the Lender or its
counsel may reasonably request.
ARTICLE 5
COVENANTS
Each of the Borrowers covenants and agrees that such Borrower shall:
18
SECTION 5.1 EXISTENCE. Do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights and
franchises and comply with all applicable Governmental Requirements.
SECTION 5.2 CONTINUATION OF CURRENT BUSINESS, OFFICES, NAME, ETC. Not
(a) engage in any business other than the business now being conducted by it and
other businesses directly related thereto; (b) remove its principal place of
business or business records from Xxxxxxx County, Alabama, unless the removal is
pursuant to a merger, consolidation or transfer of assets approved by the
Lender; (c) change its name or conduct its business in any name other than its
current name; (d) enter into (1) any agreement whereby the management,
supervision or control of its business is delegated to or placed in any person
other than its governing body and officers or (2) any contract or agreement
whereby any of its principal functions are delegated to or placed in any agent
or independent contractor.
SECTION 5.3 SALE OF ASSETS, CONSOLIDATION, MERGER. Not (a) sell, lease,
transfer or otherwise dispose of all or a substantial part of its properties or
assets to any person; or (b) consolidate with, merge into or participate in a
statutory share exchange with any other person, or permit another person to
merge into it, acquire all or substantially all the properties or assets of any
other person, or acquire all or substantially all the properties or assets
relating to a line of business or a division of any other person.
SECTION 5.4 ACCOUNTING RECORDS. Keep proper books of record and account
in which full, true and correct entries are made in accordance with generally
accepted accounting principles applied on a consistent basis.
SECTION 5.5 REPORTS TO THE LENDER. Furnish to the Lender:
(a) within 90 days after the end of each fiscal year, financial
statements (including a balance sheet and the related statements of income, cash
flows and retained earnings) of the Borrowers for such fiscal year, together
with statements in comparative form for the preceding fiscal year, all in
reasonable detail (including all computations necessary to show the Borrowers'
compliance with Section 5.15), prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved, and
audited and certified by independent certified public accountants of recognized
standing selected by the Borrowers and satisfactory to the Lender (the form of
such certification also to be satisfactory to the Lender);
(b) within 45 days after the end of each fiscal quarter, financial
statements of the Borrowers similar to those referred to in Section 5.5(a) for
such quarter and for the period beginning on the first day of the fiscal year
and ending on the last day of such quarter, unaudited but certified by an
Authorized Representative of the Borrowers;
19
(c) within 45 days after the fiscal quarters ending June 30 and
December 31 of each year, a compliance certificate duly executed by the
president or chief financial officer of Xxxx in the form of Exhibit D attached
hereto ("Compliance Certificate");
(d) with the financial statements submitted under Section 5.5(a) and
5.5(b), a certificate signed by the party certifying said statement to the
effect that no Event of Default, nor any event that, upon notice or lapse of
time or both, would constitute an Event of Default, exists or, if any such Event
of Default or event exists, specifying the nature and extent thereof;
(e) contemporaneously with the distributions thereof to the Borrowers'
stockholders or the filing thereof with the Securities and Exchange Commission,
as the case may be, copies of all statements, reports, notices and filings
distributed by the Borrowers to their stockholders or filed with the Securities
and Exchange Commission (including reports on SEC Forms 10-K, 10-Q and 8-K);
(f) promptly upon receipt thereof, copies of all other reports,
management letters and other documents submitted to it by independent
accountants in connection with any annual or interim audit of its books made by
such accountants; and
(g) as soon as practical, from time to time, such other information
regarding its operations, business affairs and financial condition as the Lender
may reasonably request.
SECTION 5.6 MAINTENANCE. Maintain, preserve and protect all franchises
and trade names and preserve all the remainder of its property used or useful in
the conduct of its business and keep the same in good repair, working order and
condition, and from time to time make, or cause to be made, all needful and
proper repairs, renewals, replacements, betterments and improvements thereto, so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times.
SECTION 5.7 INSURANCE. Maintain (a) adequate insurance on its
properties to such extent and against such risks, including fire, as is
customary with companies in the same or a similar business, (b) necessary
worker's compensation insurance and (c) such other insurance as may be required
by law or the Security Documents or as may reasonably be required in writing by
the Lender.
SECTION 5.8 PAYMENT OF INDEBTEDNESS, TAXES, ETC. (a) Pay its
indebtedness and obligations in accordance with normal terms; (b) pay all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income and profits or upon any of its properties before they become in default,
except any such tax, assessment or governmental charge that is subject to a
Permitted Contest; and (c) pay all lawful claims for labor, materials and
supplies or otherwise, which, if unpaid, might become a Lien upon any of its
properties, except any such claim that is subject to a Permitted Contest.
20
SECTION 5.9 LITIGATION NOTICE. Promptly notify the Lender of any
action, suit or proceeding at law or in equity or by or before any Governmental
Authority that, if adversely determined, might reasonably be expected to impair
its ability to perform its obligations under any of the Credit Documents to
which it is a party, might reasonably be expected to impair its right to carry
on its business substantially as now conducted, or might reasonably be expected
to materially and adversely affect its business, operations, properties or
condition, financial or otherwise.
SECTION 5.10 VISITATION. Permit representatives of the Lender from time
to time to visit and inspect any of its offices and properties and to examine
its assets and books of account and to discuss its affairs, finances and
accounts with and be advised as to the same by its officers, all at such
reasonable times and intervals as the Lender may desire.
SECTION 5.11 NOTICE OF DEFAULT. Promptly notify the Lender of the
existence of any Event of Default, or any event that upon notice or lapse of
time or both would constitute an Event of Default.
SECTION 5.12 FURTHER ASSURANCES. At its cost and expense, upon request
of the Lender, duly execute and deliver, or cause to be duly executed and
delivered, to the Lender such further instruments and do and cause to be done
such further acts as may be reasonably necessary or proper in the opinion of the
Lender or its counsel to carry out more effectively the provisions and purposes
of the Credit Documents.
SECTION 5.13 TRANSACTIONS WITH RELATED PERSONS. Except as set forth on
Schedule 5.13, not enter into any transaction with any Obligor or any officer,
director, partner, member or Affiliate unless the terms of that transaction are
no less favorable to it than those that would be obtained on an arms-length
basis.
SECTION 5.14 USE OF CREDIT PROCEEDS. Not, directly or indirectly use
any part of the proceeds of the Credit (a) for any purpose other than working
capital and purchasing equipment or (b) without limiting the generality of the
foregoing, for the purpose of purchasing or carrying any Margin Stock, or of
reducing, retiring or purchasing any indebtedness incurred for such purpose; or
take any other action that would involve a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, or any regulation issued
thereunder, including Regulation U or Regulation X of the Federal Reserve Board,
in connection with the transactions contemplated hereby; provided, however, that
nothing set forth in this Section 5.14 or elsewhere in this Agreement shall be
construed as imposing any duty on the Lender to supervise the use or application
of the Credit proceeds or any liability on the Lender to any person if the
Credit proceeds are not used for the purposes set forth in this Agreement.
SECTION 5.15 FINANCIAL COVENANTS.
(a) LEVERAGE RATIO. Not permit its ratio of Debt to Tangible Net Worth
to be at any time greater than 3.0 to 1.0.
21
(b) DEBT SERVICE COVERAGE RATIO. Not permit its ratio of EBITDA plus
the Net Gain from the sale of rolling stock to Interest Expense and Principal
Maturities measured as of the end of each June 30 and December 31 of each year
for the previous four fiscal quarters to be less than 1.25 to 1.0.
(c) TOTAL FUNDED DEBT RATIO. Not permit its ratio of Total Funded Debt
to EBITDA plus the Net Gain from the sale of rolling stock measured as of the
end of each June 30 and December 31 of each year for the previous four
consecutive fiscal quarters to be greater than 3.0 to 1.0 at the end of each
June 30 and December 31 in each fiscal year.
(d) CAPITAL EXPENDITURES. Not make Capital Expenditures (exclusive of
trucks and trailers) during any fiscal year in an amount greater than $500,000.
(e) DIVIDENDS. Not declare or pay any dividends or make any
distributions upon any of its stock (including dividends and distributions
payable only in shares of its stock) or directly or indirectly apply any of its
assets to the redemption, retirement, purchase or other acquisition of its
stock.
(f) INDEBTEDNESS. Not incur, create, assume or permit to exist any
indebtedness or liability on account of deposits or advances or any indebtedness
or liability for borrowed money, or any other indebtedness or liability
evidenced by notes, bonds, debentures or similar obligations, except the
indebtedness evidenced by the Notes, other indebtedness to the Lender and to
Compass Bank and purchase money obligations allowed under Section 5.15(g)(7) to
purchase revenue generating assets including trucks and trailers.
(g) LIENS. Not incur, create, assume or permit to exist any Lien on any
of its properties, now or hereafter owned, other than:
(1) Liens securing the payment of obligations permitted under
Section 5.8(b);
(2) other Permitted Encumbrances;
(3) deposits under workmen's compensation, unemployment insurance
and Social Security laws, or to secure the performance of bids,
tenders, contracts (other than for the repayment of borrowed money) or
leases or to secure statutory obligations or surety or appeal bonds, or
to secure indemnity, performance or other similar bonds in the ordinary
course of business;
(4) Liens imposed by law, such as carriers', warehousemen's or
mechanics' liens, incurred in good faith in the ordinary course of
business and that are not delinquent or that are subject to Permitted
Contests, and any Lien arising out of a judgment or award not
22
exceeding $100,000 with respect to which an appeal is being prosecuted,
a stay of execution pending such appeal having been secured;
(5) Liens in favor of the Lender;
(6) Liens for taxes, assessments or other governmental charges or
levies that are not delinquent or that are subject to Permitted
Contests; and
(7) purchase money Liens on equipment (arising substantially
contemporaneously with the purchase of such equipment) acquired in the
ordinary course of business to secure the purchase price of such
equipment or to secure indebtedness incurred solely for the purpose of
financing the acquisition of such equipment, or any Lien existing on
the equipment at the time of its acquisition, provided that (A) the
indebtedness secured by such Lien does not exceed the purchase price or
fair market value, whichever is less, of the equipment so acquired at
the time of its acquisition, (B) the equipment is used or useful in the
ordinary course of business of the acquiring person, and (C) the Lien
does not cover any property other than the equipment so acquired.
(h) GUARANTIES. Not guarantee, endorse, become surety for or otherwise
in any way become or be responsible for the indebtedness, liabilities or
obligations of any other person, whether by agreement to purchase the
indebtedness or obligations of any other person, or agreement for the furnishing
of funds to any other person (directly or indirectly, through the purchase of
goods, supplies or services or by way of stock purchase, capital contribution,
working capital maintenance agreement, advance or loan) or for the purpose of
paying or discharging the indebtedness or obligations of any other person, or
otherwise, except for the endorsement of negotiable instruments in the ordinary
course of business for collection.
(i) TAKE OR PAY CONTRACTS. Not enter into or be a party to any contract
for the purchase of merchandise, materials, supplies or other property if such
contract provides that payment for such merchandise, materials, supplies or
other property shall be made regardless of whether delivery of such merchandise,
materials, supplies or other property is ever made or tendered.
(j) SALE-LEASEBACK. Not enter into any arrangement, directly or
indirectly, with any person whereby it sells or transfers any property, real,
personal or mixed, and used or useful in its business, whether now owned or
hereafter acquired, and thereafter rents or leases such property or other
property that it intends to use for substantially the same purpose or purposes
as the property sold or transferred.
(k) INVESTMENTS, ETC. Not purchase or hold beneficially any stock,
other securities or evidences of indebtedness of, make or permit to exist any
loans or advances to, or make any investment or acquire any interest whatsoever
in, any other person; provided, however, that it may invest in (1) direct
obligations of, or obligations unconditionally guaranteed by, the United States
of America or any agency thereof maturing in less than one year from the date of
23
purchase; (2) commercial paper issued by any person organized and doing business
under the laws of the United States of America or any state thereof rated in the
highest category by Xxxxx'x Investors Services, Inc. or by Standard & Poor's
Corporation and maturing in less than one year from the date of purchase; and
(3) certificates of deposit maturing within one year of the date of acquisition
thereof issued by any commercial bank, organized and doing business under the
laws of the United States of America or any state thereof whose deposits are
insured by the Federal Deposit Insurance Corporation, if the face amount of said
certificate of deposit, when added to all other deposits of the Borrowers at
such commercial bank, does not exceed the then-applicable limitation on the
amount of federally insured deposits.
(l) SALE OF RECEIVABLES. Not sell, assign or discount, or grant or
permit any Lien on any of its accounts receivable or any promissory note held by
it, with or without recourse, other than the discount of such notes in the
ordinary course of business for collection.
(m) LEASE OBLIGATIONS. Except as set forth on Schedule 5.13, not incur,
create, permit to exist or assume any commitment to make any direct or indirect
payment, whether as rent or otherwise, under any lease, rental or other
arrangement for the use of property of any other person, if immediately
thereafter the aggregate of such payments to be made by it would exceed $200,000
in any consecutive twelve-month period.
(n) SOLVENCY. Continue to be Solvent.
(o) CERTAIN DEFINED TERMS. For purposes of this Section 5.15 the
following terms are defined as follows:
(1) CAPITAL EXPENDITURES means any expenditure for fixed assets or
that is properly chargeable to capital account in accordance with
generally accepted accounting principles.
(2) EBITDA for any period means net income (or the net deficit, if
expenses and charges exceed revenues and other proper income credits)
for such period, plus amounts that have been deducted for (A)
depreciation, (B) amortization, (C) Interest Expense and (D) income and
profit taxes in determining net income for such period.
(3) INTEREST EXPENSE means interest payable on Debt during the
period in question.
(4) NET GAIN means the difference between (A) the gross proceeds
generated from the sale of rolling stock minus all reasonable and
customary fees and expenses associated with such sale (including any
brokerage commissions) and (B) the book value of such asset sold.
24
(5) PRINCIPAL MATURITIES means principal maturing or coming due on
Debt during the period in question.
(6) TANGIBLE NET WORTH means the sum of the amounts set forth on
the balance sheet as shareholders' equity (including the par or stated
value of all outstanding capital stock, retained earnings, additional
paid-in capital, capital surplus and earned surplus), less the sum of
(A) any amount of any write-up of assets, (B) goodwill, (C) patents,
trademarks, copyrights, leasehold improvements not recoverable at the
expiration of a lease, and deferred charges (including unamortized
debt, discount and expense, organization expenses, experimental and
developmental expenses, but excluding prepaid expenses), (D) any
amounts at which shares of capital stock of such person appear on the
asset side of the balance sheet and (E) any amounts due from or owed by
any shareholder or Affiliate.
(7) TOTAL FUNDED DEBT means all obligations for borrowed money,
including the Term Loan, advances under the Revolving Loan, all
capitalized lease obligations, whether short-term or long-term, and
including all Letter of Credit Obligations.
SECTION 5.16 CHANGE IN MANAGEMENT. Promptly notify the Lender of any
change with respect to the members of the Board of Directors of the Borrowers or
any change in the senior executive officers of the Borrowers.
ARTICLE 6
EVENTS OF DEFAULT
SECTION 6.1 EVENTS OF DEFAULT. The occurrence of any of the following
events shall constitute an event of default (an "Event of Default") under this
Agreement (whatever the reason for such event and whether or not it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
Governmental Requirement):
(a) any representation or warranty made in this Agreement or in any of
the other Credit Documents shall prove to be false or misleading in any material
respect as of the time made; or
(b) any report, certificate, financial statement or other instrument
furnished in connection with the Credit, this Agreement or any of the other
Credit Documents, shall prove to be false or misleading in any material respect
as of the time furnished; or
(c) default shall be made in the payment when due of any of the
Obligations; or
(d) default shall be made in the due observance or performance of any
covenant, condition or agreement on the part of the Borrowers to be observed or
performed pursuant to the terms of Sections 5.2, 5.3, 5.15 and 5.16 hereof; or
25
(e) default shall be made in the due observance or performance of any
covenant, condition or agreement on the part of the Borrowers to be observed or
performed pursuant to the terms of this Agreement (other than any covenant,
condition or agreement, default in the observance or performance of which is
elsewhere in this Section 6.1 specifically dealt with) and such default shall
continue unremedied until the first to occur of (1) the date that is 30 days
after written notice by the Lender to the Borrowers or (2) the date that is 30
days after the Borrowers first obtains knowledge thereof; or
(f) failure of Borrowers to timely perform any covenant in the Credit
Documents requiring the furnishing of notices, financial reports or other
information to the Lender within five (5) Business Days of when due; and
provided, however, that during any period of time that a report is delinquent,
the Lender may at its option increase the Margin to their highest levels
permitted under this Agreement.
(g) any default or event of default, as therein defined, shall occur
under any of the other Credit Documents (after giving effect to any applicable
notice, grace or cure period specified therein); or
(h) (1) default shall be made with respect to any Debt (other than the
Obligations) of any Obligor, if the effect of such default is to accelerate the
maturity of such Debt or to permit the holder thereof to cause such Debt to
become due prior to its stated maturity, or (2) any such Debt shall not be paid
when due (after giving effect to any applicable notice, grace or cure periods);
or
(i) any Obligor shall (1) apply for or consent to the appointment of a
receiver, trustee, liquidator or other custodian of such Obligor or any of such
Obligor's properties or assets, (2) fail or admit in writing such Obligor's
inability to pay such Obligor's debts generally as they become due, (3) make a
general assignment for the benefit of creditors, (4) suffer or permit an order
for relief to be entered against such Obligor in any proceeding under the
federal Bankruptcy Code, or (5) file a voluntary petition in bankruptcy, or a
petition or an answer seeking an arrangement with creditors or to take advantage
of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution
or liquidation law or statute, or an answer admitting the material allegations
of a petition filed against such Obligor in any proceeding under any such law or
statute, or if corporate action shall be taken by any Obligor for the purpose of
effecting any of the foregoing; or
(j) a petition shall be filed, without the application, approval or
consent of any Obligor in any court of competent jurisdiction, seeking
bankruptcy, reorganization, rearrangement, dissolution or liquidation of such
Obligor or of all or a substantial part of the properties or assets of such
Obligor, or seeking any other relief under any law or statute of the type
referred to in Section 6.1(i)(5) against such Obligor, or the appointment of a
receiver, trustee, liquidator or other custodian of such Obligor or of all or a
substantial part of the properties or assets of such Obligor, and such petition
shall not have been stayed or dismissed within 30 days after the filing thereof;
or
(k) any Obligor shall die, if an individual, be dissolved or
liquidated, if an entity, or cease to be Solvent or suspend business; or
26
(l) any writ of execution, attachment or garnishment shall be issued
against the assets of any Obligor and such writ of execution, attachment or
garnishment shall not be dismissed, discharged or quashed within 30 days of
issuance; or
(m) any final judgment for the payment of money shall be rendered
against any Obligor and the same shall remain undischarged for a period of 30
days during which execution shall not be effectively stayed.
SECTION 6.2 LENDER'S REMEDIES ON DEFAULT.
(a) If an Event of Default exists, or any event exists that upon notice
or lapse of time or both would constitute an Event of Default, the Lender shall
have no obligation to extend any further Credit hereunder. If an Event of
Default exists under Section 6.1(i) or 6.1(j), all of the Obligations shall
automatically become immediately due and payable. If any other Event of Default
exists, the Lender may, by written notice to the Borrowers, declare any or all
of the Obligations to be immediately due and payable, whereupon they shall
become immediately due and payable. Any such acceleration (whether automatic or
upon notice) shall be effective without presentment, demand, protest or other
action of any kind, all of which are hereby expressly waived, anything contained
herein or in any of the other Credit Documents to the contrary notwithstanding.
If an Event of Default exists, the Lender may exercise any of its rights and
remedies on default under the Credit Documents or applicable law.
(b) If an Event of Default exists, the Lender may treat all then
outstanding Letters of Credit as if drafts in the full amount available to be
drawn thereunder had been properly drawn thereunder and paid by the Lender and
the Borrowers had failed or refused to reimburse the Lender for the amount so
paid within the time required for the Borrowers to do so.
(c) If an Event of Default exists, the Borrowers shall, promptly upon
demand of the Lender, deposit in cash with the Lender an amount equal to the
amount of all Letter of Credit Obligations then outstanding, as collateral
security for the repayment thereof, which deposit shall be held by the Lender
under the provisions of Section 7.17.
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ARTICLE 7
MISCELLANEOUS
SECTION 7.1 NOTICE.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other document provided or permitted by this Agreement or the other
Credit Documents to be made upon, given or furnished to, or filed with, the
Borrowers or the Lender must (except as otherwise provided in this Agreement or
the other Credit Documents) be in writing and be delivered by one of the
following means: (6) by personal delivery at the hand delivery address specified
below, (7) by first-class, registered or certified mail, postage prepaid and
addressed as specified below, or (8) if facsimile transmission facilities for
such party are identified below or pursuant to a separate notice from such
party, sent by facsimile transmission to the number specified below or in such
notice.
(b) The hand delivery address, mailing address and (if applicable)
facsimile transmission number for receipt of notice or other documents by such
parties are as follows:
Borrowers
By hand and mail:
0000 Xxxxxxx 00
Xxxxxxx, Xxxxxxx 00000
By facsimile: (000) 000-0000
Lender
By hand:
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Xx.
By mail:
Xxxx Xxxxxx Xxxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Xx.
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By facsimile: (000) 000-0000
With a copy to:
J. Xxxx Xxxxx
Xxxxxxx, Xxxxxx & Xxxx, P.C.
0000 0xx Xxxxxx Xxxxx
0000 XxXxxxx/Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
By facsimile: (000) 000-0000
Any of such parties may change the address or facsimile transmission notice for
receiving any such notice or other document by giving notice of the change to
the other parties named in this Section 7.1.
(c) Any such notice or other document shall be deemed delivered when
actually received by the party to whom directed (or, if such party is not a
natural person, to an officer, director, partner, member or other legal
representative of the party) at the address or number specified pursuant to this
Section 7.1, or, if sent by mail, three Business Days after such notice or
document is deposited in the United States mail, addressed as provided above.
(d) Five Business Days' written notice to the Borrowers as provided
above shall constitute reasonable notification to the Borrowers when
notification is required by law; provided, however, that nothing contained in
the foregoing shall be construed as requiring five Business Days' notice if,
under applicable law and the circumstances then existing, a shorter period of
time would constitute reasonable notice.
SECTION 7.2 EXPENSES. The Borrowers shall promptly on demand pay all
costs and expenses, including the fees and disbursements of counsel to the
Lender, incurred by the Lender in connection with (a) the extension of the
Credit and the administration or collection of the Obligations, (b) the
negotiation, preparation and review of the Credit Documents (whether or not the
transactions contemplated by this Agreement shall be consummated), (c) the
enforcement of any of the Credit Documents, (d) the custody and preservation of
the Property, (e) the protection or perfection of the Lender's rights and
interests under the Security Documents in the Property, (f) the filing or
recording of the Security Documents or any related financing, continuation or
termination statements, or similar documents (including any stamp, documentary,
mortgage, recording and similar taxes and fees), (g) the exercise by or on
behalf of the Lender of any of its rights, powers or remedies under the Credit
Documents, (h) the compliance by the Lender with any Governmental Requirements
with respect to any of the Credit Documents, any of the
29
Property or any of the Obligations, and (i) the prosecution or defense of any
action or proceeding by or against the Lender, the Borrowers, any Obligor, or
any one or more of them, concerning any matter related to this Agreement or any
of the other Credit Documents, any of the Property or any of the Obligations.
All such amounts shall bear interest from the date demand is made at the Default
Rate and shall be included in the Obligations secured by the Security Documents.
The Borrowers' obligations under this Section 7.2 shall survive the payment in
full of the Obligations and the termination of this Agreement.
SECTION 7.3 INDEPENDENT OBLIGATION. The Borrowers agree that each of
the obligations of the Borrowers to the Lender under this Agreement may be
enforced against the Borrowers without the necessity of joining any other
Obligor or any other person, as a party.
SECTION 7.4 HEIRS, SUCCESSORS AND ASSIGNS. Whenever in this Agreement
any party hereto is referred to, such reference shall be deemed to include the
heirs, successors and assigns of such party, except that the Borrowers may not
assign or transfer this Agreement without the prior written consent of the
Lender; and all covenants and agreements of the Borrowers contained in this
Agreement shall bind the Borrowers' heirs, successors and assigns and shall
inure to the benefit of the successors and assigns of the Lender.
SECTION 7.5 GOVERNING LAW. This Agreement and the other Credit
Documents shall be construed in accordance with and governed by Title 9 of the
U.S. Code and the internal laws of the State of Alabama (without regard to
conflict of law principles) except as required by mandatory provisions of law.
SECTION 7.6 DATE OF AGREEMENT. The date of this Agreement is intended
as a date for the convenient identification of this Agreement and is not
intended to indicate that this Agreement was executed and delivered on that
date.
SECTION 7.7 SEPARABILITY CLAUSE. If any provision of the Credit
Documents shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 7.8 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed an original, but all
such counterparts shall together constitute but one and the same agreement.
SECTION 7.9 NO ORAL AGREEMENTS. This Agreement is the final expression
of the agreement between the parties hereto, and this Agreement may not be
contradicted by evidence of any prior oral agreement between such parties. All
previous oral agreements between the parties hereto have been incorporated into
this Agreement and the other Credit Documents, and there is no unwritten oral
agreement between the parties hereto in existence.
SECTION 7.10 WAIVER AND ELECTION. The exercise by the Lender of any
option given under this Agreement shall not constitute a waiver of the right to
exercise any other option. No failure or delay on the part of the Lender in
exercising any right, power or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or
30
partial exercise of any such right, power or remedy preclude any further
exercise thereof or the exercise of any other right, power or remedy. No
modification, termination or waiver of any provisions of the Credit Documents,
nor consent to any departure by the Borrowers therefrom, shall be effective
unless in writing and signed by an authorized representative of the Lender, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given. No notice to or demand on the
Borrowers in any case shall entitle the Borrowers to any other or further notice
or demand in similar or other circumstances.
SECTION 7.11 NO OBLIGATIONS OF LENDER; INDEMNIFICATION. The Lender does
not by virtue of this Agreement or any of the transactions contemplated by the
Credit Documents assume any duties, liabilities or obligations with respect to
any property now or hereafter granted to it as collateral for any of the
Obligations unless expressly assumed by the Lender under a separate agreement in
writing, and the Credit Documents shall not be deemed to confer on the Lender
any duties or obligations that would make the Lender directly or derivatively
liable for any person's negligent, reckless or wilful conduct. The Borrowers
agree to indemnify and hold the Lender harmless against and with respect to any
damage, claim, action, loss, cost, expense, liability, penalty or interest
(including attorney's fees) and all costs and expenses of all actions, suits,
proceedings, demands, assessments, claims and judgments directly or indirectly
resulting from, occurring in connection with, or arising out of: (a) any
inaccurate representation made by the Borrowers or any Obligor in this Agreement
or any other Credit Document; and (b) any breach of any of the warranties or
obligations of the Borrowers or any Obligor under this Agreement or any other
Credit Document. The provisions of this Section 7.11 shall survive the payment
of the Obligations in full and the termination of this Agreement and the other
Credit Documents, and the satisfaction, release (in whole or in part) and
foreclosure of the Security Documents.
SECTION 7.12 SET-OFF. While any Event of Default exists, the Lender is
authorized at any time and from time to time, without notice to the Borrowers
(any such notice being expressly waived by the Borrowers), to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by the Lender to or
for the credit or the account of the Borrowers against any and all of the
Obligations, irrespective of whether or not the Lender shall have made any
demand under this Agreement and although such Obligations may be unmatured. The
rights of the Lender under this Section 7.12 are in addition to all other rights
and remedies (including other rights of set-off or pursuant to any banker's
lien) that the Lender may have.
SECTION 7.13 PARTICIPATION. The Borrowers understand that the Lender
may from time to time enter into a participation agreement or agreements with
one or more participants pursuant to which each such participant shall be given
a participation in the Credit and that any such participant may from time to
time similarly grant to one or more subparticipants subparticipations in the
Credit. The Borrowers agree that any participant or subparticipant may exercise
any and all rights of banker's lien or set-off with respect to the Borrowers, as
fully as if such participant or subparticipant had made a loan directly to the
Borrowers in the amount of the participation or subparticipation given to such
participant or subparticipant in
31
the Credit. For the purposes of this Section 7.13 only, the Borrowers shall be
deemed to be directly obligated to each participant or subparticipant in the
amount of their participating interest in the amount of the Credit and any other
Obligations. Nothing contained in this Section 7.13 shall affect the Lender's
right of set-off (under Section 7.12 or applicable law) with respect to the
entire amount of the Obligations, notwithstanding any such participation or
subparticipation. The Lender may divulge to any participant or subparticipant
all information, reports, financial statements, certificates and documents
obtained by it from the Borrowers or any other person under any provision of
this Agreement or otherwise.
SECTION 7.14 SUBMISSION TO JURISDICTION. The Borrowers irrevocably (a)
acknowledge that this Agreement will be accepted by the Lender and performed by
the Borrowers in the State of Alabama; (b) submit to the jurisdiction of each
state or federal court sitting in Xxxxxxxxxx County, Alabama (collectively, the
"Courts") over any suit, action or proceeding arising out of or relating to this
Agreement (to enforce the arbitration provisions hereof or, if the arbitration
provisions are found to be unenforceable, to determine any issues arising out of
or relating to this Agreement) or any of the other Credit Documents
(individually, an "Agreement Action"); (c) waive, to the fullest extent
permitted by law, any objection or defense that the Borrowers may now or
hereafter have based on improper venue, lack of personal jurisdiction,
inconvenience of forum or any similar matter in any Agreement Action brought in
any of the Courts; (d) agree that final judgment in any Agreement Action brought
in any of the Courts shall be conclusive and binding upon the Borrowers and may
be enforced in any other court to the jurisdiction of which the Borrowers is
subject, by a suit upon such judgment; (e) consent to the service of process on
the Borrowers in any Agreement Action by the mailing of a copy thereof by
registered or certified mail, postage prepaid, to the Borrowers at the
Borrowers' address designated in or pursuant to Section 7.1; (f) agrees that
service in accordance with Section 7.14(e) shall in every respect be effective
and binding on the Borrowers to the same extent as though served on the
Borrowers in person by a person duly authorized to serve such process; and (g)
AGREES THAT THE PROVISIONS OF THIS SECTION, EVEN IF FOUND NOT TO BE STRICTLY
ENFORCEABLE BY ANY COURT, SHALL CONSTITUTE "FAIR WARNING" TO THE BORROWERS THAT
THE EXECUTION OF THIS AGREEMENT MAY SUBJECT THE BORROWERS TO THE JURISDICTION OF
EACH STATE OR FEDERAL COURT SITTING IN JEFFERSON COUNTY, ALABAMA WITH RESPECT TO
ANY AGREEMENT ACTIONS, AND THAT IT IS FORESEEABLE BY THE BORROWERS THAT THE
BORROWERS MAY BE SUBJECTED TO THE JURISDICTION OF SUCH COURTS AND MAY BE SUED IN
THE STATE OF ALABAMA IN ANY AGREEMENT ACTIONS. Nothing in this Section 7.14
shall limit or restrict the Lender's right to serve process or bring Agreement
Actions in manners and in courts otherwise than as herein provided.
SECTION 7.15 USURY LAWS. Any provision of this Agreement or any of the
other Credit Documents to the contrary notwithstanding, the Borrowers and the
Lender agree that they do not intend for the interest or other consideration
provided for in this Agreement and the other Credit Documents to be greater than
the maximum amount permitted by applicable law. Regardless of any provision in
this Agreement or any of the other Credit Documents, the Lender shall not be
entitled to receive, collect or apply, as interest on the Obligations, any
amount in excess of the maximum rate of
32
interest permitted to be charged under applicable law until such time, if any,
as that interest, together with all other interest then payable, falls within
the then applicable maximum lawful rate of interest. If the Lender shall
receive, collect or apply any amount in excess of the then maximum rate of
interest, the amount that would be excessive interest shall be applied first to
the reduction of the principal amount of the Obligations then outstanding in the
inverse order of maturity, and second, if such principal amount is paid in full,
any excess shall forthwith be returned to the Borrowers. In determining whether
the interest paid or payable under any specific contingency exceeds the highest
lawful rate, the Borrowers and the Lender shall, to the maximum extent permitted
under applicable law, (a) characterize any nonprincipal payment as an expense,
fee or premium rather than as interest, (b) exclude voluntary prepayments and
the effects thereof, (c) consider all the Obligations as one general obligation
of the Borrowers, and (d) "spread" the total amount of the interest throughout
the entire term of the Notes so that the interest rate is uniform throughout the
entire term of the Notes.
SECTION 7.16 ARBITRATION; DISPUTE RESOLUTION; PRESERVATION OF
FORECLOSURE REMEDIES.
(a) The Borrowers represent to the Lender that their business and
affairs constitute substantial interstate commerce and that they contemplate
using the proceeds of the Note in substantial interstate commerce. Except as
otherwise specifically set forth below, any action, dispute, claim, counterclaim
or controversy ("Dispute" or "Disputes"), between or among the Lender, the
Borrowers or any other Obligor, including any claim based on or arising from an
alleged tort, shall be resolved by arbitration as set forth below. As used
herein, Disputes shall include all actions, disputes, claims, counterclaims or
controversies arising in connection with the Note, any extension of or
commitment to extend Credit by the Lender, any collection of any indebtedness
owed to the Lender, any security or collateral given to the Lender, any action
taken (or any omission to take any action) in connection with any of the
foregoing, any past, present and future agreement between or among the Lender,
the Borrowers or any other Obligor (including the Note and any Credit Document),
and any past, present or future transactions between or among the Lender, the
Borrowers or any other Obligor. Without limiting the generality of the
foregoing, Disputes shall include actions commonly referred to as lender
liability actions.
(b) All Disputes shall be resolved by binding arbitration in accordance
with Title 9 of the U.S. Code and the Commercial Arbitration Rules of the
American Arbitration Association (the "AAA"). Defenses based on statutes of
limitation, estoppel, waiver, laches and similar doctrines, that would otherwise
be applicable to an action brought by a party, shall be applicable in any such
arbitration proceeding, and the commencement of an arbitration proceeding with
respect to this Agreement shall be deemed the commencement of an action for such
purposes.
(c) Notwithstanding the foregoing, the Borrowers and each other Obligor
agrees that the Lender shall have the option, but not the obligation, to submit
to and pursue in a court of law any claim against the Borrowers or any other
Obligor for a debt due. The Borrowers and each other Obligor agrees that, if the
Lender pursues such a claim in a court of law, (9) failure of the Lender to
assert any additional claim in such proceeding shall not be deemed a waiver of,
or estoppel to pursue, such claim as a claim or counterclaim in arbitration as
set forth above, and (10) the institution or
33
maintenance of a judicial action hereunder shall not constitute a waiver of the
right of any party to submit any other action, dispute, claim or controversy as
described above, even though arising out of the same transaction or occurrence,
to binding arbitration as set forth herein. If the Borrowers assert a claim
against the Lender in arbitration or otherwise during the pendency of a claim
brought by the Lender in a court of law, the court action shall be stayed and
the parties shall submit to arbitration all claims.
(d) No provision of, nor the exercise of any rights under this Section,
shall limit the right of any party (11) to foreclose against any real or
personal property collateral by exercise of a power of sale under any Credit
Document, or by exercise of any rights of foreclosure or of sale under
applicable law, (12) to exercise self-help remedies such as set-off, or (13) to
obtain provisional or ancillary remedies such as injunctive relief, attachment
or the appointment of a receiver from a court having jurisdiction before, during
or after the pendency of any arbitration or referral. The institution and
maintenance of an action for judicial relief or pursuit of provisional or
ancillary remedies or exercise of self-help remedies shall not constitute a
waiver of the right of any party, including the plaintiff in such an action, to
submit the Dispute to arbitration or, in the case of actions on a debt, to
judicial resolution.
(e) Whenever an arbitration is required hereunder, the arbitrator shall
be selected in accordance with the Commercial Arbitration Rules of the AAA. The
AAA shall designate a panel of 10 potential arbitrators knowledgeable in the
subject matter of the Dispute. Each of the Lender and the Obligor shall
designate, within 30 days of the receipt of the list of potential arbitrators,
one of the potential arbitrators to serve, and the two arbitrators so designated
shall select a third arbitrator from the eight remaining potential arbitrators.
The panel of three arbitrators shall determine the resolution of the Dispute.
SECTION 7.17 TERMINATION. This Agreement shall continue until the
Obligations shall have been paid in full and the Lender shall have no obligation
to make any further Advances, issue any Letters of Credit or extend any other
credit hereunder. If on any date on which the Borrowers wish to pay the
Obligations in full and terminate this Agreement, there are any outstanding
Letter of Credit Borrowings, the Borrowers shall, unless otherwise agreed by the
Lender in its sole discretion, make a cash prepayment to the Lender on such date
in an amount equal to the then-outstanding Letter of Credit Borrowings, and the
Lender shall hold such prepayment in an interest-bearing cash collateral account
in the name and under the sole control of the Lender (which account shall bear
interest at the Lender's then-current rate for such accounts) as security for
the Reimbursement Obligations and other Letter of Credit Obligations. Such
account shall not constitute an asset of the Borrowers but shall be subject to
the Borrowers' rights under this Section 7.17. The Lender shall from time to
time debit such account for the payment of the Letter of Credit Obligations as
the same become due and payable and shall promptly refund any excess funds
(including interest) held in said account to the Borrowers if and when no Letter
of Credit Borrowings remain outstanding hereunder and all of the Obligations
have been paid in full. The Borrowers shall remain liable for any Obligations in
excess of the amounts paid from such account. This Agreement, and the
obligations of the Borrowers hereunder, shall continue to be effective, or be
automatically reinstated, as the case may be, if at any time payment in whole or
in
34
part of any payment made with respect to the Obligations is rescinded or must
otherwise be restored or returned to the person making such payment upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of such
person, or upon or as a result of the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to such person or with
respect to any part of the property thereof, or otherwise, all as though such
payment had not been made.
SECTION 7.18 AGREEMENT AMENDS AND RESTATES ORIGINAL CREDIT AGREEMENT.
The Original Credit Agreement is amended and restated in its entirety by this
Agreement. All amounts owing on the Closing Date, including principal and
interest, fees and other charges, shall be treated for all purposes as if the
same had been incurred under this Agreement and shall be payable in accordance
with and otherwise governed by the terms of this Agreement. The promissory notes
held by the Lender to evidence the indebtedness owing by the Borrowers to the
Lender under the Original Credit Agreement shall be retained by the Lender in
its files until this Agreement is terminated.
SECTION 7.19 OBLIGATIONS OF XXXX ABSOLUTE. Xxxx hereby agrees that its
obligations and liabilities with respect to the Obligations are joint and
several with the Borrowers, continuing, absolute and unconditional. Without
limiting the generality of the foregoing, the obligations and liabilities of
Xxxx with respect to the Obligations shall not be released, discharged,
impaired, modified or in any way affected by (a) the invalidity or
unenforceability of any Credit Document executed by any other person with
respect to the Obligations, (b) the failure of the Lender to give Xxxx a copy of
any notice given to any other person, (c) any modification, amendment or
supplement of any obligation, covenant or agreement contained in any Credit
Document executed by any other person with respect to the Obligations, (d) any
compromise, settlement, release or termination of any obligation, covenant or
agreement in any Credit Document executed with respect to the Obligations, (e)
any waiver of payment, performance or observance by or in favor of any other
person of any obligation, covenant or agreement under any Credit Document, (f)
any consent, extension, indulgence or other action or inaction, or any exercise
or non-exercise of any right, remedy or privilege with respect to any Credit
Document executed by any other person with respect to the Obligations, or (g)
the extension of time for payment or performance of any Obligation by any other
person.
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35
IN WITNESS WHEREOF, the Borrowers and the Lender have caused this
Agreement to be dated May 1, 2001 and to be duly executed and delivered.
XXXX XXXXXXXX TRANSPORTATION, INC.
By /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Its: CFO
------------------------------------
XXXXXXX TRANSPORT, INC.
By /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Its: CFO
------------------------------------
AMSOUTH BANK
By /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Its: Senior Vice President
------------------------------------
