Exhibit (b)(2)
TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT (this "Agreement") dated September 13, 2004, made
by and between Xxxx Bros. Transportation Inc., a Delaware corporation
("Borrower") and Xxxxxxx Xxxx ("Lender").
W I T N E S S E T H:
WHEREAS, Borrower has requested Lender to lend it the sum of $4,600,000.00
on a term loan basis, and Lender is willing to do so upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises herein contained, Lender
and Borrower, intending to be legally bound, agree as follows:
ARTICLE I. - THE TERM LOAN
SECTION 1.1 GENERAL TERMS. Lender hereby agrees to lend to Borrower, and
Borrower hereby agrees to borrow from Lender, upon the terms and conditions set
forth in this Agreement, the principal sum of FOUR MILLION SIX HUNDRED THOUSAND
AND NO/100 United States Dollars (U.S. $4,600,000.00) (the "Term Loan").
Borrower's obligation to repay the Term Loan and the interest thereon shall be
evidenced by a promissory note (the "Note") in form and substance satisfactory
to Lender. The form of the original Note is attached hereto as Exhibit A.
SECTION 1.2 INTEREST RATE. Borrower agrees to pay interest on the Term
Loan at the rate(s), on the date(s), and calculated by the method, set forth in
the Note.
SECTION 1.3 PAYMENTS OF PRINCIPAL AND INTEREST. Unless payment is required
to be made earlier pursuant to Section 5.2 of this Agreement, Borrower shall
make to Lender such payments of principal and interest on the Term Loan as are
required by the terms of the Note.
SECTION 1.4 PREPAYMENT. If the interest rate on the Term Loan is a
variable rate, Borrower may prepay the Term Loan in full at any time without
premium or penalty. If the interest rate on the Term Loan is a fixed rate,
Borrower may not prepay the Term Loan in whole or in part, unless otherwise
expressly provided in the Note (and upon payment of any prepayment premium
provided for in the Note), and except as otherwise required by applicable law.
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ARTICLE II. - REPRESENTATIONS AND WARRANTIES;
CONDITIONS PRECEDENT
To induce Lender to enter into this Agreement, Borrower represents and
warrants to Lender, as of the date hereof and except as otherwise expressly
provided, as of all times until the Agreement is terminated and all obligations
under the Term Loan are satisfied, that:
SECTION 2.1 INCORPORATION, GOOD STANDING AND DUE QUALIFICATION. Borrower
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, has the corporate power and authority to own its
assets and to transact the business in which it is now engaged or proposes to be
engaged, and is qualified to do business and in good standing in all
jurisdictions in which it conducts its business.
SECTION 2.2 CORPORATE POWER AND AUTHORITY. The execution and delivery by
Borrower of, and the performance by Borrower of its obligations under, this
Agreement and the Note have been duly authorized by all requisite action on the
part of Borrower and do not and will not (i) violate any provision of Borrower's
certificate of incorporation, by-laws, or other organizational documents, any
law, rule, regulation or any judgment, order or ruling of any court or
governmental agency, or (ii) be in conflict with, result in a breach of, or
constitute, following notice or lapse of time or both, a default under, any
indenture, agreement or other instrument to which Borrower is a party or by
which Borrower or any of its property may be bound or affected.
SECTION 2.3 LEGALLY ENFORCEABLE AGREEMENT. Each of this Agreement and the
Note is the legal, valid and binding obligation of Borrower enforceable against
Borrower in accordance with its terms.
SECTION 2.4 LITIGATION. There are no pending or threatened actions or
proceedings before any court or administrative or governmental agency that may,
individually or collectively, adversely affect in any material respect the
financial condition, business operations or properties of Borrower.
SECTION 2.5 FINANCIAL STATEMENTS. The financial statements for the year
ended December 31, 2003 and for each of the quarters ended March 31, 2004 and
June 30, 2004, previously delivered by Borrower to Lender, fairly and accurately
present the financial condition of Borrower as of such dates and have been
prepared in accordance with generally accepted accounting principles
consistently applied. Since June 30, 2004, there has been no materially adverse
change in the financial condition of Borrower, and, after due inquiry, there
exists no material contingent liability or obligation assertable against
Borrower.
SECTION 2.6 OTHER AGREEMENTS. Borrower is not a party to any indenture,
loan, or credit agreement, or to any lease or other agreement or instrument, or
subject to any charter or corporate restriction which could have a materially
adverse effect on the business, properties, assets, operations, or conditions,
financial or otherwise, of Borrower, or the ability of Borrower to carry out its
obligations under the Agreement and the Note. Borrower is not in default in any
material respect in the performance, observance or fulfillment of any of the
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obligations, covenants or conditions contained in any agreement or instrument
material to its business.
SECTION 2.7 TAXES. All federal, state and other tax returns of Borrower
required by law to be filed have been completed in full and have been duly
filed, and all taxes, assessments and withholdings shown on such returns or
billed to Borrower have been paid, and Borrower maintains adequate reserves and
accruals in respect of all such federal, state and other taxes, assessments and
withholdings. There are no unpaid assessments pending against Borrower for any
taxes or withholdings, and Borrower knows of no basis therefor.
SECTION 2.8 PRIORITY OF OBLIGATIONS. Except as set forth in Article VIII
below, the obligations of Borrower under this Agreement and the Note are not
subordinated in right of payment to any other obligation of Borrower.
SECTION 2.9 OPERATION OF BUSINESS; CONSENTS. Borrower possesses all
permits, memberships, franchises, contracts, licenses, trademark rights, trade
names, patents, and other authorizations necessary to enable it to conduct its
business operations as now conducted, and no filing with, and no consent,
permission, authorization, order or license of, any individual, entity, or
governmental authority is necessary in connection with the execution, delivery,
performance or enforcement of this Agreement or the Note.
SECTION 2.10 NO DEFAULTS. No event has occurred and is continuing which
is, or which with the giving of notice or lapse of time or both would be, an
Event of Default (as defined in Article V) of this Agreement.
SECTION 2.11 OWNERSHIP AND LIENS. Borrower has good and marketable title
to all of its properties and assets including, without limitation, properties
and assets reflected in the above-described financial statements (other than
such properties and assets as have been disposed of in the ordinary course of
business since the date of the most recent financial statement).
SECTION 2.12 ERISA. Borrower is in compliance in all material respects
with all applicable provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"). The minimum funding standards of Section 302 of
ERISA have been met at all times with respect to all "plans" of Borrower to
which such standards apply; Borrower has not made a "partial withdrawal" or a
"complete withdrawal" from any "multi-employer plan"; and no "reportable event"
or "prohibited transaction" has occurred with respect to any such "plan" (as all
of the quoted terms are defined in ERISA).
SECTION 2.13 ENVIRONMENT. Except as otherwise expressly disclosed by
Borrower to Lender in writing on the date of this Agreement, no "hazardous
substance" (as that term is defined in Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
["CERCLA"]) has been released, discharged, disposed of, or stored in violation
of law on any of Borrower's owned or leased real or personal property by
Borrower, by any third party, or by any predecessor in interest or title to
Borrower; Borrower and all of Borrower's properties are in compliance with all
applicable local, state and federal
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environmental laws and regulations; no notice has been served on Borrower by any
governmental authority or any individual or entity claiming violation of any
environmental protection law or regulation, or demanding compliance with any
environmental protection law or regulation, or demanding payment, indemnity, or
contribution for any environmental damage or injury to natural resources; no
"hazardous substance" (as defined in CERCLA) is produced or used in violation of
law in Borrower's business; and no improvement on any real property owned or
leased by Borrower contains any asbestos, including, without limitation,
asbestos insulation on ceilings, piping or structural members or supports.
SECTION 2.14 CONDITIONS PRECEDENT. Lender shall not be obligated to make
the Term Loan until Borrower shall have furnished Lender, at Borrower's expense
and as Lender may request from time to time, such evidence as Lender shall
require regarding the truth of the foregoing representations and warranties,
including, without limitation, opinions of Borrower's outside legal counsel,
opinions and certificates of Borrower's independent certified public
accountants, surveys, appraisals, environmental audits by qualified
environmental engineers approved by Lender, reports of other independent
consultants approved by Lender, and certificates of Borrower's officers. All
such evidence must be in form and content satisfactory to Lender.
ARTICLE III. - AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as it may borrow under this
Agreement or so long as any indebtedness remains outstanding under the Term Loan
or under the Note, Borrower shall:
SECTION 3.1 MAINTENANCE OF EXISTENCE. Preserve and maintain its existence
in good standing in the state of its organization or incorporation and its
qualification and good standing in all jurisdictions where such qualification is
required under applicable law, and conduct its business in the manner in which
it is now conducted subject only to changes made in the ordinary course of
business.
SECTION 3.2 FINANCIAL STATEMENTS; REPORTS. Deliver to Lender (i) within 30
days after each fiscal quarter an unaudited financial statement including a
balance sheet and statements of income and cash flows, certified by Borrower's
chief executive or chief financial officer to be correct and complete, (ii)
within 90 days after the end of each fiscal year a financial statement including
a balance sheet of Borrower as of the end of such year and statements of income,
cash flows and changes in equity for such year, setting forth in each case in
comparative form the corresponding figures for the previous year, together with
accompanying schedules and footnotes, audited by the present independent
certified public accountants of Borrower or by another firm of independent
certified public accountants designated by Borrower which is satisfactory to
Lender, such financial statement to be prepared in accordance with generally
accepted accounting principles applied in a manner consistent with the financial
statements previously furnished to Lender, or if not so prepared, setting forth
the manner in which such financial statement departs from generally accepted
accounting principles, or from previous financial statements furnished to Lender
by Borrower, and (iii) with reasonable promptness, such
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other information (including, without limitation, copies of tax returns and
amendments thereto filed by Borrower) as Lender may request.
SECTION 3.3 MAINTENANCE OF RECORDS; RIGHT OF INSPECTION. Maintain its
books, accounts and records in accordance with generally accepted accounting
principles, applied in a manner consistent with the financial statements
previously furnished to Lender, and shall, at any reasonable time and from time
to time, permit any person or entity designated in writing by Lender to visit
and inspect any of its properties, books and financial records, and to make
copies thereof and take extracts therefrom, and to discuss Borrower's financial
affairs with Borrower's financial officers and accountants.
SECTION 3.4 TAXES. Pay and discharge all taxes, assessments, fees,
withholdings and other governmental charges or levies imposed upon it, or upon
its income and profits, or upon any property belonging to it, prior to the date
on which penalties attach thereto, unless the legality thereof shall be promptly
and actively contested in good faith by appropriate proceedings and adequate
reserves for such liability are maintained by Borrower pending determination of
such contest.
SECTION 3.5 LITIGATION AND DEFAULT NOTICE. Promptly notify Lender in
writing of the occurrence of any Event of Default or of any pending or
threatened litigation claiming damages in excess of $25,000 or seeking relief
that, if granted, would adversely affect the financial condition or business
operations of Borrower.
SECTION 3.6 MAINTENANCE OF INSURANCE. Maintain and keep in force at all
times insurance of the types and in the amounts customarily carried in lines of
business similar to Borrower's and such other insurance as Lender may require,
including, without limitation, fire, public liability, casualty, property
damage, flood damage, and worker's compensation insurance, which insurance shall
be carried with companies and in amounts satisfactory to Lender. All casualty
and property damage insurance shall name Lender as mortgagee or loss payee, as
appropriate, and shall provide for a minimum of thirty days' written notice to
Lender before cancellation. Borrower shall deliver to Lender from time to time
at Lender's request copies of all such insurance policies and certificates of
insurance and schedules setting forth all insurance then in effect.
SECTION 3.7 MAINTENANCE OF PROPERTIES. Keep all of its properties in good
repair and condition, and from time to time make necessary repairs, renewals and
replacements thereto and thereof so that Borrower's property shall be fully and
efficiently preserved and maintained.
SECTION 3.8 FURTHER ASSURANCES. Perform or take, on request of Lender,
such action as may be necessary or advisable to perfect any lien or security
interest in any collateral or otherwise to carry out the intent of this
Agreement.
SECTION 3.9 EXPENSES OF LENDER. Borrower will, on demand, reimburse Lender
for all expenses, including the fees and expenses of legal counsel for Lender,
reasonably incurred in connection with the preparation, administration,
amendment, modification, renewal,
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extension or enforcement of the Agreement and the Note and any other documents
related to this Agreement and the collection or attempted collection of the Term
Loan and any other sum due under this Agreement and the Note after default by
Borrower in the payment thereof. Any amounts paid by Lender under this section
shall bear interest at the rate specified under the Note. The obligation of
Borrower under this section to pay all expenses incurred by Lender shall survive
payment of the Term Loan and the Note and termination of this Agreement.
SECTION 3.10 ERISA. Fund all of its "plans" to which the minimum funding
standards of Section 302 of ERISA apply in accordance with such standards;
furnish Lender, promptly upon Lender's request, copies of all reports or other
statements filed with, or received from, the United States Department of Labor,
the Internal Revenue Service, or the Pension Benefit Guaranty Corporation with
respect to all of Borrower's "plans"; and promptly advise Lender of the
occurrence of any "reportable event" or "prohibited transaction" with respect to
any such "plan" (as all of the quoted terms are defined in ERISA).
SECTION 3.11 COMPLIANCE WITH LAWS. Comply with all applicable present and
future local, state and federal laws, including, without limitation,
environmental laws and regulations; notify Lender immediately if any "hazardous
substance" (as defined in CERCLA) is released, discharged, disposed of, stored,
or discovered on any real or personal property owned or leased by Borrower;
notify Lender in writing within three days after Borrower receives notice from
any governmental authority or any individual or entity claiming violation of any
environmental protection law or regulation, or demanding compliance with any
environmental protection law or regulation, or demanding payment, indemnity, or
contribution for any environmental damage or injury to natural resources; and
permit Lender from time to time to observe Borrower's operations and to perform
tests (including soil tests and ground water tests) for "hazardous substances"
on any real or personal property owned or leased by Borrower.
SECTION 3.12 USE OF PROCEEDS. Use the proceeds of the Term Loan only in
connection with the proposed redemption of the publicly held stock of the
Borrower, including related costs and expenses.
ARTICLE IV. - NEGATIVE COVENANTS
Borrower covenants and agrees that, without the prior written consent of
Lender, which may be given or withheld in Lender's sole and absolute discretion,
so long as it may borrow under this Agreement or so long as any indebtedness
remains outstanding under the Term Loan or under the Note, Borrower shall not:
SECTION 4.1 USE OF PROCEEDS. Use any proceeds of the Term Loan except for
the purposes stated in Section 3.12.
SECTION 4.2 [RESERVED].
SECTION 4.3 SALE OF ASSETS, CONSOLIDATION, MERGER, ETC. (i) Sell, lease,
transfer or otherwise dispose of any of its assets (except in the ordinary
course of business and as
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permitted under this Agreement) or all or a substantial part of the properties
and assets of Borrower to any person or entity; (ii) consolidate with or merge
into any other entity, or permit another entity to merge into Borrower, or
acquire stock in or all or substantially all of the properties or assets of any
other person or entity or enter into any reorganization, recapitalization or
otherwise change Borrower's corporate structure; (iii) enter into any
arrangement, directly or indirectly with any person or entity whereby Borrower
shall sell or transfer any property, real, personal or mixed, and used and
useful in the business of the Borrower, whether now owned or hereafter acquired,
and thereafter rent or lease such property or other property which Borrower
intends to use for substantially the same purpose or purposes as the property
being sold or transferred; (iv) enter into a partnership or joint venture with
any person or entity; or (v) authorize or enter into any plan, letter of intent,
or agreement to do any of the foregoing.
SECTION 4.4 NAME; CHIEF EXECUTIVE OFFICE. Change its name, its state of
incorporation, or the location of its chief executive office.
SECTION 4.5 GUARANTIES, ETC. Guarantee or become directly or contingently
liable for any obligation or indebtedness of any other person or entity, except
that Borrower may endorse negotiable instruments for collection in the ordinary
course of business.
SECTION 4.6 INVESTMENTS, LOANS. Purchase or hold beneficially any stock,
other securities or evidences of indebtedness of, or make or permit to exist any
loans or advances to, or make any investment or acquire any interest whatsoever
in, any other person or entity except that Borrower may invest in any of the
following if they mature within one year from the date of acquisition thereof:
(i) readily marketable direct obligations issued or guaranteed by the United
States of America or an agency thereof, (ii) certificates of time deposit issued
by commercial banks of recognized standing organized under the laws of, and
operating in, the United States of America or one of the States of the United
States and having a combined paid-in-capital and paid-in surplus of not less
than $10,000,000 in the case of each such bank and (iii) commercial paper rated
at least Prime-1 by Xxxxx'x Investors Services, Inc., or A-1 by Standard &
Poor's Corporation (or having a comparable rating by another rating service of
comparable standing).
SECTION 4.7 DIVIDENDS. Pay or declare any dividend on any of its capital
stock after the date hereof, provided, however, that if Borrower is an S
Corporation, it may pay dividends not to exceed the amount of income taxes
payable by its shareholders attributable to Borrower's income.
SECTION 4.8 [RESERVED].
SECTION 4.9 ERISA. Take, or fail to take, any act if such act or failure
to act results in the imposition of withdrawal liability under Title IV of
ERISA.
SECTION 4.10 OTHER NEGATIVE COVENANTS. (i) Engage in any business other
than that in which Borrower is now engaged or make any material change in the
manner in which Borrower conducts Borrower's business; (ii) enter into any
transaction which materially and adversely affects Borrower's property or assets
or Borrower's ability to repay the Term Loan;
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(iii) enter into any transaction with any affiliate of Borrower except in the
ordinary course of business and upon fair and reasonable terms no less favorable
to Borrower than Borrower would obtain in a comparable arm's length transaction
with a person or entity not an affiliate of Borrower; or (iv) prepay any
indebtedness which is subordinate to the Note or other indebtedness of Borrower
to Lender.
ARTICLE V. - EVENTS OF DEFAULT AND REMEDIES
SECTION 5.1 EVENTS OF DEFAULT. Any one or more of the following shall
constitute an Event of Default hereunder by Borrower;
(a) Failure to pay when due any payment of principal or interest due on
the Note or any sum due hereunder; or
(b) Failure to pay when due any payment of principal or interest due on
any other obligation for money borrowed or the deferred purchase
price of goods or services; or
(c) Default under any other document, note, agreement, mortgage,
security agreement, instrument, or understanding with, held by, or
executed in favor of Lender; or
(d) Should any representation or warranty contained herein or made by or
furnished on behalf of Borrower in connection herewith be false or
misleading in any material respect as of the date made; or
(e) Failure to perform or observe any covenant or agreement contained in
Articles III or IV of this Agreement; or
(f) Failure to pay its debts generally as they become due; or
(g) Borrower's or any Guarantor's making or taking any action to make an
assignment for the benefit of creditors, or petitioning or taking
any action to petition any tribunal for the appointment of a
custodian, receiver or any trustee for it or a substantial part of
its assets, or commencing or taking any action to commence any
proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution, liquidation or debtor relief law
or statute of any jurisdiction, whether now or hereafter in effect,
including, without limitation, any chapter of the federal Bankruptcy
Code; or, if there shall have been filed or commenced against
Borrower or any Guarantor any such petition, application or
proceeding which is not dismissed within 30 days or in which an
order for relief is entered; or should Borrower or any such
Guarantor by any act or omission indicate its approval of or
acquiescence in any such petition, application or proceeding or
order for relief or the appointment of a custodian, receiver
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or any trustee for it or any substantial part of any of its
properties; or should Borrower or any such Guarantor suffer to exist
any such custodianship, receivership or trusteeship; or
(h) Borrower's or any Guarantor's concealing, removing, or permitting to
be concealed or removed, any part of its property, with intent to
hinder, delay or defraud its creditors or any of them, or making or
suffering a transfer of any of its property which may be fraudulent
under any bankruptcy, fraudulent conveyance or similar law; or
making any transfer of its property to or for the benefit of a
creditor at a time when other creditors similarly situated have not
been paid, or suffering or permitting, while insolvent, any creditor
to obtain a lien upon any of its property through legal proceedings
or distraint which is not vacated within 30 days after the date
thereof; or
(i) Occurrence of any of the following with respect to Borrower or any
Guarantor: death (if an individual), death or withdrawal of a
general partner (if a partnership), death or withdrawal of a member
(if a limited liability company), dissolution or cessation of
business (if a partnership, limited liability company, corporation,
or other organization), or insolvency.
SECTION 5.2 REMEDIES. Upon the occurrence of an Event of Default, Lender
may (i) terminate all obligations of Lender to Borrower, including, without
limitation, any obligations to lend money under this Agreement or the Note, (ii)
declare immediately due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are expressly waived, the Note and any
other note of Borrower held by Lender, including, without limitation, principal,
accrued interest and costs of collection (including, without limitation, a
reasonable attorney's fee if collected by or through an attorney who is not a
salaried employee of Lender, whether through arbitration, in bankruptcy or in
other judicial proceedings, including appellate proceedings, which costs
Borrower hereby agrees to pay) and (iii) pursue any remedy available to it under
this Agreement, the Note, the Security Documents, or any other note or agreement
made by Borrower with Lender, or available at law or in equity. Notwithstanding
the foregoing, upon the occurrence of an Event of Default specified in Sections
5.1(g), 5.1(h) or 5.1(i), the Note and any other note of Borrower to Lender,
shall immediately and without notice become due and payable without action of
any kind on Lender's part.
ARTICLE VI. - DEFINITIONS
SECTION 6.1 As used in this Agreement, the following terms shall have the
meanings set forth below:
(a) Accounting terms used in this Agreement such as "net income",
"working capital", "current assets", "current liabilities",
"tangible net worth", and "total liabilities" shall have the
meanings normally given them by, and
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shall be calculated, both as to amounts and classification of items,
in accordance with, generally accepted accounting principles.
(b) "Agreement" means this Term Loan Agreement, as amended or
supplemented in writing from time to time.
(c) "Lender" means the person named in the first sentence of this
Agreement and which executes this Agreement below as "Lender", and
his successors and assigns.
(d) "Borrower" means the person or entity named in the first sentence of
this Agreement and who executes this Agreement below as "Borrower."
For purposes of Section 2.12, 3.10, and 4.9 such term also includes
any member of a "controlled group" (as defined in ERISA) of which
the named Borrower is a member.
(d) "CERCLA" is defined in Section 2.13.
(e) "ERISA" is defined in Section 2.12
(f) "Event of Default" is defined in Section 5.1.
(g) "Guarantor" means any person or entity who endorses the Note or who
now or hereafter guarantees payment or collection of the Term Loan
in whole or in part.
(h) "Note" is defined in Section 1.1 and includes any promissory note or
notes given in extension or renewal of, or in substitution for, the
original Note, and any amendment to the original Note or to any
promissory note or notes given in extension or renewal of, or in
substitution for, such note.
(i) "Term Loan" is defined in Section 1.1.
ARTICLE VII. - MISCELLANEOUS
SECTION 7.1 NO WAIVER. No delay or failure on the part of Lender in the
exercise of any right, power or privilege granted under this Agreement or the
Note, or available at law or in equity, shall impair any such right, power or
privilege or be construed as a waiver of any Event of Default or any
acquiescence therein. No single or partial exercise of any such right, power or
privilege shall preclude the further exercise of such right, power or privilege.
No waiver shall be valid against Lender unless made in writing and signed by
Lender, and then only to the extent expressly specified therein.
SECTION 7.2 NOTICES. All notices or consents required or permitted by this
Agreement shall be in writing and shall be deemed to have been given or made (i)
when actually
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received, if delivered by hand or sent by facsimile transmission, or (ii) upon
the earlier of actual receipt or five (5) days after mailing, if sent by U.S.
Mail, postage prepaid, and addressed as follows:
(a) If to Lender, Xxxxxxx Xxxx
00000 Xxxxxxxx Xxxxx
Xxxxxx Xxxx Xxxxx, Xxxxxxx 00000
Facsimile Number:_____________________
(b) If to Borrower, Xxxx Bros. Transportation Inc.
0000 Xxxxxxx 00
Xxxxxxx, Xxxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxx Xxxxxx
Either Borrower or Lender, or both, may change its address for notice purposes
by notice to the other party in the manner provided herein.
SECTION 7.3 GOVERNING LAW. This Agreement and the Note shall be governed
by and construed and enforced in accordance with the substantive laws of the
United States and, to the extent not inconsistent therewith, the laws of the
State of Alabama, without regard to principles governing conflicts of law.
SECTION 7.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in this Agreement or made or furnished
on behalf of Borrower in connection herewith shall survive the execution and
delivery of this Agreement and the Note and the making of the Term Loan, and
shall survive until the Term Loan and all interest thereon are paid in full, and
thereafter as provided in Section 7.10.
SECTION 7.5 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to
the benefit of Borrower and Lender, and their respective successors and assigns;
provided, however, Borrower shall have no right to assign its rights or
obligations hereunder to any person or entity.
SECTION 7.6 TIME OF THE ESSENCE. Time is of the essence in the payment and
performance of every term and covenant of this Agreement and the Note.
SECTION 7.7 AMENDMENTS, ETC. This Agreement may be amended or modified,
and Borrower may take any action herein prohibited, or omit to perform any
action required to be performed by it, only if Borrower shall obtain the prior
written consent of Lender to such amendment, modification, action or omission to
act, and no course of dealing between Borrower and Lender shall operate as a
waiver of any right, power or privilege granted under this Agreement, under the
Note, or available at law or in equity. This Agreement and the Note contain the
entire agreement between Borrower and Lender regarding the Term Loan. No oral
representations or statements shall be binding on Lender, and no agent of Lender
has the
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authority to vary the terms of this Agreement except in writing on the
face hereof or on a separate page attached hereto.
SECTION 7.8 CUMULATIVE RIGHTS. All rights, powers, privileges and remedies
granted hereunder shall be cumulative, may be exercised successively or
concurrently, and shall not be exclusive of any other rights, powers, privileges
or remedies granted by the Note or any other document or agreement, or available
at law or in equity.
SECTION 7.9 SET-OFF, ETC. Upon the occurrence and during the continuation
of an Event of Default, Borrower recognizes Lender's right, without notice or
demand, to apply any indebtedness due or to become due to Borrower from Lender
in satisfaction of any of the indebtedness, liabilities or obligations of
Borrower under this Agreement, under the Note, or under any other note,
instrument, agreement, document or writing of Borrower held by or executed in
favor of Lender, including, without limitation, the right to set off against any
deposits and cash collateral of Borrower held by Lender.
SECTION 7.10 INDEMNITY. Borrower hereby agrees to indemnify Lender and his
agents and attorneys against, and to hold Lender and all such other persons
harmless from, any claims, demands, liabilities, costs, damages, and judgments
(including, without limitation, liability under CERCLA, the Federal Resource
Conservation and Recovery Act, or other environmental law or regulation, and
costs of defense and attorneys' fees) resulting from any Representation or
Warranty made by Borrower or on Borrower's behalf pursuant to Article II of this
Agreement having been false when made, or resulting from Borrower's breach of
any of the covenants set forth in Articles III or IV of this Agreement. This
Agreement of indemnity shall be a continuing agreement and shall survive payment
of the Term Loan and the Note and termination of this Agreement.
SECTION 7.11 [RESERVED].
SECTION 7.12 SEVERABILITY. Any provision of this Agreement or any other
loan document to which Borrower is or is to be a party which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 7.13 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but when taken
together shall constitute but one agreement, and any party may execute this
Agreement by executing and delivering any one or more of such counterparts.
SECTION 7.14 SECTION TITLES. The section titles contained in this
Agreement are for convenience only, are without substantive meaning, and are not
a part of the agreement between the parties hereto.
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ARTICLE VIII. - SUBORDINATION
This Agreement is subordinated to all indebtedness now or hereafter owing
by the maker to LaSalle Bank National Association, Chicago, Illinois, as
provided in that certain Subordination Agreement dated as of September 13,
2004.
WITNESS the hands and seals of the parties hereto or their duly
authorized officers, partners, members or agents on or as of the date first
above written.
BORROWER:
XXXX BROS. TRANSPORTATION INC.
By: /S/ XXXX X. XXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: President and Chief Executive Officer
LENDER:
/S/ XXXXXXX XXXX
------------------------------------------
Xxxxxxx Xxxx, individually
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