EXHIBIT 10.4(a)
REVOLVING CREDIT LOAN AGREEMENT
dated as of April 30, 2002
between
CENTRAL FREIGHT LINES, INC.,
A TEXAS CORPORATION
as Borrower
and
SUNTRUST BANK
as Lender
REVOLVING CREDIT LOAN AGREEMENT
THIS REVOLVING CREDIT LOAN AGREEMENT (this "Agreement") is made and
entered into as of April 30, 2002, by and between CENTRAL FREIGHT LINES, INC., a
Texas corporation (the "Borrower") and SUNTRUST BANK, a Georgia state banking
corporation (the "Lender").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lender establish a
$8,000,000 revolving credit and letter of credit facility for Borrower;
WHEREAS, subject to the terms and conditions of this Agreement, the
Lender is willing to establish the requested revolving credit and letter of
credit facility.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Borrower and the Lender agree as follows:
ARTICLE 1
DEFINITIONS; CONSTRUCTION
SECTION 1.1 DEFINITIONS. In addition to the other terms defined herein,
the following terms used herein shall have the meanings herein specified (to be
equally applicable to both the singular and plural forms of the terms defined):
"ADVANCE" or "ADVANCES" shall mean any advance of funds under or any
extension of credit (including the issuance of a Letter of Credit hereunder)
made pursuant to this Agreement. The terms "ADVANCE," "LOAN" and "REVOLVING
LOAN" may be used interchangeably hereunder.
"AFFILIATE" shall mean, as to any Person, any other Person that
directly, or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, such Person.
"BASE RATE" shall mean the per annum rate which the Lender publicly
announces from time to time to be its prime lending rate, as in effect from time
to time. The Lender's prime lending rate is a reference rate and does not
necessarily represent the lowest or best rate charged to customers. The Lender
may make commercial loans or other loans at rates of interest at, above or below
the Lender's prime lending rate. Each change in the Lender's prime lending rate
shall be effective from and including the date such change is publicly announced
as being effective.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in Nashville, Tennessee or Atlanta, Georgia
are authorized or required by law to close.
"CAPITAL LEASE OBLIGATIONS" of any Person shall mean all obligations of
such Person to pay rent or other amounts under any lease (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"CENTRAL REFRIGERATED" shall mean Central Refrigerated, Inc., a
Nebraska corporation, a Subsidiary of Borrower.
"CHANGE IN CONTROL" shall mean the occurrence of one or more of the
following events: (a) any sale, lease, exchange or other transfer (in a single
transaction or a series of related transactions) of all or substantially all of
the assets of the Borrower to any Person or "group" (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder in effect on the date hereof), (b) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or
"group" (within the meaning of the Securities Exchange Act of 1934 and the rules
of the Securities and Exchange Commission thereunder as in effect on the date
hereof) of 30% or more of the outstanding shares of the voting stock of the
Borrower; or (c) occupation of a majority of the seats (other than vacant seats)
on the board of directors of the Borrower by Persons who were neither (i)
nominated by the current board of directors or (ii) appointed by directors so
nominated.
"CHANGE IN LAW" shall mean (i) the adoption of any applicable law, rule
or regulation after the date of this Agreement, (ii) any change in any
applicable law, rule or regulation, or any change in the interpretation or
application thereof, by any Governmental Authority after the date of this
Agreement, or (iii) compliance by the Lender with any request, guideline or
directive (whether or not having the force of law) of any Governmental Authority
made or issued after the date of this Agreement.
"CLOSING DATE" shall mean April 30, 2002.
"CODE" shall mean the Internal Revenue Code of 1986, as amended and in
effect from time to time.
"CONTINGENT OBLIGATION" means, as to any Person, any direct or indirect
liability of that Person with respect to any Indebtedness, lease, dividend,
guaranty, letter of credit or other obligation (each a "PRIMARY OBLIGATION") of
another Person (the "PRIMARY OBLIGOR"), whether or not contingent, (a) to
purchase, repurchase or otherwise acquire any such primary obligation or any
property constituting direct or indirect security therefor, or (b) to advance or
provide funds (i) for the payment or discharge of any such primary obligation,
or (ii) to maintain working capital or equity capital of the primary obligor in
respect of any such primary obligation or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
such primary obligor, or (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor thereof to make payment of such primary
obligation, or (d) otherwise to assure or hold harmless the owner of any such
primary obligation against loss or failure or
inability to perform in respect thereof. The amount of any Contingent Obligation
shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof.
"CONTROL" shall mean the power, directly or indirectly, either to (i)
vote 30% or more of securities having ordinary voting power for the election of
directors (or persons performing similar functions) of a Person or (ii) direct
or cause the direction of the management and policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. The
terms "CONTROLLING", "CONTROLLED BY", and "UNDER COMMON CONTROL WITH" have
meanings correlative thereto.
"DEFAULT" shall mean any condition or event that, with the giving of
notice or the lapse of time or both, would constitute an Event of Default.
"DEFAULT RATE" shall mean the Base Rate plus two percent (2%) per
annum.
"DOLLAR(S)" and the sign "$" shall mean lawful money of the United
States of America.
"EBITDA" shall mean, for the Borrower for any period, an amount equal
to the sum of (a) Net Income for such period plus (b) to the extent deducted in
determining Net Income for such period, (i) Interest Expense, (ii) income tax
expense, and (iii) depreciation and amortization.
"EBITDAR" shall mean, for the Borrower for any period, an amount equal
to the sum of (a) EBITDA and (b) Lease Expense.
"ENVIRONMENTAL LAWS" shall mean all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, Release or threatened Release of any
Hazardous Material or to health and safety matters.
"ENVIRONMENTAL LIABILITY" shall mean any liability, contingent or
otherwise (including any liability for damages, costs of environmental
investigation and remediation, costs of administrative oversight, fines, natural
resource damages, penalties or indemnities), of the Borrower directly or
indirectly resulting from or based upon (a) any actual or alleged violation of
any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) any actual or
alleged exposure to any Hazardous Materials, (d) the Release or threatened
Release of any Hazardous Materials or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"ERISA AFFILIATE" shall mean any trade or business (whether or not
incorporated), which, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for the purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA EVENT" shall mean (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator appointed by the PBGC of any notice
relating to an intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"EVENT OF DEFAULT" shall have the meaning provided in Article 8.
"FISCAL PERIOD" shall mean any thirteen 4 week period during a fiscal
year of Borrower which ends on December 31. Such 4 week periods shall run
consecutively during any fiscal year and shall be numerically designated herein
beginning with the Fiscal Period 1 commencing on January 1 and ending on January
28 of any fiscal year.
"GAAP" shall mean generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of Section
1.2.
"GOVERNMENTAL AUTHORITY" shall mean the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GUARANTY" shall mean that certain Guaranty executed by Parent in favor
of Lender of even date herewith whereby Parent guarantees the Obligations, as
such may be amended and/or restated from time to time.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature
regulated pursuant to any Environmental Law.
"HEDGING AGREEMENTS" shall mean interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts, commodity agreements and other similar
agreements or arrangements designed to protect against fluctuations in interest
rates, currency values or commodity values entered into by Borrower and Lender
(or an Affiliate thereof) with respect to all or any portion of the Obligations.
"INDEBTEDNESS" of any Person shall mean, without duplication (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person in respect of the deferred purchase price of
property or services (other than trade payables incurred in the ordinary course
of business), (iv) all obligations of such Person under any conditional sale or
other title retention agreement(s) relating to property acquired by such Person,
(v) all Capital Lease Obligations of such Person, (vi) all obligations,
contingent or otherwise, of such Person in respect of letters of credit,
acceptances or similar extensions of credit, (vii) all Guarantees of such Person
of the type of Indebtedness described in clauses (i) through (vi) above, (viii)
all Indebtedness of a third party secured by any Lien on property owned by such
Person, whether or not such Indebtedness has been assumed by such Person, (ix)
all obligations of such Person, contingent or otherwise, to purchase, redeem,
retire or otherwise acquire for value any common stock of such Person, and (x)
Off-Balance Sheet Liabilities. The Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer, except to the extent that the terms of such
Indebtedness provide that such Person is not liable therefor.
"INTEREST EXPENSE" shall mean, for the Borrower for any period
determined in accordance with GAAP, the sum of (i) total cash interest expense,
including without limitation the interest component of any payments in respect
of Capital Lease Obligations capitalized or expensed during such period (whether
or not actually paid during such period) and/or in respect to any interest rate
hedging or swap agreement.
"INTEREST PERIOD" shall mean, with respect to any Advance, a period of
one, two or three months, as the Borrower may request; provided, that:
(i) the initial Interest Period for any Advance shall
commence on the date of such Advance and each Interest Period occurring
thereafter in respect of such Advance shall commence on the day on
which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise end on a day
other than a Business Day, such Interest Period shall be extended to
the next succeeding Business Day, unless such Business Day falls in
another calendar month, in which case such Interest Period would end on
the next preceding Business Day;
(iii) any Interest Period which begins on the last Business
Day of a calendar month or on a day for which there is no numerically
corresponding day in the calendar
month at the end of such Interest Period shall end on the last Business
Day of such calendar month; and
(iv) no Interest Period may extend beyond the Maturity
Date.
"LC DISBURSEMENT" shall mean a payment made by the Lender pursuant to a
Letter of Credit.
"LC DOCUMENTS" shall mean the Letters of Credit and all applications,
agreements and instruments relating to the Letters of Credit.
"LC EXPOSURE" shall mean, at any time, the sum of (i) the aggregate
undrawn amount of all outstanding Letters of Credit at such time, plus (ii) the
aggregate amount of all LC Disbursements that have not been reimbursed by or on
behalf of the Borrower at such time.
"LEASE ADJUSTED FUNDED DEBT" shall mean the sum of (i) Total Debt, (ii)
the present value of all future Lease Payments (calculated using a discount rate
equal to 10%), and (iii) all Contingent Obligations of Borrower.
"LEASE ADJUSTED LEVERAGE RATIO" shall mean the ratio of Lease Adjusted
Funded Debt to EBITDAR, calculated on a rolling thirteen Fiscal Period basis.
"LEASE EXPENSE" shall mean, for any period, the aggregate amount of
fixed and contingent rentals payable by the Borrower with respect to leases of
real and personal property (excluding Capital Lease Obligations) determined in
accordance with GAAP for such period.
"LEASE PAYMENTS" means the gross amount of all lease or rental
payments, whether or not characterized as rent, of Borrower, excluding payments
in respect of Capital Lease Obligations constituting Indebtedness or in respect
of any synthetic lease obligations.
"LETTER OF CREDIT" shall mean any letter of credit issued pursuant to
Section 2.9 by the Lender for the account of the Borrower.
"LIBOR" shall mean for any applicable Interest Period the rate per
annum for deposits in Dollars for a period equal to such Interest Period
appearing on that page of the Bloomberg's Service which displays British
Banker's Association Interest Settlement Rates for deposits in Dollars (or if
page or service shall cease to be available, such other page on that service or
such other service designated by the British Banker's Association for the
display of such Association's Interest Settlement Rates for Dollar deposits) as
of 11:00 a.m. (London, England time) on the day that is two Business Days prior
to the first day of such Interest Period; provided, that if such rate or service
is not available to the Lender for any reason, LIBOR shall mean the rate of
interest determined by the Lender to be the average (rounded upward, if
necessary, to the nearest 1/100th of 1%) of the rates per annum at which
deposits in Dollars are offered to the Lender two Business Days preceding the
first day of such Interest Period by leading banks in the London interbank
market as of 10:00 a.m. (Nashville, Tennessee time) for a period equal to such
Interest Period and in an amount comparable to the amount of the Revolving
Commitment.
"LIEN" shall mean any mortgage, pledge, security interest, lien
(statutory or otherwise), charge, encumbrance, hypothecation, assignment,
deposit arrangement, or other arrangement having the practical effect of the
foregoing or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease having
the same economic effect as any of the foregoing).
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the
Revolving Credit Note, the LC Documents, the Security Agreement, the Moyes Note
Assignment, the Guaranty, and any and all other instruments, agreements,
documents and writings executed in connection with any of the foregoing.
"MATERIAL ADVERSE EFFECT" shall mean, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences whether or not related, a
material adverse change in, or a material adverse effect on, (i) the business,
results of operations, financial condition, assets, liabilities or prospects of
the Borrower, (ii) the ability of Borrower and Parent to perform any of their
respective obligations under the Loan Documents, (iii) the rights and remedies
of the Lender under any of the Loan Documents or (iv) the legality, validity or
enforceability of any of the Loan Documents.
"MATURITY DATE" shall mean April 30, 2004.
"MOYES NOTE" shall mean that certain $8,000,000 promissory note dated
as of the date hereof, executed by ▇▇▇▇▇ ▇. ▇▇▇▇▇ in favor of Borrower, and any
permitted amendments thereto or restatements thereof.
"MOYES NOTE ASSIGNMENT" shall mean that certain security agreement
executed by Borrower, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and Lender of even date herewith whereby
Borrower grants Lender, as security for the Obligations, a security interest in
the Moyes Note.
"MULTIEMPLOYER PLAN" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"NET INCOME" shall mean, for any period, the net income (or loss) of
the Borrower (or Central Refrigerated, as the case may be) for such period
determined in accordance with GAAP, but excluding therefrom (to the extent
otherwise included therein) (i) any extraordinary gains, (ii) any gains
attributable to write-ups of assets, and (iii) any equity interest of the
Borrower in the unremitted earnings of any Person.
"OBLIGATIONS" shall mean all amounts owing by the Borrower to the
Lender pursuant to or in connection with this Agreement or any other Loan
Document, including without limitation, all principal, interest (including any
interest accruing after the filing of any petition in bankruptcy or the
commencement of any insolvency, reorganization or like proceeding relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), all reimbursement obligations, fees, expenses,
indemnification and reimbursement
payments, costs and expenses (including all fees and expenses of counsel to the
Lender incurred pursuant to this Agreement or any other Loan Document), whether
direct or indirect, absolute or contingent, liquidated or unliquidated, now
existing or hereafter arising hereunder or thereunder, together with all
renewals, extensions, modifications or refinancings thereof.
"OFF-BALANCE SHEET LIABILITIES" of any Person shall mean (i) any
repurchase obligation or liability of such Person with respect to accounts or
notes receivable sold by such Person, (ii) any liability of such Person under
any sale and leaseback transactions which do not create a liability on the
balance sheet of such Person, (iii) any liability of such Person under any
so-called "synthetic" lease transaction or (iv) any obligation arising with
respect to any other transaction which is the functional equivalent of or takes
the place of borrowing but which does not constitute a liability on the balance
sheet of such Person.
"PARENT" shall mean Central Freight Lines, Inc., a Nevada corporation.
"PAYMENT OFFICE" shall mean the office of the Lender located at ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other location as to
which the Lender shall have given written notice to the Borrower.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA, and any successor entity performing similar functions.
"PERMITTED ENCUMBRANCES" shall mean
(i) Liens imposed by law for taxes not yet due or which
are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves are being maintained in accordance
with GAAP;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law
created in the ordinary course of business for amounts not yet due or
which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves are being maintained in
accordance with GAAP;
(iii) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(iv) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business;
(v) judgment and attachment liens not giving rise to an
Event of Default or Liens created by or existing from any litigation or
legal proceeding that are currently being contested in good faith by
appropriate proceedings and with respect to which adequate reserves are
being maintained in accordance with GAAP; and
(vi) easements, zoning restrictions, rights-of-way and
similar encumbrances on real property imposed by law or arising in the
ordinary course of business that do not secure any monetary obligations
and do not materially detract from the value of the affected property
or materially interfere with the ordinary conduct of business of the
Borrower;
provided, that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"PERMITTED INVESTMENTS" shall mean:
(i) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by, the United
States (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States), in each case
maturing within one year from the date of acquisition thereof;
(ii) certificates of deposit, bankers' acceptances and
time deposits maturing within 180 days of the date of acquisition
thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States or any
state thereof which has a combined capital and surplus and undivided
profits of not less than $500,000,000;
(iii) fully collateralized repurchase agreements with a
term of not more than 30 days for securities described in clause (i)
above and entered into with a financial institution satisfying the
criteria described in clause (iii) above; and
(iv) mutual funds investing solely in any one or more of
the Permitted Investments described in clauses (i) through (iv) above.
"PERSON" shall mean any individual, partnership, firm, corporation,
association, joint venture, limited liability company, trust or other entity, or
any Governmental Authority.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"REGULATION D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as the same may be in effect from time to time, and any
successor regulations.
"RELATED PARTIES" shall mean, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"RELEASE" means any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into the environment (including ambient air, surface water,
groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.
"RESPONSIBLE OFFICER" shall mean any of the president, the chief
executive officer, the chief operating officer, the chief financial officer, the
treasurer or a vice president of the Borrower or such other representative of
the Borrower as may be designated in writing by any one of the foregoing with
the consent of the Lender; and, with respect to the financial covenants only,
the chief financial officer or the treasurer of the Borrower.
"REVOLVING COMMITMENT" shall mean the obligation of the Lender to make
Advances to the Borrower, subjection to Section 2.1 hereof, in an aggregate
principal amount not exceeding $8,000,000.
"REVOLVING CREDIT NOTE" shall mean that certain $8,000,000 Revolving
Credit Note issued by Borrower to the order of Lender of even date herewith, as
such may be amended and/or restated from time to time. The Revolving Credit Note
may periodically be referred to herein as the "NOTE."
"SECURITY AGREEMENT" shall mean that certain Security Agreement
executed by Borrower in favor of Lender of even date herewith whereby Borrower
grants Lender a security interest in certain personal property of Borrower as
collateral for the Obligations, as such may be amended and/or restated from time
to time.
"SPP" shall mean Southwest Premier Properties, LLC,.
"SUBSIDIARY" shall mean, with respect to any Person (the "PARENT"), any
corporation, partnership, joint venture, limited liability company, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, partnership, joint venture, limited liability company,
association or other entity (i) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power, or in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, Controlled or held, or (ii) that is, as
of such date, otherwise Controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.
"TANGIBLE NET WORTH" shall mean as of any date, (i) the total assets of
the Borrower that would be reflected on the Borrower's balance sheet as of such
date prepared in accordance with GAAP, minus the sum of (i) the total
liabilities of the Borrower that would be reflected on the Borrower's balance
sheet as of such date prepared in accordance with GAAP, (ii) the amount of any
write-up in the book value of any assets resulting from a revaluation thereof or
any write-up in excess of the cost of such assets acquired reflected on the
balance sheet of the Borrower as of such date prepared in accordance with GAAP
and (iii) the net book amount of all assets of the
Borrower that would be classified as intangible assets on a balance sheet of the
Borrower as of such date prepared in accordance with GAAP.
"TAXES" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TOTAL DEBT" shall mean, as of any date of determination, all
Indebtedness of the Borrower that would be reflected on a balance sheet of the
Borrower prepared in accordance with GAAP as of such date.
"TYPE," when used in reference to an Advance, refers to whether the
rate of interest on such Advance is determined by reference to LIBOR or the Base
Rate. Accordingly, Advances may be referred to herein as "LIBOR ADVANCES" or
"BASE RATE ADVANCES."
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2 ACCOUNTING TERMS AND DETERMINATION. Unless otherwise
defined or specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP as in effect from time to time.
SECTION 1.3 TERMS GENERALLY. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.
ARTICLE 2
AMOUNT AND TERMS OF THE COMMITMENTS
SECTION 2.1 REVOLVING LOANS AND REVOLVING CREDIT NOTE. Subject to the
terms and conditions set forth herein, the Lender agrees to make Advances to the
Borrower on a revolving credit basis, from time to time until the Maturity Date,
in an aggregate principal amount outstanding at any time that will not result in
the sum of the principal amount of Advances then outstanding plus the
outstanding LC Exposure to exceed the Revolving Commitment.
SECTION 2.2 PAYMENT TERMS. Payment terms for the Revolving Loan shall
be set forth herein and in the Note. All amounts owed by Borrower to Lender
pursuant to this Agreement, the Note, or any Loan Document shall be due and
payable in full on the Maturity Date.
SECTION 2.3 BORROWING PROCEDURES FOR THE LOAN. Prior to 10:00 a.m.
central standard time on the same Business Day of a proposed Base Rate Advance
and at least three Business Days prior to any proposed LIBOR Advance, Borrower
shall present a Borrowing Request in the form of Exhibit 2.3 attached hereto and
any other documentation that Lender may reasonably require in connection with
any such Advance. The following individuals are authorized to
request an Advance on behalf of Borrower: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and
▇▇▇▇▇ Cookie Kutnie. Lender shall make Advances by depositing the funds into
Borrower's operating account with Lender on the same Business Day of a request
for a Base Rate Advance and three Business Days following a request for a LIBOR
Advance. Each request by Borrower for an Advance shall constitute a
representation and warranty by Borrower, as of the date of the request and as of
the date of the Advance, that (a) the officers of Borrower do not have any
knowledge of any Default or Event of Default and (b) the representations and
warranties contained in Article 4 hereof are true and correct, except as to
changes occurring after the date of this Agreement caused by transactions
permitted under this Agreement.
SECTION 2.4 INTEREST.
(a) Base Rate Advances.
(i) Interest shall accrue on all Base Rate
Advances at a variable rate of interest equal to the Base
Rate; provided, that interest shall accrue at the Default Rate
following the occurrence of any Event of Default (regardless
of whether notice thereof has been given to Borrower).
Interest shall accrue on the basis of a 360 day year.
(ii) Borrower shall have the option to convert
any Base Rate Advance to a LIBOR Advance by providing Lender
with a Notice of Continuation/Conversion in the form of
Exhibit 2.4 attached hereto three Business Days prior to the
date of the requested conversion. Each such Notice of
Continuation/Conversion shall be irrevocable and shall specify
(A) the Advance to which such notice applies and (B) the
Interest Period applicable thereto after giving effect to such
conversion. Subsequent to any conversion to a LIBOR Advance in
accordance herewith, such Advance shall then be governed in
accordance with Section 2.4(b) hereof and such other
provisions of this Agreement as may be applicable to LIBOR
Advances.
(b) LIBOR Advances.
(i) Interest shall accrue on all LIBOR Advances
at a variable rate of interest equal to LIBOR plus 175 basis
points per annum at such Interest Period as shall be specified
by Borrower in the applicable Borrowing Request; provided,
that interest shall accrue at the Default Rate following the
occurrence of any Event of Default (regardless of whether
notice thereof has been given to Borrower). Interest shall
accrue on the basis of a 360 day year.
(ii) Borrower shall have the option at the end of
any Interest Period in respect to any Advance (A) to continue
such Interest Period, (B) to convert such Interest Period, or
(C) to convert such LIBOR Advance to a Base Rate Advance by
providing Lender with a Notice of Continuation/Conversion in
the form of Exhibit 2.4 attached hereto three Business Days
prior to the end of the then applicable Interest Period. Each
such Notice of Continuation/Conversion shall be
irrevocable and shall specify (A) the Advance to which such
notice applies, (B) the Interest Period applicable thereto
after giving effect to such continuation/conversion, as
applicable, and (C) whether such LIBOR Advance will be
converted to a Base Rate Advance. If, on the expiration of any
Interest Period in respect of any LIBOR Advance, the Borrower
shall have failed to deliver a Notice of
Continuation/Conversion, then, unless such LIBOR Advance is
repaid as provided herein, the Borrower shall be deemed to
have elected to continue such Advance at the previously
applicable Interest Period. Subsequent to any conversion to a
Base Rate Advance in accordance herewith, such Advance shall
then be governed in accordance with Section 2.4(a) hereof and
such other provisions of this Agreement as may be applicable
to Base Rate Advances.
SECTION 2.5 OPTIONAL PREPAYMENTS AND TERMINATION OF COMMITMENTS.
(a) The Borrower shall have the right at any time and
from time to time to prepay any Advance, in whole or in part, without
premium or penalty; provided, that if an Advance or any portion thereof
is prepaid on a date other than the last day of the Interest Period
applicable thereto, the Borrower shall also pay all amounts required
pursuant to Section 2.6.
(b) Upon at least two Business Days prior written notice
(or telephonic notice promptly confirmed in writing) to the Lender
(which notice shall be irrevocable), the Borrower may reduce the
Revolving Commitment in part or terminate the Revolving Commitment in
whole; provided, that (i) any partial reduction pursuant to this
Section 2.5(b) shall be in an amount of at least $500,000 and any
larger multiple of $100,000, and (ii) no such reduction shall be
permitted which would reduce the Revolving Commitment (after giving
effect thereto and any concurrent prepayments made under Section
2.5(a)) to an amount less than the outstanding Revolving Loans plus the
outstanding LC Exposure.
SECTION 2.6 FUNDING INDEMNITY. In the event of the payment of any
principal of an LIBOR Advance other than on the last day of the Interest Period
applicable thereto (including as a result of an Event of Default), subject to
any continuation or conversion thereof in accordance with Section 2.4(b) hereof,
then the Borrower shall compensate the Lender, within five (5) Business Days
after written demand from the Lender, for any loss, cost or expense attributable
to such event. Such loss, cost or expense shall be deemed to include an amount
determined by the Lender to be the excess, if any, of (a) the amount of interest
that would have accrued on the principal amount of such LIBOR Advance if such
event had not occurred at the interest rate applicable to such LIBOR Advance for
the period from the date of such event to the last day of the then current
Interest Period therefor (or in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest Period for such LIBOR
Advance) over (b) the amount of interest that would accrue on the principal
amount of such LIBOR Advance for the same period if the interest rate was set on
the date such LIBOR Advance was prepaid or converted or the date on which the
Borrower failed to borrow, convert or continue such LIBOR Advance. A certificate
as to any additional amount payable under this Section submitted to the Borrower
by the Lender shall be conclusive, absent manifest error.
SECTION 2.7 FEES.
(a) COMMITMENT FEE. The Borrower agrees to pay to the
Lender a commitment fee which shall accrue at 0.25% per annum on the
daily amount of the unused Revolving Commitment up to the Maturity
Date. Accrued commitment fees shall be payable in arrears on the last
day of each March, June, September and December of each year and on the
Maturity Date, commencing on the first such date after the Closing
Date. Commitment fees shall accrue on the basis of a 360 day year.
(b) LETTER OF CREDIT FEES. The Borrower agrees to pay to
the Lender a letter of credit fee which shall accrue at 1.75% per annum
on the average daily amount of the Lender's LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements), as well
as the Lender's standard fees with respect to issuance, amendment,
renewal or extension of any Letter of Credit or processing of drawings
thereunder. Accrued letter of credit fees shall be payable in arrears
on the last day of each March, June, September and December of each
year and on the Maturity Date, commencing on the first such date after
the Closing Date. Letter of credit fees shall accrue on the basis of a
360 day year.
(c) CLOSING FEE. The Borrower shall pay to the Lender a
closing fee equal to $20,000. The closing fee shall be due and payable
on the Closing Date.
SECTION 2.8 PAYMENTS GENERALLY. The Borrower shall make each payment
required to be made by it hereunder (whether of principal, interest, fees or
reimbursement of LC Disbursements) prior to 2:00 p.m. (Central Time), on the
date when due, in immediately available funds, without set-off or counterclaim.
Any amounts received after such time on any date may, in the discretion of the
Lender, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made to the
Lender at its Payment Office. If any payment hereunder shall be due on a day
that is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be made payable for the period of such extension. All
payments hereunder shall be made in Dollars.
SECTION 2.9 LETTERS OF CREDIT.
(a) Prior to the Maturity Date, the Lender agrees to
issue, at the request of the Borrower, Letters of Credit for the
account of the Borrower on the terms and conditions hereinafter set
forth; provided, that (i) each Letter of Credit shall expire on the
earlier of (A) the date one year after the date of issuance of such
Letter of Credit (or in the case of any renewal or extension thereof,
one year after such renewal or extension) and (B) the date that is one
(1) Business Days prior to the Maturity Date; (ii) each Letter of
Credit shall be in a stated amount of at least $100,000; and (iii) the
Borrower may not request any Letter of Credit, if, after giving effect
to such issuance, the LC Exposure plus the outstanding Revolving Loans
would exceed the Revolving Commitment.
(b) To request the issuance of a Letter of Credit (or any
amendment, renewal or extension of an outstanding Letter of Credit),
the Borrower shall give the Lender irrevocable written notice at least
three (3) Business Days prior to the requested date of such issuance
specifying the date (which shall be a Business Day) such Letter of
Credit is to be issued (or amended, extended or renewed, as the case
may be), the expiration date of such Letter of Credit, the amount of
such Letter of Credit , the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare, amend,
renew or extend such Letter of Credit. In addition to the satisfaction
of the conditions in Article 3, the issuance of such Letter of Credit
(or any amendment which increases the amount of such Letter of Credit)
will be subject to the further conditions that such Letter of Credit
shall be in such form and contain such terms as the Lender shall
approve and that the Borrower shall have executed and delivered any
additional applications, agreements and instruments relating to such
Letter of Credit as the Lender shall reasonably require; provided, that
in the event of any conflict between such applications, agreements or
instruments and this Agreement, the terms of this Agreement shall
control.
(c) The Lender shall examine all documents purporting to
represent a demand for payment under a Letter of Credit promptly
following its receipt thereof. The Lender shall notify the Borrower of
such demand for payment and whether the Lender has made or will make a
LC Disbursement thereunder; provided, that any failure to give or delay
in giving such notice shall not relieve the Borrower of its obligation
to reimburse the Lender with respect to such LC Disbursement. The
Borrower shall be irrevocably and unconditionally obligated to
reimburse the Lender for any LC Disbursements paid by the Lender in
respect of such drawing, without presentment, demand or other
formalities of any kind.
(d) If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from
the Lender demanding the deposit of cash collateral pursuant to this
paragraph, the Borrower shall (within three (3) Business Days after
written notice from Lender) deposit in an account with the Lender, in
the name of the Lender and for the benefit of the Lender, an amount in
cash equal to the LC Exposure as of such date plus any accrued and
unpaid interest thereon; provided, that the obligation to deposit such
cash collateral shall become effective immediately, and such deposit
shall become immediately due and payable, with demand or notice of any
kind, upon the occurrence of any Event of Default with respect to the
Borrower described in clause (g) or (h) of Section 8.1. Such deposit
shall be held by the Lender as collateral for the payment and
performance of the obligations of the Borrower under this Agreement.
The Lender shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any
interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Lender and at
the Borrower's risk and expense, such deposits shall not bear interest.
Interest and profits, if any, on such investments shall accumulate in
such account. Moneys in such account shall applied by the Lender to
reimburse itself for LC Disbursements for which it had not been
reimbursed and to the extent so applied, shall be held for the
satisfaction of
the reimbursement obligations of the Borrower for the LC Exposure at
such time or, if the maturity of the Revolving Loan has been
accelerated, be applied to satisfy other obligations of the Borrower
under this Agreement. If the Borrower is required to provide an amount
of cash collateral hereunder as a result of the occurrence of an Event
of Default, such amount (to the extent not so applied as aforesaid)
shall be returned to the Borrower with three Business Days after all
Events of Default have been cured or waived.
(e) The Borrower's obligation to reimburse LC
Disbursements hereunder shall be absolute, unconditional and
irrevocable and shall be performed strictly in accordance with the
terms of this Agreement under all circumstances whatsoever.
(f) Each Letter of Credit shall be subject to the Uniform
Customs and Practices for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500, as the same may
be amended from time to time, and, to the extent not inconsistent
therewith, the governing law of this Agreement set forth in Section
9.5.
SECTION 2.10 COLLATERAL. The Obligations shall be secured by the
Security Agreement and the Moyes Note Assignment.
SECTION 2.11 USURY. The parties to this Agreement intend to conform
strictly to applicable usury laws as presently in effect. Accordingly, if the
transactions contemplated hereby would be usurious under applicable law
(including the laws of the United States of America and the State of Tennessee),
then, in that event, notwithstanding anything to the contrary in any Loan
Document, Borrower and Lender agree as follows: i) the aggregate of all
consideration that constitutes interest under applicable law which is contracted
for, charged, or received under any of the Loan Documents or otherwise in
connection with the Obligations, shall under no circumstance exceed the maximum
lawful rate of interest permitted by applicable law, and any excess shall be
credited on the Obligations by the holder thereof (or, if the Obligations shall
have been paid in full, refunded to Borrower); and ii) if the maturity of the
Obligations is accelerated by reason of an election of the holder resulting from
any Event of Default or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest may never include
more than the maximum amount of interest permitted by applicable law, and excess
interest, if any, for which this Agreement provides, or otherwise, shall be
canceled automatically as of the date of such acceleration or prepayment and, if
previously paid, shall be credited on the Obligations (or, if the Obligations
shall have been paid in full, refunded to Borrower).
ARTICLE 3
CONDITIONS PRECEDENT TO REVOLVING LOAN AND LETTERS OF CREDIT
SECTION 3.1 CONDITIONS TO EFFECTIVENESS. The obligations of the Lender
to make the initial Revolving Loan and to issue the initial Letter of Credit
hereunder is subject to the receipt by the Lender of the following in form and
substance reasonably satisfactory to the Lender:
(a) The Loan Documents duly executed, including without
limitation this Agreement and the Note;
(b) certified copies of resolutions of the Board of
Directors of Borrower authorizing and ratifying the execution,
delivery, and performance of this Agreement and all Loan Documents;
(c) certificates of existence or good standing for
Borrower certified by the Secretary of the State of Texas;
(d) a copy of Borrower's articles of incorporation and
bylaws (including all amendments thereto), certified by the secretary
of Borrower; and
(e) payment of the closing fee as described in Section
2.7(c) hereof.
SECTION 3.2 EACH CREDIT EVENT. The obligation of the Lender to make any
Advance or to issue, amend, renew or extend any Letter of Credit is subject to
the satisfaction of the following conditions:
(a) at the time of and immediately after giving effect to
such Advance or the issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, no Default or Event of Default shall
exist;
(b) all representations and warranties of Borrower and
Parent set forth in the Loan Documents shall be true and correct in all
material respects on and as of the date of such Advance or the date of
issuance, amendment, extension or renewal of such Letter of Credit, in
each case before and after giving effect thereto; and
(c) since the date of the most recent financial
statements of the Borrower described in Section 5.1(a), there shall
have been no change which has had or could reasonably be expected to
have a Material Adverse Effect.
The making of each Advance and each issuance, amendment, extension or renewal of
any Letter of Credit shall be deemed to constitute a representation and warranty
by the Borrower on the date thereof as to the matters specified in paragraphs
(a), (b) and (c) of this Section 3.2.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender as follows:
SECTION 4.1 EXISTENCE; POWER. The Borrower (i) is duly organized,
validly existing and in good standing as a corporation under the laws of the
jurisdiction of its organization, (ii) has all requisite power and authority to
carry on its business as now conducted, and (iii) is duly qualified to do
business, and is in good standing, in each jurisdiction where such qualification
is
required, except where a failure to be so qualified could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 4.2 ORGANIZATIONAL POWER; AUTHORIZATION. The execution,
delivery and performance by Borrower of the Loan Documents to which it is a
party are within Borrower's organizational powers and have been duly authorized
by all necessary organizational, and if required, stockholder action. This
Agreement has been duly executed and delivered by the Borrower, and constitutes,
and each other Loan Document to which Borrower is a party, when executed, will
constitute, valid and binding obligations of the Borrower, enforceable against
it in accordance with their respective terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity.
SECTION 4.3 GOVERNMENTAL APPROVALS; NO CONFLICTS. The execution,
delivery and performance by the Borrower and the Parent of the Loan Documents,
as applicable, (a) do not require any consent or approval of, registration or
filing with, or any action by, any Governmental Authority, except those as have
been obtained or made and are in full force and effect or where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect, (b) will not violate any applicable law or
regulation or the charter, by-laws or other organizational documents of the
Borrower or Parent, as applicable, or any order of any Governmental Authority,
(c) will not violate or result in a default under any indenture, material
agreement or other material instrument binding on the Borrower or Parent, as
applicable, or any of their respective assets or give rise to a right thereunder
to require any payment to be made by the Borrower or Parent, and (d) will not
result in the creation or imposition of any Lien on any asset of the Borrower or
Parent, except Liens (if any) created under the Loan Documents.
SECTION 4.4 FINANCIAL STATEMENTS. The Borrower has furnished to the
Lender (i) the audited balance sheet of the Borrower as of December 31, 2001 and
the related statements of income, shareholders' equity and cash flows for the
fiscal year then ended and (ii) the unaudited balance sheet of the Borrower as
at the end of Period Three (3) of 2002, and the related unaudited statements of
income and cash flows for the fiscal quarter and year-to-date period then
ending, certified by a Responsible Officer. Such financial statements fairly
present the financial condition of the Borrower as of such dates and the results
of operations for such periods in conformity with GAAP consistently applied,
subject to year end audit adjustments and the absence of footnotes in the case
of the statements referred to in clause (ii). Since December 31, 2001, there
have been no changes with respect to the Borrower which have had or could
reasonably be expected to have, singly or in the aggregate, a Material Adverse
Effect.
SECTION 4.5 LITIGATION AND ENVIRONMENTAL MATTERS.
(a) No litigation, investigation or proceeding of or
before any arbitrators or Governmental Authorities is pending against
or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or Parent (i) as to which there is a reasonable
possibility of an adverse determination that could reasonably be
expected to have, either individually or in the aggregate, a Material
Adverse Effect or (ii) which in any manner
draws into question the validity or enforceability of this Agreement or
any other Loan Document.
(b) Neither Borrower nor Parent (i) has failed to comply
with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has
received notice of any claim with respect to any Environmental
Liability or (iv) knows of any basis for any Environmental Liability.
SECTION 4.6 COMPLIANCE WITH LAWS AND AGREEMENTS. The Borrower and
Parent are in compliance with (a) all applicable laws, rules, regulations and
orders of any Governmental Authority, and (b) all indentures, agreements or
other instruments binding upon it or its properties, except where
non-compliance, either singly or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 4.7 INVESTMENT COMPANY ACT, ETC. Neither Borrower nor Parent is
(a) an "investment company", as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended, (b) a "holding company" as defined
in, or subject to regulation under, the Public Utility Holding Company Act of
1935, as amended or (c) otherwise subject to any other regulatory scheme
limiting its ability to incur debt.
SECTION 4.8 TAXES. The Borrower and Parent have timely filed or caused
to be filed all Federal income tax returns and all other material tax returns
that are required to be filed by them, and have paid all taxes shown to be due
and payable on such returns or on any assessments made against it or its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority, except (i) to the extent the failure to
do so would not have a Material Adverse Effect or (ii) where the same are
currently being contested in good faith by appropriate proceedings and for which
the Borrower or Parent has set aside on its books adequate reserves.
SECTION 4.9 MARGIN REGULATIONS. None of the proceeds of any of the
Revolving Loan or Letters of Credit will be used for "purchasing" or "carrying"
any "margin stock" with the respective meanings of each of such terms under
Regulation U as now and from time to time hereafter in effect or for any purpose
that violates the provisions of the applicable Margin Regulations.
SECTION 4.10 ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$100,000 the fair market value of the assets of such Plan, and the present value
of all accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Standards No. 87) did
not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $100,000 the fair market value of
the assets of all such underfunded Plans.
SECTION 4.11 OWNERSHIP OF PROPERTY.
(a) Borrower has good title to, or valid leasehold
interests in, all of its real and personal property material to the
operation of its business.
(b) Borrower owns, or is licensed, or otherwise has the
right, to use, all patents, trademarks, service marks, trade names,
copyrights and other intellectual property material to its business,
and the use thereof by the Borrower does not infringe on the rights of
any other Person, except for any such infringements that, individually
or in the aggregate, would not have a Material Adverse Effect.
SECTION 4.12 DISCLOSURE. The Borrower has disclosed to the Lender all
agreements, instruments, and corporate or other restrictions to which the
Borrower is subject, and all other matters known to any of them, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other information furnished by or on behalf of the Borrower to the Lender in
connection with the negotiation of this Agreement or any other Loan Document or
delivered hereunder or thereunder (as modified or supplemented by any other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, taken as a
whole, in light of the circumstances under which they were made, not misleading.
SECTION 4.13 LABOR RELATIONS. Except for existing negotiations between
Borrower and the Teamsters with respect to the Las Vegas, Nevada terminal, there
are no strikes, lockouts or other material labor disputes or grievances against
the Borrower or Parent, or to the Borrower's knowledge, threatened against or
affecting the Borrower or Parent, and no significant unfair labor practice,
charges or grievances are pending against the Borrower, or to the Borrower's
knowledge, threatened against either of them before any Governmental Authority.
All payments due from the Borrower pursuant to the provisions of any collective
bargaining agreement have been paid or accrued as a liability on the books of
the Borrower, except where the failure to do so could not reasonably be expected
to have a Material Adverse Effect.
SECTION 4.14 SUBSIDIARIES. Central Refrigerated and Central
Receivables, Inc., a Nevada corporation, are the sole Subsidiaries of Borrower.
ARTICLE 5
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that so long as the Lender has a
Revolving Commitment hereunder or any fee or any LC Disbursement remains unpaid
or any Letter of Credit remains outstanding:
SECTION 5.1 FINANCIAL STATEMENTS AND OTHER INFORMATION. The Borrower
will deliver to the Lender:
(a) as soon as available and in any event within 120 days
after the end of each fiscal year of Borrower, a copy of the annual
audited report for such fiscal year for the Parent and the Borrower,
containing a consolidated and consolidating balance sheet of the Parent
and the Borrower and Central Refrigerated as of the end of such fiscal
year and the related consolidated and consolidating statements of
income, stockholders' equity and cash flows (together with all
footnotes thereto) of the Parent, Borrower and Central Refrigerated for
such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and
reported on by independent public accountants of nationally recognized
standing (without a "going concern" or like qualification, exception or
explanation and without any qualification or exception as to scope of
such audit) to the effect that such financial statements present fairly
in all material respects the financial condition and the results of
operations of the Parent, Borrower and Central Refrigerated for such
fiscal year on a consolidated and consolidating basis in accordance
with GAAP and that the examination by such accountants in connection
with such consolidating financial statements has been made in
accordance with generally accepted auditing standards;
(b) as soon as available and in any event within 45 days
after the end of FISCAL PERIODS 3,6 AND 9 of each fiscal year of the
Borrower, an unaudited consolidating balance sheet of the Borrower and
Central Refrigerated (the balance sheet of Central Refrigerated shall
be based on calendar quarters and not Fiscal Periods) (and consolidated
for the Parent and the Borrower) as of the end of such Fiscal Periods
and the related unaudited consolidating statements of income and cash
flows of the Borrower and Central Refrigerated (and consolidated for
the Parent and the Borrower) for such Fiscal Periods and the then
elapsed portion of such fiscal year, setting forth in each case in
comparative form the figures for the corresponding Fiscal Period and
the corresponding portion of the previous fiscal year, all certified by
the chief financial officer or treasurer of the Borrower as presenting
fairly in all material respects the financial condition and results of
operations of the Parent, Borrower and Central Refrigerated in
accordance with GAAP, subject to normal year-end audit adjustments and
the absence of footnotes; and
(c) concurrently with the delivery of the financial
statements referred to in clauses (a) and (b) above, a certificate from
Borrower's chief financial officer or treasurer setting forth in
reasonable detail calculations demonstrating compliance (or lack
thereof) with Article 6 (and, as applicable, with Section 5.11(b)).
SECTION 5.2 NOTICES OF MATERIAL EVENTS. The Borrower will furnish to
the Lender prompt written notice of the following:
(a) the occurrence of any Default or Event of Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or, to the knowledge of the Borrower,
affecting the Borrower or Parent which, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any event or any other development
by which the Borrower or Parent (i) fails to comply with any
Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii)
becomes subject to any Environmental Liability, (iii) receives notice
of any claim with respect to any Environmental Liability, or (iv)
becomes aware of any basis for any Environmental Liability and in each
of the preceding clauses, which individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect;
(d) the occurrence of any ERISA Event that alone, or
together with any other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Borrower or Parent
in an aggregate amount exceeding $100,000; and
(e) any other development that results in, or could
reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a
written statement of a Responsible Officer setting forth the details of the
event or development requiring such notice and any action taken or proposed to
be taken with respect thereto.
SECTION 5.3 EXISTENCE; CONDUCT OF BUSINESS. The Borrower will do or
cause to be done all things necessary to preserve, renew and maintain in full
force and effect its legal existence and its respective rights, licenses,
permits, privileges, franchises, patents, copyrights, trademarks and trade names
material to the conduct of its business and will continue to engage in the same
business as presently conducted or such other businesses that are reasonably
related thereto.
SECTION 5.4 COMPLIANCE WITH LAWS, ETC. The Borrower will comply with
all laws, rules, regulations and requirements of any Governmental Authority
applicable to its properties, except where the failure to do so, either
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 5.5 PAYMENT OF OBLIGATIONS. The Borrower will pay and discharge
at or before maturity, all of its obligations and liabilities (including without
limitation all tax liabilities and claims that could result in a statutory Lien)
before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Borrower has set aside on its books adequate reserves with
respect thereto in accordance with GAAP, and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.6 BOOKS AND RECORDS. The Borrower will keep proper books of
record and account in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and activities to the
extent necessary to prepare the consolidating financial statements of Borrower
and Central Refrigerated in conformity with GAAP.
SECTION 5.7 VISITATION, INSPECTION, ETC. The Borrower will permit any
representative of the Lender to visit and inspect its properties, to examine its
books and records and to make copies and take extracts therefrom, and to discuss
its affairs, finances and accounts with any of its officers and with its
independent certified public accountants, all at such reasonable times and as
often as the Lender may reasonably request after reasonable prior notice to the
Borrower.
SECTION 5.8 MAINTENANCE OF PROPERTIES; INSURANCE. The Borrower will (a)
keep and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear except where the failure to
do so, either individually or it the aggregate, could not reasonably be expected
to result in a Material Adverse Effect and (b) maintain with financially sound
and reputable insurance companies, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
companies in the same or similar businesses operating in the same or similar
locations.
SECTION 5.9 USE OF PROCEEDS AND LETTERS OF CREDIT. The Borrower will
use the proceeds of the Revolving Loan to (a) payoff any and all Indebtedness
owed by Borrower to Compass Bank and (b) finance working capital needs and for
other general corporate purposes of the Borrower. No part of the proceeds of any
Loan will be used, whether directly or indirectly, for any purpose that would
violate any rule or regulation of the Board of Governors of the Federal Reserve
System, including Regulations T, U or X. All Letters of Credit will be used for
general corporate purposes.
SECTION 5.10 CENTRAL REFRIGERATED.
(a) Borrower will maintain the separate and distinct
corporate and legal nature of Borrower and Central Refrigerated in all
respects, including but not limited to exercising all distinct
corporate formalities and maintaining separate boards of directors,
minute books, officers, headquarters, payroll, operations, employees
and bank accounts.
(b) Central Refrigerated will have a Net Income of at
least $1,500,000 measured from May 1, 2002 to October 31, 2002. In the
event Central Refrigerated fails to satisfy said minimum Net Income
requirement, Borrower shall, at Lender's option, sell or otherwise
dispose of such portion of Central Refrigerated so as to make Central
Refrigerated no longer an Affiliate of Borrower; provided, that such
sale or disposition shall take place within sixty (60) days of
Borrower's receipt of Lender's written notice of its intention to
exercise the option granted hereunder; provided further, that the
option granted to Lender hereunder shall terminate sixty (60) days
after Lender receives written notice of Central Refrigerated's failure
to comply with the minimum Net Income requirement set forth herein in
accordance with Section 5.1(c) hereof.
ARTICLE 6
FINANCIAL COVENANTS
The Borrower covenants and agrees that so long as the Lender has its
Revolving Commitment hereunder or any fee or any LC Disbursement remains unpaid
or any Letter of Credit remains outstanding:
SECTION 6.1 MINIMUM TANGIBLE NET WORTH. The Borrower will not permit
its Tangible Net Worth at any time to be less than $25,000,000, plus 50% of Net
Income on a cumulative basis as of the last day of Fiscal Periods 3, 6, 9 and 13
of any fiscal year of Borrower; provided, that if Net Income is negative for any
such period the amount added for such period shall be zero and such negative Net
Income shall not reduce the amount of Net Income added from any previous period.
SECTION 6.2 MINIMUM EBITDA. The Borrower will maintain an EBITDA as of
the last day of the periods set forth below of not less than the amounts set
forth below:
From January 1, 2002 to
the last day of Fiscal Period 4, 2002 $5,563,000;
From January 1, 2002 to
the last day of Fiscal Period 7, 2002 $13,118,000;
From January 1, 2002 to
the last day of Fiscal Period 10, 2002 $23,410,000; and
From January 1, 2002 to
the last day of Fiscal Period 13, 2002
and thereafter on a rolling
thirteen Fiscal Period basis $34,946,000.
SECTION 6.3 MAXIMUM LEASE ADJUSTED LEVERAGE RATIO. For the period
ending with Fiscal Period No. 13 of 2002, the Borrower shall maintain a Lease
Adjusted Leverage Ratio of not greater than 3.0 to 1.0, measured on a rolling
thirteen Fiscal Period basis. Thereafter, the Borrower will maintain a Lease
Adjusted Leverage Ratio of not greater than the ratios set forth below measured
on a rolling thirteen Fiscal Period basis as of the last day of each Fiscal
Period 3, 6, 9 and 13 during the calendar years set forth below:
2003 3.0 to 1.0; and
2004 and thereafter 2.5 to 1.0.
ARTICLE 7
NEGATIVE COVENANTS
The Borrower covenants and agrees that so long as the Lender has its
Revolving Commitment hereunder or any fee or any LC Disbursement remains unpaid
or any Letter of Credit remains outstanding:
SECTION 7.1 INDEBTEDNESS. The Borrower will not create, incur, assume
or suffer to exist any Indebtedness, except:
(a) Indebtedness created pursuant to the Loan Documents;
(b) Indebtedness existing on the date hereof and set
forth on Schedule 7.1 and extensions, renewals and replacements of any
such Indebtedness that do not increase the outstanding principal amount
thereof (immediately prior to giving effect to such extension, renewal
or replacement) or shorten the maturity or the weighted average life
thereof;
(c) Indebtedness incurred to finance the acquisition of
any capital assets (including Capital Lease Obligations); provided,
that (i) such Indebtedness is incurred prior to or within 90 days after
such acquisition, (ii) any extensions, renewals, and replacements of
any such Indebtedness do not increase the outstanding principal amount
thereof (immediately prior to giving effect to such extension, renewal
or replacement) or shorten the maturity or the weighted average life
thereof, and (iii) the aggregate principal amount of such Indebtedness
does not exceed $20,000,000 at any time outstanding; and
(d) other unsecured Indebtedness in an aggregate
principal amount not to exceed $1,000,000 at any time outstanding.
SECTION 7.2 NEGATIVE PLEDGE. The Borrower will not create, incur,
assume or suffer to exist any Lien on any of its assets or property now owned or
hereafter acquired or, except:
(a) Liens created in favor of the Lender pursuant to the
Loan Documents;
(b) Permitted Encumbrances;
(c) any Liens on any property or asset of the Borrower
existing on the Closing Date set forth on Schedule 7.2; provided, that
such Lien shall not apply to any other property or asset of the
Borrower; and
(d) purchase money Liens upon any capital assets to
secure the purchase price of such capital assets (including Liens
securing any Capital Lease Obligations); provided, that (i) such Lien
secures Indebtedness permitted by Section 7.1(c), (ii) such Lien
attaches to such asset concurrently or within 90 days after the
acquisition thereof; (iii) such Lien does not extend to any other
asset; and (iv) the Indebtedness secured thereby does not exceed the
cost of acquiring such capital assets; and
(e) extensions, renewals, or replacements of any Lien
referred to in paragraphs (a) through (d) of this Section; provided,
that the principal amount of the
Indebtedness secured thereby is not increased and that any such
extension, renewal or replacement is limited to the assets originally
encumbered thereby.
SECTION 7.3 FUNDAMENTAL CHANGES.
(a) The Borrower will not merge into or consolidate into
any other Person, or permit any other Person to merge into or
consolidate with it, or sell, lease, transfer or otherwise dispose of
(in a single transaction or a series of transactions) all or
substantially all of its assets (in each case, whether now owned or
hereafter acquired) or liquidate or dissolve.
(b) The Borrower will not engage to any material extent
in any business other than businesses of the type conducted by the
Borrower on the date hereof and businesses reasonably related thereto.
SECTION 7.4 INVESTMENTS, LOANS, ETC. The Borrower will not purchase,
hold or acquire any common stock, evidence of indebtedness or other securities
(including any option, warrant, or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person, including without limitation Central Refrigerated (all of the
foregoing being collectively called "INVESTMENTS"), or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person, including without limitation Central Refrigerated, that constitute a
business unit, except:
(a) Investments (other than Permitted Investments)
existing on the date hereof and set forth on Schedule 7.4;
(b) Permitted Investments; and
(c) The Moyes Note.
SECTION 7.5 SALE OF ASSETS. The Borrower will not convey, sell, lease,
assign, transfer or otherwise dispose of, any of its assets, business or
property, whether now owned or hereafter acquired, except:
(a) the sale or other disposition for fair market value
of obsolete or worn out property or other property not necessary for
operations disposed of in the ordinary course of business;
(b) the sale of inventory in the ordinary course of
business; and
(c) the sale of real property constituting existing
terminals to SPP for fair market value, in connection with a sale and
leaseback transaction with SPP.
SECTION 7.6 TRANSACTIONS WITH AFFILIATES. The Borrower will not sell,
lease or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property
or assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except in the ordinary course of business at prices and on terms and
conditions not less favorable to the Borrower than could be obtained on an
arm's-length basis from unrelated third parties. Notwithstanding the foregoing,
Borrower will not transfer, sell or lease any material asset to Central
Refrigerated. Notwithstanding the foregoing, the prohibitions of this Section
shall not apply to the transactions described in Section 7.5(c) hereof nor shall
they prohibit group purchasing by Borrower of property purchased on behalf of
Central Refrigerated and which is subsequently conveyed to Central Refrigerated
on an arms-length basis and in the ordinary course of business.
SECTION 7.7 SALE AND LEASEBACK TRANSACTIONS. Except as described in
Section 7.5(c) hereof, the Borrower will not enter into any arrangement,
directly or indirectly, whereby it shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or hereinafter
acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property
sold or transferred.
SECTION 7.8 AMENDMENT TO MATERIAL DOCUMENTS. The Borrower will not
amend, modify or waive any of its rights in a manner materially adverse to the
Lender under its certificate of incorporation, bylaws or other organizational
documents.
SECTION 7.9 ACCOUNTING CHANGES. The Borrower will not make any
significant change in accounting treatment or reporting practices, except as
required by GAAP, or change the fiscal year of the Borrower.
SECTION 7.10 SUBSIDIARIES. Borrower will not create any additional
Subsidiaries.
SECTION 7.11 DIVIDENDS. Borrower will not pay or declare any dividends
during any fiscal year in excess of 40% of Borrower's Net Income for such fiscal
year.
ARTICLE 8
EVENTS OF DEFAULT
SECTION 8.1 EVENTS OF DEFAULT. If any of the following events (each an
"Event of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any
Advance or of any reimbursement obligation in respect of any LC
Disbursement when and as the same shall become due and payable, whether
at the due date thereof or at a date fixed for prepayment or otherwise;
or
(b) the Borrower shall fail to pay any interest on any
Advance or any fee or any other amount (other than an amount payable
under clause (a) of this Article) payable under this Agreement or any
other Loan Document, when and as the same shall become due and payable,
and such failure shall continue unremedied for a period of three (3)
Business Days; or
(c) any representation or warranty made or deemed made by
or on behalf of the Borrower or Parent in or in connection with this
Agreement or any other Loan Document (including the Schedules attached
thereto) and any amendments or modifications hereof or waivers
hereunder, or in any certificate, report, financial statement or other
document submitted to the Lender or the Lenders by Borrower or Parent
or any representative of Borrower or Parent pursuant to or in
connection with this Agreement or any other Loan Document shall prove
to be incorrect when made or deemed made or submitted; or
(d) the Borrower shall fail to observe or perform any
covenant or agreement contained in Sections 5.2, 5.3 (with respect to
the Borrower's existence) or Articles 6 or 7; or
(e) the Borrower shall fail to observe or perform any
covenant or agreement contained in this Agreement (other than those
referred to in clauses (a), (b) and (d) above), and such failure shall
remain unremedied for 30 days after the earlier of (i) any officer of
the Borrower becomes aware of such failure, or (ii) notice thereof
shall have been given to the Borrower by the Lender; or
(f) the Borrower (whether as primary obligor or as
guarantor or other surety) shall fail to pay any principal of or
premium or interest on any Indebtedness that is outstanding, when and
as the same shall become due and payable (whether at scheduled
maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument evidencing such Indebtedness;
or any other event shall occur or condition shall exist under any
agreement or instrument relating to such Indebtedness and shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or permit the acceleration of, the maturity of such
Indebtedness; or any such Indebtedness shall be declared to be due and
payable; or required to be prepaid or redeemed (other than by a
regularly scheduled required prepayment or redemption), purchased or
defeased, or any offer to prepay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case prior to the
stated maturity thereof; or
(g) the Borrower, Parent or Central Refrigerated shall
(i) commence a voluntary case or other proceeding or file any petition
seeking liquidation, reorganization or other relief under any federal,
state or foreign bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a custodian, trustee,
receiver, liquidator or other similar official of it or any substantial
part of its property, (ii) consent to the institution of , or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (i) of this Section, (iii) apply for or consent to
the appointment of a custodian, trustee, receiver, liquidator or other
similar official for the Borrower, Parent or Central Refrigerated or
for a substantial part of any of their assets, (iv) file an answer
admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of
creditors, or (vi) take any action for the purpose of effecting any of
the foregoing; or
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower, Parent or
Central Refrigerated or their debts, or any substantial part of their
assets, under any federal, state or foreign bankruptcy, insolvency or
other similar law now or hereafter in effect or (ii) the appointment of
a custodian, trustee, receiver, liquidator or other similar official
for the Borrower, Parent or Central Refrigerated or for a substantial
part of any of their assets, and in any such case, such proceeding or
petition shall remain undismissed for a period of 60 days or an order
or decree approving or ordering any of the foregoing shall be entered;
or
(i) the Borrower, Parent or Central Refrigerated shall
become unable to pay, shall admit in writing its inability to pay, or
shall fail to pay, its debts as they become due; or
(j) an ERISA Event shall have occurred that, when taken
together with other ERISA Events that have occurred, could reasonably
be expected to result in liability to the Borrower in an aggregate
amount exceeding $250,000; or
(k) any judgment or order for the payment of money in
excess of $500,000 in the aggregate shall be rendered against the
Borrower, and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there
shall be a period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(l) any non-monetary judgment or order shall be rendered
against the Borrower that could reasonably be expected to have a
Material Adverse Effect, and there shall be a period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or
(m) a Change in Control shall occur or exist for Borrower
or Parent; or
(n) a default or event of default shall occur under any
other Loan Document, including without limitation a default by Parent
under the Guaranty; or
(o) a default or event of default shall occur under any
document evidencing Indebtedness owed by Borrower to Lender, including
without limitation any Hedging Agreement; or
(p) ▇▇▇▇▇▇ ▇▇▇▇▇ shall no longer serve as chief executive
officer of Borrower; or
(q) any liability (or liabilities), as determined in
accordance with GAAP, of Central Refrigerated exceeding $100,000,
whether individually or in the aggregate, shall at any time become a
liability (or liabilities) of Borrower.
then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h) of this Section) and at any time thereafter
during the continuance of such event, the Lender may, by notice to the Borrower,
take any or all of the following actions, at the same or different times: (i)
terminate its Revolving Commitment; (ii) declare the principal of and any
accrued interest on the Revolving Loan, and all other Obligations owing
hereunder, to be, whereupon the same shall become due and payable immediately,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower and (iii) exercise all remedies contained in
any other Loan Document; and that, if an Event of Default specified in either
clause (g) or (h) shall occur, the Revolving Commitment shall automatically
terminate and the principal of the Revolving Loan then outstanding, together
with accrued interest thereon, and all fees, and all other Obligations shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 NOTICES.
(a) Except in the case of notices and other
communications expressly permitted to be given by telephone, all
notices and other communications to any party herein to be effective
shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as
follows:
To the Borrower: Central Freight Lines, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ Law Firm, P.C., L.L.O.
411 Building
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
To the Lender: SunTrust Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other
parties hereto. All such notices and other communications shall, when
transmitted by overnight delivery, or faxed, be effective when
delivered for overnight (next-day) delivery, or transmitted in legible
form by facsimile machine, respectively, or if mailed, upon the third
Business Day after the date deposited into the mails or if delivered,
upon delivery; provided, that notices delivered by mail to the Lender
shall not be effective until actually received by the Lender at its
address specified in this Section 9.1.
(b) Any agreement of the Lender herein to receive certain
notices by telephone or facsimile is solely for the convenience and at
the request of the Borrower. The Lender shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the
Borrower to give such notice and the Lender shall not have any
liability to the Borrower or other Person on account of any action
taken or not taken by the Lender in reliance upon such telephonic or
facsimile notice. The obligation of the Borrower to repay the Revolving
Loan and all other Obligations hereunder shall not be affected in any
way or to any extent by any failure of the Lender to receive written
confirmation of any telephonic or facsimile notice or the receipt by
the Lender of a confirmation which is at variance with the terms
understood by the Lender to be contained in any such telephonic or
facsimile notice.
SECTION 9.2 WAIVER; AMENDMENTS.
(a) No failure or delay by the Lender in exercising any
right or power hereunder or any other Loan Document, and no course of
dealing between the Borrower and the Lender, shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or
power or any abandonment or discontinuance of steps to enforce such
right or power, preclude any other or further exercise thereof or the
exercise of any other right or power hereunder or thereunder. The
rights and remedies of the Lender hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or
remedies provided by law. No waiver of any provision of this Agreement
or any other Loan Document or consent to any departure by the Borrower
therefrom shall in
any event be effective unless the same shall be permitted by paragraph
(b) of this Section, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan
or the issuance of a Letter of Credit shall not be construed as a
waiver of any Default or Event of Default, regardless of whether the
Lender may have had notice or knowledge of such Default or Event of
Default at the time.
(b) No amendment or waiver of any provision of this
Agreement or the other Loan Documents, nor consent to any departure by
the Borrower therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Borrower and the Lender and then
such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
SECTION 9.3 EXPENSES; INDEMNIFICATION.
(a) The Borrower shall pay (i) all reasonable,
out-of-pocket costs and expenses of the Lender (including, without
limitation, the reasonable fees, charges and disbursements of outside
counsel and the allocated cost of inside counsel) in connection with
the preparation and administration of the Loan Documents and any
amendments, modifications or waivers thereof (whether or not the
transactions contemplated in this Agreement or any other Loan Document
shall be consummated), and (ii) all out-of-pocket costs and expenses
(including, without limitation, the reasonable fees, charges and
disbursements of outside counsel and the allocated cost of inside
counsel) incurred by the Lender in connection with the enforcement or
protection of its rights in connection with this Agreement, including
its rights under this Section, or in connection with any Advance made
or any Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations thereof.
(b) The Borrower shall indemnify the Lender and each
Related Party of the Lender (each, an "INDEMNITEE") against, and hold
each of them harmless from, any and all costs, losses, liabilities,
claims, damages and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, which may be incurred
by or asserted against any Indemnitee arising out of, in connection
with or as a result of (i) the execution or delivery of this Agreement
or any other agreement or instrument contemplated hereby, the
performance by the parties hereto of their respective obligations
hereunder or the consummation of any of the transactions contemplated
hereby, (ii) any Advance or Letter of Credit or any actual or proposed
use of the proceeds therefrom (including any refusal by the Lender to
honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit), (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property
owned by the Borrower or any Environmental Liability related in any way
to the Borrower or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether
based on contract, tort, or any other theory and regardless of whether
any Indemnitee is a party thereto; provided, that the Borrower shall
not be obligated to
indemnify any Indemnitee for any of the foregoing arising out of such
Indemnitee's gross negligence or willful misconduct as determined by a
court of competent jurisdiction in a final and nonappealable judgment.
(c) The Borrower shall pay, and hold the Lender harmless
from and against, any and all present and future stamp, documentary,
and other similar taxes with respect to this Agreement and any other
Loan Documents, any collateral described therein, or any payments due
thereunder, and save the Lender harmless from and against any and all
liabilities with respect to or resulting from any delay or omission to
pay such taxes.
(d) To the extent permitted by applicable law, the
Borrower shall not assert, and hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to actual or direct
damages) arising out of, in connection with or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the
transactions contemplated therein, any Loan or the Letter of Credit or
the use of proceeds thereof.
(e) All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 9.4 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not
assign or transfer any of its rights hereunder without the prior
written consent of the Lender (and any attempted assignment or transfer
by the Borrower without such consent shall be null and void).
(b) The Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including all or a portion of
its Revolving Commitment and the Revolving Loan and LC Exposure at the
time owing to it); provided, that the Borrower must give its prior
written consent (which consent shall not be unreasonably withheld or
delayed) to any assignment, except an assignment to an Affiliate of the
Lender or during the occurrence and continuation of a Default or an
Event of Default. Upon the execution and delivery of an assignment
agreement by the Lender and such assignee and payment by such assignee
of an amount equal to the purchase price agreed between the Lender and
such assignee, such assignee shall become a party to this Agreement and
the other Loan Documents and shall have the rights and obligations of a
Lender under this Agreement, and the Lender shall be released from its
obligations hereunder to a corresponding extent.
(c) The Lender may at any time, without the consent of
the Borrower, sell participations to one or more banks or other
entities (a "PARTICIPANT") in all or a portion of the Lender's rights
and obligations under this Agreement; provided, that (i) the Lender's
obligations under this Agreement shall remain unchanged, (ii) the
Lender shall remain solely responsible to the other parties hereto for
the performance of its obligations
hereunder, and (iii) the Borrower shall continue to deal solely and
directly with the Lender in connection with the Lender's rights and
obligations under this Agreement and the other Loan Documents. Any
agreement between the Lender and the Participant with respect to such
participation shall provide that the Lender shall retain the sole right
and responsibility to enforce this Agreement and the other Loan
Documents and the right to approve any amendment, modification or
waiver of this Agreement and the other Loan Documents; provided, that
such participation agreement may provide that such Lender will not,
without the consent of the Participant, agree to any amendment,
modification or waiver of this Agreement described in the first proviso
of Section 9.2(b) that affects the Participant.
(d) The Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this
Agreement and the Revolving Credit Note to secure its obligations to a
Federal Reserve Bank without complying with this Section; provided,
that no such pledge or assignment shall release the Lender from any of
its obligations hereunder or substitute any such pledgee or assignee
for such Lender as a party hereto.
SECTION 9.5 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) This Agreement and the other Loan Documents shall be
construed in accordance with and be governed by the law (without giving
effect to the conflict of law principles thereof) of the State of
Tennessee.
(b) The Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the non-exclusive jurisdiction
of the United States District Court of the Middle District of
Tennessee, and of any state court of the State of Tennessee and any
appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or any other Loan Document or the
transactions contemplated hereby or thereby, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard and determined in such
Tennessee state court or, to the extent permitted by applicable law,
such Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law. Nothing in this Agreement or any other
Loan Document shall affect any right that the Lender may otherwise have
to bring any action or proceeding relating to this Agreement or any
other Loan Document against the Borrower or its properties in the
courts of any jurisdiction.
(c) The Borrower irrevocably and unconditionally waives
any objection which it may now or hereafter have to the laying of venue
of any such suit, action or proceeding described in paragraph (b) of
this Section and brought in any court referred to in paragraph (b) of
this Section. Each of the parties hereto irrevocably waives, to the
fullest extent permitted by applicable law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in
any such court.
(d) Each party to this Agreement irrevocably consents to
the service of process in the manner provided for notices in Section
9.1. Nothing in this Agreement or in any other Loan Document will
affect the right of any party hereto to serve process in any other
manner permitted by law.
SECTION 9.6 WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.7 RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
the Lender shall have the right, at any time or from time to time upon the
occurrence and during the continuance of an Event of Default, without prior
notice to the Borrower, any such notice being expressly waived by the Borrower
to the extent permitted by applicable law, to set off and apply against all
deposits (general or special, time or demand, provisional or final) of the
Borrower at any time held or other obligations at any time owing by the Lender
to or for the credit or the account of the Borrower against any and all
Obligations held by the Lender, irrespective of whether the Lender shall have
made demand hereunder and although such Obligations may be unmatured. The Lender
agrees promptly to notify the Borrower after any such set-off and any
application made by the Lender; provided, that the failure to give such notice
shall not affect the validity of such set-off and application.
SECTION 9.8 COUNTERPARTS; INTEGRATION. This Agreement may be executed
by one or more of the parties to this Agreement on any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. This
Agreement, the other Loan Documents, and any separate letter agreement(s)
relating to any fees payable to the Lender constitute the entire agreement among
the parties hereto and thereto regarding the subject matters hereof and thereof
and supersede all prior agreements and understandings, oral or written,
regarding such subject matters.
SECTION 9.9 SURVIVAL. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other party hereto and shall survive
the execution and delivery of this Agreement and the making of any
Revolving Loan and issuance of any Letters of Credit, regardless of any
investigation made by such other party or on its behalf and notwithstanding that
the Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Revolving Commitment has not expired or terminated. All
representations and warranties made herein, in the certificates, reports,
notices, and other documents delivered pursuant to this Agreement shall survive
the execution and delivery of this Agreement and the other Loan Documents, and
the making of the Revolving Loan.
SECTION 9.10 SEVERABILITY. Any provision of this Agreement or any other
Loan Document held to be illegal, invalid or unenforceable in any jurisdiction,
shall, as to such jurisdiction, be ineffective to the extent of such illegality,
invalidity or unenforceability without affecting the legality, validity or
enforceability of the remaining provisions hereof or thereof; and the
illegality, invalidity or unenforceability of a particular provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
SECTION 9.11 CONFIDENTIALITY. The Lender agrees to take normal and
reasonable precautions to maintain the confidentiality of any information
designated in writing as confidential and provided to it by the Borrower, Parent
or Central Refrigerated, except that such information may be disclosed (i) to
any Related Party of the Lender, including without limitation accountants, legal
counsel and other advisors, (ii) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (iii) to the extent
requested by any regulatory agency or authority, (iv) to the extent that such
information becomes publicly available other than as a result of a breach of
this Section, or which becomes available to the Lender or any Related Party of
the Lender on a nonconfidential basis from a source other than the Borrower, (v)
in connection with the exercise of any remedy hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,
and (ix) subject to provisions substantially similar to this Section 9.11, to
any actual or prospective assignee or Participant, or (vi) with the consent of
the Borrower. Any Person required to maintain the confidentiality of any
information as provided for in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such information as such Person would
accord its own confidential information. Lender shall give PRIOR written notice
to Borrower of disclosures made under subsections (ii) through (vi) hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BORROWER:
CENTRAL FREIGHT LINES, INC.,
a Texas Corporation
By: /s/ ▇▇▇ ▇▇▇▇▇
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Title: Executive Vice President
LENDER:
SUNTRUST BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Vice President