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EXHIBIT 10.12
SOUTHTRUST
COMMERCIAL LOAN AGREEMENT
THIS COMMERCIAL LOAN AGREEMENT is made and entered into on March 28,
1997, by and among ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, a Georgia resident, PROFESSIONAL
TRANSPORTATION GROUP, LTD., a Georgia corporation, TRUCK/NET, INC., a Georgia
corporation, TIMELY TRANSPORTATION, INC., a Georgia corporation, and PTG, INC.,
a Georgia corporation, with their principal place of business and chief
executive offices located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ (collectively, "Borrower"), and SOUTHTRUST BANK OF GEORGIA, N.A.,
a national banking association ("Bank").
WITNESSETH:
For and in consideration of the mutual promises, undertakings and
covenants set forth herein, and for other valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, Bank and Borrower,
intending to be legally bound, agree as follows:
1. DEFINITIONS. As used in this Agreement and in addition to
those terms defined elsewhere in this Agreement, the following terms shall have
the meanings set forth below, unless the context otherwise requires:
Accounting terms used in this Agreement, such as "current
assets," "current liabilities," "LIFO reserve," "net income," and "total
liabilities," shall have the meanings normally given them by, and shall be
calculated, both as to amounts and classification of items, in accordance with,
generally accepted accounting principles in the United States.
"Agreement" shall mean this Commercial Loan Agreement,
together with any amendments or supplements hereto and any schedules or
exhibits hereto.
"Borrower" shall mean the person or entity named in the first
sentence of this Agreement and who executes this Agreement below as "Borrower."
For purposes of Sections 7(m) and 8(h), "Borrower" also includes any member of
a "control group" (as defined in ERISA) of which the named Borrower is a
member.
"Borrowing Base" shall mean eighty percent (80%) of Eligible
Accounts, plus eighty percent (80%) of Eligible Securities.
"Borrowing Base Certificate" shall mean a certificate, in form
and substance satisfactory to Bank, setting forth in detail the Borrowing Base
and certified by Borrower to be true and correct as of its date.
"Compliance Certificate" shall mean a certificate, in form and
substance satisfactory to Bank, assuring Bank of Borrower's compliance with all
of the terms and conditions of this Agreement and certified by Borrower to be
true and correct as of its date.
"Eligible Accounts" shall mean the aggregate of the
outstanding balances of all of Borrower's accounts (as such term is defined by
Article 9 of the Uniform Commercial Code) that conform to the representations
and warranties of Borrower contained in each and every document and instrument
executed in connection with the Revolving Loans; provided that no account owing
by any account debtor of Borrower shall be deemed to be included in Eligible
Accounts if (i) the account is unpaid more than ninety (90) days after the
invoice date thereof; (ii) twenty-five percent (25%) or more of the aggregate
balances of all accounts owed to Borrower by said account debtor are unpaid
more than ninety (90) days after the invoice dates thereof; (iii) such account
would make all accounts owing by said account debtor to Borrower
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aggregate more than twenty-five percent (25%) of all accounts owed to Borrower
by all account debtors; (iv) the account debtor is a division, subsidiary,
affiliate or employee of Borrower or is any other person, corporation,
partnership or other legal entity related through common stock ownership or
otherwise related directly or indirectly to Borrower or any of the Borrower's
shareholders or is an employee of Borrower; (v) the account debtor is a
creditor of Borrower or otherwise has available with respect to the account any
offset, recoupment, credit, charge or defense (to the extent of such offset,
recoupment, credit, charge or defense); (vi) Borrower has received any notice
of the death of the account debtor or any partner thereof, or of the
dissolution, termination of existence, insolvency, business failure,
appointment of a receiver for any part of the property of, assignment for the
benefit of creditors by, or the filing of a petition in bankruptcy or the
commencement of any proceeding under any bankruptcy or insolvency laws by or
against, the account debtor; (vii) the account arises out of a contract with or
an order from an agency of the United States government; (viii) Bank has deemed
the account to be ineligible because of uncertainty about the credit worthiness
of the account debtor or because Bank otherwise reasonably considers the
collateral value thereof to Bank to be impaired or Borrower's or Bank's ability
to realize such value to be insecure; (ix) the location of the account debtor
to which the goods generating the account were sent is outside the United
States and such account debtor has not provided to Borrower a letter of credit
satisfactory to Bank; (x) the goods generating the account have not been
delivered to the account debtor; or (xi) Bank, in its sole discretion,
determines in good faith that such account is ineligible.
"Eligible Securities" shall mean all marketable securities,
cash, cash equivalents, or other investments, together with all additions
thereto, whether by deposit, dividend, accrual of interest or otherwise, owned
by Borrower ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and held by ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc., in
Account Nos. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, and 34016468.
"Event of Default" shall mean any default or event of default
under this Agreement, the Note or any Security Instrument (as hereinafter
defined).
"Fixed Charge Coverage" at any date shall mean a fraction the
numerator of which is the sum of net income for any period ending on such date,
plus the interest, lease and rental expenses of Borrower for the period, plus
the sum of non-cash expenses or allowances for the period (including, without
limitation, amortization or write-down of intangible assets, and depreciation),
and the denominator of which is the sum of the current portion of the long-term
debt as of such date, plus the interest, lease and rental expenses for the
period.
"Guarantor" shall mean any person or entity who endorses the
Note or who now or hereafter guarantees the payment, performance or collection
of this Agreement, the Note or the Obligations, in whole or in part.
"Loan" shall mean each and every Revolving Loan.
"Loan Documents" shall mean this Agreement, the Note and all
documents, instruments and agreements executed in connection therewith or
pursuant thereto.
"Note" shall mean each Revolving Note.
"Obligations" shall mean any and all indebtedness, liabilities
and obligations of Borrower to Bank whatsoever, including, without limiting the
generality of the foregoing: any and all indebtedness, liabilities and
obligations of Borrower to Bank arising out of the Loan; all Bank's fees,
charges and expenses of or incidental to the preparation, renewal, modification
or enforcement of Borrower's obligations arising out of the Loan and any and
all extensions or renewals thereof in whole or in part; and any indebtedness,
liabilities or obligations of Borrower to Bank under any later or future
advances or loans made by Bank to Borrower, and any and all extensions or
renewals thereof in whole or in part, joint or several, and in any event
whether existing as of the date hereof or hereafter arising and whether direct,
indirect, absolute or contingent, as
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maker, endorser, guarantor or otherwise, including, without limitation, Bank's
participation in others' loans and all charges, interest, expenses, and costs
of collection in connection with the foregoing, including, without limitation,
fifteen percent (15%) of the foregoing as attorneys' fees (if collected by or
through an attorney) and other legal and court costs.
"Obligor" shall mean Borrower, Guarantor and each other
individual or entity primarily or secondarily, directly or indirectly, liable
for, whether as maker, endorser, surety, guarantor or otherwise, or directly or
indirectly securing, any of the Obligations, together with his, her, its or
their heirs, administrators, executors, successors and assigns, including,
without limitation, any resulting or surviving corporation following any merger
or any other reorganization, any debtor in possession or similar entity
following the filing of a petition for relief by or against such Obligor under
any chapter of the Federal Bankruptcy Code, as amended, or in any similar
proceeding under any state or federal law, and any proprietorship, partnership,
corporation, trust or other entity resulting from or arising out of the
dissolution, liquidation or change in form of business organization by such
Obligor or following any change of name or domicile by such Obligor.
2. THE LOAN. (a) WORKING CAPITAL LINE OF CREDIT. Upon the
execution of this Agreement and provided that Borrower is in compliance with
its terms and conditions, Borrower may from time to time request from Bank, and
Bank in its discretion may extend to Borrower, a working capital line of credit
in the maximum amount of up to an aggregate principal sum outstanding equal to
the face amount of a Commercial Revolving Note dated of even date herewith
(said amount being $1,915,000.00, and which note, together with any and all
amendments thereto and renewals thereof, are referred to as the "Revolving
Note") made by Borrower to the order of Bank and in form and substance
satisfactory to Bank (the "Maximum Sum"), which sum may, at Bank's discretion,
be borrowed, and which Borrower shall repay, together with interest thereon and
loan fees and commitment fees, as applicable, in accordance with the terms and
conditions of the Revolving Note, which shall evidence Borrower's obligation to
repay each advance made under the line of credit, together with such interest
and fees, if applicable (each such advance a "Revolving Loan" and all such
advances collectively the "Revolving Loans"). Borrower may borrow, repay, and
reborrow a maximum aggregate amount of advances outstanding under working
capital Revolving Loans not to exceed the lesser of the Maximum Sum or the
Borrowing Base. If at any time the outstanding principal balance of the
Revolving Note exceeds the Borrowing Base, Borrower shall pay Bank immediately,
without notice or demand, the amount of such excess, regardless of the
stipulated date of maturity, if not payable on demand. Proceeds of the working
capital line of credit Revolving Loans will be used by Borrower solely for its
working capital needs in its present line of business and for only such other
purposes as may be specifically approved by Bank in writing. Each request for,
and each acceptance of, an advance of any Revolving Loans shall constitute a
reaffirmation of the truth and accuracy of the representations and warranties
set forth in this Agreement and in the Borrowing Base Certificate.
(b) If requested to do so by Borrower, and subject to the terms
and conditions set forth in this Agreement, Lender agrees to issue one or more
letters of credit for the account of Borrower; provided, however, that (i)
prior to the issuance of each letter of credit Borrower shall execute and
deliver to Lender a letter of credit application and agreement (on Lender's
standard form therefor) for such letter of credit which shall specify the terms
and conditions of such letter of credit, (ii) each letter of credit shall be in
form and substance mutually acceptable to Borrower and Lender, (iii) prior to
the issuance of each letter of credit, Borrower shall pay to Lender a
non-refundable letter of credit fee therefor at the rate of 1.25% per annum
plus any other usual and customary fees and charges imposed by Lender in the
issuance of a letter of credit, (iv) the sum of the aggregate stated amount of
all letters of credit then outstanding plus all then outstanding reimbursement
obligations under letter of credit agreements shall not exceed $300,000 at any
one time, (v) no letters of credit shall be issued on or after the maturity of
the Revolving Loans, (vi) the proceeds of each Letter of credit may be used
only for a purpose for which Borrower would be entitled to obtain a Revolving
Loan hereunder, and (vii) Borrower's reimbursement obligations to Lender for
any and all amounts paid by Lender with respect to any draw under any letter of
credit shall constitute an Obligation of Borrower to Lender which will be
secured and guaranteed on an equal priority basis with all other Obligations
pursuant to this Agreement and the other Loan Documents and, subject to the
terms and conditions of this Agreement,
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Borrower may obtain or Lender may make a Revolving Loan hereunder in order to
repay each reimbursement obligation. Notwithstanding anything in this
Agreement to the contrary, Lender shall not be obligated hereunder or under any
letter of credit agreement to issue any letter of credit if the sum of the
aggregate principal balance of the Revolving Loans then outstanding plus the
aggregate stated amount of all letters of credit then outstanding plus the
aggregate outstanding principal amount of all reimbursement obligations then
outstanding exceeds, or would exceed with the issuance of such letter of
credit, the lesser of the Maximum Sum or the Borrowing Base then in effect.
3. SECURITY. As security for the full payment and performance of
the Obligations, Borrower hereby assigns, conveys, and grants a security
interest to Bank in all property, real and personal, in which Borrower has an
interest and which is in or comes into the possession, control or custody of
Bank (including, but not limited to, balances, credits, deposits, accounts and
monies), all property in which Borrower has heretofore granted or hereinafter
grants to Bank a security interest or has heretofore conveyed or hereinafter
conveys to Bank security title to secure any obligation pursuant to each and
every mortgage, deed to secure debt, security agreement or other instrument,
agreement or document heretofore or hereinafter executed by Borrower in favor
of Bank (collectively the "Security Instruments"), and all proceeds and
products of the foregoing property and all books and records relating thereto
and all property of Borrower in which Bank has acquired or hereafter otherwise
acquires a lien, encumbrance or other right (all of the aforesaid property
collectively the "Collateral"), and Borrower hereby agrees that Bank may, at
any time and without notice, apply any balances, credits, deposits, accounts,
monies or other indebtedness now or hereafter owing by Bank to Borrower in
satisfaction of any of the Obligations, whether or not due.
4. CONDITIONS TO INITIAL REVOLVING LOAN. Bank shall not be
obligated to make the initial Revolving Loan unless:
(a) Each of the conditions set forth in Section 5 hereof
have been satisfied;
(b) Bank shall have received payment in full of all fees,
charges, and expenses due in connection with this Agreement, including, without
limitation, any loan fees, commitment fees, service fees and attorneys' fees;
and
(c) Bank shall have received all loan documentation
deemed reasonably necessary or desirable by Bank or its counsel, satisfactory
in form and substance to Bank, providing for the Loan to be extended, secured
and guaranteed.
5. CONDITIONS TO ALL LOANS. Bank shall not be obligated to make
any Loan, unless:
(a) The representations and warranties made by or on
behalf of Borrower in connection with the Loan and the representations and
warranties contained in this Agreement are true and correct on and as of the
date of the request for the Loan;
(b) If the request is for a Revolving Loan, the amount of
the Revolving Loan requested, when aggregated with the unpaid principal balance
of all Revolving Loans, does not exceed the lesser of the Borrowing Base or the
Maximum Sum;
(c) At the time of the request for the Loan, no Event of
Default or an event that upon notice or lapse of time or both would constitute
an Event of Default shall have occurred, and there is no claim, action, suit or
proceeding pending or threatened against Borrower, or any other fact or
circumstance, that would, in Bank's sole opinion, materially affect any of
Borrower's assets or result in a material adverse change in the business
condition, affairs, or operations of Borrower; and
(d) Bank, in its sole discretion, determines to make the
Loan.
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6. REPRESENTATIONS AND WARRANTIES OF BORROWER. In order to
induce Bank to enter into this Agreement and to make or extend Loans as
contemplated hereby, Borrower represents and warrants to Bank, each of which
representations and warranties is deemed to be material, that:
(a) Each Obligor which is a corporation is duly
organized, validly existing and in good standing under the laws of the State of
Georgia, and has full right, power and authority to conduct its business as
currently conducted and is qualified to do business in all jurisdictions in
which it conducts its business; Borrower's principal place of business and
chief executive office is located at the address set forth above.
(b) Each Obligor has full right, power and authority to
enter into the Loan Documents to which it or he is a party and to consummate
the transactions contemplated thereby and has taken all necessary action to
authorize the execution, delivery and performance of such Loan Documents and
the documents contemplated to be executed and delivered thereby.
(c) The execution, delivery and performance by each
Obligor of the Loan Documents to which such Obligor is a party have been duly
authorized by all requisite action on the part of such Obligor and do not and
will not (i) violate any provision of such Obligor's articles of incorporation,
by-laws, partnership agreement or other organizational documents, or any law,
judgment, order or ruling of any court or governmental agency, or (ii) be in
conflict with, result in a breach of, or constitute, following notice or lapse
of time or both, a default under any mortgage, indenture, security agreement,
contract or other instrument, agreement or undertaking to which any Obligor is
a party or which purports to be binding on any Obligor or any of its property.
(d) This Agreement and each of the Loan Documents
constitutes or will constitute upon execution thereof the legal, valid and
binding obligation of the party executing the same, enforceable against it or
him in accordance with its terms, and each Obligor possesses all permits,
memberships, franchises, contracts, licenses, trademark rights, trade names,
patents, and other authorizations necessary to enable it or him to conduct its
or his business operations as now conducted, and no filing with, and no
consent, approval, permission, authorization, order or license of, any
individual, entity, or governmental authority, bureau or agency is necessary in
connection with the execution, delivery, performance, validity or
enforceability of the Loan Documents.
(e) Except as disclosed in a letter from Lender to
Borrower of even date herewith, there is no litigation, action, proceeding or
investigation pending or threatened before any court or administrative or
governmental agency that may, individually or collectively, adversely affect
the financial condition or business operations of any Obligor or any of its or
their properties or assets or that questions the validity of any action taken
or to be taken by any Obligor pursuant to or in connection with the
transactions contemplated by this Agreement, nor does Borrower know or have any
reasonable grounds to know the basis for the institution of such litigation,
action, proceeding or investigation.
(f) The most recent financial statements of each Obligor
delivered to Bank are preliminary drafts that are not yet complete, but to
Borrower's best knowledge, are correct and fairly and accurately present the
financial condition of such Obligor and the results of operations as of such
date and for such period to which such statements relate and have been prepared
in accordance with generally accepted accounting principles applied in a manner
consistent with any financial statement previously furnished to Bank, except as
noted in such statements. Since the date of those most recent financial
statements of each Obligor, there has been no material adverse change in the
financial condition of such Obligor and, after due inquiry, there exists no
material liability or obligation, direct or indirect, fixed or contingent,
assertable against such Obligor that is not reflected in its most recent
financial statements or in the notes thereto.
(g) All federal, state and other tax returns of Borrower
required by law to be filed have been completed in full and have been duly
filed with the appropriate governmental agency. All taxes, assessments and
withholdings shown on such returns or billed to Borrower have been paid, and
Borrower maintains
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adequate reserves and accruals in respect of all such federal, state and other
taxes, assessments and withholdings. There are no unpaid assessments pending
or threatened against Borrower for any taxes or withholdings, and Borrower
knows of no basis therefor; and no waivers of the Statute of Limitations have
been granted to the Commissioner of Internal Revenue or any other taxing
authority by Borrower.
(h) The minimum funding standards of Section 302 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), have
been met at all times with respect to all "plans" (if any) of each Obligor to
which such standards apply; no Obligor has made a "partial withdrawal" or a
"complete withdrawal" from any "multi- employer plan"; no "reportable event" or
"prohibited transaction" has occurred with respect to any such "plan" (as all
quoted terms are defined in ERISA); no Obligor has incurred any material
liability to the Pension Benefit Guaranty Corporation established under ERISA
in connection with any "plan."
(i) Except as otherwise expressly disclosed by Borrower
to Bank in writing on the date of this Agreement, no "hazardous substance" (as
that term is defined in Section 101 of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ["CERCLA"]) has
been released, discharged, disposed of, or stored on any Obligor's owned or
leased real or personal property whether by any Obligor, by any third party or
by any predecessor in interest or title to such Obligor; each Obligor and all
of such Obligor's properties are in compliance with all applicable local, state
and federal environmental laws and regulations; no notice has been served on
any Obligor by any governmental authority or any individual or entity claiming
violation of any environmental protection law or regulation, or demanding
compliance with any environmental protection law or regulation, or demanding
payment, indemnity, or contribution for any environmental damage or injury to
natural resources; no "hazardous substance" (as defined in CERCLA) is produced
or used in any Obligor's business; and no improvement on any real property
owned or leased by any Obligor contains any asbestos, including, without
limitation, asbestos insulation on ceilings, piping or structural members or
supports.
(j) No representation or warranty by Borrower made herein
and no statement or certificate to be furnished to Bank pursuant hereto in
connection with the transactions contemplated hereby contains or will contain
any untrue statement of a material fact or will omit to state a material fact
necessary to make the statements therein not misleading.
7. AFFIRMATIVE COVENANTS OF BORROWER. Borrower covenants and
agrees that from and after the date hereof, and so long as the Obligations
remain unpaid or this Agreement remains in effect, as follows:
(a) Borrower shall deliver to Bank, in form and content
satisfactory to Bank, within ninety (90) days after the last day of each fiscal
year of Borrower, annual financial statements of each corporate Borrower on a
consolidated basis, including statements of income, expenses, retained earnings
and cash flows for the just-ended fiscal year and a balance sheet as of the end
of such fiscal year, such statements to be prepared and audited by a certified
public accountant acceptable to Bank.
(b) Borrower shall deliver to Bank, in form and content
satisfactory to Bank, within thirty (30) days after the last day of each
calendar month, interim financial statements of each corporate Borrower,
including an income and expense statement and balance sheet, such statements to
present fairly the financial condition and results of operations as of and for
the periods specified, to set forth all material claims and liabilities,
contingent or otherwise, and fully to disclose any Event of Default, including
the nature and period of existence thereof, and such statements to be prepared
and certified by the chief financial officer of the corporate Borrowers.
(c) Borrower shall deliver to Bank, in form and content
satisfactory to Bank, within thirty (30) days after the last day of each
calendar month, such data, information and reports of or concerning Borrower
and each Obligor as Bank may reasonably request and the following additional
documents and information: an aging of Borrower's accounts receivable and a
Borrowing Base Certificate. Borrower shall deliver to Bank,
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in form and content satisfactory to Bank, within thirty (30) days after the
last day of each fiscal quarter, a Compliance Certificate and a report from
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc. showing the status of the accounts of Borrower
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ maintained with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc. and which
comprise the Eligible Securities, including account balances and a description
of all investments in the accounts. Additionally, Borrower shall deliver to
Bank, in form and content satisfactory to Bank, within one hundred twenty (120)
days after the last day of each calendar year, a personal financial statement
on ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
(d) Borrower shall keep adequate records and books of
accounts, in which complete entries will be made, reflecting all its financial
transactions, and shall maintain its books, accounts and records, including,
without limitation, all books and records evidencing or relating to Collateral,
in accordance with generally accepted accounting principles, at Borrower's
chief executive office as set forth in this Agreement, and shall not remove
said books and records from such address without the prior written consent of
Bank.
(e) Borrower shall permit Bank or any persons duly
designated by Bank to call at the places of business of Borrower at any
reasonable time, and without hindrance or delay to visit, inspect, audit and
check any of Borrower's properties, books, records, journals, orders, receipts
and any correspondence or other data relating to Borrower's business or any
other transactions between or among the parties hereto, and to make copies
thereof and take extracts therefrom, and to discuss Borrower's financial
affairs with Borrower's financial officers and accountants.
(f) Borrower shall pay and discharge or cause to be paid
and discharged promptly all taxes, assessments, fees, withholdings and other
governmental charges or levies imposed upon it, or upon its income and profits,
or upon any property belonging to it, as well as all claims of any kind
(including claims for labor, materials and supplies), which, if unpaid, might
by law become a lien or charge against said property; provided, however, that
Borrower shall not be required to pay any such tax, assessment, fee,
withholding, charge, levy or claim if the amount, applicability or validity
thereof shall currently be contested in good faith by appropriate proceedings,
and if it shall have either: (i) set aside on its books reserves (segregated
to the extent required by sound accounting practice) deemed by Bank adequate
with respect thereto, or (ii) established a deposit with Bank sufficient to pay
or discharge such tax, assessment, fee, withholding, charge, levy or claim, if
such proceedings are adversely determined.
(g) Each corporate Borrower shall maintain its existence
in good standing in the state of its organization or incorporation, maintain
its qualification to conduct business and good standing in all jurisdictions
where, under applicable law, the failure so to qualify could have a material
adverse effect on Borrower's business or its ability to perform the Loan
Documents, and conduct its business in the manner in which it is now conducted
subject only to changes made in the ordinary course of business.
(h) Borrower shall promptly, and in any event within five
(5) business days after it becomes aware thereof, notify Bank in writing of the
occurrence of any material adverse change in its or any Obligor's business,
properties, operations or conditions (financial or other) which could
reasonably be expected to impair substantially its or such Obligor's ability to
perform its or his obligations pursuant to this Agreement, or any of the other
Loan Documents, the occurrence of any Event of Default or the occurrence of any
pending or threatened litigation claiming damages in excess of $10,000 or
seeking relief that, if granted, would adversely affect the financial condition
or business operations of Borrower or any Obligor.
(i) Borrower shall pay or cause to be paid the principal
of, and, if any, the interest and premium on all indebtedness heretofore or
hereafter incurred or assumed by it when and as the same shall become due and
payable, unless such indebtedness be renewed or extended; and faithfully
observe, perform and discharge all the covenants, conditions and obligations
that are imposed upon it by any and all indentures and other agreements
securing or evidencing such indebtedness or pursuant to which such indebtedness
is issued, and not permit the continuance of any act or omission that is, or
pursuant to the provisions thereof may be declared to be, a default in the
payment of principal and interest, unless waived, pursuant to the
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provisions thereof; provided, however, that Borrower shall not be required to
make any payment or to take any other action pursuant to this subparagraph at
any time while it shall be currently contesting in good faith by appropriate
proceedings its obligations to make such a payment or to take such action, if
it shall have either: (i) set aside on its books, reserves (segregated to the
extent required by sound accounting practices) deemed adequate with respect
thereto, or (ii) established a deposit with Bank sufficient to pay any such
amount if such proceedings are adversely determined.
(j) Borrower shall take all appropriate action necessary
to protect its business and assets consistent with normal practices; conduct
its business in a sound and businesslike manner; and do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and all of its rights.
(k) Borrower shall pay or reimburse Bank for any
out-of-pocket expenses, including, without limitation, attorneys' fees,
incurred by Bank in preparing, negotiating, modifying or amending the Loan
Documents.
(l) Borrower shall fund all of its "plans" (if any) to
which the minimum funding standards of Section 302 of ERISA apply in accordance
with such standards; furnish Bank, promptly upon Bank's request, copies of all
reports or other statements filed with, or received from, the United States
Department of Labor, the Internal Revenue Service, or the Pension Benefit
Guaranty Corporation with respect to all of Borrower's "plans"; and promptly
advise Bank of the occurrence of any "reportable event" or "prohibited
transaction" with respect to any such "plan" (as all quoted terms are defined
in ERISA).
(m) Borrower shall comply with all applicable present and
future local, state and federal laws, including, without limitation,
environmental laws and regulations; notify Bank immediately if any "hazardous
substance" (as defined in CERCLA) is released, discharged, disposed of, stored,
or discovered on any real or personal property owned or leased by Borrower;
notify Bank in writing within three (3) days after Borrower receives notice
from any governmental authority or any individual or entity claiming violation
of any environmental protection law or regulation, or demanding compliance with
any environmental protection law or regulation, or demanding payment,
indemnity, or contribution for any environmental damage or injury to natural
resources; and permit Bank from time to time without hindrance or delay to
observe Borrower's operations and to perform tests (including soil tests and
ground water tests) for "hazardous substances" on any real or personal property
owned or leased by Borrower.
(n) Borrower shall maintain its principal transaction
account with Bank.
(o) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ shall at all times maintain a senior
management position with each corporate Borrower or Obligor.
8. NEGATIVE COVENANTS. Borrower covenants and agrees
that from and after the date hereof, and so long as the Obligations remain
unpaid or this Agreement remains in effect, without the prior written consent
of Bank, Borrower shall not:
(a) Create, incur, assume, or suffer to exist any
indebtedness of any description whatsoever not existing as of the date of this
Agreement, except (i) indebtedness incurred under this Agreement, (ii) any
trade indebtedness incurred in the ordinary course of business payable within
sixty (60) days of its incurrence, (iii) subordinated indebtedness in favor of
Professional Sales Group, Ltd., a Georgia corporation, an affiliate of
Borrower, and (iv) loans between the parties comprising Borrower.
(b) Enter into any merger, reorganization or
consolidation; enter into a partnership or joint venture with any other person
or entity; make any substantial change in the basic type of business now
conducted by it; sell, lease, transfer or otherwise dispose of all or any
substantial portion of its assets; take any action
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that would make it impossible for it to carry out its business as now
conducted; change its name; or change the location of its principal place of
business or chief executive office.
(c) Guarantee, endorse, become surety with respect to, or
otherwise become directly or contingently liable for or in connection with any
obligation or indebtedness of any other person or entity, except that Borrower
may endorse negotiable instruments for collection in the ordinary course of
business; make any loans, advances or extensions of credit to any person or
entity, except for travel advances made to employees in the ordinary course of
business; make any investments in any subsidiary or affiliate of any Obligor or
any individual or entity related to any Obligor; make any investments in or
acquisitions of any business enterprise.
(d) Allow any single judgment for the payment of money in
excess of $10,000.00 or of any number of judgments for the payment of money in
excess of the aggregate sum of $25,000.00, excluding amounts in either case
with respect to which an insurance carrier admits full coverage (except for
applicable deductibles), to remain unsatisfied against it for a period of
thirty (30) consecutive days, unless execution thereof is stayed.
(e) Sell, transfer, lease, pledge, abandon, grant any
lien on or security interest in, or otherwise encumber or dispose of any of its
properties or assets, including without limitation the Collateral or any
interest therein, and, except for liens for taxes not yet due and payable,
Borrower shall not permit or suffer to exist any lien, security interest or
other encumbrance on any of its properties or assets.
(f) Take or fail to take any action which would result in
the imposition of withdrawal liability under Title IV of ERISA.
(g) Release, discharge, dispose of, store, accept or
receive for storage or disposal, or allow to be stored or disposed of, any
"hazardous substance" (as defined in CERCLA) on or in any real or personal
property owned or leased by Borrower, except as otherwise expressly consented
to by Bank in writing; or release, discharge, use, transport, or dispose of any
"hazardous substance" in an unlawful manner.
9. RIGHTS AND REMEDIES EXCLUSIVE OF DEFAULT. Before or after the
occurrence of an Event of Default: Bank may examine, audit or inspect
Borrower's books and records constituting, evidencing or otherwise relating to
the Collateral, wherever located, at any reasonable time or times, and, without
hindrance or delay, may enter upon Borrower's premises for such purposes.
Borrower shall assist Bank in whatever way reasonably necessary to make each
such examination, audit and inspection. Bank, from time to time at its option,
may perform any agreement of Borrower hereunder which Borrower shall fail to
perform and take any other action which Bank deems necessary for the
maintenance or preservation of any of the Collateral or its interest therein,
and Borrower agrees to reimburse forthwith Bank for all reasonable costs and
expenses of Bank in connection with the foregoing, together with interest
thereon from the date incurred until reimbursed. Borrower hereby constitutes
Bank or its designee as its attorney-in-fact: to receive, open, and dispose of
all mail addressed to the Borrower; to notify the postal authorities to change
the address and delivery of mail addressed to the Borrower to such address as
Bank may designate; to endorse Borrower's name upon any notes, acceptances,
checks, drafts, money orders and other remittances that may come into Bank's
possession and to deposit or otherwise collect the same; to sign Borrower's
name on any invoice or ▇▇▇▇ of lading, on drafts against customers, and notices
to customers; to send verifications of accounts to customers; to execute in
Borrower's name any affidavits and notices with regard to any or all lien
rights; and to do all other acts and things necessary to carry out this
Agreement. Borrower hereby waives notice of presentment, protest and dishonor
of any instrument so endorsed. All acts of said attorney-in-fact or designee
are hereby authorized and ratified, and said attorney-in-fact or designee shall
not be liable for any acts of omission or commission, or for any error of
judgment or mistake of fact or law, unless resulting from Bank's gross
negligence or intentional misconduct; this power being coupled with an interest
is irrevocable while the Obligations remain outstanding.
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10
10. RIGHTS AND REMEDIES UPON DEFAULT. Upon the occurrence of any
one or more Events of Default: Bank may terminate this Agreement and any
obligations of Bank to Borrower under any other agreement, document or
instrument and may declare the Obligations, notwithstanding any provisions
thereof, without demand or notice of any kind, immediately due and payable,
whereupon the Obligations shall become immediately due and payable and may be
collected forthwith; Bank shall have the right to take immediate possession of
the Collateral without notice or resort to legal process and without demand or
notice of any kind to set off and deduct the outstanding balance of the
Obligations from sums, if any, which now or hereafter may be owing by Bank to
Borrower; and Bank may exercise from time to time any rights and remedies
available to it under the Uniform Commercial Code and other applicable law.
Borrower agrees to pay all costs of Bank of collection of the Obligations and
enforcement of rights hereunder, and, if collected by or through an attorney,
fifteen percent (15%) of the unpaid Obligations as attorneys' fees and also
other legal and court expenses. Notwithstanding anything stated to the
contrary in this Agreement or in any other instrument evidencing, securing, or
otherwise relating to the Obligations, prior to the occurrence of any
NONMONETARY Event of Default and the exercise of any remedy granted in the Loan
Documents following a NONMONETARY Event of Default, including, without
limitation the right to accelerate the maturity of the indebtedness evidenced
by the Note and secured by any Security Instrument, both of the following two
(2) conditions shall have been satisfied: (a) Borrower shall have received
written notice of any event or condition which, if not cured, will give rise to
a NONMONETARY Event of Default ("default condition") hereunder, which notice
shall specify the default condition which will result in a NONMONETARY Event of
Default and set forth the requirements to cure such default condition; and (b)
Borrower shall have failed to cure such default condition within ten (10) days
following the receipt of said written notice; PROVIDED, HOWEVER, THAT NO SUCH
NOTICE SHALL BE REQUIRED AS TO ANY MONETARY EVENT OF DEFAULT.
11. MISCELLANEOUS. (a) Each and every right, power or privilege
granted to Bank under the Loan Documents or available to Bank at law or in
equity shall be cumulative and may be exercised, and no delay in exercising any
such right, power or privilege shall impair any such right, power or privilege
or be construed as a waiver of any Event of Default or any acquiescence
therein. All rights, powers and privileges granted to Bank hereunder shall be
cumulative, and shall not be exclusive of any other rights, powers and
privileges granted to Bank by the Loan Documents or any other document,
instrument or agreement, or available at law or in equity. No single or
partial exercise of any such right, power or privilege shall preclude the
further exercise of such right, power or privilege or the exercise of any other
right, power or privilege. No waiver by Bank of any Event of Default hereunder
shall constitute a waiver of any subsequent Event of Default. No waiver shall
be valid against Bank unless made in writing and signed by Bank, and then only
to the extent expressly specified therein.
(b) All notices, demands and communications required or
permitted hereunder shall be deemed to have been sufficiently given or served
for all purposes if in a writing delivered personally to a party or to an
officer of the party to whom the same is directed, or if sent by first-class or
certified mail, postage and charges prepaid, addressed to such party at the
following address, or to such other address as shall be furnished in writing by
any party to the other pursuant to the provisions hereof:
If to Bank, to: SouthTrust Bank of Georgia, N.A.
One Georgia Center, 22nd Floor
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Lending
If to Borrower, to: c/o Professional Transportation Group, Ltd.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Any such notice shall be deemed given as of the date so delivered personally,
or three (3) days after the date on which the same was deposited, first-class
or certified postage prepaid, in a regularly maintained receptacle for the
deposit of United States Mail, addressed as aforesaid.
(c) This Agreement and the other Loan Documents shall be
governed by and construed and enforced in accordance with the substantive laws
of the State of Georgia, without regard to principles governing conflicts of
law. BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED IN THE STATE OF GEORGIA AND, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, WAIVES ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS
WITH RESPECT TO ANY ACTION INSTITUTED IN ANY SUCH COURT AND AGREES THAT SERVICE
OF PROCESS IN ANY SUCH ACTION WILL BE SUFFICIENT IF SERVED ON BORROWER BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR IN ANY MANNER PROVIDED BY LAW.
NOTWITHSTANDING THE FOREGOING, BANK SHALL HAVE THE RIGHT TO BRING ANY ACTION OR
PROCEEDING AGAINST BORROWER OR THE COLLATERAL IN THE COURTS OF ANY OTHER
JURISDICTION BANK DEEMS NECESSARY OR APPROPRIATE IN ORDER TO ENFORCE THE
OBLIGATIONS OF BORROWER UNDER THIS AGREEMENT OR THE RIGHTS OF BANK WITH RESPECT
TO THE COLLATERAL.
(d) This Agreement shall inure to the benefit of Bank, its
successors and assigns, and to any person to whom Bank may grant an interest in
the Obligations, and shall be binding upon Borrower and its or his respective
heirs, personal representatives, executors, administrators, successors and
assigns; provided, however, that Borrower shall have no right to assign its
rights or obligations hereunder to any person or entity. Time is of the
essence in the payment and performance of every provision and covenant of this
Agreement and the other Loan Documents. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provisions in any other
jurisdiction. This Agreement may not be amended or modified, and Borrower
shall not take any action herein prohibited, or omit to perform any action
required to be performed by it, unless Borrower shall obtain the prior written
consent of Bank to such amendment, modification, action or omission to act, and
no course of dealing between Borrower and Bank shall operate as a waiver of any
right, power or privilege granted under this Agreement, under the other Loan
Documents, or available at law or in equity. This Agreement and the other Loan
Documents contain the entire agreement between Borrower and Bank regarding the
Loan and the Collateral. Upon the execution and delivery of this Agreement,
the terms and conditions of any commitment letter relating to the Loan shall be
of no further force or effect. NO ORAL REPRESENTATIONS OR STATEMENTS SHALL BE
BINDING ON BANK, AND NO AGENT OF BANK HAS THE AUTHORITY TO VARY THE TERMS OF
THIS AGREEMENT, EXCEPT IN WRITING ON THE FACE HEREOF OR ON A SEPARATE PAGE
ATTACHED HERETO. If any provision of this Agreement conflicts or is
inconsistent with any provision of the Note, the provisions of the Note shall
control.
(e) Borrower, for itself, its heirs, personal
representatives, executors, administrators, successors and assigns, hereby
agrees to indemnify and hold harmless Bank and its affiliates, successors and
assigns, and its stockholders, officers, directors, employees, agents and
attorneys from and against any and all claims, demands, liabilities, losses,
costs, expenses, damages, suits and judgments (including, without limitation,
liability under CERCLA, the Federal Resource Conservation and Recovery Act, and
other environmental laws and regulations, and costs of defense and attorneys'
fees) resulting from any representation or warranty made by Borrower or on
Borrower's behalf pursuant to Section 7(m) of this Agreement having been false
when made, or resulting from Borrower's breach of any of the covenants set
forth in Section 8(n) or Section 9(k) of this Agreement. This Agreement of
indemnity shall be a continuing agreement and shall survive payment of the
Obligations and termination of the other provisions of this Agreement.
12. BENEFIT TO GUARANTORS. In consideration for the execution and
delivery by the corporate Borrowers of that certain Guaranty of Payment and
Performance of even date hererwith, Borrower ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ agrees to make the
benefit of all Loans hereunder available to the corporate Borrowers (including,
without limitation, each and every of the other Obligors). Borrower
acknowledges and agrees that each of the corporate Borrowers is under common
management and control with Borrower and will benefit directly and materially
by the extension of the Loans hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed under seal by their duly authorized representatives on or as of the
date first above written.
BORROWER:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (SEAL)
-----------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
PROFESSIONAL TRANSPORTATION GROUP, LTD., A GEORGIA CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
[CORPORATE SEAL]
TRUCK/NET, INC., a Georgia corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
[CORPORATE SEAL]
TIMELY TRANSPORTATION, INC., A GEORGIA CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
[CORPORATE SEAL]
PTG, INC., a Georgia corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
[CORPORATE SEAL]
BANK:
SOUTHTRUST BANK OF GEORGIA, N.A., a national banking association
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
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