REVOLVING CREDIT FACILITY AGREEMENT
THIS REVOLVING CREDIT FACILITY AGREEMENT ("this Agreement"), to be
effective March 27, 1997, is entered into by and between ▇▇▇▇▇▇ DRIVE AWAY,
INC., an Indiana corporation ("▇▇▇▇▇▇"), TDI, INC., an Indiana corporation
("TDI"), INTERSTATE INDEMNITY COMPANY, a Vermont Corporation ("Interstate") and
KEYBANK NATIONAL ASSOCIATION, a national banking association ("Bank").
In consideration of the covenants and agreements contained herein,
▇▇▇▇▇▇, Interstate and TDI and the Bank hereby mutually agree as follows:
ARTICLE I. DEFINITIONS
Section 1.1. General. Any accounting term used but not specifically
defined herein shall be construed in accordance with GAAP.
The definition of each agreement, document, and instrument set forth in
Section 1.2 hereof shall be deemed to mean and include such agreement, document,
or instrument as amended, restated, or modified from time to time.
Interstate is a party to this Agreement as it will be entitled to
request letters of credit in accordance with the terms, conditions, and
restrictions set forth herein. The liability of Interstate under this Agreement
is limited at any given time to the then aggregate dollar amount of letters of
credit which have been issued at Interstate's request or for the benefit of
Interstate, plus related interest, fees and costs hereunder.
Section 1.2. Defined Terms. As used in this Agreement:
"Affiliate" shall mean any Person (other than a Subsidiary):
(a) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under
common control with, the Companies; or
(b) Five percent (5%) or more of the equity interest of which is
held beneficially or of record by the Companies or a
Subsidiary. The term "control" means the possession, directly
or indirectly, of the power to cause the direction of the
management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Affiliate Bank" shall mean any one or more bank subsidiaries (other
than the Bank) of KeyCorp and its successors.
"Bank" shall mean KeyBank National Association, a national banking
association with an office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and its
successors and assigns.
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"Beneficiary" shall mean one or more insurance companies or regulatory
bodies which are, or may become, beneficiaries of standby letter(s) of credit.
Companies have entered into and/or may enter into agreements with various
insurance companies (each, "Beneficiary") under which Beneficiary is
contingently liable for or may initially pay on behalf of Companies amounts
attributable to the deductible portion of Companies' insurance program with
Beneficiary, and under which Companies are obligated to repay Beneficiary for
any such payments made by Beneficiary on behalf of Companies. Beneficiary has
required Companies to provide a standby payment facility for payments made by
Beneficiary on behalf of Companies attributable to the deductible portion of
Companies' insurance program with Beneficiary. Additionally, Companies are or
may be obligated to deposit money or pledge some other form of guaranty of
payment with various state authorities wherein Companies are liable for excise
or use taxes as a result of their use of the public roads for commercial trans
portation in said states. To the extent Companies are or may be required to
deposit money or pledge some other form of guaranty of payment, the appropriate
state agency responsible for collection of such use taxes or bonding company
shall be deemed to be a Beneficiary herein.
"Business Day" means a day of the year on which banks are not required
or authorized to close in Cleveland, Ohio and, if the applicable Business Day
relates to any Libor Rate Loan, on which dealings are carried on in the London
interbank Eurodollar market.
"Companies" shall mean ▇▇▇▇▇▇ Drive Away, Inc., an Indiana corporation,
with its principal office located at Elkhart, Indiana; TDI, Inc., an Indiana
corporation, with its principal office located in Elkhart, Indiana; and
Interstate Indemnity Company and their successors.
"Consolidated Net Worth" is defined as the net book value of ▇▇▇▇▇▇
Group's assets less all liabilities as determined on a consolidated basis for
the ▇▇▇▇▇▇ Group and its Subsidiaries in accordance with GAAP.
"Consolidated Pre-Tax Earnings" is defined as earnings (or losses)
experienced by the ▇▇▇▇▇▇ Group and its subsidiaries as determined on a
consolidated basis and as determined by GAAP. Consolidated Pre-Tax Earnings
shall not include any extraordinary gains experienced by the ▇▇▇▇▇▇ Group and
its subsidiaries.
"EBIT" shall mean Consolidated Pre-Tax Earnings plus Net Interest
Expense.
"Environmental Law" means any federal, state or local statute, law,
ordinance, code, rule, regulation, order or decree regulating, relating to, or
imposing liability upon a Person in connection with the use, release or disposal
of any hazardous, toxic or dangerous substance, waste or material.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
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"ERISA Affiliate" means each Person (whether or not incorporated) which
together with Companies would be treated as a single employer under ERISA.
"Event of Default" shall mean any one or more of the occurrences
described in Article VII hereof.
"Expiration Date" as to a Standby Letter of Credit means the earliest
of: (1) 4:45 p.m. (Elkhart, Indiana time) on the Expiry Date of that Standby
Letter of Credit; or (2) when the full stated amount of the Standby Letter of
Credit has been drawn upon in a single drawing or aggregate of drawings; or (3)
the day on which the Standby Letter of Credit is surrendered.
"Funded Debt" is defined as the sum of funds provided by KeyBank to the
▇▇▇▇▇▇ Group and its Subsidiaries and the sum of all other borrowed debt of the
▇▇▇▇▇▇ Group and its subsidiaries, including capitalized lease obligations and
corporate guaranties.
"GAAP" shall mean generally accepted accounting principles as then in
effect, which shall include the official interpretations thereof by the
Financial Accounting Standards Board, consistently applied.
"Guarantor" shall mean each Person that now or hereafter guarantees any
portion of the Companies' Indebtedness payable to the Bank, and such Person's
successors and shall include ▇▇▇▇▇▇ Group and all existing and to be created
operating Subsidiaries of ▇▇▇▇▇▇ Group.
"Indebtedness" shall mean for any Person: (1) all obligations to repay
borrowed money, direct or indirect, incurred, assumed or guaranteed; (2) all
obligations for the deferred purchase price of capital assets excluding trade
payables; (3) all obligations under conditional sales or other title retention
agreements; and (4) all lease obligations which have been or should be
capitalized on the books of such Person.
"Interest Coverage" shall mean the ratio of Consolidated Pre-Tax
Earnings plus Net Interest Expense divided by Net Interest Expense.
"Interest Period" means, with respect to any Libor Rate Loan, the
period commencing on the date such Loan is made, continued, or converted and
ending on the last day of such period as selected by ▇▇▇▇▇▇ or TDI (for purposes
of this definition ("the Company") pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the last day of such period as selected
by the Company pursuant to the provisions below. The duration of each Interest
Period for any Libor Rate Loan shall be one (1) month, two (2) months, three (3)
months, or six (6) months, in each case as the Company may select upon notice,
as set forth in Section 2.1(b), provided that:
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(1) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall occur on the next succeeding Business
Day, provided that if such extension of time would cause the
last day of such Interest Period for a Libor Rate Loan to
occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding
Business Day;
(2) if the Company fails to so select the duration of any Interest
Period, the duration of such Interest Period shall be three
(3) months in the case of a Libor Rate Loan; and
(3) the Company may not select any Interest Period which both
begins before and ends after the principal installment payment
date set forth in Section 2.1(c).
"Interstate" shall mean Interstate Indemnity Company, also a subsidiary
of ▇▇▇▇▇▇ Group.
"Leasing Company" shall mean Key Corp Leasing Company, and its
successors.
"Leverage" is defined as Funded Debt divided by the sum of Funded Debt
plus Consolidated Net Worth.
"Libor Rate" means, for any Interest Period for any Libor Rate Loan, an
interest rate per annum (rounded upwards to the next higher whole multiple of
1/16% if such rate is not such a multiple) equal at all times during such
Interest Period to the quotient of: (1) the rate per annum (rounded upwards to
the next higher whole multiple of 1/16% if such rate is not such a multiple) at
which deposits in United States dollars are offered at 11:00 a.m. (London,
England time) (or as soon thereafter as is reasonably practicable) by prime
banks in the London interbank Eurodollar market two (2) Business Days prior to
the first day of such Interest Period in an amount and maturity of such Libor
Rate Loan, divided by: (2) a number equal to 1.00 minus the aggregate (without
duplication) of the rates (expressed as a decimal fraction) of the Libor Reserve
Requirements current on the date two (2) Business Days prior to the first day of
such Interest Period.
"Libor Rate Loan" means any Loan that bears interest with reference to
the Libor Rate.
"Libor Reserve Requirements" means, for any Interest Period for any
Libor Rate Loan, the maximum reserves (whether basic, supplemental, marginal,
emergency or otherwise) prescribed by the Board of Governors of the Federal
Reserve System (or any successor) with respect to liabilities or assets
consisting of or including "Eurocurrency liabilities" (as defined in Regulation
D of the Board of Governors of the Federal Reserve System) having a term equal
to such Interest Period.
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"Lien" shall mean any mortgage, security interest, lien, charge,
encumbrance on, pledge or deposit of, or conditional sale or other title
retention agreement with respect to any property or asset.
"Loan" or "Loans" shall mean the Revolving Loans.
"Loan Documents" shall mean this Agreement, the Note, the Security
Agreements of even date herewith, and any other documents relating thereto.
"Margin Stock" shall have the meaning given to it under Regulation U of
the Board of Governors of the Federal Reserve System, as amended from time to
time.
"▇▇▇▇▇▇ Group" shall mean The ▇▇▇▇▇▇ Group, Inc., a Delaware
corporation, of which the Companies are a subsidiary.
"Multiemployer Plan" means a plan described in ERISA which covers
employees of the Companies or an ERISA Affiliate.
"Net Interest Expense" is interest expense as defined by GAAP less
interest income as defined by GAAP.
"Note" shall mean the Promissory Note, in the form of Exhibit "A"
attached hereto, signed and delivered by the Companies to evidence their
obligation to the Bank in accordance with Section 2.1 hereof (including all
extensions, renewals, and modifications).
"Other Collateral Documents" shall mean each and every document
executed and delivered by any third person or entity in favor of Bank, pledging,
securing or guaranteeing any indebtedness owed to Bank or otherwise obligating
such third person or entity to Bank on behalf of Companies.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Title IV of ERISA.
"Person" shall mean any natural person, corporation (which shall be
deemed to include business trust), association, partnership, joint venture,
political entity or political subdivision thereof.
"Plan" shall mean any plan (other than a Multiemployer Plan) defined in
ERISA in which the Companies or any subsidiary are, or has been at any time
during the preceding two (2) years, an "employer" or a "substantial employer" as
such terms are defined in ERISA.
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"Potential Default" shall mean any condition, action or failure to act
which, with the passage of time, service of notice, or both, will constitute an
Event of Default under this Agreement.
"Prime Rate" shall mean that interest rate established from time to
time by the Bank as the Bank's Prime Rate, whether or not such rate is publicly
announced; the Prime Rate may not be the lowest interest rate charged by Bank
for commercial or other extensions of credit.
"Prime Rate Loan" means any Loan that bears interest with reference to
the Prime Rate.
"Prohibited Transaction" shall mean any prohibited transaction as that
term is defined for purposes of ERISA.
"Reportable Event" shall mean any reportable event as that term is
defined for purposes of ERISA.
"Revolving Loan(s)" means the revolving credit extended by the Bank
under the Master Revolving Loan Note pursuant to Article II hereof.
"Security Agreement" shall mean each and every security agreement
related to this Agreement, executed and delivered by Companies in favor of Bank,
including, but not limited to, the Security Agreements dated this date and
executed and delivered by Companies to Bank, and any and all security agreements
ratified pursuant to Section 4.4.
"Standby Letter of Credit" shall mean a letter of credit issued by the
Bank pursuant to this Agreement and shall include the letters of credit issued
by the Bank that are listed on Exhibit "B," and shall also include any amended
Standby Letter of Credit or any replacement Standby Letter of Credit, and any
other Standby Letter of Credit issued by Bank under this Agreement.
"Subordinated Debt" shall mean Indebtedness of a Person which is
subordinated in writing, in a manner satisfactory to the Bank, to all
Indebtedness owing to the Bank.
"Subsidiary" shall mean any corporation fifty-one percent (51%) of the
outstanding voting stock of which is at the time directly or indirectly owned by
Companies or by one or more of their Subsidiaries, or by the ▇▇▇▇▇▇ Group.
"Termination Date" shall mean April 30, 1999, or such earlier date on
which the commitment of the Bank to make loans pursuant to Section 2.1(a) hereof
shall have been terminated pursuant to Article VIII of this Agreement.
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"Total Indebtedness" shall mean the total of all items of indebtedness
or liability which in accordance with GAAP would be included in determining
total liabilities on the liability side of the balance sheet as of the date of
determination.
The foregoing definitions shall be applicable to the singulars and
plurals of the fore going defined terms.
ARTICLE II. REVOLVING CREDIT
AND STANDBY LETTER OF CREDIT FACILITY
REVOLVING CREDIT
Section 2.1. Amount of Revolving Credit. The Bank hereby agrees,
subject to the terms and conditions of this Agreement, to make, continue, and
convert Revolving Loans to ▇▇▇▇▇▇ and TDI as follows:
(a) The Bank will, subject to the terms and conditions of this
Agreement, make one or more Revolving Loans to ▇▇▇▇▇▇ and TDI
from time to time on and after the date of this Agreement
through and including the Termination Date, in an aggregate
principal amount not to exceed Ten Million Dollars
($10,000,000.00) outstanding at any one time (Revolving
Credit). All issued Standby Letters of Credit, whether issued
at the request of ▇▇▇▇▇▇, Interstate or TDI, shall be included
in the calculation of the unpaid aggregate principal
outstanding and shall reduce the amount of the Revolving Loans
available dollar for dollar. ▇▇▇▇▇▇ and TDI may borrow,
prepay, and reborrow such maximum amount of credit; provided,
however, that except as otherwise provided in this Agreement,
▇▇▇▇▇▇ and TDI may prepay any Libor Rate Loan only on the last
day of the applicable Interest Period for such Loan. The
Companies may from time to time, upon not less than three (3)
Business Days' prior notice made by telegraph, Telex or
telephone and confirmed in a writing delivered to the Bank,
terminate or reduce permanently, the commitment of the Bank to
make Revolving Loans pursuant to this Section 2.1(a) hereof by
the amount of Five Hundred Thousand Dollars ($500,000.00) or
any integral multiple thereof; provided that ▇▇▇▇▇▇ and TDI
shall immediately pay to the Bank the amount, if any, by which
the aggregate principal amount of such Revolving Loans
outstanding plus the stated amount of the Standby Letters of
Credit exceeds such reduced commitment of the Bank at that
time. If, however, after giving effect to any such payment any
Libor Rate Loans would be prepaid prior to the end of their
respective Interest Periods, the notice of the termination or
permanent reduction in the commitment of the Bank to make
Revolving Loans pursuant to Section 2.1(a) shall be deemed to
be ▇▇▇▇▇▇ and TDI's request that such termination or reduction
be effective on the last day of such Interest Periods.
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(b) Each Revolving Loan that is made as or converted into a Prime
Rate Loan shall be made or converted on such Business Day and
in such amount (equal to One Hundred Thousand Dollars
($100,000.00) or any integral multiple thereof) as ▇▇▇▇▇▇ or
TDI, jointly or individually, shall request by written notice
given to the Bank no later than 11:00 a.m. (Cleveland, Ohio
time) on the date of disbursement of or conversion into the
requested Prime Rate Loan; provided, however, that a Libor
Rate Loan may be converted into a Prime Rate Loan only upon
the expiration of the Libor Rate Loan's Interest Period except
in situations covered by Sections 2.7 and 2.8 of this
Agreement. Each Revolving Loan that is made or continued as or
converted into a Libor Rate Loan shall be made, continued, or
converted on such Business Day, in such amount (equal to One
Hundred Thousand Dollars ($100,000.00) or an integral multiple
thereof), and with such an Interest Period as ▇▇▇▇▇▇ or TDI
shall request by written notice given to the Bank no later
than 11:00 a.m. (Cleveland, Ohio time) on the third Business
Day prior to the date of disbursement or continuation of or
conversion into the requested Libor Rate Loan. Each written
notice of any Libor Rate Loan shall be irrevocable and binding
on ▇▇▇▇▇▇ and TDI and ▇▇▇▇▇▇ and TDI shall indemnify the Bank
against any loss or expense incurred by the Bank as a result
of any failure by ▇▇▇▇▇▇ or TDI to consummate such Revolving
Loan, including, without limitation, any loss (including loss
of anticipated profits) or expense incurred by reason of
liquidation or re-employment of deposits or other funds
acquired by the Bank to fund the Revolving Loan. A certificate
as to the amount of such loss or expense submitted by the Bank
to ▇▇▇▇▇▇ and TDI shall be conclusive and binding for all
purposes, absent manifest error. In the event that ▇▇▇▇▇▇ or
TDI fails to provide the Bank with the required written
notice, ▇▇▇▇▇▇ or TDI shall be deemed to have given a written
notice that such Revolving Loan shall be converted to a Prime
Rate Loan on the last day of the applicable Interest Period.
All Revolving Loans under this Section shall be evidenced by
the Master Revolving Note, dated the date hereof. The Note
shall be a master note, and the principal amount of all
Revolving Loans outstanding shall be evidenced by the Note or
any ledger or other record of the Bank, which shall be
presumptive evidence of the principal owing and unpaid on the
Note.
(c) ▇▇▇▇▇▇ and TDI shall repay to the Bank on the Termination
Date, the principal amount of all Revolving Loans evidenced by
the Master Revolving Note that are outstanding on the
Termination Date.
Section 2.2. Interest Rate.
(a) Each Revolving Loan that is a Libor Rate Loan shall bear
interest during each Interest Period at a fixed rate per annum
equal to the Libor Rate for such Interest Period plus the
Libor Margin. The Libor Margin as of the date of this
Agreement shall be one hundred fifty (150) basis points. The
Libor Margin
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shall be adjusted on a quarterly basis as follows: Upon
submission of ▇▇▇▇▇▇ Group's consolidated quarterly financial
statements the Libor Margin shall be determined for the
succeeding quarter by KeyBank using the following matrix:
EBIT Libor Margin
Less than $3,000,000.00 150 basis points
Greater than or equal to $3,000,000.00
but less than $4,500,000.00 125 basis points
Greater than or equal to $4,500,000.00 100 basis points
This matrix is based upon certain levels of ▇▇▇▇▇▇ Group's
EBIT on a rolling four (4) quarter basis.
The special charges included in the 1996 audited financial
statements related to the closing of the Truckaway segment of
the specialized transport division of ▇▇▇▇▇▇ shall be excluded
for testing purposes in an amount not to exceed Three Million
Five Hundred Thousand Dollars ($3,500,000.00) for special
charges and Seven Hundred Fifty Thousand Dollars ($750,000.00)
for insurance claim reserves.
Each Revolving Loan that is a Prime Rate Loan shall bear
interest at a floating rate per annum equal to the Prime Rate.
In the event of any change in the Prime Rate, the rate of
interest upon each Prime Rate Loan shall be adjusted to
immediately correspond with such change, except such interest
rate shall not exceed the highest rate permitted by law.
(b) After the maturity of any Revolving Loan, the unpaid principal
amount of the Revolving Loan, and accrued interest thereon, or
any fees or any other sum payable hereunder, shall thereafter
until paid in full bear interest at a rate per annum equal to
three percent (3%) in excess of the Prime Rate in effect from
time to time, which rate shall be adjusted in the manner
described in Section 2.2(a) above.
Section 2.3. Interest Payments. ▇▇▇▇▇▇ and TDI shall pay to the Bank
interest on the unpaid principal balance of each Prime Rate Loan on: (1) the
date such Loan is converted to a Libor Rate Loan; and (2) on the last day of
each month hereafter and at maturity. ▇▇▇▇▇▇ and TDI shall pay to the Bank
interest on the unpaid principal balance of each Libor Rate Loan on: (1) the
date such Loan is converted to a Prime Rate Loan; (2) the last day of the
applicable Interest Period of such Loan; or (3) each date an installment of
principal becomes due and payable in accordance with Section 2.1 hereof,
whichever is earlier. Additionally, if the
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applicable Interest Period exceeds three (3) months, interest shall also be paid
at quarterly intervals during the course of the applicable Interest Period.
Section 2.4. Payment. ▇▇▇▇▇▇ and TDI may pay any Prime Rate Loans in
whole, or in part, in the principal amount of One Hundred Thousand Dollars
($100,000.00) or any integral multiple thereof, at any time or times upon same
day by 11:00 a.m. Cleveland time notice made by telephone to the Bank. ▇▇▇▇▇▇
and TDI may pay any Libor Rate Loan in whole or in part, in the principal amount
of One Hundred Thousand Dollars ($100,000.00) or any integral multiple thereof
only on the last day of the Interest Period applicable to such Loan upon not
less than three (3) Business Days' prior written notice given to the Bank.
Section 2.5. Fees. ▇▇▇▇▇▇ and TDI shall pay to the Bank a total yearly
fee of one-fourth percent (1/4%) of the total amount of the Revolving Credit
($10,0000,000.00) set forth in Section 2.1 whether or not the entire amount of
the Revolving Credit is available or used. This fee shall be paid quarterly, in
advance.
▇▇▇▇▇▇ and TDI shall also pay to the Bank; prior to maturity (whether
by acceleration or otherwise), for each payment of principal or interest not
paid when due, a late fee equal to the greater of five percent (5%) of such
payment or One Hundred Dollars ($100.00).
Section 2.6. Computation of Interest and Fees. Interest on Loans shall
be computed on the basis of a year of three hundred sixty (360) days and paid
for the actual number of days elapsed. Interest on unpaid fees, if any,
hereunder shall be computed on the basis of a year of three hundred sixty (360)
days and paid for the actual number of days elapsed.
Section 2.7. Additional Costs.
(a) If, due to either: (1) the introduction of, or any change in,
or in the interpre tation of, any law or regulation; or (2)
the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having
the force of law), there shall be any increase in the cost to
the Bank of making, funding or maintaining Loans, then ▇▇▇▇▇▇
and TDI shall from time to time, upon demand by the Bank, pay
to the Bank additional amounts sufficient to reimburse the
Bank for any such additional costs. A certificate of the Bank
submitted to ▇▇▇▇▇▇ and TDI as to the amount of such
additional costs, shall be conclusive and binding for all
purposes, absent manifest error. Upon notice from ▇▇▇▇▇▇ or
TDI to the Bank within five (5) Business Days after the Bank
notifies ▇▇▇▇▇▇ and TDI of any such additional costs pursuant
to this Section 2.8(a), ▇▇▇▇▇▇ and TDI may either: (1) prepay
in full all Loans of any types so affected then outstanding,
together with interest accrued thereon to the date of such
prepayment; or (2) convert all Loans of any types so affected
then out standing into Loans of any other type not so affected
upon not less than four (4) Business Days' notice to the Bank.
If any such prepayment or conversion of
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any Libor Rate Loan occurs on any day other than the last day
of the applicable Interest Period for such Loan, ▇▇▇▇▇▇ and
TDI also shall pay to the Bank such additional amounts
sufficient to indemnify the Bank against any loss, cost or
expense incurred by the Bank as a result of such prepayment or
conversion, including, without limitation, any loss (including
loss of anticipated profits), cost or expense incurred by
reason of the liquidation or re-employment of deposits or
other funds acquired by the Bank to fund any such Loan, and a
certificate as to the amount of any such loss, cost or expense
submitted by the Bank to ▇▇▇▇▇▇ and TDI shall be conclusive
and binding for all purposes, absent manifest error.
(b) If either: (1) the introduction of, or any change in, or in
the interpretation of, any law or regulation; or (2) the
compliance with any guideline or request from any central bank
or other governmental authority (whether or not having the
force of law), affects or would affect the amount of capital
required or expected to be maintained by the Bank or any
corporation controlling the Bank and the Bank determines that
the amount of such capital is increased by or based upon the
existence of the Loans (or commitment to make the Loans) and
other extensions of credit (or commitments to extend credit)
of similar type, then, upon demand by the Bank, ▇▇▇▇▇▇ and TDI
shall pay to the Bank from time to time as specified by the
Bank additional amounts sufficient to compensate the Bank in
the light of such circumstances, to the extent that the Bank
reasonably determines such increase in capital to be allocable
to the existence of the Bank's Loans (or commitment to make
the Loans). A certificate of the Bank submitted to ▇▇▇▇▇▇ and
TDI as to such amounts shall be conclusive and binding for all
purposes, absent manifest error. Upon notice from ▇▇▇▇▇▇ or
TDI to the Bank within five (5) Business Days after the Bank
notifies ▇▇▇▇▇▇ or TDI of any such additional costs pursuant
to this Section 2.8(b), ▇▇▇▇▇▇ or TDI may either: (1) prepay
in full all Loans of any types so affected then outstanding,
together with interest accrued thereon to the date of such
prepayment; or (2) convert all Loans of any types so affected
then outstanding into Loans of any other type not so affected
upon not less than four (4) Business Days' notice to the Bank.
If any such prepayment or conversion of any Libor Rate Loan
occurs on any day other than the last day of the applicable
Interest Period for such Loan, ▇▇▇▇▇▇ and TDI also shall pay
to the Bank such additional amounts sufficient to indemnify
the Bank against any loss, cost or expense incurred by the
Bank as a result of such prepayment or conversion, including,
without limitation, any loss (including loss of anticipated
profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds
acquired by the Bank to fund any such Loan, and a certificate
as to the amount of any such loss, cost or expense submitted
by the Bank to ▇▇▇▇▇▇ or TDI shall be conclusive and binding
for all purposes, absent manifest error.
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Section 2.8. Illegality. Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation of
any law or regulation shall make it unlawful, or any central bank or other
governmental authority shall assert that it is unlawful, for the Bank to perform
its obligations hereunder to make, continue or convert Libor Rate Loans
hereunder, then: (1) on notice thereof by the Bank to ▇▇▇▇▇▇ or TDI, the
obligation of the Bank to make or continue a Loan of a type so affected or to
convert any type of Loan into a Loan of a type so affected shall terminate and
the Bank shall thereafter be obligated to make Prime Rate Loans whenever any
written notice requests any type of Loans so affected; and (2) upon demand
therefor by the Bank to ▇▇▇▇▇▇ or TDI, ▇▇▇▇▇▇ or TDI shall either, (a) forth
with prepay in full all Loans of the type so affected then outstanding, together
with interest accrued thereon, or (b) request that the Bank, upon four (4)
Business Days' notice, convert all Loans of the type so affected then
outstanding into Loans of a type not so affected. If any such prepayment or
conversion of any Libor Rate Loan occurs on any day other than the last day of
the applicable Interest Period for such Loan, ▇▇▇▇▇▇ and TDI also shall pay to
the Bank such additional amounts sufficient to indemnify the Bank against any
loss, cost or expense incurred by the Bank as a result of such prepayment or
conversion, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
re-employment of deposits or other funds acquired by the Bank to fund any such
Loan, and a certificate as to the amount of any such loss, cost or expense
submitted by the Bank to ▇▇▇▇▇▇ or TDI shall be conclusive and binding for all
purposes, absent manifest error.
Section 2.9. Renewals/Extensions. In 1998 and in each year thereafter,
▇▇▇▇▇▇ and TDI may request in writing an extension of the Termination Date for
an additional one-year period. Such written request must be accompanied by the
▇▇▇▇▇▇ Group's preceding fiscal year's audited financial statements and any
other financial information reasonably requested by Bank. Any such extension
shall be in each instance, made in the Bank's sole discretion. Upon such
extension, the Termination Date shall be changed to reflect the extension.
Section 2.10. Liability of ▇▇▇▇▇▇ and TDI. ▇▇▇▇▇▇ and TDI shall each be
jointly, severally, and unconditionally liable for all payments owing under the
Revolving Credit without regard to which of the Companies actually draws down or
received the proceeds from the Revolving Loan.
STANDBY LETTER OF CREDIT FACILITY
Section 2.11. Amount and Terms of Standby Letter of Credit Facility.
The Bank hereby agrees, subject to the terms and conditions of this Agreement,
to issue one or more standby letters of credit as follows:
(a) The Bank agrees, subject to the terms and conditions of this
Agreement, to issue one or more standby letters of credit to
the Beneficiary for account of the Companies from time to
time, to cover payments made by Beneficiary on behalf of
Companies and attributable to the deductible portion of
Companies' insurance
12
program with the Beneficiary; provided, however, the total of
all issued Standby Letters of Credit shall not exceed, in the
aggregate, Seven Million Dollars ($7,000,000.00) (the stated
amount). Of the Seven Million Dollar ($7,000,000.00) aggregate
amount, Bank agrees, subject to all other terms and provisions
of this Agreement to issue up to Five Hundred Thousand Dollars
($500,000.00) in Standby Letters of Credit outstanding at any
one time at the request of or for use by Interstate.
As set forth in Section 2.1, issued Standby Letters of Credit
shall reduce the amount of the Revolving Credit available
hereunder by the stated amount of the Standby Letter of
Credit, dollar for dollar.
(b) Drawings under the Standby Letter of Credit shall be made only
by Beneficiary pursuant to the terms and provisions of, and
subject to the conditions set forth in, the Standby Letter of
Credit.
(c) No Standby Letter of Credit shall be issued for a period of
time exceeding one year and no Standby Letter of Credit shall
be issued with an expiration date which is later than the date
which is fifteen (15) business days prior to the Termination
Date.
Section 2.12. Reimbursement and Other Payment Obligations.
(a) Companies shall pay Bank, on demand and in lawful United
States funds, the amount paid by Bank on each draft or other
order, instrument or demand drawn or presented under the
Letter of Credit.
(b) Companies shall pay Bank interest at a floating rate per annum
equal to the Bank's Prime Rate on all amounts paid by Bank in
connection with a Letter of Credit from the date of such
payment until Bank receives Companies' reimbursement therefor.
In the event of any change in the Prime Rate, the rate of
interest upon each Prime Rate Loan shall be adjusted to
immediately correspond to such change, except such interest
rate shall not exceed the highest rate permitted by law.
Interest shall be calculated on the basis of a three hundred
sixty (360) day year and paid for actual days elapsed and
shall be paid on the last day of each month beginning with the
first month following a payment by Bank in connection with a
Letter of Credit.
(c) No interest shall be payable on drawings which are reimbursed
on or prior to 1:00 p.m. (Cleveland, Ohio time) on the day on
which the Bank honors such drawings. After such time, interest
shall be payable by the Companies on such reimbursable amounts
at a floating rate per annum equal to the Bank's Prime Rate.
13
Section 2.13. Increased Cost. If any law or regulation hereinafter
enacted or, any change in any law or regulation, or any interpretation by any
court or administrative, banking or governmental authority charged or claiming
to be charged with the administration applicable to the Bank, shall:
(a) impose, modify or make applicable any reserve, special
deposit, risk/capital ratio or similar requirement against
letters of credit issued by the Bank;
(b) impose on the Bank any other condition regarding this
Agreement or the Standby Letter of Credit; or
(c) subject the Bank to any tax (other than taxes based upon gross
revenues or income), charge, deduction or withholding of any
kind whatsoever;
and the result of any event referred to in clause (a), (b) or (c) above shall be
to increase the cost to the Bank issuing or maintaining the Standby Letter of
Credit (which increase in cost shall be the result of a reasonable allocation of
the aggregate of such cost increase as resulting from such events), or to reduce
the amount of principal, interest or any fee or compensation to be paid to the
Bank under this Agreement or the Standby Letter of Credit or the Note, then, not
later than five (5) business days following demand for payment by the Bank, the
Companies shall pay to the Bank, from time to time as specified by the Bank,
additional amounts which shall be sufficient to compensate the Bank for such
increased cost or reduction. Any such amounts that remain unpaid as of the end
of said fifth business day shall accrue interest after such date at a floating
rate of the prime rate plus one percent (1%). A certificate setting forth in
reasonable detail such increased cost or reduction incurred by the Bank as a
result of any event referred to in clause (a), (b) or (c) above, submitted by
the Bank to the Companies, shall be conclusive, absent manifest error, as to the
amount. The obligations of the Companies under this section shall survive the
termination of this Agreement.
Section 2.14. Note and Payments. As soon as practicable under the
circumstances (which sometimes may be after a draw under the Standby Letter of
Credit is honored by the Bank) the Bank will make an attempt to notify
telephonically the appropriate Company (▇▇▇▇▇▇, TDI or Interstate) that it has
received a demand for a draw under the Standby Letter of Credit and in any event
the Bank will notify the Company forthwith after a draw under the Standby Letter
of Credit is honored by the Bank. Upon demand, all payments by the Companies to
the Bank with respect to the Standby Letters of Credit shall be made in lawful
currency of the United States in immediately available funds at the Bank's
office at 127 Public Square, Cleveland, Ohio. In the event that the date
specified for any payment is not a business day, such payment shall be made not
later than the next following business day and interest shall be paid at the
rate provided for in this Agreement on any such payment. Obligations of
Companies to Bank shall be evidenced by the Note or any ledger or other record
of the Bank, which shall be presumptive evidence of the principal owing and
unpaid on the Note.
14
Section 2.15. Letter of Credit Fee. Companies shall pay Bank an annual
fee based on the stated amount of each Standby Letter of Credit on or before the
date of issuance and on each anniversary date of the date of issuance of that
Standby Letter of Credit.
The fee for the entire year shall be determined and paid on the date of
issuance based upon the Letter of Credit fee in effect on the date of issuance,
and on each anniversary date. The fee for Standby Letters of Credit shall be
adjusted on a quarterly basis as follows: Upon submission of ▇▇▇▇▇▇ Group's
consolidated quarterly financial statements, the Standby Letter of Credit fee
shall be determined for Letters of Credit issued in the succeeding quarter by
KeyBank using the following matrix:
EBIT Letter of Credit Fee
Less than $3,000,000.00 150 basis points
Greater than or equal to $3,000,000.00
but less than $4,500,000.00 125 basis points
Greater than or equal to $4,500,000.00 100 basis points
This matrix is based upon certain levels of ▇▇▇▇▇▇ Group's EBIT on a
rolling four (4) quarter basis.
The special charges included in the 1996 audited financial statements
related to the closing of the Truckaway segment of the specialized
transport division of ▇▇▇▇▇▇ shall be excluded for testing purposes in
an amount not to exceed Three Million Five Hundred Thousand Dollars
($3,500,000.00) for special charges and Seven Hundred Fifty Thousand
Dollars ($750,000.00) for insurance claim reserves.
Also, Companies agree to pay an issuance fee equal to the Bank's standard
issuance fee at the time of issuance and the Bank's standard amendment fee for
each amendment. Companies shall also pay the fees of Bank for review of any draw
of a letter of credit.
Section 2.16. Indemnification. In addition to any other amounts payable
by the Companies under this Agreement, the Companies hereby agree to pay and
indemnify the Bank from and against any and all claims, liabilities, losses,
costs, and expenses (including, without limitation, reasonable attorney's fees)
which the Bank may incur or be subject to as a consequence, directly or
indirectly, of:
(a) the issuance of, or payment or failure to pay under the
Standby Letter of Credit;
(b) any breach by the Companies of any warranty term or condition
in, or the occurrence of any default under, this Agreement,
including all reasonable fees
15
or expenses resulting from the settlement or defense of any
claim or liabilities arising as a result of any such breach or
default; and
(c) any suit, investigation or proceeding as to which the Bank is
involved as a consequence, direct or indirect, of its issuance
of the Standby Letter of Credit or its execution of this
Agreement or any other event or transaction contemplated by
any of these matters. The obligations of the Companies under
this section shall survive the termination of this Agreement.
Section 2.17. Nature of Bank's Duties. The Companies assume all risks
of the acts, omissions or misuse of the Standby Letter of Credit by Beneficiary
or any successor; and except for instances of willful misconduct by Bank, the
Bank shall not be responsible:
(a) for the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted in connection with the
application for and issuance of, or the making of a drawing
under, the Standby Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged;
(b) for the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign the Standby
Letter of Credit or the rights or benefits under it or
proceeds of it, in whole or in part, which may prove to be
invalid or ineffective for any reason;
(c) for failure of the Beneficiary to comply fully with conditions
required in order to effect a drawing;
(d) for errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, telecopier, Telex or
otherwise;
(e) for any loss or delay in the transmission or otherwise of any
document or draft required in order to make a drawing; and
(f) for any consequences arising from causes beyond the control of
the Bank. Any action taken or omitted by the Bank, under or in
connection with the Standby Letter of Credit or any related
certificates or other documents, if taken or omitted in good
faith, shall be binding upon the Companies and shall not put
the Bank under any resulting liability to the Companies.
Section 2.18. Liability of Companies. ▇▇▇▇▇▇ and TDI shall each be
jointly, severally and unconditionally liable for all reimbursements under any
Letter of Credit without regard as to which of the Companies requested the
Letter of Credit. The liability of Interstate hereunder is limited at any given
time to the then aggregate Letters of Credit which have been
16
issued at Interstate's request, or for the benefit of Interstate plus related
interest, fees and costs hereunder.
ARTICLE III. WARRANTIES
The Companies represent and warrant to the Bank (which representations
and warran ties will survive the delivery of the Note and all extensions of
credit under this Agreement) that:
Section 3.1. Organization; Corporate Power.
(a) The Companies are corporations duly organized, validly
existing, and in good standing under the laws of the
jurisdiction in which they are incorporated;
(b) The Companies have the corporate power and authority to own
their properties and assets and to carry on their business as
now being conducted;
(c) The Companies are qualified to do business in every
jurisdiction in which the ownership or leasing of their
property or the doing of business requires such qualification;
and
(d) The Companies have the corporate power to execute, deliver,
and perform their Loan Documents and to borrow hereunder.
Section 3.2. Authorization of Borrowing. The execution, delivery, and
performance of the Loan Documents have been duly authorized by all requisite
corporate action.
Section 3.3. No Conflict. The execution, delivery, and performance of
the Loan Documents will not: (1) violate any provision of law, the Articles of
Incorporation, the Code of Regulations or Bylaws of the Companies; (2) violate
any order of any court or other agency of any federal or state government or any
provision of any indenture, agreement, or other instrument to which the
Companies are parties or by which they or any of their properties or assets are
bound; (3) conflict with, result in a breach of, or constitute (with passage of
time or delivery of notice, or both), a default under any such indenture,
agreement or other instrument; or (4) result in the creation or imposition of
any Lien or other encumbrance of any nature whatsoever upon any of the
properties or assets of the Companies except in favor of the Bank.
Section 3.4. Execution of Loan Documents. The Loan Documents have been
duly executed and are valid and binding obligations of the Companies fully
enforceable in accor dance with their respective terms.
Section 3.5. Financial Condition. The Companies have furnished to the
Bank true and correct financial statements of ▇▇▇▇▇▇ Group prepared by a
certified public accountant as
17
of the end of the Companies' calendar year which ended December 31, 1996, which
audited financial statements present fairly ▇▇▇▇▇▇ Group's financial condition
at such date, and there has been no material adverse change in ▇▇▇▇▇▇ Group's
financial condition since that date.
Section 3.6. Liabilities; Liens. The Companies have made no investment
in, advance to, or guarantee of, the obligations of any Person nor are the
Companies' assets and properties subject to any claims, liabilities, Liens or
other encumbrances, except as disclosed in the ▇▇▇▇▇ cial statements and related
notes thereto referred to in Section 3.5 hereof.
Section 3.7. Litigation. There is no action, suit, examination, review
or proceeding by or before any governmental instrumentality or agency now
pending or, to the knowledge of the Companies, threatened against the Companies
or against any property or rights of the Companies, which, if adversely
determined, would materially impair the right of the Companies to carry on
business as now being conducted or which would materially adversely affect the
financial condition of the Companies, except for the litigation, if any,
described in the notes to the financial statements referred to in Section 3.5
hereof.
Section 3.8. Payment of Taxes. Federal income tax returns of the
Companies have been examined by the Internal Revenue Service for all years prior
to and including their calendar year which ended December 31, 1993, and all
deficiencies finally resulting from such examinations have been discharged or
proper amounts have been set aside on the Companies' books to cover such
deficiencies. The Companies have filed, or caused to be filed, all federal,
state, local, and foreign tax returns required to be filed, and has paid, or
caused to be paid, all taxes as are shown on such returns, or on any assessment
received by the Companies, to the extent that such taxes become due, except as
otherwise contested in good faith. The Companies have set aside proper amounts
on their books, determined in accordance with GAAP, for the payment of all taxes
for the years that have not been audited by the respective tax authorities or
for taxes being contested by the Companies.
Section 3.9. Agreements. The Companies are not in default in the
performance, observance, or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which it is a party,
which default materially adversely affects the business, properties, assets or
financial condition of the Companies.
Section 3.10. Regulatory Status. Neither the making nor the performance
of this Agreement, nor any extension of credit hereunder, requires the consent
or approval of any governmental instrumentality or political subdivision
thereof, any other regulatory or adminis trative agency, or any court of
competent jurisdiction.
Section 3.11. Federal Reserve Regulations; Use of Loan Proceeds. The
Companies are not engaged principally, or as one of their important activities,
in the business of extending credit for the purpose of purchasing or carrying
any Margin Stock. No part of the proceeds of the Loans will be used, directly or
indirectly, for a purpose which violates any law, rule or
18
regulation of any governmental body, including, without limitation, the
provisions of Regulations G, U or X of the Board of Governors of the Federal
Reserve System, as amended. No part of the proceeds of the Loans will be used,
directly or indirectly, to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock.
Following application of the proceeds of each Loan, not more than ten percent
(10%) of the value of the assets of the Companies and their subsidiaries on a
consolidated basis will be Margin Stock.
Section 3.12. Subsidiaries. ▇▇▇▇▇▇ has three (3) subsidiaries,
Transport Services Unlimited, Inc., Advertising Associates, Inc., MDA
Corporation and Interstate and TDI have no subsidiaries and neither will form,
purchase, or otherwise hold additional subsidiaries without written consent of
the Bank. The ▇▇▇▇▇▇ Group has four (4) subsidiaries, ▇▇▇▇▇▇ Drive Away, Inc.,
Interstate Indemnity Company, ▇▇▇▇▇▇ Finance, Inc., TDI, Inc., and will not
form, purchase or otherwise hold additional subsidiaries without written consent
of Bank.
Section 3.13. Licenses. The Companies have all licenses, franchises,
consents, approvals or authorizations required in connection with the conduct of
the business of the Companies, the absence of which would have a material
adverse affect on the conduct of the Companies' business, and all such licenses,
franchises, consents, approvals, and authorizations are in full force and
effect.
Section 3.14. ERISA. No Reportable Event or Prohibited Transaction has
occurred and is continuing with respect to any Plan, and the Companies have
incurred no "accumulated funding deficiency" (as that term is defined by ERISA)
since the effective date of ERISA.
Section 3.15. Environmental Matters. The Companies are in compliance
with all Environmental Laws and all applicable federal, state, and local health
and safety laws, regula tions, ordinances or rules.
Section 3.16. Solvency. The Companies have received consideration which
is the reasonable equivalent value of the obligations and liabilities that the
Companies have incurred to Bank. The Companies are not insolvent as defined in
any applicable state or federal statute, nor will the Companies be rendered
insolvent by the execution and delivery of this Agreement or the Note to Bank.
The Companies are not engaged or about to engage in any business or transaction
for which the assets retained by it shall be an unreasonably small capital,
taking into consideration the obligations to Bank incurred hereunder. The
Companies do not intend to, nor do they believe that they will, incur debts
beyond their ability to pay them as they mature.
ARTICLE IV. CONDITIONS OF LENDING AND COLLATERAL
Section 4.1. Credit Facility. The obligation of the Bank to make a Loan
or issue a Standby Letter of Credit shall be subject to satisfaction of the
following conditions, unless
19
waived in writing by the Bank: (1) all legal matters and Loan Documents incident
to the trans actions contemplated hereby shall be satisfactory, in form and
substance, to Bank's counsel; (2) the Bank shall have received, (a) certificates
by an authorized officer of the Companies, upon which the Bank may conclusively
rely until superseded by similar certificates delivered to the Bank, certifying,
(i) all requisite action taken in connection with the transactions contemplated
hereby, and (ii) the names, signatures, and authority of the Companies'
authorized signers executing the Loan Documents; and (b) such other documents as
the Bank may reasonably require to be executed by, or delivered on behalf of,
the Companies; (3) the Bank shall have received the Note with all blanks
appropriately completed, executed by an authorized signer of the Companies; (4)
the Companies shall have paid to the Bank the fee(s) then due and payable in
accordance with Article II and Article IX of this Agreement and a closing fee of
Thirty Thousand Dollars ($30,000.00); (5) all existing credit facilities to
▇▇▇▇▇▇ Group and its Subsidiaries are canceled ; (6) there is no Event of
Default or Potential Event of Default; (7) the Bank shall have received the
written opinion of legal counsel selected by the Companies and satisfactory to
the Bank, dated the date of this Agreement, in form and substance satisfactory
to the Bank, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by the Companies and constitutes a legal, valid and
binding obligation of the Companies enforceable in accordance
with its terms except to the extent that such enforceability
is limited by bankruptcy, insolvency, moratorium or similar
laws or equitable principles relating to the enforcement of
creditors' rights;
(ii) the Note delivered to Bank on the Closing Date has been
duly author ized, executed and delivered by the Companies and
is a legal, valid and binding obligation of the Companies
enforceable in accordance with its terms except to the extent
that such enforceability is limited by bankruptcy, insolvency,
moratorium or similar laws or equitable principles relating to
the enforcement of creditors' rights;
(iii) it is not necessary, in connection with the making and
delivery of the Note under the circumstances contemplated by
this Agreement, to register the Note under the Securities Act
of 1933, as amended, or to qualify an indenture in respect
thereof under the Trust Indenture Act of 1939, as amended;
(iv) no order, permission, consent or approval of any federal
or state com mission, board of regulatory authority is
required for the execution and delivery or performance of this
Agreement and of the Note;
(v) neither the consummation of the Agreement nor the use by
the Companies of any financial accommodation hereunder will
violate the Securities Exchange Act of 1934, as amended, or
applicable regulations thereunder;
20
(vi) the Companies are corporations duly organized, existing
and in good standing under the laws of the state as set forth
in Section 3.1 with full corporate power and authority to
carry on the business, to enter into this Agreement, to borrow
money as contemplated by them, to issue the Note and to carry
out the provisions of this Agreement and the Note;
(vii) the Companies are duly qualified as foreign corporations
to do business in each of the states, other than the state of
their incorporation, in which the character of the properties
owned by them or the nature of the business trans acted by
them makes such qualification necessary, and is in good
standing in each of such states;
(viii) there is no charter, bylaw or preferred or common stock
provision, nor any indenture, contract or agreement to which
the Companies are to the knowledge of such counsel parties,
nor any statute, rule or regulation binding on the Companies,
which would be contravened by the execution and delivery of
this Agreement or of the Note or by the performance of any
terms, provisions, conditions, agreements, covenants or
obligations of the Companies contained herein or therein;
(ix) there are no actions, suits, investigations or
proceedings (whether or not purportedly on behalf of the
Companies) pending or, to the knowledge and belief of said
counsel, threatened against or affecting the Companies, or the
business or properties of the Companies, or before or by any
governmental agency, or any court, arbitrator or grand jury,
which can reasonably be expected to result in any material
adverse change in the business, operations, properties or
assets or in the condition, financial or otherwise, of the
Companies or in the ability of the Companies to perform this
Agreement. The Companies are not, to the knowledge and belief
of said counsel, in default with respect to any judgment,
order, writ, injunction, decree, demand, rule or regulation of
any court, arbitrator, grand jury, or any of the governmental
agency, default under which might have consequences which
would materially and adversely affect the business, properties
or assets or the condition, financial or otherwise, of the
Companies;
(x) the consummation of the Agreement and the execution and
delivery of the Note will not involve any prohibited
transaction under the Internal Revenue Code or ERISA; and
(6) the Bank shall have received a guarantee, satisfactory in form and substance
to Bank's counsel, by The ▇▇▇▇▇▇ Group, Inc. and ▇▇▇▇▇▇ Finance in favor of Bank
guaranteeing all indebtedness of Companies to Bank and from ▇▇▇▇▇▇ and TDI
guaranteeing all indebtedness of Interstate to Bank, and an opinion letter of
legal counsel selected by the Guarantor and
21
satisfactory to the Bank in the form of Exhibit "C" attached to this Agreement
and covering such additional matters as Bank may reasonably require.
Section 4.2. Each Loan. The obligation of the Bank to make any Loan or
to issue any Standby Letter of Credit shall be subject to compliance with
Section 4.1 herein and also subject to satisfaction of the following conditions
that at the date of making such Loan or issuing any Standby Letter of Credit,
and after giving effect thereto: (1) no Event of Default or Potential Default
shall have occurred and be then continuing; and (2) each representation and
warranty set forth in Article III above is true and correct as if then made.
Section 4.3. Collateral. The obligations of Companies, hereunder shall
be secured by the Master Revolving Note, and by the collateral described in the
Security Agreements executed on even date herewith, and any and all security
agreements ratified pursuant to Section 4.4 herein, and by the Other Collateral
Documents and by any and all collateral securing any obligation of Companies to
Bank.
Section 4.4. Ratification and Confirmation. All security agreements,
financing statements, evidence of liens, and other security documents, executed
by the Companies in favor of Bank, are hereby ratified and confirmed, and
adopted by and to the uses of this Agreement, and shall continue in full force
and effect, and shall hereafter be related to this Agreement.
ARTICLE V. AFFIRMATIVE COVENANTS
As long as financial accommodation is available hereunder and until the
Expiration Date of all Letters of Credit shall have passed and until all
principal of and interest on the Note have been paid in full:
Section 5.1. Accounting; Financial Statements; and Other Information.
The Companies will maintain a standard system of accounting, established and
administered in accordance with GAAP consistently followed throughout the
periods involved, and will set aside on their books for each fiscal quarter the
proper amounts or accruals for depreciation, obsolescence, amortization, bad
debts, current and deferred taxes, prepaid expenses, and for other purposes as
shall be required by GAAP. The Companies will deliver to the Bank:
(a) As soon as practicable after the end of each month, and in any
event within thirty (30) days thereafter, a balance sheet of
the Companies as of the end of such month, and statements of
income, certified as complete and correct by the principal
financial officer of the Companies, accompanied by a
certificate by the chief financial officer stating whether or
not there exists any Event of Default or Potential Default.
22
(b) Quarterly 10Q reports of ▇▇▇▇▇▇ Group within forty-five (45)
days of the quarter end.
(c) As soon as practicable after the end of each fiscal year, and
in any event within one hundred twenty (120) days thereafter,
the Annual 10K Report, and an audited consolidated financial
statement for The ▇▇▇▇▇▇ Group, audited by certified public
accountants of recognized standing, selected by the Companies
and satisfactory to the Bank prepared in accordance with GAAP.
In addition, a consolidating balance sheet as of the end of
such year, and statements of income of Companies, Interstate,
▇▇▇▇▇▇ Finance, and the ▇▇▇▇▇▇ Group for such year, setting
forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail certified as
complete and correct by the principal financial officer of
each entity.
(d) Annual budgeted financial statements within ninety (90) days
of year end.
(e) Together with each set of financial statements required by
subparagraphs (b) and (c) above and, in addition, upon request
of the Bank at any other times, a certifi cate by the chief
financial officer or other authorized officer of the Companies
stating whether or not there exists any Event of Default or
Potential Default (including the calculations pursuant to
Sections 6.7, 6.10 and 6.11 hereunder) and if there is an
Event of Default or Potential Default, specifying the nature
and period of existence thereof and what action, if any, the
Companies are taking or proposes to take with respect thereto.
(f) With reasonable promptness, such other data and information as
from time to time may be reasonably requested by the Bank.
(g) Promptly and in any event within ten (10) days after the
occurrence of a Reportable Event with respect to a Plan,
copies of any materials required to be filed with the PBGC
with respect to such Reportable Event or those that would have
been required to be filed if the thirty (30) day notice
requirement to the PBGC were not waived.
(h) Promptly upon receipt, and in no event more than three (3)
days after receipt, of a notice by the Companies or any ERISA
Affiliate or any administrator of any Plan or Multiemployer
Plan that the PBGC has instituted proceedings to terminate
such Plan or to appoint a trustee to administer such Plan, a
copy of such notice.
Section 5.2. Insurance; Maintenance of Properties. The Companies will
maintain with financially sound and reputable insurers, insurance with coverage
and limits as may be required by law or as may be reasonably required by the
Bank. The Companies will, upon
23
request from time to time, furnish to the Bank a schedule of all insurance
carried by it, setting forth in detail the amount and type of such insurance.
The Companies will maintain in good repair, working order, and condition, all
properties used or useful in the business of the Companies.
Section 5.3. Existence; Business. The Companies will cause to be done
all things necessary to preserve and keep in full force and effect their
existence and rights, to conduct their business in a prudent manner, to maintain
in full force and effect, and renew from time to time, their franchises,
permits, licenses, patents, and trademarks that are necessary to operate their
businesses. The Companies will comply in all material respects with all valid
laws and regulations now in effect or hereafter promulgated by any properly
constituted governmental authority having jurisdiction; provided, however, the
Companies shall not be required to comply with any law or regulation which it is
contesting in good faith by appropriate proceedings as long as either the effect
of such law or regulation is stayed pending the resolution of such proceedings
or the effect of not complying with such law or regulation is not to jeopardize
any franchise, license, permit patent or trademark necessary to conduct the
Companies' business.
Section 5.4. Payment of Taxes. The Companies will pay all taxes,
assessments, and other governmental charges levied upon any of their properties
or assets or in respect of their franchises, business, income or profits before
the same become delinquent, except that no such taxes, assessments, or other
charges need be paid if contested by the Companies in good faith and by
appropriate proceedings promptly initiated and diligently conducted and if the
Companies has set aside proper amounts, determined in accordance with GAAP, for
the payment of all such taxes, charges, and assessments.
Section 5.5. Litigation; Adverse Changes. The Companies will promptly
notify the Bank in writing of: (1) any future event which, if it had existed on
the date of this Agreement, would have required qualification of the
representations and warranties set forth in Article III hereof; and (2) any
material adverse change in the condition, business or prospects, financial or
otherwise, of the Companies.
Section 5.6. Notice of Default. The Companies will promptly notify the
Bank of any Event of Default or Potential Default hereunder and any demands made
upon the Companies by any Person for the acceleration and immediate payment of
any Indebtedness owed to such Person.
Section 5.7. Inspection. The Companies will make available for
inspection by duly authorized representatives of the Bank, or its designated
agent, the Companies' books, records, and properties when reasonably requested
to do so, and will furnish the Bank such information regarding their business
affairs and financial condition within a reasonable time after written request
therefor.
24
Section 5.8. Environmental Matters. The Companies and each of their
subsidiaries:
(a) Shall comply with all Environmental Laws.
(b) Shall deliver promptly to Bank notice of the receipt of any
document received from the United States Environmental
Protection Agency or any state, county or municipal
environmental or health agency and, upon request of Bank: (1)
copies of any documents received from the United States
Environmental Pro tection Agency or any state, county or
municipal environmental or health agency; and (2) copies of
any documents submitted by Companies or any of their
Subsidiaries to the United States Environmental Protection
Agency or any state, county or municipal environmental or
health agency concerning their operations.
Section 5.9. Depository Accounts. Companies shall maintain all of their
primary depository accounts with the Bank, and Companies grant Bank the right to
offset Companies' funds on deposit with the Bank against Indebtedness owed by
Companies to the Bank.
ARTICLE VI. NEGATIVE COVENANTS
As long as credit is available hereunder and until all principal of and
interest on the Note have been paid in full:
Section 6.1. Sale or Purchase of Assets. ▇▇▇▇▇▇ Group and the Companies
(indivi dually or collectively) will not, nor will they allow any Subsidiary to,
directly or indirectly: (1) purchase, lease or otherwise acquire any assets
except in the ordinary course of business or as otherwise permitted by any
provision of this Agreement; or (2) sell, lease, transfer or otherwise dispose
of any facility (for purposes of this provision, sales of assets associated with
the closing of the Truckaway segment shall be excluded in an amount not to
exceed Two Million One Hundred Twenty-Five Thousand Dollars ($2,125,000.00); or
(3) sell, lease, transfer or otherwise dispose of in any transaction or series
of related transactions any of their property or assets (except in the ordinary
course of business) without written consent of Bank.
Section 6.2. Liens. ▇▇▇▇▇▇ Group and the Companies (individually or
collectively) will not, nor will they allow any Subsidiary to, directly or
indirectly, create, incur, assume, or permit to exist any Lien with respect to
any property or asset of the Companies now owned or hereafter acquired other
than:
(a) Liens for taxes or governmental assessments, charges or levies
the payment of which is not at the time required by Section
5.4 hereof;
(b) Liens imposed by law, such as Liens of landlords, carriers,
warehousemen, mechanics, and materialmen arising in the
ordinary course of business for sums
25
not yet due or being contested by appropriate proceedings
promptly initiated and diligently conducted, provided the
Companies have set aside proper amounts, determined in
accordance with GAAP, for the payment of all such Liens;
(c) Liens incurred or deposits made in the ordinary course of
business in connection with worker's compensation,
unemployment insurance, and other types of social security, or
to secure the performance of tenders, statutory obligations,
and surety and appeal bonds, or to secure the performance and
return of money, bonds, and other similar obligations, but
excluding Indebtedness; and
(d) Liens in respect of judgments or awards with respect to which
the Companies shall, in good faith, be prosecuting an appeal
or proceeding for review and with respect to which a stay of
execution upon such appeal or proceeding for review shall have
been obtained;
(e) Liens that secure the Companies' Indebtedness for the purchase
price of any real or personal property and that only encumber
the property purchased; provided the aggregate amount of all
such purchase money Liens shall not exceed an aggregate amount
outstanding at any time of Two Hundred Thousand Dollars
($200,000.00) (For purposes of calculating said $200,000.00
figure, all purchase money Liens of the ▇▇▇▇▇▇ Group,
Companies, Interstate, ▇▇▇▇▇▇ Finance, and the Subsidiaries of
Companies will be included so that the combined purchase money
Liens shall not exceed Two Hundred Thousand Dollars
($200,000.00);
(f) Liens in favor of the Bank or any Affiliate Bank.
Section 6.3. Indebtedness. ▇▇▇▇▇▇ Group and the Companies (individually
or collectively) will not, nor will they allow any Subsidiary to, directly or
indirectly, create, incur or assume Indebtedness, or otherwise become liable
with respect to, any Indebtedness other than:
(a) Indebtedness now or hereafter payable, directly or indirectly,
by the Companies to the Bank or any Affiliate Bank;
(b) Subordinated Debt of the Companies;
(c) To the extent permitted by this Agreement, Indebtedness for
the purchase price of any real or personal property, which is
secured only by a Lien on the Property purchased;
(d) Unsecured current Indebtedness and deferred liabilities (other
than for borrowed money or represented by bonds, notes, or
other securities) incurred in the
26
ordinary course of business (except that Companies may enter
into agreements with their insurance providers for payment of
premiums over a period of time not to exceed one (1) year);
and
(e) Indebtedness for taxes, assessments, governmental charges,
Liens, or similar claims to the extent not yet due and
payable.
Section 6.4. Investments; Loans. ▇▇▇▇▇▇ Group and the Companies
(individually or collectively) will not, nor will they allow any Subsidiary to,
directly or indirectly, without written approval of the Bank: (1) purchase or
otherwise acquire any stock or other securities of any other Person (except that
it shall not be a violation of this agreement if Companies receive, following a
bankruptcy or other insolvency proceeding by one of Companies' debtors, stock in
exchange for or settlement of the unpaid account of that debtor to Companies);
or (2) make or permit to be outstanding any loan (other than loans to officers
in relation to or for the purpose of the special employee stock purchase plan)
or advance (other than trade advances in the ordinary course of business and
extensions of credit by Companies or ▇▇▇▇▇▇ Finance to owner-operators for the
purchase of a piece of equipment so long as the advances do not exceed the value
of the collateral pledged by the owner-operator to Companies or ▇▇▇▇▇▇ Finance
and assigned by Companies or ▇▇▇▇▇▇ Finance to Bank) or enter into any arrange
ment to provide funds or credit, to any other Person, except that the Companies
may purchase or otherwise acquire and own marketable United States Treasury and
Agency obligations, and certificates of deposit and bankers' acceptances issued
or created by any domestic commercial bank.
Section 6.5. Guaranties. Except for the guarantees given to Bank,
▇▇▇▇▇▇ Group and the Companies (individually or collectively) will not, nor will
they allow any Subsidiary to, guarantee, directly or indirectly, or otherwise
become surety (including, without limitation, liability by way of agreement,
contingent or otherwise, to purchase, to provide funds for payment, to supply
funds to, or otherwise invest in, any Person, or enter into any working capital
maintenance or similar agreement) in respect of any obligation or Indebtedness
of any other Person, except guaranties by endorsement of negotiable instruments
for deposit, collection, or similar transactions in the ordinary course of
business; provided, however, ▇▇▇▇▇▇ Group and/or its Subsidiaries may guarantee
the debt of Persons in an amount not to exceed, in the aggregate, Five Hundred
Thousand Dollars ($500,000.00).
Section 6.6. Mergers; Consolidation; Acquisitions. ▇▇▇▇▇▇ Group and the
Companies (individually or collectively) will not, nor will they allow any
Subsidiaries to, merge or consolidate with any Person or sell, assign, lease or
otherwise dispose of (whether in one transaction or in a series of
transactions), all or substantially all of their assets (whether now owned or
hereafter acquired). Nor ▇▇▇▇ ▇▇▇▇▇▇ Group, or Companies, or any Subsidiaries
purchase or otherwise acquire (whether in one transaction or in a series of
trans actions) all or substantially all of the assets of any Person (whether
through an asset or stock purchase) without prior written consent of Bank.
27
Section 6.7. Consolidated Net Worth. ▇▇▇▇▇▇ Group will not permit at
any time its Consolidated Net Worth to be less than Twelve Million Five Hundred
Thousand Dollars ($12,500,000.00). The required Consolidated Net Worth shall
increase quarterly by an amount equal to fifty percent (50%) of ▇▇▇▇▇▇ Group's
consolidated quarterly positive net earnings beginning with the first quarter
end that occurs following execution of this Agreement. The required Consolidated
Net Worth shall not decrease below the amount established in the prior quarter
even if there is a quarter in which the ▇▇▇▇▇▇ Group does not have positive net
earnings.
The required Consolidated Net Worth shall also be increased by the
amount of any equity issued or subordinated debt converted to equity by the
▇▇▇▇▇▇ Group over the term of this Revolving Credit Facility Agreement,
excluding stock offerings under any of the ▇▇▇▇▇▇ Group's or its Subsidiaries'
employee benefit plan.
Section 6.9. Subordinated Debt. ▇▇▇▇▇▇ Group and the Companies
(individually or collectively) will not, nor will they allow any Subsidiaries
to, make any payment upon outstanding Subordinated Debt, except in such manner
and amounts as may be expressly authorized in any subordination agreement
presently or hereafter held by the Bank.
Section 6.10. Leverage. ▇▇▇▇▇▇ Group will not permit its Leverage, on a
consolidated basis, to be at any time more than forty-five percent (45%),
calculated at closing and quarterly thereafter beginning with the first quarter
end that occurs following execution of this Agreement.
Section 6.11. Interest Coverage. ▇▇▇▇▇▇ Group will not permit its
Interest Coverage, on a consolidated basis, to fall below 2.0 to 1.0. This
covenant will be measured on a year-to-date basis for fiscal year 1997, until a
rolling four-quarter period is established.
Section 6.12. Transactions With Affiliates. ▇▇▇▇▇▇ Group and the
Companies (individually or collectively) will not, nor will they allow any
Subsidiary to, enter into any transaction including, without limitation, the
purchase, sale or exchange of property or the rendering of any service, with any
Affiliate except in the ordinary course of business (or as otherwise allowed
herein) and pursuant to the reasonable requirements of the Companies' business
and upon terms found by the Board of Directors to be fair and reasonable and no
less favorable to the Companies than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate.
Section 6.13. Name Change. ▇▇▇▇▇▇ Group and the Companies (individually
or collectively) will not change their name or location without written
notification to Bank.
Section 6.14. Use of Proceeds. Proceeds from the Loans hereunder shall
be used solely for proper corporate purposes.
28
ARTICLE VII. EVENTS OF DEFAULT
The occurrence of any one or more of the following events shall
constitute an Event of Default under this Agreement:
Section 7.1. Principal or Interest. If the Companies fail to pay any
installment of principal of or interest on the Note or any other sums of money
upon demand or when otherwise due and payable under this Agreement or fail to
pay any installment of principal of or interest on any other obligation of
Companies to Bank, an Affiliate Bank or Leasing Company when due and payable; or
Section 7.2. Misrepresentation. If any representation or warranty made
herein by the Companies or in any written statement, certificate, report or
financial statement at any time furnished by, or on behalf of, the Companies in
connection herewith, is incorrect or misleading in any material respect when
made; or
Section 7.3. Failure of Performance of this Agreement. If the Companies
or the ▇▇▇▇▇▇ Group or any Affiliate or Subsidiary fails to perform or observe
any covenant or agreement contained in this Agreement, or in any other agreement
between Companies and Bank, an Affiliate Bank or Leasing Company other than any
sums of money payable, and such failure remains unremedied for ten (10) calendar
days after the Bank, Affiliate Bank or Leasing Company shall have given written
notice thereof to the Companies; or
Section 7.4. Default by ▇▇▇▇▇▇ Group. Any action which would constitute
a default by ▇▇▇▇▇▇ Group in the performance or observation of any covenants,
conditions or agreements contained in any agreement entered into by ▇▇▇▇▇▇ Group
and Bank, an Affiliate Bank or Leasing Company or in any note, guaranty or
mortgage or other security instrument signed by ▇▇▇▇▇▇ Group and given to Bank,
an Affiliate Bank or Leasing Company; or
Section 7.5. Default by ▇▇▇▇▇▇ Finance. Any action which would
constitute a default by ▇▇▇▇▇▇ Finance in the performance or observation of any
covenants, conditions or agreements contained in any agreement entered into by
▇▇▇▇▇▇ Finance and Bank, an Affiliate Bank or Leasing Company or in any note,
guaranty or mortgage or other security instrument signed by ▇▇▇▇▇▇ Finance and
given to Bank, an Affiliate Bank or Leasing Company; or
Section 7.6. Cross-Default. If the Companies (or any Guarantor or any
Affiliate or Subsidiary): (1) fails to pay any Indebtedness (other than as
evidenced by the Note) owing by the Companies (or such Guarantor or any
Affiliate or Subsidiary) when due, whether at matur ity, by acceleration, or
otherwise; or (2) fails to perform any term, covenant or agreement on their part
to be performed under any agreement or instrument (other than the Loan
Documents) evidencing, securing or relating to such Indebtedness when required
to be performed, or is otherwise in default thereunder, if the effect of such
failure is to accelerate, or to permit the holder(s) of such Indebtedness or the
trustee(s) under any such agreement or instrument to
29
accelerate, the maturity of such Indebtedness, whether or not such failure shall
be waived by such holder(s) or trustee(s); or
Section 7.7. Event of Default Under Any Security Agreement. If any
Event of Default occurs (with passage of time or service of notice, or both)
under the terms of any Security Agreement; or
Section 7.8. ERISA. If any of the following events occur: (1) any Plan
incurs any "accumulated funding deficiency" (as such term is defined in ERISA)
whether waived or not; (2) the Companies engage in any Prohibited Transaction;
(3) any Plan is terminated; (4) a trustee is appointed by an appropriate United
States district court to administer any Plan; or (5) the PBGC institutes
proceedings to terminate any Plan or to appoint a trustee to administer any
Plan; or
Section 7.9. Guaranty. Failure by any Guarantor to maintain in effect
guarantees of all obligations of Companies to Bank, an Affiliate Bank, and
Leasing Company, including, but not limited to, obligations under this
Agreement, or failure of any Guarantor to deliver to Bank any financial
statements or documents required under Section 5.1 hereunder.
Section 7.10. Insolvency. If the Companies (or any Guarantor) shall
discontinue business or if the Companies or any Guarantor or Subsidiary: (1) is
adjudicated bankrupt or insolvent under any law of any existing jurisdiction,
domestic or foreign, or ceases, is unable, or admits in writing their inability
to pay their debts generally as they mature, or makes a general assignment for
the benefit of creditors; (2) applies for, or consents to, the appointment of
any receiver, trustee or similar officer for it or for any substantial part of
their property, or any such receiver, trustee or similar officer is appointed
without the application or consent of the Companies (or such Guarantor or
Subsidiary), and such appointment continues thereafter undischarged for a period
of thirty (30) days; (3) institutes, or consents to the institution of any
bankruptcy, insolvency, reorganization, arrangement, readjustment or debt,
dissolution, liquidation or similar proceeding relating to it under the laws of
any jurisdiction; (4) any such proceeding is instituted against the Companies
(or such Guarantor or Subsidiary) and remains thereafter undismissed for a
period of thirty (30) days; or (5) any judgment, writ, warrant of attachment or
execution, or similar process is issued or levied against a substantial part of
the property of the Companies or any subsidiary (or Guarantor or Subsidiary) and
such judgment, writ or similar process is not effectively stayed within thirty
(30) days after its issue or levy, or any Guarantor becomes deceased.
ARTICLE VIII. REMEDIES UPON DEFAULT
Section 8.1. Optional Acceleration. In the event that one or more of
the Events of Default set forth in Sections 7.1 through 7.9 above occurs and is
not waived by the Bank, then, in any such event, and at any time thereafter, the
Bank may, it its option, terminate its commitment to issue any Loan and any
Standby Letter of Credit and declare the unpaid
30
principal of, and all accrued interest on, the Note, and any other liabilities
hereunder, and all other Indebtedness of the Companies to the Bank forthwith due
and payable, whereupon the same will forthwith become due and payable without
presentment, demand, protest or other notice of any kind, all of which the
Companies hereby expressly waive, anything contained herein or in the Note to
the contrary notwithstanding.
Section 8.2. Automatic Acceleration. Upon the happening of an Event of
Default referred to in Section 7.10 above, the unpaid principal of, and all
accrued interest on, the Note, and any other liabilities hereunder and all other
Indebtedness of the Companies to the Bank then existing will thereupon become
immediately due and payable in full and the commitment, if any, of the Bank to
issue Loans or any Standby Letter of Credit, if not previously terminated, will
thereupon immediately terminate without presentment, demand, protest or notice
of any kind, all of which are hereby expressly waived by the Companies, anything
contained herein or in the Note to the contrary notwithstanding.
Section 8.3. Right of Setoff; Security. Upon the occurrence of an Event
of Default, the Bank has the right, in addition to all other rights and remedies
available to it, to set off the unpaid balance of the Note and any other
Indebtedness payable to the Bank held by it against any debt owing to the
Companies by the Bank or by an Affiliate Bank, including, without limitation,
any obligation under a repurchase agreement or any funds held at any time by the
Bank or any Affiliate Bank, whether collected or in the process of collection,
or in any time or demand deposit account maintained by the Companies at, or
evidenced by any certificate of deposit issued by, the Bank or any Affiliate
Bank. The Companies hereby grant, pledge, and assign to the Bank a security
interest in, or Lien upon, all cash, negotiable instruments, securities, deposit
accounts, and other cash equivalents, whether collected or in the process of
collection, whether matured or unmatured, now or hereafter in the possession of
the Bank or any Affiliate Bank and upon which the Companies have or may
hereafter have any claim. The Companies acknowledge and agree that all of the
foregoing shall constitute "cash collateral" for purposes of this Agreement. The
Companies agree, to the fullest extent it may effectively do so under applicable
law, that any holder of a participation in the Note may exercise rights of
setoff or counterclaim and other rights with respect to such participation as
fully as if such holder of a participation were a direct creditor of the
Companies pursuant to this Agreement in the amount of such participation.
Section 8.4. No Waiver. The remedies in this Article VIII are in
addition to, not in limitation of, any other right, power, privilege or remedy,
either in law, in equity, or other wise, to which the Bank may be entitled. No
failure or delay on the part of the Bank in exercising any right, power or
remedy will operate as a waiver thereof, nor will any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right hereunder.
Section 8.5. Waiver of Surety Defenses. Each and every guarantor,
surety, endorser, and accommodation party of the obligations contained herein
shall be deemed to and shall have
31
irrevocably waived and relinquished (1) the benefit of any and all defenses to
enforcement of the Note, any counterclaim, offset or claim in recoupment, based
upon contract, arising at equity, or under any state or federal law regarding
suretyship or guaranty generally; and (2) any discharge provided in Indiana Code
26-1-3.1-605, or other state or federal statute of similar import. Consistent
with this waiver, and not by way of limitation, the person or persons entitled
to enforce the Note may, at any time and without notice to any guarantor,
surety, endorser or accommodation party of the obligations contained in the
Note, (i) extend the maturity date of the Note; (ii) adjust any and all terms of
the Note, even if such adjustment materially alters the obligation; (iii) take
any action (or not take any action) with respect to any collateral for the Note,
including without limitation, releasing or diminishing (intentionally or
otherwise) the extent or value of such collateral.
Section 8.6. Additional Waivers. Each and every guarantor, surety,
endorser, and accommodation party of the obligations contained herein, or in the
Note, hereby waives each of the following:
(a) presentment, demand and protest, and notice of dishonor,
nonpayment or other default with respect to any of the
obligations hereunder;
(b) any and all defenses, claims and discharges of Companies or
any other obligor, except the defense of discharge by payment
in full; and, without limiting the generality of the
foregoing, will not assert, plead or enforce against the Bank
any defense of waiver, release, discharge in bankruptcy,
statute of limitations, respondent judicata, statute of
frauds, anti-deficiency statute, incapacity, minority, usury,
illegality or unenforceability which may be available to the
Companies or any setoff available to the Companies or any
other person against Bank; and
(c) any requirement that Bank take action, realize, institute
suit, or exercise or exhaust its rights or remedies against
any of the Companies or against any other person or guarantor,
or collateral securing and/or guaranteeing all or any part of
the obligations, prior to enforcing any rights it has against
said guarantor, surety, endorser or accommodation party.
(d) the invalidity of any instruments evidencing any obligation
hereunder or the disability or legal incapacity of any person
in whole or in part, at any time;
(e) the fact that the amount or value of any of the property
constituting a part of the Collateral, may at any time have
been or be incorrectly estimated;
(f) the deterioration in market or other values, waste, loss by
fire, theft, loss, non- existence or substitution of any
property constituting a part of the Collateral;
32
(g) relief from valuation and appraisement laws; and
(h) any right that a guarantor, surety, endorser or accommodation
party has, or might hereafter have, to recover from any of the
Companies the monies that any such guarantor, surety, endorser
or accommodation party is obligated to pay to Bank hereunder.
Until Bank is paid in full and until no commitment by Bank to
provide Loans or financial accommodations hereunder remains,
the undersigned will not exercise or enforce, and expressly
waives, any right of contribution, reimbursement,
indemnification, recourse or subrogation available to the
undersigned against any person liable for payment of the
obligations hereunder, including, but not limited to, each of
the Companies or as to any collateral security therefor.
Section 8.7. Information Concerning Financial Conditions of Borrower.
Each and every guarantor, surety, endorser and accommodation party of the
obligations contained herein acknowledges that it is capable of, and hereby
assumes responsibility for keeping informed of the financial conditions of the
Companies, and of all other circumstances bearing upon the risk of nonpayment of
the obligations that diligent inquiry would reveal, and hereby agree that Bank
shall have no duty to advise them of information known to Bank regarding such
conditions or any such circumstances.
ARTICLE IX. MISCELLANEOUS
Section 9.1. Amendments. No waiver of any provision of this Agreement
or the Note, or consent to departure therefrom, is effective unless in writing
and signed by the Bank. No such consent or waiver extends beyond the particular
case and purpose involved. No amendment to this Agreement is effective unless in
writing and signed by the Companies and the Bank.
Section 9.2. Expenses; Documentary Taxes. The Companies shall pay: (1)
all out-of-pocket expenses of the Bank, including, but not limited to, all
filing fees and costs related thereto and all legal fees and disbursements of
special counsel for the Bank, in connection with the preparation of this
Agreement and the related documents; (2) any out-of-pocket expenses of the Bank,
including fees and disbursements of special counsel for the Bank related to any
waiver or consent hereunder or any amendment hereof or any Event of Default
hereunder; and (3) if an Event of Default or Potential Default occurs, all
out-of-pocket expenses incurred by the Bank, including reasonable fees and
disbursements of counsel, in connection with such Event of Default or Potential
Default and collection and other enforcement proceedings result ing therefrom.
The Companies shall reimburse the Bank for its payment of all transfer taxes,
documentary taxes, assessments or charges made by any governmental authority be
reason of the execution and delivery of this Agreement or the Note. Provided,
however, nothing contained herein shall be construed as requiring Companies to
pay income taxes of Bank incurred as a result of the Revolving Loan
relationship.
33
Section 9.3. Indemnification. The Companies shall indemnify and hold
the Bank harmless against any and all liabilities, losses, damages, costs, and
expenses of any kind (including, without limitation, the reasonable fees and
disbursements of counsel in connection with any investigative, administrative or
judicial proceeding, whether or not the Bank shall be designated a party
thereto) which may be incurred by the Bank relating to or arising out of this
Agreement or any actual or proposed use of proceeds of any Loan hereunder;
provided, however, that the Bank shall have no right to be indemnified hereunder
for its own bad faith or willful misconduct as determined by a court of
competent jurisdiction. The Companies further agree to indemnify the Bank
against any loss or expense which the Bank may sustain or incur as a consequence
of any default by the Companies in payment when due of any amount due hereunder
in respect of any Libor Rate Loan, including, but not limited to, any loss of
profit, premium or penalty incurred by the Bank in respect of funds borrowed by
it for the purpose of making or maintaining any such Loan, as determined by the
Bank in the exercise of its sole but reasonable discretion. A certificate as to
any such loss or expense shall be promptly submitted by the Bank to the
Companies and shall, in the absence of manifest error, be conclusive and binding
as to the amount thereof.
Section 9.4. Construction. This Agreement and the Note will be governed
by and construed in accordance with the laws of the state of Indiana without
regard to principles of conflict of laws. The several captions to different
sections of this Agreement are inserted for convenience only and shall be
ignored in interpreting the provisions hereof.
Section 9.5. Extension of Time. Whenever any payment hereunder or under
the Note becomes due on a date which the Bank is not open for the transaction of
business, such payment will be due on the next succeeding Business Day and such
extension of time will be included in computing interest in connection with such
payment.
Section 9.6. Notices. All written notices, requests or other
communications herein provided for must be addressed to the Companies as
follows:
▇▇▇▇▇▇ Drive Away, Inc.
▇▇▇▇ ▇▇▇ ▇.▇. ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Financial Officer
TDI, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Financial Officer
34
Interstate Indemnity Company
▇▇▇▇ ▇▇▇ ▇.▇. ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Financial Officer
to the Bank as follows:
KeyBank National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Assistant Vice President
Service of all written notices under this Agreement shall be sufficient if hand
delivered, or delivered or mailed to the party at its respective address as set
forth above or at such address as such party may provide in writing from time to
time. Any such notice shall be effective when hand delivered, delivered by
overnight carrier or received by United States mail, certified mail, return
receipt requested at the address provided herein or at such address designated
to the other in writing.
Section 9.7. Survival of Agreements; Relationship. All agreements,
representations, and warranties made in this Agreement will survive the making
of the extension of credit hereunder, and will bind and inure to the benefit of
the Companies and the Bank, and their respective successors and assigns;
provided, that no subsequent holder of the Note shall by reason of acquiring
that Note become obligated to make any Loan hereunder and no successor to or
assignee of the Companies may borrow hereunder without the Bank's written
assent. The relationship between the Companies and the Bank with respect to this
Agreement, the Note and any other Loan Document is and shall be solely that of
debtor and creditor, respectively, and the Bank has no fiduciary obligation
toward the Companies with respect to any such document or the transactions
contemplated thereby.
Section 9.8. Severability. If any provision of this Agreement or the
Note, or any action taken hereunder, or any application thereof, is for any
reason held to be illegal or invalid, such illegality or invalidity shall not
affect any other provision of this Agreement or the Note, each of which shall be
construed and enforced without reference to such illegal or invalid portion and
shall be deemed to be effective or taken in the manner and to the full extent
permitted by law.
Section 9.9. Entire Agreement. This Agreement, the Note, and any other
Loan Document integrate all the terms and conditions mentioned herein or
incidental hereto and supersede all oral representations and negotiations and
prior writings with respect to the subject matter hereof.
35
Section 9.10. Submission to Jurisdiction; Venue. As part of the
consideration for the financial accommodation extended to Companies by Bank,
Companies consent to the juris diction of any local, state or federal court
located within Elkhart County, Indiana, (or in the case of a federal court, the
jurisdiction of which includes Elkhart County, Indiana) and consent that all
such service of process be made by registered mail directed to the parties at
the address stated in this Agreement and service so made shall be deemed to be
completed five (5) days after such mailing.
Section 9.11. Jury Trial Waiver. COMPANIES WAIVE ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, BETWEEN BANK AND COMPANIES ARISING OUT OF, IN CONNECTION WITH,
RELATED TO, OR INCIDENTAL TO THE RELA TIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREE MENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED THERETO.
IN WITNESS WHEREOF, the Companies and the Bank have each caused this
Agree ment to be executed by their duly authorized officers this 27 day of
March, 1997.
COMPANIES:
▇▇▇▇▇▇ DRIVE AWAY, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Financial Officer
and Treasurer
------------------------------------------
(Typed or Printed Name and Office)
TDI, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Financial Officer
and Treasurer
------------------------------------------
(Typed or Printed Name and Office)
INTERSTATE INDEMNITY COMPANY
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Financial Officer
and Treasurer
------------------------------------------
(Typed or Printed Name and Office)
SIGNATURES CONTINUED ON PAGE 37
36
BANK:
KEYBANK NATIONAL ASSOCIATION
By:_________________________________________
(Signature)
------------------------------------------
(Typed or Printed Name and Office)
The undersigned, The ▇▇▇▇▇▇ Group, Inc. represents and warrants that it
has read and reviewed this Agreement and that it consents to the execution of
this document by ▇▇▇▇▇▇ Drive Away, Inc., TDI, Inc., and Interstate Indemnity
Company and agrees to be bound by the terms and conditions contained herein.
THE ▇▇▇▇▇▇ GROUP, INC.:
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Financial Officer
and Treasurer
------------------------------------------
(Typed or Printed Name and Office)
37
LIST OF EXHIBITS TO ▇▇▇▇▇▇ DRIVE AWAY, INC.'S
REVOLVING CREDIT FACILITY AGREEMENT
Exhibit "A"
Promissory Note........................................5
Exhibit "B"
Letters of Credit......................................6
Exhibit "C"
Opinion Letter........................................22
38