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EXHIBIT 4.1.1
FIRST AMENDMENT TO LOAN AGREEMENT
THIS AMENDMENT is made and entered into on this the 27 day of June,
1995, by and among P.A.M. TRANSPORT, INC., an Arkansas corporation, whose chief
executive office and principal place of business is located at Highway 412
West, P.O. Box 188, Tontitown, Arkansas 72770, party of the first part,
hereinafter called "Borrower," FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a
national banking association organized and existing under the laws of the
United States, with its principal place of business at 165 Madison Avenue,
Memphis, Tennessee 38103, party of the second part, hereinafter called "Bank,"
and P.A.M. TRANSPORTATION SERVICES, INC., a Delaware corporation, party of the
third part, hereinafter called "Guarantor."
Recitals of Fact
Pursuant to the terms and provisions of that certain Loan Agreement
("Loan Agreement"), bearing date of the 26th day of July, 1994, among the
parties hereto, the Bank committed to make loans and advances and extensions of
credit to the Borrower on a revolving credit basis, in an amount not to exceed,
at any one time outstanding, the principal sum of Seven Million Five Hundred
Thousand Dollars ($7,500,000.00). The Bank has now agreed to increase its
Committed Amount (as defined in the Loan Agreement), to the end that the Bank
will, subject to all of the terms and conditions of the Loan Agreement, as
amended hereby, make loans and advances and extensions of credit to the
Borrower, on a revolving credit basis, in an amount not to exceed, at any one
time outstanding, the lesser of (a) the principal sum of Ten Million Dollars
($10,000,000.00), or (b) the Borrower's Borrowing Base (as defined in the Loan
Agreement).
By reason of such increased commitment, it is necessary to modify and
amend the Loan Agreement as hereinafter provided. In addition, the parties
have agreed to make certain other changes in the Loan Agreement, all as are set
forth herein.
NOW, THEREFORE, for and in consideration of the premises, as set forth
in the Recitals of Fact, and other good and valuable considerations, the
receipt and sufficiency of which are hereby acknowledged, it is agreed by the
parties as follows:
Agreements
1. To induce the Bank to enter into this Amendment, the Borrower and
the Guarantor do hereby absolute and unconditionally, jointly and severally,
certify, represent and warrant to the Bank, and covenant and agree with the
Bank, that:
(a) All representations and warranties made by the Borrower or the
Guarantor in the Loan Agreement, as amended hereby, in the Security Agreement,
as amended, and in all other loan documents (all of which are herein sometimes
called the "Loan Documents"), are true, correct and complete in all material
respects as of the date of this Amendment.
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(b) As of the date hereof and with the execution of this Amendment,
there are no existing events, circumstances or conditions which constitute, or
would, with the giving of notice, lapse of time, or both, constitute Events of
Default.
(c) There are no existing offsets, defenses or counterclaims to the
respective obligations of the Borrower or the Guarantor, as set forth in the
Note, the Security Agreement, as amended, the Loan Agreement, as amended, or in
any other Loan Document executed by the Borrower or the Guarantor,
respectively, in connection with the Loan.
(d) Neither the Borrower nor the Guarantor has any existing claim for
damages against the Bank arising out of or related to the Loan; and, if and to
the extent (if any) that the Borrower or the Guarantor has or may have any such
existing claim (whether known or unknown), the Borrower and the Guarantor do
hereby forever release and discharge, in all respects, the Bank with respect to
such claim.
(e) The Loan Documents, as amended by this Amendment and by the
Amendment (also of even date herewith) to the Security Agreement, are valid,
genuine, enforceable in accordance with their respective terms, and in full
force and effect.
2. The amount of Seven Million Five Hundred Thousand Dollars
($7,500,000.00), as contained in the Recitals of Fact of the Loan Agreement and
in Section 2.1 thereof, is hereby changed to the sum of Ten Million Dollars
($10,000,000.00).
3. The definitions of "Note" and "Termination Date," as set forth in
Article One of the Loan Agreement are hereby modified and amended to read as
follows:
"1.18 'Note' means, collectively, the Notes given to evidence
the Loan, one of said Notes being dated July 26, 1994 and being in the
principal sum of Seven Million Five Hundred Thousand Dollars
($7,500,000.00), and the other of said Notes being dated June 27,
1995, and being in the principal sum of Two Million Five Hundred
Thousand Dollars ($2,500,000.00), as either or both of said Notes may
be modified, renewed, amended, restated or extended, in whole or in
part, from time to time; and any other note or notes executed at any
time hereafter to evidence the Loan.
"1.25 'Termination Date' shall mean the 31st day of May, 1997,
unless such date is extended pursuant to the provisions of Section
10.12 hereof, in which event such extended date shall be the
Termination Date."
4. Article One is further modified and amended by the addition
thereto of two (2) new sections, being Sections 1.28 and 1.29, reading as
follows:
"1.28 'Choctaw' shall mean Choctaw Express, Inc., an Oklahoma
corporation.
"1.29 'Choctaw Security Agreement' shall mean the security
agreement, bearing date of the 27 day of June, 1995, executed by
Choctaw for the
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purpose of securing the Loan and the other Obligations (as that term
is defined in the Security Agreement)."
5. The first sentence of Section 2.3(a) is hereby modified and
amended to read as follows:
"All advances with respect to the Loan up to but not exceeding at any
one time outstanding the principal sum of Seven Million Five Hundred
Thousand Dollars ($7,500,000.00) shall be evidenced by the promissory
note of the Borrower, payable to the order of the Bank, in the
principal amount of Seven Million Five Hundred Thousand Dollars
($7,500,000.00), in form substantially the same as the Note attached
hereto as EXHIBIT '2.3'; and all advances with respect to the Loan
exceeding, at any one time outstanding, the principal sum of Seven
Million Five Hundred Thousand Dollars ($7,500,000.00) shall be
evidenced by the promissory note of the Borrower, payable to the order
of the Bank, in the principal amount of Two Million Five Hundred
Thousand Dollars ($2,500,000.00) in form substantially as the Note
attached hereto as EXHIBIT '2.3(A)'."
6. Sections 8.1 and 8.5 of the Loan Agreement are hereby modified and
amended to read as follows:
"8.1 Net Worth. Maintain at all times a Net Worth (as defined
in Article One) of not less than Ten Million Five Hundred Thousand
Dollars ($10,500,000.00).
"8.5 Debt Service Coverage Ratio. Maintain at all times a
Debt Service Coverage Ratio of not less than 1.1 to 1.0. For the
purposes hereof, the term "Debt Service Coverage Ratio" shall mean net
after-tax income, plus current year's deferred taxes, plus
depreciation, divided by current maturities of long-term debt, all
determined in accordance with generally accepted accounting
principles, consistently applied."
7. Section 9.1(d) of the Loan Agreement is hereby modified and
amended to read as follows:
"(d) Covenants. The Borrower, the Guarantor, or Choctaw
defaults in the performance or observance of any covenant, condition,
agreement or undertaking on its part to be performed or observed, as
contained herein, in the Security Agreement, in the Choctaw Security
Agreement, or in any other instrument or document which now or
hereafter evidences, secures, or relates to all or any part of the
Loan or any extensions of credit made pursuant hereto; and, with
respect to the covenants of the Guarantor set forth in Sections 8.1
and 8.2 hereof, such default is not cured within sixty (60) days
following the Guarantor's or the Borrower's first knowledge or notice
thereof; or"
8. The Loan Agreement is further modified and amended by the addition
thereto of a new exhibit, being EXHIBIT "2.3(A)," in form and substance
substantially the same as EXHIBIT "2.3(A)" attached to this Amendment.
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9. All terms and provisions of the Loan Agreement which are
inconsistent with the provisions of this Amendment are hereby modified and
amended to conform hereto; and, as so modified and amended, the Loan Agreement
is hereby ratified, approved and confirmed. Except as otherwise may be
expressly provided herein, this Amendment shall become effective as of the date
set forth in the initial paragraph hereof.
10. All references in all Loan Documents to the Loan Agreement shall,
except as the context may otherwise require, be deemed to constitute references
to the Loan Agreement as amended hereby.
11. The Guarantor does further (a) consent to and approve of all of
the terms and provisions of this Amendment, and the Amendment to the Security
Agreement, which Amendment is also of even date herewith, insofar as its rights
are or may be affected hereby, and (b) acknowledge the continued effectiveness
of its Guaranty in accordance with the terms thereof.
12. Choctaw joins herein for the purpose of consenting to and
approving of all of the terms and provisions of the Loan Agreement, as amended
hereby, insofar as its rights are or may be affected hereby. Without limiting
the generality of the foregoing, Choctaw specifically agrees to the terms and
provisions set forth in Sections 10.21 and 10.22 of the Loan Agreement.
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IN WITNESS WHEREOF, Borrower, Guarantor, Choctaw and Bank have caused
this Amendment to be executed by their respective officers, duly authorized so
to do, on this the day and year first above written.
ATTEST: P.A.M. TRANSPORT, INC.
/s/ Larry J. Goddard By: /s/ Robert W. Weaver
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Secretary President
BORROWER
ATTEST: P.A.M. TRANSPORTATION SERVICES, INC.
/s/ Larry J. Goddard By: /s/ Robert W. Weaver
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Secretary President
GUARANTOR
ATTEST: CHOCTAW EXPRESS, INC.
/s/ Larry J. Goddard By: /s/ Robert W. Weaver
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Secretary Chief Executive Officer
CHOCTAW
FIRST TENNESSEE BANK NATIONAL ASSOCIATION
By: /s/ Steve Hawkins
----------------------------------------
Senior Vice President
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EXHIBIT "2.3(a)"
PROMISSORY NOTE
$2,500,000.00 Memphis, Tennessee
June 27, 1995
ON OR BEFORE MAY 31, 1997 (the "Termination Date"), the undersigned,
P.A.M. TRANSPORT, INC., an Arkansas corporation (the "Maker"), promises to pay
to the order of FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a national banking
association having its principal place of business in Memphis, Tennessee (the
"Bank"), the principal sum of TWO MILLION FIVE HUNDRED THOUSAND DOLLARS
($2,500,000.00), value received, together with interest from date until
maturity, upon disbursed and unpaid principal balances, at the Applicable Rate,
determined quarterly as hereinafter provided, said interest being payable
monthly on the first day of each and every month hereafter, commencing on the
1st day of August, 1994, with the final installment of interest being due and
payable concurrently on the same date that the principal balance is due
hereunder.
The "Termination Date" may be extended one or more times pursuant to
the provisions of that certain Loan Agreement ("Loan Agreement"), bearing date
of the 26th day of July, 1994, as amended, among the Maker, the Bank and
certain other parties therein mentioned; and if so extended, such extended date
shall thereupon constitute the Termination Date.
For the purposes hereof, the following terms shall have the following
meanings (such meanings to be applicable equally to the both the singular and
plural forms of such terms) unless the context otherwise requires:
"Adjustment Date" shall mean the first day of each February, May,
August and November of each year, with the next Adjustment Date being the 1st
day of August, 1995.
"Alternate Contract Rate" shall mean a rate per annum equal to the
lesser of (a) the Maximum Rate, or (b) a rate equal to (i) two and one-half
percent (2 1/2%) per annum, plus (ii) the LIBOR Rate, adjusted and determined
as of the opening of business on Wednesday of each week.
"Applicable Rate" shall mean (a) from the date hereof to the 1st day
of August, 1995, the Alternate Contract Rate, and (b) thereafter, the Contract
Rate, if the Maker's Net Income After Taxes for the Maker's fiscal quarter last
ending prior to the applicable Adjustment Date is less than Five Hundred
Thousand Dollars ($500,000.00), and the Alternate Contract Rate if the Maker's
Net Income After Taxes for such fiscal quarter is Five Hundred Thousand Dollars
($500,000.00) or more.
2.3(a)-1
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"Base Rate" shall mean the base commercial rate of interest
established from time to time by the Bank, it being understood and agreed,
however, that the Bank has made, and may hereafter make, loans at rates of
interest which are higher or lower than the Base Rate. [The Bank's Base Rate
is, as of the date hereof, nine percent (9%) per annum.]
"Contract Rate" shall mean a rate per annum equal to the lesser of (a)
the Base Rate, as adjusted and determined on a daily basis, or (b) the Maximum
Rate.
"Default Rate" shall mean a rate of interest per annum which shall be
equal to the Applicable Rate, plus two percent (2%) per annum, but never to
exceed the Maximum Rate.
"LIBOR Rate" shall mean the London Interbank Offered Rate of Interest
for an interest period of one (1) month, as reported on each Wednesday of each
week in The Wall Street Journal; provided, however, that if The Wall Street
Journal is not published on a Wednesday, the "LIBOR Rate" shall be determined
by reference to The Wall Street Journal last published immediately preceding
such Wednesday. [The one-month LIBOR Rate quoted in The Wall Street Journal
published on Monday, June 12, 1995, is six and one-sixteenth percent (6-1/16%)
per annum. Therefore, if Monday, June 12, 1995 were a Wednesday, the Alternate
Contract Rate, based upon the LIBOR Rate quoted in The Wall Street Journal on
such date, would be 8.5625% per annum.]
"Maximum Rate" shall mean the maximum effective variable contract rate
of interest which the Bank may, from time to time, lawfully charge.
"Net Income After Taxes" shall mean, with respect to any fiscal period
of the Maker, the Maker's consolidated net income after provision for income
taxes for such fiscal period, as determined in accordance with generally
accepted accounting principles, consistently applied.
The Applicable Rate prior to maturity upon the unpaid principal
balances of this Note shall be determined quarterly as of each Adjustment Date,
based upon the Net Profit After Taxes of the Maker for the calendar quarter of
its fiscal year ending most recently prior to such Adjustment Date. In the
event that the financial report for the immediately preceding calendar quarter
of the Maker has not been received by the Bank on or before an Adjustment Date,
then and in such event the rate of interest prior to maturity for the fiscal
quarter commencing as of such Adjustment Date shall be the Contract Rate.
Any payments of principal or interest not made when due shall bear
interest after maturity (whether by reason of default, acceleration or
otherwise) at the Applicable Rate for a period of sixty (60) days following
such maturity, and, if payment is not made within such sixty (60) day period,
upon the expiration of such sixty (60) day period, at the Default Rate.
However, in the event the Maker is obligated to pay the Default Rate under this
paragraph, such obligation to pay the Default Rate shall terminate when the
Maker cures the default and the interest rate thereafter shall revert back to
the Applicable Rate.
2.3(a)-2
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In the event that the foregoing provisions should be construed by a
court of competent jurisdiction not to constitute a valid, enforceable
designation of a rate of interest or method of determining same, the
indebtedness hereby evidenced shall bear interest at the Maximum Rate.
This Note is secured by one or more Security Agreements ("Security
Agreements") dated July 26, 1994, as amended, covering Maker's Accounts
Receivable, and other collateral, as is more particularly described in said
Security Agreement(s), and may now or hereafter be secured by other mortgages,
trust deeds, assignments, security agreements, or other instruments of pledge
or hypothecation, including a Security Agreement ("Choctaw Security
Agreement"), of even date herewith, executed by Choctaw Express, Inc., an
Oklahoma corporation, in favor of the Bank.
This Note is payable at the offices of Bank, at 165 Madison Avenue,
Memphis, Tennessee, 38103, or at such other place as the holder may designate
in writing, in lawful money of the United States of America, which shall be
legal tender in payment of all debts and dues, public and private, at the time
of payment.
On the Termination Date, or, at the option of the Bank (a) if the
undersigned shall fail to make payment of any installment of interest, as above
provided, and such default remains uncured for a period of five (5) days, or
(b) upon any default in the terms and provisions of any of the Security
Agreements or the Choctaw Security Agreement, or any trust deed, mortgage, or
other instrument of pledge or hypothecation which now or hereafter secures the
payment of the indebtedness evidenced hereby, or (c) upon the occurrence of any
Event of Default as that term is defined in the Loan Agreement, or (d) upon the
dissolution of the Maker, or (e) upon default in the payment when due of any
other indebtednesses, liabilities, or obligations of the Maker to the Bank,
whether now existing or hereafter created or arising, and such default remains
uncured for a period of five (5) days, the entire unpaid balance of the
indebtedness hereby evidenced, together with all interest then accrued, shall
at once become due and payable for all purposes.
If this Note is placed in the hands of an attorney for collection, by
suit or otherwise, or to protect the security for its payment, or to enforce
its collection, or to represent the rights of the Bank in connection with any
loan documentation executed in connection herewith, or to defend successfully
against any claim, cause of action or suit brought by the Maker against the
Bank, the Maker shall pay on demand all costs of collection and litigation
(including court costs), together with a reasonable attorney's fee.
The Maker and any endorsers or guarantors hereof waive protest,
demand, presentment and notice of dishonor. The Maker and any endorsers or
guarantors that this Note may be extended, in whole or in part, without limit
as to the number of such extensions, or the period or periods thereof, and
without notice to them and without affecting their liability thereon.
It is the intention of the Bank and the Maker to comply strictly with
all applicable usury laws; and, accordingly, in no event and upon no
contingency shall the holder hereof ever be entitled to receive, collect, or
apply as interest any interest, fees, charges, or other payments equivalent to
interest, in excess of the Maximum Rate; and, in the event that the holder
hereof ever receives, collects, or applies as interest, any such excess, such
amount which, but for this
2.3(a)-3
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provision, would be excessive interest, shall be applied to the reduction of
the principal amount of the indebtedness evidenced hereby; and, if the
principal amount of the indebtedness evidenced hereby, and all lawful interest
thereon, is paid in full, any remaining excess shall forthwith be paid to the
Maker, or other party lawfully entitled thereto. All interest paid or agreed
to be paid by the Maker shall, to the maximum extent permitted under applicable
law, be amortized, pro rated, allocated and spread throughout the full period
until payment in full of the principal so that the interest hereon for such
full period shall not exceed the maximum amount permitted by applicable law.
Any provision hereof, or of any other agreement between the Bank and the Maker,
that operates to bind, obligate, or compel the Maker to pay interest in excess
of such Maximum Rate shall be construed to require the payment of the maximum
rate only. The provisions of this paragraph shall be given precedence over any
other provision contained herein or in any other agreement between the Bank and
the Maker that is in conflict with the provisions of this paragraph.
This Note shall be governed and construed according to the statutes
and laws of the State of Tennessee from time to time in effect, except to the
extent that Section 85 of Title 12 of the United States Code (or other
applicable federal statute) may permit the charging of a higher rate of
interest than applicable state law, in which event such applicable federal
statute, as amended and supplemented from time to time, shall govern and
control the maximum rate of interest permitted to be charged hereunder; it
being intended that, as to the maximum rate of interest which may be charged,
received, and collected hereunder, those applicable statutes and laws, whether
state or federal, from time to time in effect, which permit the charging of a
higher rate of interest, shall govern and control; provided, always, however,
that in no event and under no circumstances shall the Maker be liable for the
payment of interest in excess of the maximum effective rate permitted by such
applicable law, from time to time in effect.
ATTEST: P.A.M. TRANSPORT, INC.
/s/ Larry J. Goddard By: /s/ Robert W. Weaver
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Secretary President
2.3(a)-4