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Exhibit 10.2
THIRD AMENDMENT TO LINE OF CREDIT LOAN AGREEMENT AND
TO AMENDED AND RESTATED SECURITY AGREEMENT
THIS THIRD AMENDMENT TO LINE OF CREDIT LOAN AGREEMENT AND TO AMENDED
AND RESTATED SECURITY AGREEMENT is made and entered into as of the 30th day of
January, 1998, by and between FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a
national banking association ("Bank"), LANDAIR SERVICES, INC., a Tennessee
corporation ("Borrower"), LANDAIR TRANSPORT, INC., a Tennessee corporation which
is a wholly owned subsidiary of Borrower ("LTI"), LANDAIR INTERNATIONAL
AIRLINES, INC., a Tennessee corporation which is a wholly owned subsidiary of
Borrower ("LIA"), TRANSPORTATION PROPERTIES, INC., previously known as "Landair
Properties, Inc.," a Tennessee corporation which is a wholly owned subsidiary of
Borrower ("LPI"), and FORWARD AIR, INC., a Tennessee corporation which is a
wholly owned subsidiary of Borrower ("FAI").
RECITALS
A. Bank and Borrower, LTI, LIA, LPI AND FAI (Borrower, LTI, LIA, LPI
and FAI sometimes referred to herein collectively as the "Borrowing Entities")
have entered into that certain Line of Credit Loan Agreement dated as of October
17, 1994, providing for a loan in the amount of Five Million Five Hundred
Thousand Dollars ($5,500,000.00) (the "Original Loan"), to fund operating
expenses and to cover any advances under letters of credit issued for the
benefit of creditors of the Borrowing Entities, and relating to Inventory and
other property of the Borrowing Entities (the "Original Loan Agreement").
B. Bank made the Original Loan to Borrower pursuant to various loan
documents, among them a promissory note dated as of October 17, 1994, in the
original principal amount of Five Million Five Hundred Thousand Dollars
($5,500,000.00) (the "Master Draw Note"), an amended and restated security
agreement securing the obligations of the Borrowing Entities with respect to the
Original Loan dated as of October 17, 1994, under which a security interest was
and is granted in the Collateral (the "Original Security Agreement"), and the
Original Loan Agreement.
C. Bank and the Borrowing Entities extended the maturity date set
forth in the Master Draw Note, increased the principal indebtedness which was
able to be drawn with respect to the aforesaid line of credit facility, and
modified other terms and provisions set forth in the Master Draw Note, in the
Original Loan Agreement and in the Original Security Agreement, by instruments
dated as of May 31, 1995. Such modifications to the Master Draw Note and the
outstanding indebtedness evidenced thereby were, as of May 31, 1995, set forth
in and evidenced by that certain Restated, Amended and Replacement Promissory
Note (the "Initial Replacement Note") dated as of May 31, 1995, executed by
Borrower, payable to the order of Bank, and in the
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original principal amount of Fifteen Million Dollars ($15,000,000.00) (the
"Amended Loan"). Such modifications to the Original Loan Agreement and to the
Original Security Agreement were set forth in that certain First Amendment to
Line of Credit Loan Agreement and to Amended and Restated Security Agreement
(the "First Amendment") dated as of May 31, 1995, executed by the Borrowing
Entities and Bank.
D. Bank and the Borrowing Entities extended the maturity date set
forth in the Initial Replacement Note and modified other terms and provisions
set forth in the Initial Replacement Note and in the Original Loan Agreement and
the Original Security Agreement, as amended by the First Amendment, by
instruments dated as of January 28, 1997. Such modifications to the Initial
Replacement Note and the outstanding indebtedness evidenced thereby were, as of
January 28, 1997, set forth in and evidenced by that certain Restated, Amended
and Replacement Promissory Note (the "Second Replacement Note") dated as of
January 28, 1997, executed by the Borrowing Entities, payable to the order of
Bank, and in the original principal amount of Fifteen Million Dollars
($15,000,000.00) (the "New Loan"). Such modifications to the Original Loan
Agreement and to the Original Security Agreement, as amended by the First
Amendment, were set forth in that certain Second Amendment to Line of Credit
Loan Agreement and to Amended and Restated Security Agreement (the "Second
Amendment") dated as of January 28, 1997, executed by the Borrowing Entities and
Bank.
E. Bank and the Borrowing Entities have agreed to change the interest
rate in the Second Replacement Note and to modify other terms and provisions set
forth in the Second Replacement Note and in the Original Loan Agreement and the
Original Security Agreement, as amended by the First Amendment and the Second
Amendment. Such modifications to the Second Replacement Note are set forth in
and evidenced by that certain Restated, Amended and Replacement Promissory Note
(the "Third Replacement Note") of even date herewith executed by the Borrowing
Entities, payable to the order of Bank, and in the original principal amount of
Fifteen Million Dollars ($15,000,000.00) (the "Modified New Loan").
F. Bank and the Borrowing Entities desire (i) that the prompt and
punctual payment of the Second Replacement Note, as amended, restated and
replaced by the Third Replacement Note, be secured by the Original Loan
Agreement and the Original Security Agreement, as amended by the First Amendment
and the Second Amendment , in accordance with the terms thereof and hereof, and
(ii) to modify certain other provisions of the Original Loan Agreement and of
the Original Security Agreement, as amended by the First Amendment and the
Second Amendment, as set forth herein.
G. The Second Replacement Note, as amended, restated and replaced by
the Third Replacement Note, the Original Loan Agreement and the Original
Security Agreement, as amended by the First Amendment and the Second Amendment,
the First Amendment, the Second Amendment, this instrument, the Guaranties and
all other instruments executed in connection with the Original Loan, the Amended
Loan, the New Loan and the Modified New Loan are herein sometimes referred to
collectively as the "Loan Documents."
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TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the foregoing and of the
agreements set out in this instrument, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows.
1. The foregoing RECITALS are agreed to by the parties and
incorporated by reference herein.
2. The Borrowing Entities have made and delivered the Third
Replacement Note to Bank, and Bank has accepted the same in accordance with the
provisions hereof and of the other Loan Documents.
3. The Loan Documents are hereby amended to include the following:
(a) The "Commitment Fee" as described and defined in the
first sentence in the third full paragraph on page 1 of the Original Loan
Agreement, as amended by the First Amendment and the Second Amendment, shall
continue to refer to the commitment fee outlined in the commitment letter for
the Amended Loan dated May 25, 1995, with respect to future advances under the
Third Replacement Note.
(b) The "Draw Certificates" form attached as Exhibit D to
the Original Loan Agreement, as amended by the First Amendment and the Second
Amendment, is replaced with the form attached hereto as Exhibit A.
(c) The "Equipment Note" and the "Master Draw Note" as
described and defined in Sections 1.15 and 1.26 of the Original Loan Agreement,
as amended by the First Amendment and the Second Amendment, shall now refer to
the promissory note of the Borrowing Entities of even date herewith, a copy of
which is attached hereto as Exhibit B. Similarly, the term "Committed Equipment
Loan Amount" in Section 1.26 of the Original Loan Agreement, as amended by the
First Amendment and the Second Amendment, shall continue to refer to the
principal amount of Fifteen Million Dollars ($15,000,000.00).
(d) The "Guaranties" as described and defined in Section
1.18 of the Original Loan Agreement and in Recital V of the Original Security
Agreement, as amended by the First Amendment, shall continue to refer to those
guaranty agreements dated May 31, 1995, copies of which were attached as
collective Exhibit C to the First Amendment, which shall remain in full force
and effect, it being understood and agreed, however, that the primary
obligations of the guarantors under said Exhibit C agreements with respect to
the Modified New Loan are as makers of the Third Replacement Note. All
obligations of each Borrowing Entity as a "guarantor" under any Guaranty shall
include all obligations of each and every Borrowing Entity under the Equipment
Note, the Line Note and all documents relating thereto (including this
instrument).
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(e) The "Line Note" as described and defined in Section 1.23
of the Original Loan Agreement and which is described and defined as the "Note
in Recital II of the Original Security Agreement, as amended by the First
Amendment and the Second Amendment, shall now refer to the promissory note of
the Borrowing Entities of even date herewith attached hereto as Exhibit C, which
evidences the Modified New Loan.
(f) The "Loan Agreement" as described and defined in Section
1.25 of the Original Loan Agreement and in Recital I of the Original Security
Agreement, as amended by the First Amendment and the Second Amendment, shall now
refer to the Original Loan Agreement, as amended by the First Amendment and the
Second Amendment and as further amended by this instrument.
(g) The "Loan" as described and defined in Recital I of the
Original Security Agreement, as amended by the First Amendment and the Second
Amendment, shall now refer to the Modified New Loan.
(h) The "Security Agreement" as described and defined in
Section 1.35 of the Original Loan Agreement, as amended by the First Amendment
and the Second Amendment, shall now refer to the Original Security Agreement, as
amended by the First Amendment and the Second Amendment and as further amended
by this instrument.
(i) The "Stated Interest Rate" as described and defined in
Section 2.3(a) of the Original Loan Agreement, as amended by the First Amendment
and the Second Amendment, shall now refer to the lesser of the (1) Maximum Rate,
or (2) a rate equal to the LIBOR Rate plus one hundred thirty-five (135) Basis
Points expressed on a per annum basis, to be applicable to interest charges for
the period of time commencing on February 1, 1998, until the Termination Date.
The terms "LIBOR Rate" and "Basis Points" shall have the same meanings as given
and afforded to them in the Third Replacement Note.
(j) The "Termination Date" as described and defined in
Section 1.36 of the Original Loan Agreement, as amended by the First Amendment
and the Second Amendment, shall now refer to May 31, 1999, unless such date is
extended pursuant to the provisions of Section 9.12 of the Original Loan
Agreement, as amended by the First Amendment and the Second Amendment, in which
event such extended date shall be the Termination Date.
(k) The date "December 25, 1993" found in Sections 5.3(a)
and 5.3(b) of the Original Loan Agreement, as amended by the First Amendment and
the Second Amendment, shall continue as changed in the Second Amendment as
"December 31, 1996," and Borrower, LTI, LIA, LPI and FAI hereby confirm and
ratify the truth and accuracy of the representations and warranties made by them
in said Sections 5.3(a) and 5.3(b), as amended by the First Amendment and the
Second Amendment, with such change.
(l) The list of actions, suits and proceedings described in
Section 5.5 of the Original Loan Agreement and listed on Exhibit J to the
Original Loan Agreement, as amended by
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the First Amendment and the Second Amendment, is hereby supplemented and
replaced by Exhibit D attached hereto, and Borrower, LTI, LIA, LPI and FAI
hereby confirm and ratify the representations and warranties made by them in
said Section 5.5, as amended by the First Amendment and the Second Amendment,
with such change.
(m) The amount "Twenty-Nine Million Dollars
($29,000,000.00)" found in Section 6.8 of the Original Loan Agreement, as
amended to "Thirty-One Million Dollars ($31,000,000.00)" in the First Amendment,
shall continue as changed in the Second Amendment as "Forty Million Dollars
($40,000,000.00) until fiscal year end 1997 for the Borrower," and to a
potentially higher (but not lower) number equal to "Forty Million Dollars
($40,000,000.00) plus seventy-five percent (75%) of after-tax profit in each
fiscal year of Borrower thereafter until payment in full of the principal of and
interest on the Borrower Loans," and Borrower, LTI, LIA, LPI and FAI hereby
confirm and ratify the truth and accuracy of the representations and warranties
made by them in said Section 6.8 with such changes.
(n) The amount "Five Hundred Thousand Dollars ($500,000.00)"
found in Section 6.9 of the Original Loan Agreement shall continue as changed in
the Second Amendment as "Two Million Five Hundred Thousand Dollars
($2,500,000.00)," and Borrower, LTI, LIA, LPI and FAI hereby confirm and ratify
the truth and accuracy of the representations and warranties made by them in
said Section 6.9 with such change.
(o) Section 6.10 of the Original Loan Agreement, as amended
by the First Amendment, remains as is, and Borrower, LTI, LIA, LPI and FAI
hereby covenant and agree that each of them will, from the date hereof until
payment in full of the principal of and interest on the Borrower Loans, maintain
the debt-to-equity ratio set forth in the First Amendment and otherwise satisfy
their covenants as set forth on Exhibit F to the First Amendment.
(p) Section 6.11 of the Original Loan Agreement remains as
is, and Borrower, LTI, LIA, LPI and FAI hereby covenant and agree that each of
them will, from the date hereof until payment in full of the principal of and
interest on the Borrower Loans, maintain the cash flow coverage ratio set forth
in said Section 6.11 of the Original Loan Agreement.
4. The Borrowing Entities each represent and warrant to Bank that the
RECITALS set forth above are true and correct in all material respects and all
representations and warranties to Bank given by any of them in any one or more
of the Loan Documents are true and correct as of the date hereof. Similarly,
Borrower, LTI, LIA, LPI and FAI hereby covenant and agree to fulfill all of
their obligations and agreements made in the Loan Documents. Each Borrowing
Entity agrees to pay directly, or reimburse Bank for, all reasonable expenses,
including the reasonable fees and expenses of legal counsel, incurred in
connection with the enforcement of any one or more of the Loan Documents and the
collection of any amounts owing by any of the Borrowing Entities with respect
thereto.
5. Notwithstanding any provisions of the Loan Documents or any prior
understanding or agreement of or by any one or more of the Borrowing Entities
with Bank, as of
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the date of execution hereof, (a) the obligations of any one or more of the
Borrowing Entities under any one or more of the Loan Documents, including the
Guaranties, are intended to be secured by all the assets of each of the
Borrowing Entities now or hereafter owned by any one or more of the Borrowing
Entities and which assets are subject to the granting of a security interest
under the laws of the State of Tennessee or any other state where any of the
assets of any one or more of the Borrowing Entities may from time to time be
located and the federal laws of the United States of America (the "Pledged
Assets"), and in furtherance of the foregoing, each of the Borrowing Entities
hereby pledges and grants a security interest in all right, title and interest
of each of the Borrowing Entities in the Pledged Assets to and in favor of Bank,
and (b) each of the Borrowing Entities hereby jointly and severally, agrees to
pay and perform each and every obligation of payment and/or performance of any
other Borrowing Entity under any one or more of the Loan Documents.
6. Except as specifically modified hereby, the Loan Documents shall
remain in full force and effect, and the same are hereby ratified and confirmed
by the Borrowing Entities in all respects. In the events of any conflict between
any provisions of any one or more of the Loan Documents, the provisions most
favorable to Bank shall apply. This instrument is not intended to, and will not,
effect a novation of the indebtedness evidenced by the Second Replacement Note
outstanding as of the date the Second Replacement Note was amended, restated and
replaced by the Third Replacement Note, nor are the liens of the security
interests granted under the Original Security Agreement, as amended by the First
Amendment and the Second Amendment, intended to be released, altered, or changed
in any manner except as specifically stated herein. All capitalized terms not
otherwise defined herein shall have the same meanings as set forth in the
Original Loan Agreement, as amended by the First Amendment and the Second
Amendment.
7. As an inducement to Bank to make the Modified New Loan, (a) the
Borrowing Entities shall deliver, or cause to be delivered, to Bank the
following: (i) certified resolutions of the board of directors of each of the
Borrowing Entities authorizing this instrument and the other Modified New Loan
documents; (ii) an opinion of counsel and/or "certificate of general counsel"
and such other documentation, if any, as may be reasonably requested by Bank to
satisfy Bank that this instrument and the other Modified New Loan documents have
been duly authorized, executed and delivered on behalf of each Borrowing Entity,
and constitutes the valid and binding obligation of each of the Borrowing
Entities; (iii) appropriate UCC-1 or UCC-3 Financing Statements as necessary to
accomplish the purposes of this instrument; and (iv) UCC-11 lien searches as may
be required by Bank evidencing no liens or encumbrances on any of the Pledged
Assets of any of the Borrowing Entities except liens granted pursuant to the
Borrower Loans, and liens or encumbrances, if any, approved by Bank; (b) the
Borrowing Entities shall pay directly or reimburse Bank for all fees and
expenses, including, but not limited to, any and all filing fees, recording
fees, and reasonable expenses and fees of legal counsel, incurred in connection
with the preparation and enforcement of this instrument and other Modified New
Loan documents; and (c) each Borrowing Entity shall execute and deliver to Bank
all further documents and perform all other acts which Bank reasonably shall
deem necessary or appropriate to perfect or protect the lien and security
interests granted pursuant to the Borrower Loans.
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IN WITNESS WHEREOF, this Third Amendment to Line of Credit Loan
Agreement and to Amended and Restated Security Agreement has been entered into
by the parties hereto as of the day and year first above written.
"BANK" "BORROWER"
FIRST TENNESSEE BANK NATIONAL LANDAIR SERVICES, INC.
ASSOCIATION
By: __________________________ By: ______________________
Name: _______________________ Scott M. Niswonger,
Title: ______________________ President
"LTI"
LANDAIR TRANSPORT, INC.
By: ______________________
Eddie R. Brown,
President
"LIA"
LANDAIR INTERNATIONAL
AIRLINES, INC.
By: ________________________
Bruce A. Campbell,
President
"LPI"
TRANSPORTATION PROPERTIES,
INC. previously known as
Landair Properties, Inc.
By: ________________________
Bruce A. Campbell,
President
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"FAI"
FORWARD AIR, INC.
By: ________________________
Bruce A. Campbell,
President
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EXHIBIT A
THIRD AMENDED LINE OF CREDIT LOAN DRAW REQUEST
Number: ____________________
Date: _____________, 19___
Bank: First Tennessee Bank National Association
Borrower: Landair Services, Inc., Landair Transport, Inc., Landair
International Airlines, Inc., Transportation Properties, Inc.
previously known as "Landair Properties, Inc.," and Forward
Air, Inc.
Loan Amount: $15,000,000.00 Date of Loan: January 30, 1998
Amount Previously
Advanced or
Reserved for
Future Advance $__________________
Amount Remaining
for Disbursement $__________________
The Borrower requests (a) an advance of $_____________ to be made on
________________, 19__ for the payment and purposes shown on the attached
schedule, or (b) a letter of credit in the face amount of $______________, to be
issued on ________________, 19__, for the purposes and to the party shown on the
attached schedule. To induce the Bank to make the advance or to issue the letter
of credit, the undersigned does hereby certify as follows:
1. No Default exists or is imminent.
2. All previous advances and letters of credit have been used
strictly in conformity with the loan documents and the
representations contained in all prior draw requests.
3. No lien claims are asserted against the property which has
been pledged as collateral for the line of credit.
4. All representations and warranties made by the entities
constituting the Borrower in the loan documents are true, in
all material respects, as if made on this date.
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5. By accepting the advance and/or the issuance of the letter
of credit, the Borrower certifies that all statements made
in this draw request are true as of the moment of the
advance and/or the issuance of the letter of credit.
6. Advance or Letter of Credit amount to be credited to Account
No. _____________.
Loan Amount $15,000,000.00
Previous Advances or Reserves
for Future Advances $_______________
This Advance or Letter of Credit
Amount $________________
Total Advances and Letters of
Credit Amounts Evidenced by
Line of Credit Note $________________
Amount Remaining for
Disbursement $________________
DATED: This ___ day of _______________, 19__.
"BORROWER":
LANDAIR SERVICES, INC.
By: __________________________________
Its: ________________________________
LANDAIR TRANSPORT, INC.
By: __________________________________
Its: ________________________________
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LANDAIR INTERNATIONAL AIRLINES, INC.
By: __________________________________
Its: _________________________________
TRANSPORTATION PROPERTIES, INC.
previously known as "Landair
Properties, Inc."
By: ___________________________________
Its: __________________________________
FORWARD AIR, INC.
By: ___________________________________
Its: __________________________________
Approved:
FIRST TENNESSEE BANK NATIONAL ASSOCIATION
By:_______________________________________
Its: _____________________________________
DATE: ____________________________________
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