$42,500,000
POST-CONFIRMATION
LOAN AND SECURITY AGREEMENT
As of February 9, 2000
Between
TRISM, INC.
TRISM SECURED TRANSPORTATION, INC.
TRI-STATE MOTOR TRANSIT CO.
DIABLO SYSTEMS INCORPORATED, d/b/a DIABLO TRANSPORTATION, INC.
TRISM EASTERN, INC., d/b/a C. I. WHITTEN TRANSFER
TRISM HEAVY HAUL, INC.
TRISM SPECIALIZED CARRIERS, INC.
TRISM SPECIAL SERVICES, INC.
TRISM LOGISTICS, INC.
AND
TRISM EQUIPMENT, INC.
(collectively, the Borrowers)
and
AERO BODY AND TRUCK EQUIPMENT, INC.
E.L. POWELL & SONS TRUCKING CO., INC.
TRISM TRANSPORT, INC.
AND
TRISM TRANSPORT SERVICES, INC.
(collectively, the Guarantors)
and
THE FINANCIAL INSTITUTIONS PARTY
HERETO FROM TIME TO TIME
(collectively, the Lenders)
and
THE CIT GROUP/BUSINESS CREDIT, INC.
(the Agent)
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS 1
SECTION 1.1 Definitions 1
SECTION 1.2 Other Referential Provisions. 28
SECTION 1.3 Exhibits and Schedules 29
ARTICLE 2 REVOLVING CREDIT LOANS 29
SECTION 2.1 Revolving Credit Loans 29
SECTION 2.2 Manner of Borrowing Revolving
Credit Loans 30
SECTION 2.3 Repayment of Revolving Credit Loans. 31
SECTION 2.4 Revolving Credit Note 32
ARTICLE 3 LETTER OF CREDIT FACILITY 32
SECTION 3.1 Issuance 32
SECTION 3.2 Advances Automatic; Participations. 33
SECTION 3.3 Cash Collateral. 33
SECTION 3.4 Fees and Expenses. 34
SECTION 3.5 Request for Incurrence of Letter of
Credit Obligations. 35
SECTION 3.6 Obligation Absolute. 35
SECTION 3.7 Indemnification; Nature of Lenders'
Duties. 36
ARTICLE 4 GENERAL LOAN PROVISIONS 37
SECTION 4.1 Interest, Etc. 37
SECTION 4.2 Fees. 39
SECTION 4.3 Manner of Payment. 40
SECTION 4.4 Loan Accounts: Statements of Account. 40
SECTION 4.5 Termination of Agreement. 41
SECTION 4.8 Increased Costs and Reduced Returns. 46
ARTICLE 5 CONDITIONS PRECEDENT 48
SECTION 5.1 Conditions Precedent to Revolving
Credit Loans. 48
SECTION 5.2 All Loans; Letters of Credit. 52
SECTION 5.3 Financial Statements. 53
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF
BORROWERS AND GUARANTORS 53
SECTION 6.1 Representations and Warranties. 53
SECTION 6.2 Survival of Representation and
Warranties, Etc 64
ARTICLE 7 SECURITY INTEREST 64
SECTION 7.1 Security Interest. 64
SECTION 7.2 Continued Priority of Security
Interest. 65
ARTICLE 8 COLLATERAL COVENANTS 66
SECTION 8.1 Collection of Receivables. 66
SECTION 8.2 Verification and Notification. 68
SECTION 8.3 Disputes, Returns and Adjustments. 68
SECTION 8.4 Invoices. 69
SECTION 8.5 Delivery of Instruments 69
SECTION 8.6 Ownership and Defense of Title. 69
SECTION 8.7 Insurance. 69
SECTION 8.8 Location of Offices and Collateral. 71
SECTION 8.9 Records Relating to Collateral. 72
SECTION 8.10 Inspection. 72
SECTION 8.11 Information and Reports. 72
SECTION 8.12 Assignment of Claims Act. 73
SECTION 8.13 Covenants Regarding Intellectual
Property Collateral. 74
SECTION 8.14 Covenants Regarding Trailers. 74
SECTION 8.15 Appraisals of Trailers. 75
SECTION 8.16 Appraisals of Mortgaged Real Estate. 75
ARTICLE 9 AFFIRMATIVE COVENANTS 75
SECTION 9.1 Preservation of Corporate Existence
and Similar Matters. 75
SECTION 9.2 Compliance with Applicable Law and
Material Contracts. 76
SECTION 9.3 Maintenance of Property. 76
SECTION 9.4 Conduct of Business. 76
SECTION 9.5 Insurance. 76
SECTION 9.6 Payment of Taxes and Claims. 76
SECTION 9.7 Accounting Methods and Financial
Records. 77
SECTION 9.8 Use of Proceeds. 77
SECTION 9.9 Hazardous Waste and Substances;
Environmental Requirements. 77
SECTION 9.10 Landlords' Agreements, Mortgagee
Agreements and Bailee Letters 78
SECTION 9.11 Further Assurances. 78
ARTICLE 10 INFORMATION 79
SECTION 10.1 Financial Statements 79
SECTION 10.2 Accountants' Management Letter. 80
SECTION 10.3 Officer's Certificate. 80
SECTION 10.4 Copies of Other Reports. 81
SECTION 10.5 Notice of Litigation and Other
Matters. 81
SECTION 10.6 ERISA 82
SECTION 10.7 Accuracy of Information 82
SECTION 10.8 Revisions or Updates to Schedules 82
ARTICLE 11 NEGATIVE COVENANTS 83
SECTION 11.1 Financial Ratios. 83
SECTION 11.2 Indebtedness for Money Borrowed. 83
SECTION 11.3 Guaranties. 83
SECTION 11.4 Investments. 83
SECTION 11.5 Unfunded Capital Expenditures. 84
SECTION 11.6 Restricted Dividend Payments and
Purchases, Etc. 84
SECTION 11.7 Merger, Consolidation and Sale of
Assets. 84
SECTION 11.8 Transactions with Affiliates. 84
SECTION 11.9 Liens. 84
SECTION 11.10 Operating Leases. 84
SECTION 11.11 Plans. 84
SECTION 11.12 Sales and Leasebacks. 85
SECTION 11.13 Capital Structure and Business 85
SECTION 11.14 Change of Control; Change In
Management. 85
SECTION 11.15 No Impairment of Intercompany
Transfers 85
SECTION 11.16 No Speculative Transactions. 85
SECTION 11.17 Pledge of Real Estate. 86
ARTICLE 12 DEFAULT 86
SECTION 12.1 Events of Default 86
SECTION 12.2 Remedies 89
SECTION 12.3 Application of Proceeds 91
SECTION 12.4 Miscellaneous Provision Concerning
Remedies 92
SECTION 12.5 Trademark License 93
ARTICLE 13 ASSIGNMENTS 93
SECTION 13.1 Successors and Assigns;
Participations 93
SECTION 13.2 Representation of Lenders 96
ARTICLE 14 AGENT 97
SECTION 14.1 Appointment of Agent 97
SECTION 14.2 Delegation of Duties 97
SECTION 14.3 Exculpatory Provisions 97
SECTION 14.4 Reliance by Agent 98
SECTION 14.5 Notice of Default 98
SECTION 14.6 Non-Reliance on Agent and Other
Lenders 98
SECTION 14.7 Indemnification 99
SECTION 14.8 Agent in Its Individual Capacity 99
SECTION 14.9 Successor Agent 99
SECTION 14.10 Notices from Agent to Lenders 100
SECTION 14.11 Direction from Lenders 100
ARTICLE 15 MISCELLANEOUS 100
SECTION 15.1 Notices 100
SECTION 15.2 Expenses 102
SECTION 15.3 Stamp and Other Taxes 103
SECTION 15.4 Setoff 103
SECTION 15.5 Litigation 104
SECTION 15.6 Reversal of Payments 105
SECTION 15.7 Injunctive Relief 105
SECTION 15.8 Accounting Matters 105
SECTION 15.9 Amendments 105
SECTION 15.10 Assignment 107
SECTION 15.11 Performance of Borrowers' Duties 107
SECTION 15.12 Indemnification 107
SECTION 15.13 All Powers Coupled with Interest 107
SECTION 15.14 Survival 107
SECTION 15.15 Severability of Provisions 108
SECTION 15.16 Governing Law 108
SECTION 15.17 Counterparts 108
SECTION 15.18 Reproduction of Documents 108
SECTION 15.19 Term of Agreement 109
EXHIBITS
EXHIBIT A FORM OF REVOLVING CREDIT NOTE
EXHIBIT B FORM OF NOTICE OF PROPOSED ADVANCE
EXHIBIT C FORM OF BORROWING BASE CERTIFICATE
EXHIBIT D [INTENTIONALLY OMITTED]
EXHIBIT E FORM OF SETTLEMENT REPORT
EXHIBIT F FORM OF STOCK PLEDGE AGREEMENT
EXHIBIT G FORM OF TRADEMARK SECURITY AGREEMENT
EXHIBIT H FORM OF POWER OF ATTORNEY
EXHIBIT I FORM OF GUARANTY
EXHIBIT J FORM OF ASSIGNMENT AND TRANSFER AGREEMENT
EXHIBIT K FORM OF OFFICER'S CERTIFICATE
EXHIBIT L FORM OF SECRETARY'S CERTIFICATE
SCHEDULES
SCHEDULE 1.1 Permitted Insurance Premium Finance Agreements
SCHEDULE 2.2: Authorized Officers
SCHEDULE 6.1(a): Jurisdictions in Which Qualified as a Foreign
Corporation and Borrowers' and Guarantors' FEIN
SCHEDULE 6.1(b): List of Subsidiaries and Stock Ownership
SCHEDULE 6.1(e): Business Description
SCHEDULE 6.1(f): Government Approvals; Compliance with Law
SCHEDULE 6.1(g): Liens and Rights on Real Property; Trailers
SCHEDULE 6.1(h): Liens on Other Assets
SCHEDULE 6.1(i): Indebtedness and Guaranties
SCHEDULE 6.1(j): Litigation
SCHEDULE 6.1(k): Tax Returns
SCHEDULE 6.1(o): Benefit Plans
SCHEDULE 6.1(s): Collateral Locations and Location of Chief
Executive Office
SCHEDULE 6.1(t): Owned Real Estate
SCHEDULE 6.1(u): Corporate and Fictitious Names
SCHEDULE 6.1(x): Collective Bargaining Agreements
SCHEDULE 6.1(y): Intellectual Property
SCHEDULE 6.1(z): Trade Names
SCHEDULE 6.1(bb): Insurance Policies
SCHEDULE 6.1(cc): Financial Institutions and Bank Accounts
SCHEDULE 6.1(dd): Government Contracts
SCHEDULE 6.1(ff): Material Agreements
SCHEDULE 9.1: Guarantors to be Dissolved
SCHEDULE 11.12: Sale-Leaseback
SCHEDULE 11.13: Capital Structure of Borrowers
POST-CONFIRMATION
LOAN AND SECURITY AGREEMENT
As of February 9, 2000
TRISM, INC., a Delaware corporation ("Trism"), TRISM SECURED
TRANSPORTATION, INC., a Delaware corporation ("Trism Secured"), TRI-
STATE MOTOR TRANSIT CO., a Delaware corporation ("TSMT"), DIABLO
SYSTEMS INCORPORATED D/B/A/ DIABLO TRANSPORTATION, INC., a California
corporation ("Diablo"), TRISM EASTERN, INC. D/B/A C.I. WHITTEN
TRANSFER, a Delaware corporation ("CI Whitten"), TRISM HEAVY HAUL,
INC., a Delaware corporation ("Heavy Haul"), TRISM SPECIALIZED
CARRIERS, INC., a Georgia corporation ("Specialized"), TRISM SPECIAL
SERVICES, INC., a Georgia corporation ("Special Services"), TRISM
LOGISTICS, INC., a New Jersey corporation ("Logistics"), and TRISM
EQUIPMENT, INC., a Delaware corporation ("TEI") (each of Trism, Trism
Secured, TSMT, Diablo, CI Whitten, Heavy Haul, Specialized, Special
Services, Logistics and TEI is herein referred to individually as a
"Borrower" and are collectively referred to herein as the
"Borrowers"), all with a principal place of business at 4174 Jiles
Road, Kennesaw, Georgia 30144, AERO BODY AND TRUCK EQUIPMENT, INC., a
Delaware corporation ("Aero Body"), E.L. POWELL & SONS TRUCKING CO.,
INC., an Oklahoma corporation ("EL Powell"), TRISM TRANSPORT, INC., a
Delaware corporation ("Transport"), and TRISM TRANSPORT SERVICES,
INC., a Utah corporation ("Transport Services") (each of Aero Body, EL
Powell, Transport and Transport Services is herein referred to
individually as a "Guarantor" and are collectively referred to herein
as the "Guarantors"), the financial institutions party to this
Agreement from time to time (each individually a "Lender" and
collectively, the "Lenders") and THE CIT GROUP/BUSINESS CREDIT, INC.,
a New York corporation (the "Agent") agree as follows:
RECITALS: The Borrowers have requested that Lenders make a revolving
credit facility available to the Borrowers in an aggregate amount up
to $42,500,000. The Borrowers' business is a mutual and collective
enterprise, and the Borrowers believe that the consolidation of all
loans and other accommodations under this Agreement will enhance the
Borrowers' aggregate borrowing powers and facilitate the
administration of their relationship with the Lenders, all to the
Borrowers' respective individual and mutual advantage.
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. For the purposes of this Agreement:
"Account Debtor" means a Person who is obligated on a
Receivable.
"Acquire" or "Acquisition", as applied to any Business Unit
or Investment, means the acquiring or acquisition of such Business
Unit or Investment by purchase, exchange, issuance of stock or other
securities, or by merger, reorganization or any other method.
"Administration Fee" shall have the meaning assigned to such
term in Section 4.2(b).
"Advance" means amounts advanced by the Lenders to a
Borrower pursuant to Section 2 hereof.
"Affiliate" means, with respect to a Person, (a) any
partner, officer, shareholder (if holding more than ten percent (10%)
of the outstanding shares of capital stock of such Person), director,
employee or managing agent of such Person or such Person's Affiliates,
(b) any other Person (other than a Subsidiary) that, (i) directly or
indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such given Person,
(ii) directly or indirectly beneficially owns or holds ten percent
(10%) or more of any class of voting stock or partnership or other
voting interest of such Person or any Subsidiary of such Person, or
(iii) ten percent (10%) or more of the voting stock or partnership or
other voting interest of which is directly or indirectly beneficially
owned or held by such Person or a Subsidiary of such Person. The term
"control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities or partnership
or other voting interest, by contract or otherwise.
"Agency Account" means an account of a Borrower maintained
by it with a Clearing Bank pursuant to an Agency Account Agreement.
"Agency Account Agreement" means an agreement among a
Borrower, the Agent and a Clearing Bank, in form and substance
satisfactory to the Agent, concerning the collection, treatment and
remission of payments or other deposits which represent the proceeds
of Receivables or of any other Collateral.
"Agent" means The CIT Group/Business Credit, Inc., a New
York corporation, and any successor agent appointed pursuant to
Section 14.9 hereof.
"Agent's Office" means the office of the Agent specified in
or determined in accordance with the provisions of Section 15.1(c)
hereof.
"Agreement" means and includes this Loan and Security
Agreement, including all Schedules, Exhibits and other attachments
hereto, and all amendments, modifications and supplements hereto and
thereto.
"Agreement Date" means the date as of which this Agreement
is dated.
"Anniversary Date" shall mean the Initial Anniversary Date
and the same date in every year thereafter.
"Applicable Law" means all applicable provisions of
constitutions, statutes, rules, regulations and orders of all
governmental bodies and of all orders and decrees of all courts and
arbitrators, including, without limitation, Environmental Laws.
"Appraised Orderly Liquidation Value" means the orderly
liquidation value of the Trailers or the Mortgaged Real Estate, as the
case may be, determined from time to time by an appraiser satisfactory
to the Agent, in its sole discretion, in accordance with the terms
hereof.
"Asset Disposition" means the disposition of any asset of
any Borrower or any of its Subsidiaries.
"Assignment and Transfer" means an assignment and transfer
in the form attached hereto as Exhibit J assigning all or a portion of
a Lender's interests, rights and obligations under this Agreement
pursuant to Section 13.1.
"Audited Financial Statements" shall have the meaning
assigned to such term in Section 10.1(a) hereof.
"Availability Shortfall" shall mean a condition which
occurs, at any time and from time to time, when the Borrowers'
Borrowing Base Availability has remained below $5,000,000 for a period
of ten (10) consecutive Business Days during the term hereof.
"Benefit Plan" means an "employee pension benefit plan" as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan) in
respect of which a Borrower or any Related Company is, or with respect
to defined benefit plans (as defined under ERISA) within the
immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA, including such plans as may be established
after the Agreement Date.
"Billed Eligible Receivables" shall mean the aggregate
amount of Eligible Receivables for which the services related thereto
have been performed by a Borrower and invoices have been rendered to
the respective customers.
"Borrower" and/or "Borrowers" shall have the meanings
ascribed to such terms in the preamble of this Agreement.
"Borrowing Base" means at any time an amount equal to the
sum of Borrowing Base A and Borrowing Base B.
"Borrowing Base A" means at any time an amount equal to the
lesser of:
(a) $30,000,000 less the sum of
(i) the Letter of Credit Reserve, plus
(ii) such other reserves as the Agent may establish
from time to time in the exercise of its reasonable credit
judgment, plus
(iii) the amount of any overadvance on Borrowing
Base B, or
(b) an amount equal to
(i) the sum of (A) eighty-five percent (85%) of the
face value of Billed Eligible Receivables due and owing at such time,
plus (B) the lesser of (x) $5,000,000 or (y) the lesser of (I) eighty
percent (80%) of the face value of Unbilled Eligible Receivables due
and owing at such time or (II) twenty-five percent (25%) of the face
value of Billed Eligible Receivables due and owing at such time, less
(ii) the sum of (x) the Letter of Credit Reserve, plus
(y) such other reserves as the Agent may establish from time to time
in the exercise of its reasonable credit judgment, plus (z) the amount
of any overadvance on Borrowing Base B.
"Borrowing Base B" means at any time an amount equal to the
lesser of:
(a) $12,500,000 less an amount equal to (i) $150,000
multiplied by (ii) the number of whole months which have elapsed since
the Effective Date; or
(b) an amount equal to the sum of (i) eighty percent (80%)
of the Appraised Orderly Liquidation Value of the Trailers, plus (ii)
seventy percent (70%) of the Appraised Orderly Liquidation Value of
the Mortgaged Real Estate.
"Borrowing Base Availability" means at any time (a) the
Borrowing Base at such time less (b) the aggregate principal amount of
Revolving Credit Loans outstanding at such time.
"Borrowing Base Certificate" means a certificate in the form
attached hereto as Exhibit C.
"Business Day" means any day other than a Saturday, Sunday
or other day on which either the office of Chase Manhattan Bank, N.A.,
in New York, New York or the Agent's office in Atlanta, Georgia is
authorized to close.
"Business Unit" means the assets constituting the business
or a division or operating unit thereof of any Person.
"Capital Expenditures" means, with respect to any Person,
all expenditures made and liabilities incurred for the acquisition of
assets (other than assets which constitute a Business Unit) which are
not, in accordance with GAAP, treated as expense items for such Person
in the year made or incurred or as a prepaid expense applicable to a
future year or years.
"Capitalized Lease" means a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means Indebtedness
represented by obligations under a Capitalized Lease, and the amount
of such Indebtedness shall be the capitalized amount of such
obligations determined in accordance with GAAP.
"Cash Collateral" means collateral consisting of cash or
Cash Equivalents on which the Agent, for the benefit of itself as the
Agent and the Lenders, has a first priority Lien.
"Cash Equivalents" means
(a) marketable direct obligations issued or unconditionally
guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the
date of acquisition thereof;
(b) commercial paper maturing no more than one (1) year
from the date issued and, at the time of acquisition thereof,
having a rating of at least A-1 from Standard & Poor's
Corporation or at least P-1 from Moody's Investors Service, Inc.;
(c) certificates of deposit or bankers' acceptances issued
in Dollar denominations and maturing within one year from the
date of issuance thereof issued by any commercial bank organized
under the laws of the United States of America or any state
thereof or the District of Columbia having combined capital and
surplus of not less than $100,000,000 and, unless issued by the
Agent or a Lender, not subject to set-off or offset rights in
favor of such bank arising from any banking relationship with
such bank; and
(d) repurchase agreements in form and substance and for
amounts satisfactory to the Agent.
"Change in Management" means if (a) (i) Mr. Edward McCormick
no longer holds the position of Chairman and Chief Executive Officer
of each Borrower and Guarantor, or (ii) Mr. James Overley no longer
holds the position of Senior Vice President, Chief Financial Officer
and Treasurer of each Borrower and Guarantor, or (b) any material
diminution occurs in the powers, duties or responsibilities of the
respective positions of Messrs. McCormick or Overley identified in
clause (a) above.
"Change of Control" means: (a) any person or group of
persons (within the meaning of Section 13 or 14 of the Securities
Exchange Act of 1934, as amended) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of thirty-two and
one-half percent (32.5%) or more of the voting power of the then
outstanding common stock of Trism;(b) during any period of twelve (12)
consecutive calendar months, individuals who were directors of Trism
on the first (1st) day of such period shall cease to constitute a
majority of the board of directors of Trism; provided that a director
who has resigned or is replaced during such time shall not be included
in any determination of whether a change of control has occurred
pursuant to this clause (b) to the extent such director is replaced by
a successor director elected by a majority of those directors who were
directors at the commencement of such period; or (c) the sale, lease,
transfer or other disposition by any Borrower or any Guarantor, in one
or a series of related transactions, of all or a substantial portion
of its assets to any Person.
"Charges" means all Federal, state, county, city, municipal,
local, foreign or other governmental taxes (including, without
limitation, taxes owed to PBGC at the time due and payable), levies,
assessments, charges, liens, claims or encumbrances upon or relating
to (a) the Collateral, (b) the Secured Obligations, (c) the employees,
payroll, income or gross receipts of Borrowers, (d) the ownership or
use of any assets by any Borrower, or (e) any other aspect of
Borrowers' business.
"Chase Manhattan Bank Rate" shall mean the rate of interest
per annum announced by Chase Manhattan Bank, N.A. from time to time as
its prime rate in effect at its principal office in the City of New
York. Such rate is not intended to be the lowest rate of interest
charged by Chase Manhattan Bank, N.A. to its borrowers.
"Clearing Bank" means any banking institution including,
without limitation, Mercantile Bank, with which an Agency Account has
been established pursuant to an Agency Account Agreement.
"Closing Fee" shall have the meaning assigned to such term
in Section 4.2(a).
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means and includes all of each and every
Borrower's and each and every Guarantor's right, title and interest in
and to each of the following, wherever located and whether now or
hereafter existing or now owned or hereafter acquired or arising:
(a) all Receivables,
(b) all Contracts,
(c) all Contract Rights,
(d) all General Intangibles,
(e) the Mortgaged Real Estate,
(f) the Stock,
(g) the Trailers,
(h) all goods and other property (other than truck
tractors, computer and communications equipment including satellite
tracking equipment, and Real Estate other than the Mortgaged Real
Estate), whether or not delivered,
(i) the sale or lease of which gives or purports to
give rise to any Receivable, including, but not limited to,
all merchandise returned or rejected by or repossessed from
customers, or
(ii) securing any Receivable,
including, without limitation, all rights as an unpaid vendor or
lienor (including, without limitation, stoppage in transit,
replevin and reclamation) with respect to such goods and other
property,
(i) all mortgages, deeds to secure debt and deeds of trust
on real or personal property, guaranties, leases, security
agreements, and other agreements and property which secure or
relate to any Receivable or other Collateral, or are acquired for
the purpose of securing and enforcing any item thereof,
(j) all documents of title, policies and certificates of
insurance, securities, chattel paper and other documents and
instruments evidencing or pertaining to any and all items of
Collateral,
(k) all files, correspondence, computer programs, tapes,
discs and related data processing software which contain
information identifying or pertaining to any of the Receivables
or any Account Debtor, or showing the amounts thereof or payments
thereon or otherwise necessary or helpful in the realization
thereon or the collection thereof,
(l) all cash or Cash Equivalents deposited with the Agent
or any Lender or any Affiliate of the Agent or any Lender or
which the Agent, for the benefit of the Lenders, or any Lender
or such Affiliate is entitled to retain or otherwise possess as
collateral pursuant to the provisions of this Agreement or any of
the Security Documents or any agreement relating to any Letters
of Credit, and
(m) any and all products and proceeds of the foregoing
(including, but not limited to, any claim to any item referred to
in this definition, and any claim against any third party for
loss of, damage to or destruction of any or all of, the
Collateral or for proceeds payable under, or unearned premiums
with respect to, policies of insurance) in whatever form,
including, but not limited to, cash, Cash Equivalents, negotiable
instruments and other instruments for the payment of money,
chattel paper, security agreements and other documents.
"Collateral Valuation" means an aggregate amount equal to
(a) the amount set forth in subsection (a) of the definition of
Borrowing Base B less (b) an amount equal to (i) eighty percent (80%)
of the Appraised Orderly Liquidation Value of the Trailers, based on
the most recent appraisal thereof, plus (ii) seventy percent (70%) of
the Appraised Orderly Liquidation Value of the Mortgaged Real Estate,
based on the most recent appraisal thereof.
"Collection Account" means the Agent's account at The Chase
Manhattan Bank, N.A., New York, New York; ABA No. 021000021; For the
Account of The CIT Group/Business Credit Account No.144026613;
Reference: Trism Inc.
"Commitment" means, as to each Lender, the amount set forth
opposite such Lender's name on the signature pages hereof,
representing such Lender's obligation, upon and subject to the terms
and conditions of this Agreement (including the applicable provisions
of Section 13.1), to make Revolving Credit Loans and to purchase
participations in Letters of Credit or, from and after the date
hereof, in the Register (as defined in Section 13.1(d)) representing
such Lender's obligation to make Revolving Credit Loans and to
purchase participations in Letters of Credit.
"Commitment Fee" means the fee paid by the Borrowers to the
Agent pursuant to and in connection with the execution by the
Borrowers of the Commitment Letter.
"Commitment Letter" shall mean the commitment letter dated
December 10, 1999, issued by the Agent to, and accepted by, the
Borrowers as the same may be amended prior to the Effective Date.
"Commitment Percentage" means, as to any Lender, the
percentage of the Total Commitment obtained by dividing such Lender's
Commitment by the Total Commitment.
"Confirmation Order" means that certain Order Confirming
Debtors' Second Amended Joint Plan of Reorganization Under Chapter 11
of the Bankruptcy Code, entered by the Court on December 9, 1999.
"Consolidated Balance Sheet" shall mean a consolidated
balance sheet for the Borrowers and Guarantors and the consolidated
Subsidiaries of each of the Borrowers and Guarantors, eliminating all
inter-Borrower and Borrower-Guarantor transactions and prepared in
accordance with GAAP.
"Consolidating Balance Sheet" shall mean a Consolidated
Balance Sheet plus individual balance sheets for each Borrower and
Guarantor and the consolidated subsidiaries of each such Borrower and
Guarantor, showing all eliminations of inter-Borrower and Borrower-
Guarantor transactions and prepared in accordance with GAAP and
including a balance sheet for each such Borrower and Guarantor
exclusively.
"Contaminant" means any waste, pollutant, hazardous
substance, toxic substance, hazardous waste, special waste, petroleum
or petroleum-derived substance or waste, or any constituent of any
such substance or waste.
"Contracts" shall mean all "contracts," as such term is
defined in the Uniform Commercial Code, now owned or hereafter
acquired by any Borrower or any Guarantor, in any event, including all
contracts, undertakings, or agreements (other than rights evidenced by
chattel paper, documents or instruments as such terms are defined in
the Uniform Commercial Code) in or under which any Borrower or any
Guarantor may now or hereafter have any right, title or interest,
including any agreement relating to the terms of payment or the terms
of performance of any Receivable.
"Contract Rights" means and includes, as to any Person, all
of such Person's then owned or existing and future acquired or arising
rights under Contracts not yet earned by performance and not evidenced
by an instrument or chattel paper, to the extent that the same may
lawfully be assigned.
"Controlled Disbursement Account" means one or more accounts
maintained by and in the name of the Borrowers with a Disbursing Bank
for the purposes of disbursing Revolving Credit Loan proceeds and
amounts deposited thereto.
"Default" means any of the events specified in Section 12.1
which with the passage of time or giving of notice or both would
constitute an Event of Default.
"Default Margin" means two percent (2.0%) per annum.
"DIP Facility" means the credit facility represented by that
certain Senior Secured Superpriority Debtor-In-Possession Loan and
Security Agreement, dated as of September 20, 1999, by and among,
inter alia, the Borrowers, the Agent (as a lender and as agent
thereunder), and other lenders party thereto from time to time,
together with the other Loan Documents (as defined therein), in each
case as amended.
"Disbursing Bank" means any commercial bank with which a
Controlled Disbursement Account is maintained after the Effective
Date.
"Disclosure Statement" means that certain Second Amended
Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code
for the Second Amended and Restated Joint Plan of Reorganization of
the Debtors, dated as of October 25, 1999.
"Dollar" and "$" means freely transferable United States
dollars.
"EBITDA" means, for any period, an amount equal to the
Borrowers' aggregate consolidated Net Income from recurring
operations, excluding extraordinary items, plus Interest Expense,
depreciation and amortization expense, and taxes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as in effect from time to time, and any successor statute.
"Early Termination Date" shall mean the date prior to the
Initial Anniversary Date on which (a) the Borrowers terminate this
Agreement or the Revolving Credit Facility, or (b) this Agreement or
the Revolving Credit Facility terminates due to a Default or Event of
Default hereunder.
"Early Termination Fee" shall mean a fee payable to the
Agent, on behalf of the Lenders (in addition to the then outstanding
principal, accrued interest and other charges owing under the terms of
this Agreement or any other Loan Documents), as liquidated damages for
the loss of the benefit of the bargain and not as a penalty, in an
amount equal to (a) $637,500, if an Early Termination Date occurs on
or before February 8, 2001, (b) $425,000, if an Early Termination Date
occurs on or before February 8, 2002, or (c) $212,500, if an Early
Termination Date occurs on or before February 7, 2003.
"Effective Date" means the later of (a) the Agreement Date,
and (b) the first date on which all of the conditions set forth in
Article 5 shall have been fulfilled.
"Effective Interest Rate" means each rate of interest per
annum on the Revolving Credit Loans in effect from time to time
pursuant to the provisions of Section 4.1.
"Eligible Assignee" means (a) a commercial bank organized
under the laws of the United States, or any State thereof, or any
commercial finance or asset based lending affiliate of any such
commercial bank or any commercial finance or asset based lending
entity, in any case having total assets in excess of $1,000,000,000;
(b) a savings and loan association or savings bank organized under the
laws of the United States, or any State thereof, having a net worth of
at least $250,000,000 calculated in accordance with GAAP; and (c) any
Lender listed on the signature page of this Agreement; provided in
each case that the representation contained in Sections 13.1(c)(i) and
13.2 hereof shall be applicable with respect to such institution or
Lender.
"Eligible Receivable" means the unpaid portion of a
Receivable payable in Dollars to a Borrower net of any returns,
discounts, claims, credits, charges or other allowances, offsets,
deductions, counterclaims, disputes or other defenses and reduced by
the aggregate amount of all reserves, limits and deductions provided
for in this definition which is deemed by the Agent in its reasonable
credit judgment to be eligible for inclusion in the calculation of the
Borrowing Base. Unless otherwise approved in writing by the Agent, no
Receivable shall be deemed an Eligible Receivable unless it meets all
of the following requirements: (a) such Receivable is owned by a
Borrower and represents a complete bona fide transaction which
requires no further act under any circumstances on the part of such
Borrower to make such Receivable payable by the Account Debtor, other
than invoicing by such Borrower in the case of an Unbilled Eligible
Receivable; (b) such Receivable is not unpaid more than ninety (90)
days after the date of the original invoice or past due more than
seventy-five (75) days after its due date; (c) such Receivable does
not arise out of any transaction with any Subsidiary or Affiliate of a
Borrower; (d) such Receivable is not owing by an Account Debtor more
than fifty percent (50%) of whose then-existing accounts owing to a
Borrower do not meet the requirements set forth in clause (b) above;
(e) if the Account Debtor with respect thereto is located outside of
the United States of America (a "Foreign Receivable"), the
transportation services which gave rise to such Receivable were
rendered after receipt by a Borrower from the Account Debtor of an
irrevocable letter of credit that has been confirmed by a financial
institution acceptable to the Agent and is in form and substance
acceptable to the Agent, payable in the full face amount of the face
value of the Receivable in Dollars at a place of payment located
within the United States and has been duly delivered to the Agent (an
"L/C Backed Foreign Receivable"); provided that the Borrowers may
include in Eligible Receivables, in the aggregate, an amount of up to
$500,000 of Foreign Receivables which are not L/C Backed Foreign
Receivables, if the Account Debtors with respect to such Foreign
Receivables are located in Canada, and; (f) if such Receivable is
subject to the Assignment of Claims Act of 1940, as amended from time
to time, or any Applicable Law now or hereafter existing similar in
effect thereto, as determined in the sole discretion of the Agent, or
to any provision prohibiting its assignment or requiring notice of or
consent to such assignment that, upon the request of the Agent
pursuant to Section 8.12 or otherwise, a Borrower promptly complies
with the requirements of Section 8.12; (g) the Account Debtor with
respect to such Receivable is not insolvent or the subject of any
bankruptcy or insolvency proceedings of any kind or of any other
proceeding or action, threatened or pending, which might, in the
Agent's reasonable credit judgment, have a Materially Adverse Effect
on such Account Debtor; (h) excluding any Receivable owing by any
agency or department of the federal government, such Receivable is not
owing by an Account Debtor, who or along with a group of affiliated
Account Debtors has then-existing accounts owing to a Borrower which
exceed in face amount fifteen percent (15%) of such Borrower's total
Eligible Receivables; (i) if such Receivable is a Billed Receivable,
it is evidenced by an invoice or other documentation in a form
acceptable to the Agent containing only terms normally offered by a
Borrower, (j) if such Receivable is an Unbilled Receivable, then no
more than fifteen (15) days have elapsed from the earlier of the date
on which (i) such Receivable was created or arose, (ii) such sale was
made or service performed, or (iii) such Receivable could have been
invoiced by such Borrower; (k) such Receivable is a valid, legally
enforceable obligation of the Account Debtor with respect thereto and
is not subject to any present, or contingent (and no facts (i) exist
to the knowledge of any Borrower, or (ii) have been disclosed in the
course of any audit, which are the basis for any future), offset,
deduction or counterclaim, dispute or other defense on the part of
such Account Debtor; (l) such Receivable is not evidenced by chattel
paper or an instrument of any kind; (m) such Receivable does not arise
out of a rebill or advertising bill; (n) such Receivable is subject to
the Security Interest, which is perfected as to such Receivable, and
is subject to no other Lien whatsoever other than a Permitted Lien;
and (o) any other requirements deemed necessary by the Agent in its
reasonable business judgment and which are customary either in the
commercial finance industry or in the lending practices of the Agent.
"Environmental Laws" means all federal, state, local and
foreign laws now or hereafter in effect relating to pollution or
protection of the environment, including laws relating to emissions,
discharges, Releases or threatened Releases of pollutants,
Contaminants, chemicals, or industrial, toxic or hazardous substances
or wastes into the environment (including, without limitation, ambient
air, surface water, ground water, or land), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage,
disposal, removal, transport, or handling of pollutants, Contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes, and
any and all regulations, notices or demand letters issued, entered,
promulgated or approved thereunder; such laws and regulations include
but are not limited to the Resource Conservation and Recovery Act, 42
U.S.C. 6901 et seq., as amended; the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. 6901 et seq., as
amended; the Toxic Substances Control Act, 15 U.S.C. 2601 et seq.,
as amended; the Clean Air Act, 46 U.S.C. 7401 et seq., as amended;
and state and federal lien and environmental cleanup programs.
"Environmental Lien" means a Lien in favor of any
governmental entity for (a) any liability under Environmental Laws or
(b) damages arising from, or costs incurred by such governmental
entity in response to, a Release or threatened Release of Contaminant
into the environment.
"Environmental Liabilities" shall mean, with respect to any
Person, all liabilities, obligations, responsibilities, response,
remedial and removal costs, investigation and feasibility study costs,
capital costs, operation and maintenance costs, losses, damages,
punitive damages, property damages, natural resource damages,
consequential damages, treble damages, costs and expenses (including
all fees, disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest incurred as a
result of or related to any claim, suit, action, investigation,
proceeding or demand by any Person, whether based in contract, tort,
implied or express warranty, strict liability, criminal or civil
statute or common law, including any arising under or related to any
Environmental Laws, Environmental Permits, or in connection with any
Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any
real or personal property.
"Environmental Permits" shall mean all permits, licenses,
authorizations, certificates, approvals, registrations or other
written documents required by any Governmental Authority under any
Environmental Laws.
"Event of Default" means any of the events specified in
Section 12.1, provided that any requirement for notice or lapse of
time or any other express condition has occurred or been satisfied.
"Expense Deposit" means the amount of funds paid by the
Borrowers to the Agent from time to time pursuant to the terms and
conditions of the Commitment Letter, to be applied against all fees,
costs and out-of-pocket expenses incurred by the Agent in connection
with the Commitment Letter, as such amount may be increased from time
to time by amounts actually received by the Agent from the Borrowers.
"Financial Officer" means the chief financial officer,
Treasurer or Controller of a Borrower.
"Financing Statements" means all Uniform Commercial Code
financing statements required by the Agent and executed by a Borrower,
in form and substance satisfactory to the Agent.
"Fiscal Month" shall mean each calendar month during the
Fiscal Year.
"Fiscal Quarter" shall mean each three (3) month period
ended March 31, June 30, September 30 and December 31 of each year.
"Fiscal Year" shall mean each twelve (12) month period
commencing on January 1 of each year and ending on the following
December 31.
"Fixed Charge Coverage Ratio" shall mean, for the relevant
period, the ratio determined by dividing an amount equal to (a)(i) the
sum of (A) EBITDA and (B) all amounts paid and accrued with respect to
Operating Leases and which were deducted as operating expenses in
calculating EBITDA less (ii) the sum of (A) all federal, state and
local income tax expenses paid and accrued and (B) Unfunded Capital
Expenditures, by (b) the sum of (i) scheduled payments of principal
with respect to Indebtedness, (ii) all Interest Expense, (iii) all
amounts paid and accrued with respect to Operating Leases and which
were deducted as operating expenses in calculating EBITDA and (iv) all
payments with respect to Capitalized Leases less the portions, if any,
of Residual Value Payments relating thereto which were satisfied by
means other than payment in cash or by check or wire transfer.
"Fresh Start Financial Statements" shall have the meaning
ascribed to such term in Section 6.1(m) hereof.
"GAAP" means generally accepted accounting principles
consistently applied and maintained throughout the period indicated
and consistent with the prior financial practice of the Person
referred to.
"General Intangibles" means, as to any Person, all of such
Person's then owned or existing and future acquired or arising general
intangibles, choses in action and causes of action and all other
intangible personal property of such Person of every kind and nature
(other than Receivables), including, without limitation, Intellectual
Property, corporate or other business records, inventions, designs,
blueprints, plans, specifications, trade secrets, goodwill, computer
software, customer lists, licenses, franchises, tax refund claims,
reversions or any rights thereto and any other amounts payable to such
Person from any Benefit Plan, Multiemployer Plan or other employee
benefit plan, rights and claims against carriers and shippers, rights
to indemnification, business interruption insurance proceeds thereof,
property, casualty or any similar type of insurance and any proceeds
thereof, any letter of credit, guarantee, claims, security interest or
other security held by or granted to such Person to secure payment by
an Account Debtor of any of the Receivables.
"Governmental Approvals" means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with,
and reports to, all governmental bodies, whether federal, state, local
or foreign national or provincial and all agencies thereof.
"Governmental Authority" shall mean any nation or
government, any state or other political subdivision thereof, and any
agency, department or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.
"Guarantor" shall mean each of Aero Body and Truck
Equipment, Inc., E.L. Powell & Sons Trucking Co., Inc., Trism
Transport, Inc., and Trism Transport Services, Inc., and "Guarantors"
shall collectively refer to all of the above-listed entities.
"Guaranty Agreement" means the Guaranty, dated as of the
Effective Date, executed by the Guarantors in favor of the Agent, for
the benefit of the Lenders, as amended, modified or supplemented from
time to time.
"Guaranty," "Guaranteed" or to "Guarantee" as applied to any
obligation of another Person shall mean and include
(a) a guaranty (other than by endorsement of negotiable
instruments for collection in the ordinary course of business),
directly or indirectly, in any manner, of any part or all of such
obligation of such other Person, and
(b) an agreement direct or indirect, contingent or otherwise,
and whether or not constituting a guaranty, the practical effect of
which is to assure the payment or performance (or payment of damages
in the event of nonperformance) of any part or all of such obligation
of such other Person whether by (i) the purchase of securities or
obligations, (ii) the purchase, sale or lease (as lessee or lessor) of
property or the purchase or sale of services primarily for the purpose
of enabling the obligor with respect to such obligation to make any
payment or performance (or payment of damages in the event of
nonperformance) of or on account of any part or all of such obligation
or to assure the owner of such obligation against loss, (iii) the
supplying of funds to, or in any other manner investing in, the
obligor with respect to such obligation, (iv) repayment of amounts
drawn down by beneficiaries of letters of credit, or (v) the supplying
of funds to or investing in a Person on account of all or any part of
such Person's obligation under a guaranty of any obligation or
indemnifying or holding harmless, in any way, such Person against any
part or all of such obligations.
"Indebtedness" of any Person means, without duplication, (a)
Liabilities, (b) all obligations for money borrowed or for the
deferred purchase price of property or services or in respect of
Reimbursement Obligations under letters of credit, (c) all obligations
represented by bonds, debentures, notes and accepted drafts that
represent extensions of credit, (d) Capitalized Lease Obligations, (e)
all obligations (including, during the noncancelable term of any lease
in the nature of a title retention agreement, all future payment
obligations under such lease discounted to their present value in
accordance with GAAP) secured by any Lien to which any property or
asset owned or held by such Person is subject, whether or not the
obligation secured thereby shall have been assumed by such Person, (f)
all obligations of other Persons which such Person has Guaranteed,
including, but not limited to, all obligations of such Person
consisting of recourse liability with respect to accounts receivable
sold or otherwise disposed of by such Person, and (g) the Secured
Obligations.
"Initial Anniversary Date" shall mean that date which is two
(2) years and three hundred sixty-four (364) days after the Effective
Date.
"Intellectual Property" means, as to any Person, all of such
Person's then owned existing and future acquired or arising patents,
patent rights, copyrights, works which are the subject of copyrights,
trademarks, service marks, trade names, trade styles, patent,
trademark and service mark applications, and all licenses and rights
related to any of the foregoing and all other rights under any of the
foregoing, all extensions, renewals reissues, divisions, continuations
and continuations-in-part of any of the foregoing and all rights to
sue for past, present and future infringements of any of the
foregoing.
"Interest Expense" means the interest on Indebtedness during
the period for which computation is being made, excluding (a) the
amortization of fees and costs incurred with respect to the closing of
loans which have been capitalized as transaction costs, and (b)
interest paid in kind.
"Interest Payment Date" means the first (1st) day of each
calendar month commencing on March 1, 2000, and continuing thereafter
until the Secured Obligations have been irrevocably paid in full.
"Investment" means, with respect to any Person: (a) the
direct or indirect purchase or acquisition of any beneficial interest
in, any share of capital stock of, evidence of Indebtedness of or
other security issued by any other Person, (b) any loan, advance or
extension of credit to, or contribution to the capital of, any other
Person, excluding advances to employees in the ordinary course of
business for business expenses, (c) any Guaranty of the obligations of
any other Person, or (d) any commitment or option to take any of the
actions described in clauses (a), (b) or (c) above.
"IRS" means the Internal Revenue Service.
"Issuing Bank" means any banking institution which is an
issuer of a Letter of Credit and its successors and assigns hereunder.
"Lender" means at any time any financial institution party
to this Agreement at such time, including any such Person becoming a
party hereto pursuant to the provisions of Article 13 hereof, and its
successors and assigns, and "Lenders" shall mean all such Lenders,
collectively.
"Letter of Credit" means any Letter of Credit issued by an
Issuing Bank for the account of a Borrower pursuant to Article 3.
"Letter of Credit Amount" means, with respect to any Letter
of Credit, the aggregate maximum amount at any time available for
drawing under such Letter of Credit.
"Letter of Credit Facility" means that portion of this
Agreement pursuant to which Letters of Credit are provided.
"Letter of Credit Obligations" means, at any time, the sum
of (a) the aggregate Reimbursement Obligations of the Borrowers at
such time, plus (b) the aggregate Letter of Credit Amount for all
Letters of Credit outstanding at such time, plus (c) the aggregate
Letter of Credit Amount for all Letters of Credit the issuance of
which has been authorized by the Agent and the Issuing Lender pursuant
to Section 3.1 but that have not yet been issued, in each case (i) as
determined by the Agent, and (ii) expressly including all such amounts
outstanding under the DIP Facility as of the Effective Date, which
shall automatically, and without any further action by any Person, be
deemed assumed by the Borrowers and constitute Secured Obligations
hereunder (without duplication) upon the occurrence of the Effective
Date.
"Letter of Credit Reserve" means, at any time, the aggregate
Letter of Credit Obligations at such time, excluding Letter of Credit
Obligations that are fully secured by Cash Collateral.
"Letter of Interest" shall mean that certain Letter of
Interest from the Agent to Trism, dated as of December 1, 1999, with
respect to a Post-Confirmation Credit Facility.
"Leverage Ratio" means for any fiscal period, the ratio
determined by dividing (a) the Total Liabilities by (b) the Net Worth.
"Liabilities" means, as at the end of any fiscal period, all
liabilities determined in accordance with GAAP and included on a
balance sheet.
"LIBOR" shall mean at any time of determination, and subject
to availability, for each interest period the higher of the applicable
London Interbank Offered Rate paid in London on dollar deposits from
other banks as (a) quoted by Chase Manhattan Bank, N.A., (b) published
under "Money Rates" in the New York City edition of the Wall Street
Journal or, if there is no such publication or statement therein as to
LIBOR, then in any publication used in the New York City financial
community, or (c) determined by the Agent based upon information
presented on Telerate Systems at Page 3750 as of 11:00 a.m. (London
Time).
"LIBOR Loan" shall mean those Revolving Credit Loans for
which the Borrowers have elected to use LIBOR for interest rate
computations.
"LIBOR Option" shall have the meaning assigned to such term
in Section 4.1(a)(i).
"LIBOR Period" shall have the meaning assigned to such term
in Section 4.1(a)(i) hereof.
"Lien" as applied to the property of any Person means: (a)
any mortgage, deed to secure debt, deed of trust, lien, pledge,
charge, lease constituting a Capitalized Lease Obligation, conditional
sale or other title retention agreement, or other security interest,
security title or encumbrance of any kind in respect of any property
of such Person or upon the income and profits therefrom, (b) any
arrangement, express or implied, under which any property of such
Person is transferred, sequestered or otherwise identified for the
purpose of subjecting the same to the payment of Indebtedness or
performance of any other obligation in priority to the payment of the
general, unsecured creditors of such Person, and (c) the filing of, or
any agreement to give, any financing statement under the UCC or its
equivalent in any jurisdiction.
"Loan(s)" means any Revolving Credit Loan, as well as such
loans collectively, as the context requires.
"Loan Account" and "Loan Accounts" shall have the meanings
ascribed thereto in Section 4.4.
"Loan Documents" means collectively this Agreement, the
Notes, the Security Documents, the Guaranty Agreement, the Pledge
Agreement, and each other instrument, agreement or document executed
by the Borrowers, the Guarantors or any Affiliate or Subsidiary of the
Borrowers or the Guarantors in connection with this Agreement whether
prior to, on or after the Effective Date and each other instrument,
agreement or document referred to herein or contemplated hereby, all
in form and substance acceptable to the Agent.
"Lockbox" means each U. S. Post Office Box specified in a
Lockbox Agreement.
"Lockbox Agreement" means each agreement between a Borrower
and a Clearing Bank concerning the establishment of a Lockbox for the
collection of Receivables.
"Make-Whole Amount" shall have the meaning assigned to such
term in Section 4.7(b) hereof.
"Margin Stock" means margin stock as defined in Section
221.1(h) of Regulation U, as the same may be amended or supplemented
from time to time.
"Materially Adverse Effect" means, with respect to any
Person, a materially adverse effect upon such Person's business,
assets, liabilities, condition (financial or otherwise), results of
operations or business prospects, and in addition (a) with respect to
a Borrower, includes a materially adverse effect upon such Borrower's
ability to perform its obligations hereunder or under any other Loan
Document to which it is a party or upon the enforceability of such
obligations against such Borrower, and (b) with respect to a
Guarantor, includes a materially adverse effect upon such Guarantor's
ability to perform its obligations under the Guaranty Agreement, or
under any other Loan Document to which it is a party or upon the
enforceability of such obligations against such Guarantor.
"Minimum Commitment" shall have the meaning ascribed to such
term in Section 13.1(b) hereof.
"Money Borrowed" means, as applied to Indebtedness, (a)
Indebtedness for money borrowed, (b) Indebtedness, whether or not in
any such case the same was for money borrowed, (i) represented by
notes payable and drafts accepted, that represent extensions of
credit, (ii) constituting obligations evidenced by bonds, debentures,
notes or similar instruments, or (iii) upon which interest charges are
customarily paid (other than trade Indebtedness) or that was issued or
assumed as full or partial payment for property, (c) Indebtedness that
constitutes a Capitalized Lease Obligation, and (d) Indebtedness that
is such by virtue of clause (f) of the definition thereof, but only to
the extent that the obligations Guaranteed are obligations that would
constitute Indebtedness for Money Borrowed.
"Mortgaged Real Estate" means all real property and
improvements owned by Trism and located at 4174 Jiles Road in
Kennesaw, Georgia comprising the Borrowers' executive offices and
principal place of business.
"Mortgages" means and includes any mortgages, deeds of
trust, deeds to secure debt, assignments and other instruments
executed and delivered or that may be executed and delivered by any
Borrower to the Agent, for the benefit of itself and the Lenders.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which a Borrower or a Related
Company is required to contribute or has contributed within the
immediately preceding six years.
"Net Income" or "Net Loss" means, as applied to any Person,
the net income (or net loss) of such Person for the period in question
after giving effect to deduction of or provision for all operating
expenses, all taxes and reserves (including reserves for deferred
taxes and all other proper deductions), all determined in accordance
with GAAP, provided that there shall be excluded: (a) the net income
(or net loss) of any Person accrued prior to the date it becomes a
Subsidiary of, or is merged into or consolidated with, the Person
whose Net Income is being determined or a Subsidiary of such Person,
(b) the net income (or net loss) of any Person in which the Person
whose Net Income is being determined or any Subsidiary of such Person
has an ownership interest, except, in the case of net income, to the
extent that any such income has actually been received by such Person
or such Subsidiary in the form of cash dividends or similar
distributions, (c) any restoration of any contingency reserve, except
to the extent that provision for such reserve was made out of income
during such period, (d) any net gains or losses on the sale or other
disposition, not in the ordinary course of business, of Investments,
Business Units and other capital assets, provided that there shall
also be excluded any related charges for taxes thereon, (e) any net
gain arising from the collection of the proceeds of any insurance
policy, (f) any write-up of any asset, and (g) any other extraordinary
item.
"Net Outstandings" of any Lender means, at any time, the sum
of (a) all amounts paid by such Lender to the Agent in respect of
Revolving Credit Loans or otherwise under this Agreement less (b) all
amounts paid by the Agent to such Lender which are received by the
Agent and which, pursuant to this Agreement, are paid over to such
Lender for application in reduction of the outstanding principal
balance of the Revolving Credit Loans or the Letter of Credit
Obligations.
"Net Proceeds" means proceeds received by a Borrower or any
of its Subsidiaries in cash from any Asset Disposition (including,
without limitation, payments under notes or other debt securities
received in connection with any Asset Disposition), net of: (a) the
reasonable transaction costs of such sale, lease, transfer or other
disposition; (b) any tax liability arising solely from such
transaction; and (c) amounts applied to repayment of Indebtedness
(other than the Secured Obligations) secured by a Permitted Lien on
the asset or property disposed.
"Net Worth" means, as at the end of any fiscal period, the
total shareholders' equity determined in accordance with GAAP
(including capital stock, additional paid-in capital and retained
earnings, after deducting treasury stock) included on a Consolidated
Balance Sheet.
"Non-Ratable Loan" means a Revolving Credit Loan made by the
Settlement Lender in accordance with the provisions of Section
4.7(b)(ii).
"Note" means a Revolving Credit Note, individually, and
"Notes" means all such Notes, collectively.
"Operating Lease" shall have the meaning assigned to such
term in Section 11.10 hereof.
"Operating Lease Obligations" means the aggregate amount of
all obligations under all Operating Leases of a Borrower and any of
its Subsidiaries as of the end of any relevant fiscal period, where
such obligations, with respect to any such Operating Lease, are in an
amount equal to the sum of the following, in each case discounted to
present value using the implicit interest rate embedded in such
Operating Lease: (a) the monthly lease payment under such Operating
Lease multiplied by the number of months then remaining in the term
of such Operating Lease plus (b) the amount of any optional or
mandatory residual payment due at the end of the term of such
Operating Lease upon payment of which such Borrower will acquire the
asset(s) subject to such Operating Lease.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor agency.
"POR Effective Date" means the "Effective Date" of the Plan
of Reorganization, as such term is defined therein.
"Permitted Existing Indebtedness" means the Indebtedness set
forth on Schedule 6.1(i) hereto.
"Permitted Guaranties" means (a) the Guaranty in favor of
the Agent, (b) those described on Schedule 6.1(i) hereto, and (c)
guarantees of Permitted Obligations.
"Permitted Incremental Obligations" means, for each of the
respective Fiscal Years of the Borrowers ending on December 31, 2000,
2001 and 2002, an amount equal to (a) $50,000,000 less (b) the sum of
(i) all payments made or scheduled to be made by any Borrower during
such Fiscal Year on or with respect to Purchase Money Indebtedness,
Operating Leases and (without duplication) Indebtedness for Money
Borrowed which, in each case, was incurred by a Borrower prior to the
commencement of such Fiscal Year, and (ii) the aggregate amount of all
Unfunded Capital Expenditures by any Borrower during such Fiscal Year.
"Permitted Insurance Premium Finance Agreement(s)" shall
have the meaning ascribed to such term in the definition of Permitted
Liens.
"Permitted Investments" means (a) direct obligations of the
United States of America, or any agency, thereof, or obligations
guaranteed as to principal and interest by the United States of
America, or any agency thereof; (b) certificates of deposit issued by
any bank or trust company organized under the laws of the United
States of America or any state thereof and having capital, surplus and
undivided profits of at least Five Hundred Million Dollars
($500,000,000); and (c) commercial paper rated A-1 or better or P-1 by
Standard & Poor's Corporation or Moody's Investors Services, Inc.
respectively.
"Permitted Liens" means: (a) Liens securing taxes,
assessments and other governmental charges or levies (excluding any
Lien imposed pursuant to any of the provisions of ERISA) or the claims
of materialmen, mechanics, carriers, warehousemen or landlords for
labor, materials, supplies or rentals incurred in the ordinary course
of business, but in all cases, only if payment shall not at the time
be required to be made in accordance with Section 9.6; (b) Liens
consisting of deposits or pledges made in the ordinary course of
business in connection with, or to secure payment of, obligations
under workers' compensation, unemployment insurance or similar
legislation or under surety or performance bonds, in each case arising
in the ordinary course of business; (c) Liens constituting
encumbrances in the nature of zoning restrictions, easements and
rights or restrictions of record on the use of the real estate of a
Borrower, which in the reasonable credit judgment of the Agent do not
materially detract from the value of such real estate or impair the
use thereof in such business of such Borrower; (d) Liens securing
Permitted Obligations; (e) Liens of the Agent, for the benefit of the
Lenders, arising under this Agreement and the other Loan Documents;
(f) Liens arising out of or resulting from any judgment or award, the
time for the appeal or petition for rehearing of which shall not have
expired, or in respect of which a Borrower is fully protected by
insurance or in respect of which such Borrower shall at any time in
good faith be prosecuting an appeal or proceeding for a review and in
respect of which a stay of execution pending such appeal or proceeding
for review shall have been secured, and as to which appropriate
reserves have been established on the books of such Borrower; and (g)
Liens on insurance proceeds payable under insurance policies
maintained by any Borrower or Guarantor to the extent, but only to the
extent, that such Liens arise pursuant to an insurance premium
finance agreement listed on Schedule 1.1 hereto or pursuant to an
insurance premium finance agreement approved by Agent in writing
(collectively, the "Permitted Insurance Premium Finance Agreements").
"Permitted Obligations" means the aggregate amount of
outstanding Purchase Money Indebtedness, Operating Lease Obligations
and Indebtedness for Money Borrowed which, and only to the extent, is
incurred in accordance with the provisions of this Agreement,
including without limitation, Section 11.2.
"Person" means an individual, corporation, partnership,
association, trust or unincorporated organization, or a government or
any agency or political subdivision thereof.
"Plan" means any employee benefit plan as defined in Section
3(3) of ERISA in respect of which a Borrower or any Related Company
is, or with respect to defined benefit plans (as defined under ERISA)
within the immediately preceding six years was, an "employer" as
defined in Section 3(5) of ERISA.
"Plan of Reorganization" means that certain Second Amended
Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code,
dated as of October 25, 1999, as confirmed by order of the United
States Bankruptcy Court for the District of Delaware on December 9,
1999.
"Pledge Agreement" means the Stock Pledge Agreement dated as
of the Effective Date, among Trism, Trism Secured, Heavy Haul, TSMT
and Specialized and the Agent, for the ratable benefit of the Lenders,
as amended, modified or supplemented from time to time.
"Pre-Petition Loan Agreement" means that certain Loan and
Security Agreement, dated as of July 14, 1997, by and among the
Borrowers, certain affiliates of the Borrowers, the Agent and the
lenders identified therein, as amended.
"Prime Option" shall have the meaning assigned to such term
in Section 4.1(a)(i).
"Purchase Money Indebtedness" means (a) Indebtedness created
to finance or refinance the payment of all or any part of the lesser
of (i) the purchase price or (ii) the fair market value, of any
tangible asset (other than inventory), and secured only by Purchase
Money Liens and (b) Capitalized Lease Obligations.
"Purchase Money Lien" means any Lien securing Purchase Money
Indebtedness, but only if such Lien shall at all times be confined
solely to the tangible asset (other than inventory) which was financed
or refinanced through the incurrence of the Purchase Money
Indebtedness secured by such Lien.
"Real Estate" means all of each and every Borrower's now or
hereafter owned or leased estates in real property, including, without
limitation, all fees, leaseholds and future interests, together with
all of each and every Borrower's now or hereafter owned or leased
interests in the improvements and emblements thereon, the fixtures
attached thereto and the easements appurtenant thereto, including,
without limitation the real property described on Schedule 6.1(t).
"Receivables" means and includes, as to any Person, all of
such Person's then owned or existing and future acquired or arising
(a) rights to the payment of money or other forms of consideration of
any kind (whether classified under the Uniform Commercial Code as
accounts, contract rights, chattel paper, General Intangibles or
otherwise) including, but not limited to, accounts receivable, letters
of credit and the right to receive payment thereunder, chattel paper,
tax refunds, insurance proceeds, Contracts and Contract Rights, notes,
drafts, instruments, documents, acceptances and all other debts,
obligations and liabilities in whatever form from any Person and
guaranties, security and Liens securing payment thereof and (b) cash
and non-cash proceeds of any of the foregoing.
"Regulation U" means Regulation U of the Board of Governors
of the Federal Reserve System (or any successor), as the same may be
amended or supplemented from time to time.
"Reimbursement Agreement" means, with respect to a Letter of
Credit, such form of application therefor and form of reimbursement
agreement therefor (whether in a single document or several documents)
as the Issuing Bank may employ in the ordinary course of business for
its own account, with such modifications thereto as may be agreed upon
by an Issuing Bank and a Borrower, provided that such application and
agreement and any modifications thereto are not inconsistent with the
terms of this Agreement.
"Reimbursement Obligations" means the reimbursement or
repayment obligations of a Borrower to an Issuing Bank pursuant to
Article 3 or pursuant to a Reimbursement Agreement with respect to
amounts that have been drawn under Letters of Credit.
"Related Company" means, as to any Person, any (a)
corporation which is a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the Code) as
such Person, (b) partnership or other trade or business (whether or
not incorporated) under common control (within the meaning of Section
414(c) of the Code) with such Person, or (c) member of the same
affiliated service group (within the meaning of Section 414(m) of the
Code) as such Person or any corporation described in clause (a) above
or any partnership, trade or business described in clause (b) above.
"Release" means release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment or into or out of any
property, including the movement of Contaminants through or in the
air, soil, surface water or groundwater.
"Remedial Action" means actions required to (i) clean up,
remove, treat or in any other way address Contaminants in the indoor
or outdoor environment; (ii) prevent the Release or threat of Release
or minimize the further Release of Contaminants so they do not migrate
or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; or (iii) perform pre-remedial studies
and investigations and post-remedial monitoring and care.
"Replacement Letters of Credit" shall have the meaning
assigned to such term in Section 3.3(b) hereof.
"Required Lenders" means, at any time, any combination of
Lenders whose Commitment Percentages at such time aggregate in excess
of sixty-six and two-thirds percent (66_%).
"Residual Value Payments" means the respective final cash
payments under Capitalized Leases required to be made to the lessors
by the Borrowers upon the termination of such Capitalized Leases.
"Restricted Distribution" by any Person means (a) its
retirement, redemption, purchase, or other acquisition for value of
any capital stock or other equity securities or partnership interests
issued by such Person, (b) the declaration or payment of any dividend
or distribution on or with respect to any such securities or
partnership interests, (c) any loan or advance by such Person to, or
other investment by such Person in, the holder of any of such
securities or partnership interests, and (d) any other payment by such
Person in respect of such securities or partnership interests.
"Restricted Payment" means (a) any redemption, repurchase or
prepayment or other retirement, prior to the stated maturity thereof
or prior to the due date of any regularly scheduled installment or
amortization payment with respect thereto, of any Indebtedness of a
Person (other than the Secured Obligations and Trade Debt), and (b)
the payment by any Person of the principal amount of or interest on
any Indebtedness (other than trade debt), including, without
limitation, any management fees, owing to an Affiliate of such Person.
"Revolving Credit Facility" means that portion of this
Agreement pursuant to which Revolving Credit Loans are made.
"Revolving Credit Facility Cap" means an amount equal to
$42,500,000.
"Revolving Credit Loans" means the aggregate outstanding
amount of the Advances made to the Borrowers, from time to time,
pursuant to Section 2.1.
"Revolving Credit Note" means each Revolving Credit Note
made by the Borrowers payable to the order of a Lender evidencing the
obligation of the Borrowers to pay the aggregate unpaid principal
amount of the Revolving Credit Loans made to it by such Lender (and
any promissory note or notes that may be issued from time to time in
substitution, renewal, extension, replacement or exchange therefor
whether payable to such Lender or to a different Lender in connection
with a Person becoming a Lender after the Effective Date or otherwise)
substantially in the form of Exhibit A hereto, with all blanks
properly completed, either as originally executed or as the same may
from time to time be supplemented, modified, amended, renewed,
extended or refinanced,
"Schedule of Receivables" means a schedule delivered by the
Borrowers to the Agent, from time to time, pursuant to the provisions
of Section 8.11 setting forth a detailed aged trial balance of all the
then existing Receivables, specifying the name of each Account Debtor
and balance due from (and any rebate due to) each Account Debtor
obligated on a Receivable so listed.
"Secured Obligations" means, in each case whether now in
existence or hereafter arising, (a) the principal of, and interest and
premium, if any, on, the Revolving Credit Loans including, without
limitation, present and future Advances and present and future
obligations, whether optional or obligatory, in connection with the
Indebtedness created thereby, (b) the Reimbursement Obligations and
all other obligations of any Borrower or any Guarantor to the Agent or
any Lender in connection with the issuance of Letters of Credit, and
(c) all indebtedness, liabilities, obligations, covenants and duties
of any Borrower or any Guarantor to the Agent or to the Lenders of
every kind, nature and description arising under or in respect of this
Agreement, the Notes or any of the other Loan Documents, or the DIP
Facility, whether direct or indirect, absolute or contingent, due or
not due, contractual or tortious, liquidated or unliquidated, and
whether or not evidenced by any note, and whether or not for the
payment of money, including without limitation, fees required to be
paid pursuant to Article 4 and expenses required to be paid or
reimbursed pursuant to Section 15.2.
"Security Documents" means each of the following:
(a) the Mortgage, relating to the Mortgaged Real Estate,
(b) the Financing Statements,
(c) the Guaranty Agreement,
(d) the Pledge Agreement,
(e) the Trademark Security Agreement, and
(f) each other writing executed and delivered by a Borrower
or any other Person securing the Secured Obligations. and
(g) the certificates of titles for the Trailers, with the
first-priority Lien of the Agent properly noted thereon.
"Security Interest" means the valid and perfected first
priority Liens of the Agent, for the benefit of the Lenders, on and in
the Collateral effected hereby or by any of the Security Documents or
pursuant to the terms hereof or thereof.
"Settlement Date" means each Business Day after the
Effective Date selected by the Agent in its sole discretion subject to
and in accordance with the provisions of Section 4.7(b)(i) as of which
a Settlement Report is delivered by the Agent and on which settlement
is to be made among the Lenders in accordance with the provisions of
Section 4.7.
"Settlement Lender" means, for the purposes of Section 4.7,
the Agent in its capacity as a Lender.
"Settlement Report" means each report, substantially in the
form attached hereto as Exhibit E, prepared by the Agent and delivered
to each Lender and setting forth, among other things, as of the
Settlement Date indicated thereon and as of the next preceding
Settlement Date, the aggregate principal balance of all Revolving
Credit Loans outstanding, each Lender's Commitment Percentage thereof,
each Lender's Net Outstandings and all Non-Ratable Loans made, and all
payments of principal, interest and fees received by the Agent from a
Borrower during the period beginning on such next preceding Settlement
Date and ending on such Settlement Date.
"Stock" shall mean all of the issued and outstanding stock,
whether or not evidenced by any certificate or other document or
instrument, of all of the direct and indirect Subsidiaries of Trism,
which Stock will be pledged as Collateral for the Secured Obligations.
"Subordinated Indebtedness" means the Indebtedness evidenced
by the Subordinated Indenture.
"Subordinated Indenture" shall mean that certain Indenture,
dated as of February 15, 2000, between Trism, as Issuer, U.S. Bank
Trust National Association, as Trustee, and certain of the Borrowers,
as Guarantors, relating to the issuance of $30,000,000 of Trism's 12%
Senior Subordinated Notes due 2005, as supplemented or amended from
time to time.
"Subsidiary"
(a) when used to determine the relationship of a Person to
another Person, means a Person of which an aggregate of fifty
percent (50%) or more of the stock of any class or classes or
fifty percent (50%) or more of other ownership interests is owned
of record or beneficially by such other Person, or by one or more
Subsidiaries of such other Person, or by such other Person and
one or more Subsidiaries of such Person,
(i) if the holders of such stock, or other ownership
interests, (A) are ordinarily, in the absence of
contingencies, entitled to vote for the election of a
majority of the directors (or other individuals performing
similar functions) of such Person, even though the right so
to vote has been suspended by the happening of such a
contingency, or (B) are entitled, as such holders, to vote
for the election of a majority of the directors (or
individuals performing similar functions) of such Person,
whether or not the right so to vote exists by reason of the
happening of a contingency, or
(ii) in the case of such other ownership interests, if
such ownership interests constitute a majority voting
interest, and
(b) when used with respect to a Plan, ERISA or a provision
of the Code pertaining to employee benefit plans, also means any
corporation, trade or business (whether or not incorporated)
which is under common control with a Borrower and is treated as a
single employer with such Borrower under Section 414(b) or (c) of
the Code and the regulations thereunder.
"Substitution Trailers" means any trailers or other vehicles
or equipment pledged to the Agent by one or more Borrowers or
Guarantors from time to time in accordance with Section 8.14 hereof,
free and clear of any Lien, in replacement or substitution of (a) any
Trailer set forth on Schedule 6.1(g) hereto or (b) any subsequent
replacement or substitution of such Trailers.
"Termination Date" means, unless an Early Termination Date
occurs in accordance with the terms hereof (and then only upon payment
of the Early Termination Fee by the Borrowers), the date which is the
Initial Anniversary Date.
"Termination Event" means (a) a "Reportable Event" as
defined in Section 4043(b) of ERISA, but excluding any such event as
to which the provision for thirty (30) days' notice to the PBGC is
waived under applicable regulations, (b) the filing of a notice of
intent to terminate a Benefit Plan or the treatment of a Benefit Plan
amendment as a termination under Section 4041 of ERISA, or (c) the
institution of proceedings to terminate a Benefit Plan by the PBGC
under Section 4042 of ERISA or the appointment of a trustee to
administer any Benefit Plan.
"Total Commitment" means $42,500,000.
"Total Liabilities" means, as at the end of any relevant
fiscal period, the sum of (a) the Liabilities reflected on the
Consolidated Balance Sheet as of such date, and (b) the aggregate
amount of all Operating Lease Obligations of the Borrowers and all of
their respective Subsidiaries as of such date.
"Trade Debt" means the obligations of any Borrower or
Guarantor to any vendor or supplier which provides goods or services
to such Borrower or Guarantor in the ordinary course of the Borrower's
or Guarantor's business, in commercial transactions, at arm's length,
and in accordance with ordinary business terms and acceptable industry
standards.
"Trademark Security Agreement" means the Assignment of
Security Interest in Trademarks, dated on or about the Effective Date,
by a Borrower to the Agent, for the benefit of the Lenders, as the
same may be amended, modified or supplemented from time to time.
"Trailers" means (a) those trailers and other vehicles owned
by one or more Borrowers or Guarantors and pledged to the Agent, on
behalf of the Lenders, in accordance with this Agreement, free and
clear of any Lien, as set forth on Schedule 6.1(g) hereto, and (b) any
Substitution Trailers.
"Trism" shall have the meaning ascribed to such term in the
preamble hereof.
"Unbilled Eligible Receivables" shall mean the aggregate
amount of Eligible Receivables representing amounts for which all of
the services related thereto have been performed by a Borrower but for
which no invoice has been rendered to the respective customers.
"Unfunded Capital Expenditures" means Capital Expenditures
which are paid for by a Person other than with the proceeds of
Indebtedness for Money Borrowed (other than the Revolving Credit
Loans) incurred to finance such Capital Expenditures and other than
those represented by Capitalized Lease Obligations.
"Unfunded Vested Accrued Benefits" means with respect to any
Plan at any time, the amount (if any) by which
(a) the present value of all vested nonforfeitable benefits
under such Plan exceeds
(b) the fair market value of all Plan assets allocable to
such benefits, all determined as of the then most recent
valuation date for such Plan.
"Uniform Commercial Code" means the Uniform Commercial Code
as in effect from time to time in the State of Georgia.
"Unused Facility Fee" shall have the meaning assigned to
such term in Section 4.2(d).
SECTION 1.2 Other Referential Provisions.
(1) All defined terms in this Agreement, the Exhibits and
Schedules hereto shall have the same meanings when used in any other
Loan Document, unless the context shall require otherwise.
(2) Except as otherwise expressly provided herein, all accounting
terms not specifically defined or specified herein shall have the
meanings generally attributed to such terms under GAAP including,
without limitation, applicable statements and interpretations issued
by the Financial Accounting Standards Board and bulletins, opinions,
interpretations and statements issued by the American Institute of
Certified Public Accountants or its committees.
(3) All personal pronouns used in this Agreement, whether
used in the masculine, feminine or neuter gender, shall include all other
genders; the singular shall include the plural, and the plural shall
include the singular. In any circumstance where use of the term "Borrower"
as opposed to the term "Borrowers," or vice versa, would limit, diminish
or otherwise impair or negatively affect any of Lenders' rights
hereunder, the plural shall be substituted for the singular, or vice
versa, in such manner as will result in the maintenance or enlargement
of Lenders' rights hereunder or pursuant hereto. By way of example,
but not in limitation, if a reference to "Borrowers' property" would
otherwise be construed as referring only to property which is jointly
owned by all Borrowers, such reference shall instead be construed as
referring to the aggregate total of all of each Borrower's property.
(4) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provisions of this Agreement.
(5) Titles of Articles and Sections in this Agreement are for
convenience only, do not constitute part of this Agreement and neither
limit nor amplify the provisions of this Agreement, and all references
in this Agreement to Articles, Sections, Subsections, paragraphs,
clauses, subclauses, Schedules or Exhibits shall refer to the
corresponding Article, Section, Subsection, paragraph, clause or
subclause of, or Schedule or Exhibit attached to, this Agreement,
unless specific reference is made to the articles, sections or other
subdivisions or divisions of , or to schedules or exhibits to, another
document or instrument.
(6) Each definition of a document in this Agreement shall include
such document as amended, modified, supplemented or restated from time
to time in accordance with the terms of this Agreement.
(7) Except where specifically restricted, reference to a party
to a Loan Document includes that party and its permitted successors and
assigns permitted hereunder or under such Loan Document.
(8) Unless otherwise specifically stated, whenever a time is
referred to in this Agreement or in any other Loan Document, such time shall
be the local time in the city in which the principal office of the Agent
is located.
(9) Whenever the phrase "to the knowledge of a Borrower" or
words of similar import relating to the knowledge of a Borrower are
used herein, such phrase shall mean and refer to (i) the actual knowledge
of the President or chief financial officer or (ii) the knowledge that
such officers would have obtained if they had engaged in good faith in
the diligent performance of their duties, including the making of such
reasonable specific inquiries as may be necessary of the appropriate
persons in a reasonable credit judgment attempt to ascertain the
accuracy of the matter to which such phrase relates.
(10) The terms accounts, chattel paper, documents, equipment,
instruments, general intangibles and inventory, as and when used
(without being capitalized) in this Agreement or the Security
Documents, shall have the meanings given those terms in the Uniform
Commercial Code.
SECTION 1.3 Exhibits and Schedules. All Exhibits and Schedules
attached hereto are by reference made a part hereof.
ARTICLE 2
REVOLVING CREDIT LOANS
SECTION 1.4 Revolving Credit Loans. Upon the terms and subject to
the conditions of, and in reliance upon the representations and
warranties made under, this Agreement, each Lender agrees, severally,
but not jointly, to make Revolving Credit Loans to the Borrowers from
time to time from the Effective Date to but not including the
Termination Date, as requested or deemed requested by a Borrower in
accordance with the terms of Section 2.2, in amounts equal to such
Lender's Commitment Percentage of each such Revolving Credit Loan
requested or deemed requested hereunder up to an aggregate amount at
any one time outstanding equal to such Lender's Commitment Percentage
of the Borrowing Base; provided, however, that the aggregate principal
amount of all outstanding Revolving Credit Loans (after giving effect
to the Advances requested) shall not exceed the Borrowing Base. It is
expressly understood and agreed that the Lenders may and at present
intend to use the Borrowing Base as a maximum ceiling on Revolving
Credit Loans to the Borrower; provided, however, that it is agreed
that should the Revolving Credit Loans exceed the ceiling so
determined or any other limitation set forth in this Agreement, such
Revolving Credit Loans shall nevertheless constitute Secured
Obligations and, as such, shall be entitled to all benefits thereof
and security therefor. The principal amount of any Revolving Credit
Loan which is repaid pursuant to Section 2.3(c) may be reborrowed by
the Borrower, subject to the terms and conditions of this Agreement,
in accordance with the terms of this Section 2.1. The Agent's and
each Lender's books and records reflecting the date and the amount of
each Revolving Credit Loan and each repayment of principal thereof
shall constitute prima facie evidence of the accuracy of the
information contained therein, subject to the provisions of Section
4.7.
SECTION 1.5 Manner of Borrowing Revolving Credit Loans. Advances
under the Revolving Credit Facility shall be made as follows:
(1) Requests for Advances. A request for an Advance shall be made,
or shall be deemed to be made, in the following manner:
(1) a Financial Officer of Trism (or another authorized officer
designated by a Financial Officer and listed on Schedule 2.2 hereto)
shall give the Agent notice, in the form of Exhibit B hereto, for and
on behalf of the Borrowers not later than 1:00 p.m. (New York time) on
the Business Day of the proposed Advance, of its intention to borrow,
specifying the amount of the proposed Advance, the proposed Advance
date and interest rate, and which notice shall be given in accordance
with the provisions of Section 4.1 hereof; provided, however, that
upon written notice from the Agent, Borrowers shall thereafter include
in each such notice of a proposed Advance the amount of Borrowing Base
Availability after giving effect to such requested Advance;
(2) unless payment is otherwise made by the Borrowers, the becoming
due of any amount required to be paid under this Agreement or any of
the Notes as interest shall be deemed to be a request for an Advance
on the due date in the amount required to pay such interest, and such
request shall be irrevocable;
(3) unless payment is otherwise made by the Borrowers, the becoming
due of any other Secured Obligation shall be deemed to be a request
for an Advance on the due date in the amount then so due, and such
request shall be irrevocable;
(4) the receipt by the Agent of notification from the Issuing Bank to
the effect that a drawing has been made under a Letter of Credit and
that a Borrower has failed to reimburse the Issuing Bank therefor in
accordance with the terms of the Letter of Credit, the Reimbursement
Agreement and Article 3, shall be deemed to be a request for an
Advance on the date such notification is received in the amount of
such drawing which is so unreimbursed, and such request shall be
irrevocable; and
(5) unless payment is otherwise made by a Borrower, the receipt by
the Agent of a demand for reimbursement by a Clearing Bank pursuant to
the provisions of any Agency Account Agreement, shall be deemed to be
a request for an Advance on the date any such demand is received by
the Agent in the amount set forth therein, and such request shall be
irrevocable;
Unless the Agent has elected periodic settlements pursuant to
Section 4.7 hereof, the Agent shall promptly notify the Lenders of any
notice of Advance given or deemed given pursuant to this Section
2.2(a) by 2:00 p.m. (New York time) on the proposed Advance date with
respect to any Advance. The notice from the Agent to the Lenders
shall set forth the information contained in the Borrowers' notice of
Advance. Not later than 3:30 p.m. (New York time) on the proposed
Advance date, each Lender will make available to the Agent, for the
account of the Borrowers, at the Agent's Office in funds immediately
available to the Agent, an amount equal to such Lender's Commitment
Percentage of the Revolving Credit Loans to be made on such Advance
date.
(2) Disbursement of Loans. The Borrowers, jointly and severally,
hereby irrevocably authorize the Agent to disburse the proceeds of
each Advance requested, or deemed to be requested, pursuant to this
Section 2.2 as follows:
(1) the proceeds of each Advance requested under Section 2.2(a)(i)
shall be disbursed by the Agent in Dollars in immediately available
funds, (A) in the case of the initial Advance, in accordance with
notice from the Borrowers to the Agent referred to in Section
5.1(c)(xi), and (B) in the case of each subsequent Advance, by wire
transfer to a Controlled Disbursement Account or, in the absence of a
Controlled Disbursement Account, by wire transfer to such other
account as may be agreed upon by the Borrowers and the Agent from time
to time,
(2) the proceeds of each Advance deemed requested under Sections
2.2(a)(ii) or (iii) shall be disbursed by the Agent by way of direct
payment of the relevant interest or Secured Obligation, as the case
may be, and
(3) the proceeds of each Advance deemed requested under Section
2.2(a)(iv) or (v) shall be disbursed by the Agent directly to the
Issuing Bank or Clearing Bank, as the case may be, on behalf of the
Borrowers.
SECTION 1.6 Repayment of Revolving Credit Loans. The Revolving
Credit Loans will be repaid as follows:
(1) Whether or not any Default or Event of Default has occurred, the
outstanding principal amount of all the Revolving Credit Loans is due
and payable, and shall be repaid by the Borrowers in full, not later
than the Termination Date;
(2) If at any time the aggregate outstanding unpaid principal amount
of the Revolving Credit Loans exceeds the Borrowing Base in effect at
such time, the Borrowers shall repay the Revolving Credit Loans in an
amount sufficient to reduce the aggregate unpaid principal amount of
such Revolving Credit Loans by an amount equal to such excess,
together with accrued and unpaid interest on the amount so repaid to
the date of repayment; and
(3) The Borrowers hereby instruct the Agent to repay the Revolving
Credit Loans outstanding on any day in an amount equal to the amount
received by the Agent on such day pursuant to Section 8.1(b).
(4) Mandatory Prepayment. In the event (i) (A) any Borrower or
Guarantor effectuates a sale, transfer or other disposition of any
Collateral consisting of equipment (including, without limitation, any
of the Trailers), or any sale, transfer or other disposition of any
other Collateral outside the ordinary course of business of the
Borrowers or the Guarantors, or (B) at any time, the outstanding
Revolving Credit Loans made pursuant to Borrowing Base B exceed the
aggregate limitations set forth thereunder, and (ii) the Agent makes
demand therefor, except as provided in Section 8.14 hereof, the
Borrowers hereby agree to make a mandatory prepayment to the Agent, on
behalf of the Lenders, in an amount equal to (x) in the case of a
sale, transfer or other disposition referred to in clause (i)(A)
hereof, the Net Proceeds of such sale, transfer or disposition, or (y)
in the case of outstanding excess Revolving Credit Loans referred to
in clause (i)(B) hereof, the amount by which such outstanding
Revolving Credit Loans exceed the limitations set forth in the
definition Borrowing Base B; provided, however, that with respect to
clause (i)(A) above, nothing in this Section 2.3(d) shall be deemed or
construed as granting permission or a waiver by the Lenders to the
Borrowers to enter into any such sale, transfer or disposition.
SECTION 1.7 Revolving Credit Note. Each Lender's Revolving Credit
Loans and the obligation of the Borrowers to repay such Revolving
Credit Loans shall also be evidenced by a Revolving Credit Note
payable to the order of such Lender. Each Revolving Credit Note shall
be dated the Effective Date and be duly and validly executed and
delivered by the Borrowers.
SECTION 1.8 Voluntary Prepayment and Termination. The Borrowers
may at any time elect to make a voluntary prepayment and to terminate
this Agreement and the Revolving Credit Facility provided hereunder by
the payment and satisfaction in full of all outstanding Secured
Obligations, costs and expenses, the applicable Early Termination Fee,
and by causing the Lenders to be released, in form and substance
acceptable to the Required Lenders in their sole discretion, from any
and all obligations under outstanding Letters of Credit provided
pursuant to this Agreement.
ARTICLE 3
LETTER OF CREDIT FACILITY
SECTION 1.9 Issuance. Subject to the terms and conditions of the
Agreement, the Agent and the Lenders agree to incur, from time to time
prior to the Termination Date, upon the request of Borrowers and for
Borrowers' account, Letter of Credit Obligations by causing Letters of
Credit to be issued (by a bank or other legally authorized Person
selected by or acceptable to the Agent in its sole discretion (each,
an "Issuing Bank")) for Borrowers' account and guaranteed by the
Agent; provided, however, that if the Issuing Bank is a Lender, then
such Letters of Credit shall not be guaranteed by the Agent but rather
each Lender shall, subject to the terms and conditions hereinafter set
forth, purchase (or be deemed to have purchased) risk participations
in all such Letters of Credit issued with the written consent of the
Agent, as more fully described in Section 3.2(b)(ii) below. The
aggregate amount of all such Letter of Credit Obligations shall not at
any time exceed the lesser of (a) Seventeen Million Dollars
($17,000,000), or (b) the Borrowing Base less the aggregate
outstanding principal balance of the Revolving Credit Loans. No such
Letter of Credit shall have an expiry date which is more than one (1)
year following the date of issuance thereof, and neither the Agent nor
the Lenders shall be under any obligation to incur Letter of Credit
Obligations in respect of, or purchase risk participations in, any
Letter of Credit having an expiry date which is later than the
Termination Date.
SECTION 1.10 Advances Automatic; Participations. (a) In the event
that the Agent or any Lender shall make any payment on or pursuant to
any Letter of Credit Obligation, such payment shall then be deemed
automatically to constitute a Revolving Credit Loan under Section 2.1
of the Agreement regardless of whether a Default or Event of Default
shall have occurred and be continuing and notwithstanding Borrowers'
failure to satisfy the conditions precedent set forth in Article 5,
and each Lender shall be obligated to pay an amount calculated by
applying such Lender's Commitment Percentage to the aggregate amount
of such payment. The failure of any Lender to make available to the
Agent for the Agent's own account an amount equivalent to a Lender's
Commitment Percentage as to any such Revolving Credit Loan or payment
by the Agent under or in respect of a Letter of Credit shall not
relieve any other Lender of its obligation hereunder to make available
to the Agent an amount equivalent to such other Lender's Commitment
Percentage with respect thereto, but no breach by a Lender shall
cause an increase in any other Lender's Commitment Percentage.
(b) If it shall be illegal or unlawful for Borrowers to
incur Revolving Credit Loans in the circumstances contemplated by
paragraph (a) above because of an Event of Default described in
Section 12.1(g) or (h) or otherwise or if it shall be illegal or
unlawful for any Lender to be deemed to have assumed a ratable share
of the Reimbursement Obligations owed to an Issuing Bank, or if the
Issuing Bank is a Lender, then (i) immediately and without further
action whatsoever, each Lender shall be deemed to have irrevocably and
unconditionally purchased from the Agent (or such Issuing Bank, as the
case may be) an undivided interest and participation in an amount
equivalent to such Lender's Commitment Percentage (based on the
Commitments) of the Letter of Credit Obligations in respect of all
Letters of Credit then outstanding and (ii) thereafter, immediately
upon issuance of any Letter of Credit, each Lender shall be deemed to
have irrevocably and unconditionally purchased from the Agent (or such
Issuing Bank, as the case may be) an undivided interest and
participation in an amount equivalent to such Lender's Commitment
Percentage (based on the Commitments) of the Letter of Credit
Obligations with respect to such Letter of Credit on the date of such
issuance. Each Lender shall fund its participation in all payments or
disbursements made under the Letters of Credit in the same manner as
provided in the Agreement with respect to Revolving Credit Loans.
SECTION 1.11 Cash Collateral. (a) If Borrowers are required to
provide cash collateral for any Letter of Credit Obligations pursuant
to this Agreement prior to the Termination Date, Borrowers will,
jointly and severally, pay to the Agent for the benefit of the Lenders
cash or Cash Equivalents in an amount equal to one hundred five
percent (105%) of the maximum amount then available to be drawn under
each applicable Letter of Credit outstanding. Such funds or Cash
Equivalents shall be held by the Agent in a cash collateral account
(the "Cash Collateral Account") maintained at a bank or financial
institution acceptable to the Agent. The Cash Collateral Account
shall be in the name of Borrowers and shall be pledged to, and subject
to the control of, the Agent, for the benefit of the Lenders, in a
manner satisfactory to the Agent. Borrowers hereby, jointly and
severally, pledge and grant to the Agent, on behalf of the Lenders, a
security interest in all such funds and Cash Equivalents held in the
Cash Collateral Account from time to time and all proceeds thereof, as
security for the payment of all amounts due in respect of the Letter
of Credit Obligations and other Secured Obligations, whether or not
then due. This Agreement shall constitute a security agreement under
Applicable Law.
(b) If any Letter of Credit Obligations, whether or not
then due and payable, shall for any reason be outstanding on the
Termination Date, Borrowers shall either (i) provide cash collateral
therefor in the manner described above, or (ii) cause all such Letters
of Credit and guaranties thereof to be canceled and returned, or (iii)
deliver a stand-by letter (or letters) of credit in guarantee of such
Letter of Credit Obligations, which stand-by letter (or letters) of
credit shall be of like tenor and duration as, and be in an amount
equal to one hundred three percent (103%) of the aggregate then
available to be drawn under, the Letters of Credit to which such
outstanding Letter of Credit Obligations relate and shall be issued by
a Person, and shall be subject to such terms and conditions, as are be
satisfactory to the Agent in its sole discretion (the "Replacement
Letters of Credit").
(c) From time to time after funds are deposited in the Cash
Collateral Account by Borrowers, whether before or after the
Termination Date, the Agent may apply such funds or Cash Equivalents
then held in the Cash Collateral Account to the payment of any
amounts, in such order as the Agent may elect, as shall be or shall
become due and payable by Borrowers to Lenders with respect to such
Letter of Credit Obligations of Borrowers and, upon the satisfaction
in full of all Letter of Credit Obligations of Borrowers, to any other
Secured Obligations then due and payable.
(d) No Borrower nor any Person claiming on behalf of or
through a Borrower shall have any right to withdraw any of the funds
or Cash Equivalents held in the Cash Collateral Account, except that
upon the termination or satisfaction in full of all Letter of Credit
Obligations and the payment of all amounts payable by Borrowers to
Lenders in respect thereof, any funds remaining in the Cash Collateral
Account shall be held and applied to other Secured Obligations when
due and owing and upon payment in full of all Secured Obligations, any
remaining amount shall be paid to Borrowers or as otherwise required
by law.
SECTION 1.12 Fees and Expenses. Borrowers, jointly and severally,
agree to pay to the Agent for the benefit of the Lenders, as
compensation to such Lenders for Letter of Credit Obligations incurred
hereunder, (a) all costs and expenses incurred by the Agent or any
Lender on account of such Letter of Credit Obligations, and (b) for
each month during which any Letter of Credit Obligation shall remain
outstanding, an amount equal to the fee set forth in Section 4.2(e)
hereof. Such fee shall be paid to the Agent for the benefit of the
Lenders in arrears, on the first day of each month. In addition,
Borrowers shall pay to any Issuing Bank, on demand, such fees
(including all per annum fees), charges and expenses of such Issuing
Bank in respect of the issuance, negotiation, acceptance, amendment,
transfer and payment of such Letter of Credit or as are otherwise
payable pursuant to the application and related documentation under
which such Letter of Credit is issued.
SECTION 1.13 Request for Incurrence of Letter of Credit Obligations.
Borrowers shall give the Agent at least three (3) Business Days prior
written notice requesting a guarantee of any Letter of Credit,
specifying the date such Letter of Credit Obligation is to be
incurred, identifying the beneficiary to which such Letter of Credit
Obligation relates and describing the nature of the transactions
proposed to be supported thereby. The notice shall be accompanied by
the form of the Letter of Credit (which shall be acceptable to the
Issuing Bank) to be guaranteed. Notwithstanding anything contained
herein to the contrary, Letter of Credit applications by a Borrower
and approvals by the Agent may be made and transmitted pursuant to
electronic codes and security measures mutually agreed upon and
established by and among a Borrower, the Agent and the Issuing Bank.
SECTION 1.14 Obligation Absolute. (a) The obligation of Borrowers
to reimburse the Agent and the Lenders for payments made with respect
to any Letter of Credit Obligation shall be absolute, unconditional
and irrevocable, without necessity of presentment, demand, protest or
other formalities, and the obligations of each Lender to make payments
to the Agent with respect to Letters of Credit shall be unconditional
and irrevocable. Such obligations of Borrowers and the Lenders shall
be paid strictly in accordance with the terms hereof under all
circumstances including the following circumstances:
(1) any lack of validity or enforceability of any Letter of Credit or
this Agreement or the other Loan Documents or any other agreement;
(2) the existence of any claim, set-off, defense or other right which
a Borrower or any of its Affiliates or any Lender may at any time have
against a beneficiary or any transferee of any Letter of Credit (or
any Persons or entities for whom any such transferee may be acting),
the Agent, any Lender, or any other Person, whether in connection with
the Agreement, the Letter of Credit, the transactions contemplated
herein or therein or any unrelated transaction (including any
underlying transaction between a Borrower or any of its Affiliates and
the beneficiary for which the Letter of Credit was procured);
(3) any draft, demand, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(4) payment by the Agent or any Issuing Bank under any Letter of
Credit or guaranty thereof against presentation of a demand, draft or
certificate or other document which does not comply with the terms of
such Letter of Credit or such guaranty;
(5) any other circumstance or happening whatsoever, which is similar
to any of the foregoing; or
(6) the fact that a Default or an Event of Default shall have
occurred and be continuing.
SECTION 1.15 Indemnification; Nature of Lenders' Duties. (a) In
addition to amounts payable by Borrowers to the Agent and the Lenders
as elsewhere provided in this Agreement, Borrowers, jointly and
severally, hereby agree to pay and to protect, indemnify, and save
harmless the Agent and each Lender from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees and, after and during
the continuance of an Event of Default, reasonable allocated costs of
internal counsel) which the Agent or any Lender may incur or be
subject to as a consequence, direct or indirect, of (i) the issuance
of any Letter of Credit or guaranty thereof, or (ii) the failure of
the Agent or any Lender seeking indemnification or of any Issuing Bank
to honor a demand for payment under any Letter of Credit or guaranty
thereof as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority, in each case other than to the extent solely
as a result of the gross negligence or willful misconduct of the Agent
or such Lender (as finally determined by a court of competent
jurisdiction).
(b) As between the Agent and any Lender and Borrowers,
Borrowers hereby, jointly and severally, assume all risks of the acts
and omissions of, or misuse of any Letter of Credit by beneficiaries
of any Letter of Credit. In furtherance and not in limitation of the
foregoing, to the fullest extent permitted by law neither the Agent
nor any Lender shall be responsible: (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
issued by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to
be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid
or ineffective for any reason; (iii) for failure of the beneficiary of
any Letter of Credit to comply fully with conditions required in order
to demand payment under such Letter of Credit; provided that, in the
case of any payment by the Agent under any Letter of Credit or
guaranty thereof, the Agent shall be liable to the extent such payment
was made solely as a result of its gross negligence or willful
misconduct (as finally determined by a court of competent
jurisdiction) in determining that the demand for payment under such
Letter of Credit or guaranty thereof complies on its face with any
applicable requirements for a demand for payment under such Letter of
Credit or guaranty thereof; (iv) for errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (v)
for errors in interpretation of technical terms; (vi) for any loss or
delay in the transmission or otherwise of any document required in
order to make a payment under any Letter of Credit or guaranty thereof
or of the proceeds thereof; (vii) for the application of the proceeds
of any drawing under any Letter of Credit or guaranty thereof; and
(viii) for any consequences arising from causes beyond the control of
the Agent or any Lender. None of the above shall affect, impair, or
prevent the vesting of any of the Agent's or any Lender's rights or
powers hereunder or under the other Loan Documents.
(c) Nothing contained herein shall be deemed to limit or to
expand any waivers, covenants or indemnities made by a Borrower in
favor of any Issuing Bank in any letter of credit application,
Reimbursement Agreement or similar document, instrument or agreement
between any Borrower and such Issuing Bank.
ARTICLE 4
GENERAL LOAN PROVISIONS
SECTION 1.16 Interest, Etc.
(1) General Interest Provisions.
(i) Borrowers shall pay interest to the Agent on the
aggregate outstanding Revolving Credit Loans in each case from time to
time outstanding, for the ratable benefit of Lenders in accordance
with the various Loans being made by each Lender, in arrears on each
applicable Interest Payment Date, at a floating rate equal to either
(A) the Chase Manhattan Bank Rate plus one quarter of one percent
(0.25%) (the "Prime Option"), or (B) for interest periods of one-, two-
, three- or six whole months (each, a "LIBOR Period"), the reserve
adjusted LIBOR for the specified period plus two and one quarter
percent (2.25%) (the "LIBOR Option"). The LIBOR Option may be
exercised by the Borrowers for all, or any portion, of the outstanding
amounts under the Revolving Credit Facility at any time upon three (3)
Business Days' prior written notice pursuant to Section 2.2 hereof.
Upon such exercise, the LIBOR Option shall remain in effect until the
expiration of the LIBOR Option Period selected, at which time, unless
an additional LIBOR Option shall have been timely exercised, the rate
hereunder upon expiration shall be the Prime Option. The Borrowers
shall not be entitled to select a LIBOR Option under the Revolving
Credit Facility if a Default or Event of Default exists hereunder. In
the event of any change in the Chase Manhattan Bank Rate, the rate of
the Prime Option shall change as of the first (1st) day of the first
(1st) month following such change.
(ii) The LIBOR elections must be for $500,000 or whole
multiples thereof and in no event may the Borrowers have in the
aggregate more than four (4) LIBOR Loans outstanding at one time. If
a LIBOR election is not timely made or cannot be made, or if LIBOR
cannot be determined, then the Agent shall use the Prime Option to
compute interest. In the event that the Borrowers request a LIBOR
Loan, a Borrower shall pay to the Agent a $500 LIBOR processing fee,
due and payable upon the effective date of each such LIBOR Loan. In
addition, the Borrowers shall pay to the Agent for the benefit of the
Lenders, upon the request of the Agent such amount or amounts as shall
compensate the Agent and/or the Lenders for any actual loss, costs or
expenses incurred by the Agent and/or the Lenders (as reasonably
determined by the Agent and the Lenders) as a result of: (A) any
payment or prepayment on a date other than the last day of a LIBOR
Period for such LIBOR Loan, or (B) any failure of the Borrowers to
borrow a LIBOR Loan on the date for such Advance specified in the
relevant notice; such compensation to include, without limitation, an
amount equal to any actual loss or expense suffered by the Agent
and/or the Lenders during the period from the date of receipt of such
payment or prepayment or the date of such failure to borrow to the
last day of such LIBOR Period if the rate of interest obtained by the
Agent and/or the Lenders upon the reemployment of an amount of funds
equal to the amount of such payment, prepayment or failure to borrow
is less than the rate of interest applicable to such LIBOR Loan for
such LIBOR Period. The determination by the Agent and/or the Lenders
of the amount of any such loss or expense, when set forth in a written
notice to the Borrowers, containing the Agent's and/or the Lenders'
calculations thereof in reasonable detail, shall be conclusive on the
Borrowers, in the absence of manifest error. Calculation of all
amounts payable to the Agent and/or the Lenders under this paragraph
with regard to LIBOR Loans shall be made as though the Agent and/or
the Lenders had actually funded the LIBOR Loans through the purchase
of deposits in the relevant market and currency, as the case may be,
bearing interest at the rate applicable to such LIBOR Loans in an
amount equal to the amount of the LIBOR Loans and having a maturity
comparable to the relevant interest period; provided, however, that
the Agent and the Lenders may fund each of the LIBOR Loans in any
manner the Agent and the Lenders see fit and the foregoing assumption
shall be used only for calculation of amounts payable under this
paragraph. In addition, notwithstanding anything to the contrary
contained herein, the Agent and the Lenders shall apply all proceeds
of Collateral, including the Receivables, and all other amounts
received by it from or on behalf of the Borrowers (x) initially to the
Prime Option Revolving Credit Loans and (y) subsequently to LIBOR
Loans; provided, however, (1) upon the occurrence of an Event of
Default or (2) in the event the aggregate amount of outstanding LIBOR
Loans exceeds Borrowing Base Availability or the applicable maximum
levels set forth therefor, the Agent and the Lenders may apply all
such amounts received by them to the payment of Secured Obligations in
such manner and in such order as the Agent and the Lenders may elect
in their respective reasonable credit judgment. In the event that any
such amounts are applied to Revolving Credit Loans which are LIBOR
Loans, such application shall be treated as a prepayment of such
Revolving Credit Loans and the Agent and the Lenders shall be entitled
to indemnification hereunder.
(2) If any payment on any Loan becomes due and payable on a day other
than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during
any such extension.
(3) From and after the occurrence of an Event of Default, the unpaid
principal amount of each Secured Obligation shall bear interest while
such Event of Default is continuing at a rate per annum equal to the
Default Margin plus the Prime Option, payable on demand. The interest
rate provided for in this Section 4.1(c) shall to the extent permitted
by Applicable Law also apply to and accrue on the amount of any
judgment entered with respect to any Secured Obligation and shall
continue to accrue at such rate during any proceeding described in
Section 12.1(g) or (h).
(4) The interest rates provided for in this Section 4.1 shall be
computed on the basis of a year of three hundred sixty (360) days and
the actual number of days elapsed.
(5) It is not intended by the Lenders, and nothing contained in this
Agreement or any Note shall be deemed, to establish or require the
payment of a rate of interest in excess of the maximum rate permitted
by Applicable Law (the "Maximum Rate"). If, in any month, the
Effective Interest Rate, absent such limitation, would have exceeded
the Maximum Rate, then the Effective Interest Rate for that month
shall be the Maximum Rate, and if, in future months, the Effective
Interest Rate would otherwise be less than the Maximum Rate, then the
Effective Interest Rate shall remain at the Maximum Rate until such
time as the amount of interest paid hereunder equals the amount of
interest which would have been paid if the same had not been limited
by the Maximum Rate. In this connection, in the event that, upon
payment in full of the Secured Obligations, the total amount of
interest paid or accrued under the terms of this Agreement is less
than the total amount of interest which would have been paid or
accrued if the Effective Interest Rate had at all times been in
effect, then the Borrowers shall, to the extent permitted by
Applicable Law, pay to the Lenders an amount equal to the difference
between (i) the lesser of (A) the amount of interest which would have
been charged if the Maximum Rate had, at all times, been in effect and
(B) the amount of interest which would have accrued had the Effective
Interest Rate, at all times, been in effect, and (ii) the amount of
interest actually paid or accrued under this Agreement. In the event
the Lenders receive, collect or apply as interest any sum in excess of
the Maximum Rate, such excess amount shall be applied to the reduction
of the principal balance of the applicable Secured Obligation, and, if
no such principal is then outstanding, such excess or part thereof
remaining shall be paid to the Borrowers.
SECTION 1.17 Fees.
(1) Closing Fee. On the Effective Date, the Borrowers shall pay to
the Agent for the ratable benefit of the Lenders, a closing fee in an
amount equal to fifty one hundredths percent (.50%) of the Revolving
Credit Facility Cap in consideration of making the Loans hereunder,
which fee shall be fully earned when paid and non-refundable as of the
Effective Date (the "Closing Fee"). On the Effective Date, the
Commitment Fee and any remaining portion of the Expense Deposit shall
be credited by the Agent and the Lenders against the Closing Fee.
(2) Administration Fee. As additional consideration for the Agent's
ongoing costs and expenses of administration of this Agreement, the
Borrowers agree, jointly and severally, to pay to the Agent on the
date which is one (1) year from the Effective Date and annually on the
same date thereafter during the term hereof or any extension thereof,
an administration fee in the amount of $25,000 per year (the
"Administration Fee") for the Agent's own account, which
Administration Fee shall be deemed fully earned and non-refundable
when paid.
(3) Unused Facility Fee. As additional compensation for the costs
and risks in making the Loans available to the Borrowers, the
Borrowers agree, jointly and severally, to pay to the Agent, for the
ratable benefit of the Lenders, in arrears, on the first (1st)
Business Day of each month with respect to the immediately prior
month, prior to the Termination Date and on the Termination Date, a
fee for the available but unused Revolving Credit Facility in an
amount equal to one-quarter of one percent (0.25%) per annum of the
difference between (i) the Revolving Credit Facility Cap, and (ii) the
sum of (A) the average daily outstanding balances of the Revolving
Credit Loans plus (B) the face amount of all the Letter of Credit
Obligations during the period for which the Unused Facility Fee is due
(the "Unused Facility Fee").
(4) Letter of Credit Obligations Fee. The Borrowers agree, jointly
and severally, to pay to the Agent for the ratable benefit of the
Lenders as compensation to the Lenders for issuing guaranties in
support of Letters of Credit, in arrears, on the first (1st) Business
Day of each month with respect to the immediately preceding month
until all Letter of Credit Obligations have been paid or otherwise
satisfied, a fee in an amount equal to (i) the average daily aggregate
Letter of Credit Amount for all Letters of Credit outstanding on each
day during the previous month, multiplied by (ii) a monthly interest
rate equivalent to one and one-half percent (1.5%) per annum.
(5) Early Termination Fee. If for any reason this Agreement is
terminated or the Loans hereunder are repaid in full (including,
without limitation, by reason of any Default or Event of Default,
voluntary prepayment in full and/or termination of the Revolving
Credit Loans by the Borrowers or any termination at the option of the
Agent following an Event of Default but excluding Revolving Credit
Loan payments in the ordinary course of business), on an Early
Termination Date, the Borrowers agree, jointly and severally, to pay
to the Agent for the ratable benefit of the Lenders, upon the
effective date of such termination or prepayment, the Early
Termination Fee.
SECTION 1.18 Manner of Payment.
(1) Except as otherwise expressly provided in Section 8.1(b), each
payment (including prepayments) by the Borrowers on account of the
principal of or interest on the Loans or of any other amounts payable
to the Lenders under this Agreement or any Note shall be made not
later than 1:00 p.m. (New York time) on the date specified for payment
under this Agreement to the Agent, for the account of the Lenders, at
the Agent's Office, in Dollars, in immediately available funds and
shall be made without any setoff, counterclaim or deduction
whatsoever. Any payment received after 1:00 p.m. (New York time) on
such day shall be deemed to have been made on the next succeeding
Business Day.
(2) The Borrowers hereby, jointly and severally, irrevocably
authorize each Lender and each Affiliate of such Lender and each
participant herein to charge any account of the Borrowers maintained
with such Lender or with such Affiliate or participant with such
amounts as may be necessary from time to time to pay any Secured
Obligations (whether or not owed to such Lender, Affiliate or
participant) which are not paid when due, and the proceeds thereof
shall be applied as set forth in Section 12.3.
SECTION 1.19 Loan Accounts: Statements of Account.
(1) Each Lender shall open and maintain on its books a loan account
in the Borrowers' names (each, a "Loan Account" and collectively, the
"Loan Accounts"). Each such Loan Account shall show as debits thereto
each Loan made under this Agreement by such Lender to the Borrowers
and as credits thereto all payments received by such Lender and
applied to principal of such Loan, so that the balance of the loan
account at all times reflects the principal amount due such Lender
from the Borrowers.
(2) The Agent shall maintain on its books a control account for the
Borrowers in which shall be recorded (i) the amount of each
disbursement made hereunder, (ii) the amount of any principal or
interest due or to become due from the Borrowers hereunder, and (iii)
the amount of any sum received by the Agent hereunder from the
Borrowers and each Lender's ratable share therein.
(3) The entries made in the accounts pursuant to subsections (a) and
(b) of this Section 4.4 shall be prima facie evidence, in the absence
of manifest error, of the existence and amounts of the obligations of
the Borrowers therein recorded and in case of discrepancy between such
accounts, in the absence of manifest error, the accounts maintained
pursuant to subsection (b) of this Section 4.4 shall be controlling.
(4) The Agent will account to the Borrowers monthly with a statement
of Loans, charges and payments made to and by the Borrowers pursuant
to this Agreement, and such accounts rendered by the Agent shall be
deemed final, binding and conclusive, save for manifest error, unless
the Agent is notified by the Borrowers in writing to the contrary
within sixty (60) days of the date the account to the Borrowers was so
rendered. Such notice by the Borrowers shall be deemed an objection
to only those items specifically objected to therein. Failure of the
Agent to render such account shall in no way affect the rights of the
Agent or of the Lenders hereunder.
SECTION 1.20 Termination of Agreement.
(1) On the Termination Date, the Borrowers shall pay to the Agent,
for the account of the Lenders, in same day funds, an amount equal to
all Secured Obligations then outstanding, including, without
limitation, all (i) accrued interest thereon, (ii) all accrued fees
provided for hereunder, and (iii) any amounts payable to the Lenders
pursuant to Sections 4.1, 4.8, 15.2, 15.3 and 15.12, and, in addition
thereto, shall deliver to the Agent, in respect of each outstanding
Letter of Credit, either the Replacement Letter of Credit or the Cash
Collateral as provided in Section 3.3. Upon ninety (90) days prior
written notice to the Agent, the Borrowers may terminate this
Agreement on an Early Termination Date, upon payment in full of all
amounts specified in this Section 4.5 and the Early Termination Fee as
specified in Section 4.2 hereof. Following a notice of termination as
provided for in this Section 4.5 and upon payment in full of the
amounts specified in this Section 4.5, this Agreement shall be
terminated and the Agent, the Lenders and the Borrowers shall have no
further obligations to any other party hereto except for the
obligations to the Agent and the Lenders pursuant to Section 15.12
hereof.
SECTION 1.21 Making of Loans.
(1) Nature of Obligations of Lenders to Make Loans. The obligations
of the Lenders under this Agreement to make the Loans are several and
are not joint or joint and several.
(2) Assumption by the Agent. Subject to the provisions of Section 4.8
hereof and notwithstanding the occurrence or continuance of a Default
or Event of Default or other failure of any condition to the making of
Revolving Credit Loans hereunder subsequent to the Revolving Credit
Loans to be made on the Effective Date, unless the Agent shall have
received notice from a Lender in accordance with the provisions of
subsection (c) of this Section 4.6 prior to a proposed Advance date
that such Lender will not make available to the Agent such Lender's
ratable portion of the amount to be borrowed on such date, the Agent
may assume that such Lender will make such portion available to the
Agent in accordance with Section 2.2(a) hereof, and the Agent may, in
reliance upon such assumption, make available to the Borrowers on such
date a corresponding amount. If and to the extent such Lender shall
not make such ratable portion available to the Agent, such Lender and
the Borrowers severally agree to repay to the Agent forthwith on
demand (provided the Borrowers shall be entitled to a five-day grace
period) such corresponding amount (the "Make-Whole Amount"), together
with interest thereon for each day from the date such amount is made
available to the Borrowers until the date such amount is repaid to the
Agent at the Effective Interest Rate or, if lower, subject to Section
4.1(c) hereof, the Maximum Rate; provided, however, if on the Interest
Payment Date next following the date on which any Lender pays interest
to the Agent at the Effective Rate or the Maximum Rate on a Make-Whole
Amount as aforesaid, the Borrowers default in making the interest
payment due on such Interest Payment Date, then the Agent shall
reimburse such Lender for the excess, if any, of the amount of
interest so paid by such Lender on the Make-Whole Amount over the
amount of interest that such Lender would have paid had the Lender
been required to pay interest on the Make-Whole Amount at the Prime
Option. If such Lender shall repay to the Agent such corresponding
amount, the amount so repaid shall constitute such Lender's Commitment
Percentage of the Loan made on such Advance date for purposes of this
Agreement. The failure of any Lender to make its Commitment
Percentage of any Loan available shall not (without regard to whether
the Borrowers shall have returned the amount thereof to the Agent in
accordance with this Section 4.6) relieve it or any other Lender of
its obligation, if any, hereunder to make its Commitment Percentage of
such Loan available on such Advance date, but no Lender shall be
responsible for the failure of any other Lender to make its Commitment
Percentage of such Loan available on the Advance date.
(3) Delegation of Authority to the Agent.
(1) Without limiting the generality of Section 14.1 hereof, each
Lender expressly authorizes the Agent to determine on behalf of such
Lender (A) any reduction or increase of advance rates applicable to
the Borrowing Base, so long as such advance rates do not at any time
exceed the rates set forth in the applicable Borrowing Base
definition, (B) the creation or elimination of any reserves (other
than the Letter of Credit Reserve) against the Revolving Credit
Facility and the Borrowing Base, and (C) whether or not Receivables
shall be deemed to constitute Eligible Receivables. Such
authorization may be withdrawn by the Required Lenders by giving the
Agent written notice of such withdrawal signed by the Required
Lenders; provided, however, that unless otherwise agreed by the Agent
such withdrawal of authorization shall not become effective until the
thirtieth (30th) Business Day after receipt of such notice by the
Agent. Thereafter, the Required Lenders shall jointly instruct the
Agent in writing regarding such matters with such frequency as the
Required Lenders shall jointly determine.
(2) Unless and until the Agent shall have received written notice
from the Required Lenders that because of a Default or Event of
Default the Required Lenders do not intend to make available to the
Agent such Lenders' ratable share of Loans made after the effective
date of such notice, the Agent shall be entitled to continue to make
the assumptions described in subsection (b) of this Section 4.6. After
receipt of the notice described in the preceding sentence, which shall
become effective on the third (3rd) Business Day after receipt of such
notice by the Agent unless otherwise agreed by the Agent, the Agent
shall be entitled to make the assumptions described in subsection (b)
of this Section 4.6 as to any Loans as to which it has not received a
written notice to the contrary prior to 11:00 a.m. (New York time) on
the Business Day next preceding the day on which the Loan is to be
made. The Agent shall not be required to make any Loan as to which it
shall have received notice by a Lender of such Lender's intention not
to make its ratable portion of such Loan available to the Agent. Any
withdrawal of authorization under this Section 4.6(c) shall not affect
the validity of any Loans made prior to the effectiveness thereof.
SECTION 1.22 Settlement Among Lenders.
(1) Revolving Credit Loans. It is agreed that each Lender's Net
Outstandings are intended by the Lenders to be equal at all times to
such Lender's Commitment Percentage of the aggregate principal amount
of all Revolving Credit Loans outstanding. Notwithstanding such
agreement, the several and not joint obligation of each Lender to fund
Revolving Credit Loans made in accordance with the terms of this
Agreement ratably in accordance with such Lender's Commitment
Percentage and each Lender's right to receive its ratable share of
principal payments on Revolving Credit Loans in accordance with its
Commitment Percentage, the Lenders agree that in order to facilitate
the administration of this Agreement and the Loan Documents that
settlement among them may take place on a periodic basis in accordance
with the provisions of this Section 4.7.
(2) Settlement Procedures as to Revolving Credit Loans. To the extent
and in the manner hereinafter provided in this Section 4.7, settlement
among the Lenders as to Revolving Credit Loans may occur periodically
on Settlement Dates determined from time to time by the Agent, which
may occur before or after the occurrence or during the continuance of
a Default or Event of Default and whether or not all of the conditions
set forth in Section 5.2 hereof have been met. On each Settlement
Date payments shall be made by or to the Settlement Lender and the
other Lenders in the manner provided in this Section 4.7 in accordance
with the Settlement Report delivered by the Agent pursuant to the
provisions of this Section 4.7 in respect of such Settlement Date so
that as of each Settlement Date, and after giving effect to the
transactions to take place on such Settlement Date, each Lender's Net
Outstandings shall equal such Lender's Commitment Percentage of the
Revolving Credit Loans outstanding.
(1) Selection of Settlement Dates. If the Agent elects, in its
discretion, but subject to the consent of the Settlement Lender, to
settle accounts among the Lenders with respect to principal amounts of
Revolving Credit Loans less frequently than each Business Day, then
the Agent shall designate periodic Settlement Dates which may occur on
any Business Day after the Effective Date; provided, however, that the
Agent shall designate as a Settlement Date any Business Day which is
an Interest Payment Date; and provided further, that a Settlement Date
shall occur at least once during each seven-day period. The Agent
shall designate a Settlement Date by delivering to each Lender a
Settlement Report not later than 12:00 noon (New York time) on the
proposed Settlement Date, which Settlement Report will be in the form
of Exhibit E hereto and shall be with respect to the period beginning
on the next preceding Settlement Date and ending on such designated
Settlement Date.
(2) Non-Ratable Loans and Payments. Between Settlement Dates, the
Agent shall request and the Settlement Lender may (but shall not be
obligated to) advance to the Borrowers out of the Settlement Lender's
own funds, the entire principal amount of any Revolving Credit Loan
requested or deemed requested pursuant to Section 2.2(a) hereof (any
such Revolving Credit Loan being referred to as a "Non-Ratable Loan").
The making of each Non-Ratable Loan by the Settlement Lender shall be
deemed to be a purchase by the Settlement Lender of a one hundred
percent (100%) participation in each other Lender's Commitment
Percentage of the amount of such Non-Ratable Loan. All payments of
principal, interest and any other amount with respect to such
Non-Ratable Loan shall be payable to and received by the Agent for the
account of the Settlement Lender. Upon demand by the Settlement
Lender, with notice thereof to the Agent, each other Lender shall pay
to the Settlement Lender, as the repurchase of such participation, an
amount equal to one hundred percent (100%) of such Lender's Commitment
Percentage of the principal amount of such Non-Ratable Loan. Any
payments received by the Agent between Settlement Dates which in
accordance with the terms of this Agreement are to be applied to the
reduction of the outstanding principal balance of Revolving Credit
Loans, shall be paid over to and retained by the Settlement Lender for
such application, and such payment to and retention by the Settlement
Lender shall be deemed, to the extent of each other Lender's
Commitment Percentage of such payment, to be a purchase by each such
other Lender of a participation in the Revolving Credit Loans
(including the repurchase of participations in Non-Ratable Loans) held
by the Settlement Lender. Upon demand by another Lender, with notice
thereof to the Agent, the Settlement Lender shall pay to the Agent,
for the account of such other Lender, as a repurchase of such
participation, an amount equal to such other Lender's Commitment
Percentage of any such amounts (after application thereof to the
repurchase of any participations of the Settlement Lender in such
other Lender's Commitment Percentage of any Non-Ratable Loans) paid
only to the Settlement Lender by the Agent.
(3) Net Decrease in Outstandings. If on any Settlement Date the
increase, if any, in the dollar amount of any Lender's Net
Outstandings which is required to comply with the first sentence of
subsection (b) of this Section 4.7 is less than such Lender's
Commitment Percentage of amounts received by the Agent but paid only
to the Settlement Lender since the next preceding Settlement Date,
such Lender and the Agent, in their respective records, shall apply
such Lender's Commitment Percentage of such amounts to the increase in
such Lender's Net Outstandings, and the Settlement Lender shall pay to
the Agent, for the account of such Lender, the excess allocable to
such Lender.
(4) Net Increase in Outstandings. If on any Settlement Date the
increase, if any, in the dollar amount of any Lender's Net
Outstandings which is required to comply with the first sentence of
subsection (b) of this Section 4.7 exceeds such Lender's Commitment
Percentage of amounts received by the Agent but paid only to the
Settlement Lender since the next preceding Settlement Date, such
Lender and the Agent, in their respective records, shall apply such
Lender's Commitment Percentage of such amounts to the increase in such
Lender's Net Outstandings, and such Lender shall pay to the Agent, for
the account of the Settlement Lender, any excess.
(5) No Change in Outstandings. If a Settlement Report indicates that
no Revolving Credit Loans have been made during the period since the
next preceding Settlement Date, then such Lender's Commitment
Percentage of any amounts received by the Agent but paid only to the
Settlement Lender shall be paid by the Settlement Lender to the Agent,
for the account of such Lender. If a Settlement Report indicates that
the increase in the dollar amount of a Lender's Net Outstandings which
is required to comply with the first sentence of subsection (b) of
this Section 4.7 is exactly equal to such Lender's Commitment
Percentage of amounts received by the Agent but paid only to the
Settlement Lender since the next preceding Settlement Date, such
Lender and the Agent, in their respective records, shall apply such
Lender's Commitment Percentage of such amounts to the increase in such
Lender's Net Outstandings.
(6) Return of Payments. If any amounts received by the Settlement
Lender in respect of the Secured Obligations are later required to be
returned or repaid by the Settlement Lender to the Borrowers or any
other obligor or their respective representatives or successors in
interest, whether by court order, settlement or otherwise, in excess
of the Settlement Lender's Commitment Percentage of all such amounts
required to be returned by all Lenders, each other Lender shall, upon
demand by the Settlement Lender with notice to the Agent, pay to the
Agent for the account of the Settlement Lender, an amount equal to the
excess of such Lender's Commitment Percentage of all such amounts
required to be returned by all Lenders over the amount, if any,
returned directly by such Lender.
(7) Payments to the Agent, Lenders. (A) Payment by any Lender to the
Agent shall be made not later than 1:00 p.m. (New York time) on the
Business Day such payment is due, provided that if such payment is due
on demand by another Lender, such demand is made on the paying Lender
not later than 11:00 a.m. (New York time) on such Business Day.
Payment by the Agent to any Lender shall be made by wire transfer,
promptly following the Agent's receipt of funds for the account of
such Lender and in the type of funds received by the Agent, provided
that if the Agent receives such funds at or prior to 1:00 p.m. (New
York time), the Agent shall pay such funds to such Lender by 2:00 p.m.
(New York time) on such Business Day. If a demand for payment is made
after the applicable time set forth above, the payment due shall be
made by 2:00 p.m. (New York time) on the first Business Day following
the date of such demand.
(B) If a Lender shall, at any time, fail to make any
payment to the Agent required hereunder, the Agent may, but
shall not be required to, retain payments that would
otherwise be made to such Lender hereunder and apply such
payments to such Lender's defaulted obligations hereunder,
at such time, and in such order, as the Agent may elect in
its sole discretion.
(C) With respect to the payment of any funds under
this Section 4.7(b), whether from the Agent to a Lender or
from a Lender to the Agent, the party failing to make full
payment when due pursuant to the terms hereof shall, upon
demand by the other party, pay such amount together with
interest on such amount at the Prime Option.
(3) Settlement of Other Obligations. All other amounts received by
the Agent on account of, or applied by the Agent to the payment of,
any Secured Obligation owed to the Lenders (including, without
limitation, fees payable to the Lenders pursuant to Sections 4.2(d)
and (e) and proceeds from the sale of, or other realization upon, all
or any part of the Collateral following an Event of Default) that are
received by the Agent on or prior to 1:00 p.m. (New York time) on a
Business Day will be paid by the Agent to each Lender on the same
Business Day, and any such amounts that are received by the Agent
after 1:00 p.m. (New York time) will be paid by the Agent to each
Lender on the following Business Day. Unless otherwise stated herein,
the Agent shall distribute fees payable to the Lenders pursuant to
Sections 4.2(d) and (e) ratably to the Lenders based on each Lender's
Commitment Percentage and shall distribute proceeds from the sale of,
or other realization upon, all or any part of the Collateral following
an Event of Default ratably to the Lenders based on the amount of the
Secured Obligations then owing to each Lender.
SECTION 1.23 Increased Costs and Reduced Returns. Borrowers agree
that if (a) any law hereafter in effect or (b) any request, guideline
or directive of any Governmental Authority (whether or not having the
force of law and whether or not failure to comply therewith would be
unlawful) not in effect as of the Effective Date with respect to any
law now or hereafter in effect (and whether or not any such law is
presently applicable to any Lender) or the interpretation or
administration thereof by any Governmental Authority, shall either
(i)(A) impose, affect, modify or deem applicable any reserve, special
deposit, capital maintenance or similar requirement against any Loan,
(B) impose on such Lender any other condition regarding any Loan, this
Agreement, any Note or the facilities provided hereunder, or (C)
result in any requirement regarding capital adequacy (including any
risk-based capital guidelines) affecting such Lender being imposed or
modified or deemed applicable to such Lender or (ii) subject such
Lender to any taxes on the recording, registration, notarization or
other formalization of the Loans or any Note, and the result of any
event referred to in clause (a) or (b) above shall be to increase the
cost to such Lender of making, funding or maintaining any Loan or to
reduce the amount of any sum receivable by such Lender or such
Lender's rate of return on capital with respect to any Loan to a level
below that which such Lender could have achieved but for such
imposition, modification or deemed applicability (taking into
consideration such Lender's policies with respect to capital adequacy)
by an amount deemed by such Lender (in the exercise of its reasonable
discretion) to be material, then, upon demand by such Lender,
Borrowers shall immediately pay to such Lender additional amounts
which shall be sufficient to compensate such Lender for such increased
cost, tax or reduced rate of return. A certificate of such Lender to
the Borrowers claiming compensation under this Section 4.8 shall be
final, conclusive and binding on all parties for all purposes in the
absence of manifest error. Such certificate shall set forth the
nature of the occurrence giving rise to such compensation, the
additional amount or amounts to be paid to it hereunder and the method
by which such amounts were determined. In determining such amount,
such Lender may use any reasonable averaging and attribution methods.
Notwithstanding anything to the contrary in this Section 4.8, (x) a
Borrower shall not be liable to any such Lender(s) for any costs,
taxes or reduced rates of return which were incurred or paid by such
Lender(s) more than ninety (90) days prior to the date of the
certificate of Lender to be delivered to a Borrower pursuant to this
Section 4.8 and (y) if the costs, taxes or reduced rates of return
incurred or paid by the Lender(s) at any time during the term hereof
exceed in the aggregate $250,000 and, in the future any additional
costs, taxes or reduced rates of return may be mitigated by changing
the location of such Lender(s) office for administration of the Loans
to another existing loan office of such Lender(s) within the United
States of America then such Lender(s) shall use commercially
reasonable efforts to move the administration of the Loans and this
Agreement to such other existing loan office.
SECTION 1.24 Waiver of DIP Facility Early Termination Fee.
Notwithstanding anything in the DIP Facility to the contrary, the
Agent, in its capacity as agent under the DIP Facility, hereby waives
any early termination fee to which the Agent and the other lenders
thereunder would otherwise be entitled in connection with the
satisfaction of the DIP Facility, such waiver to be effective upon the
closing and the initial funding of the Revolving Credit Facility by
the Lenders pursuant to this Agreement.
ARTICLE 5
CONDITIONS PRECEDENT
SECTION 1.25 Conditions Precedent to Revolving Credit Loans.
Notwithstanding any other provision of this Agreement, the initial
Revolving Credit Loan will not be made, nor will any Letter of Credit
be issued, until the fulfillment of each of the following conditions
prior to or contemporaneously with the making of the first to be made
of such Loans (unless waived in writing by the Agent):
(1) Fees. Borrowers shall have paid all of the fees payable on the
Effective Date referred to herein, including, without limitation, the
Closing Fee.
(2) Security Interests. The Agent shall have received satisfactory
evidence that the Agent (for the benefit of itself and the Lenders)
has a valid and perfected first priority security interest as of the
Effective Date in all of the Collateral, subject only to Permitted
Liens.
(3) Closing Documents. The Agent shall have received each of the
following documents, all of which shall be satisfactory in form and
substance to the Agent and its counsel and to the Lenders:
(1) a certificate of the Secretary or Assistant Secretary of each of
the Borrowers in the form attached hereto as Exhibit L with the
required attachments thereto;
(2) a certificate evidencing the good standing of each Borrower in
the jurisdiction of its incorporation and in each jurisdiction where
such Borrower is qualified to do business;
(3) signed opinions of Proskauer Rose LLP and local counsel in
Missouri, Georgia and New Jersey reasonably acceptable to the Agent,
as counsel for the Borrowers and the Guarantors, opining as to such
matters in connection with the transactions contemplated by this
Agreement as the Agent or its special counsel may reasonably request,
including, without limitation, that no third party or governmental
consents or waivers are necessary or appropriate in order for any of
the Borrowers or the Guarantors to enter into this Agreement or to
perform the transactions contemplated herein;
(4) the Financing Statements duly executed and delivered by the
Borrowers and the Guarantors, and acknowledgment copies evidencing the
filing of such Financing Statements in each jurisdiction where such
filing may be necessary or appropriate to perfect the Security
Interest;
(5) certificates or binders of insurance relating to each of the
policies of insurance covering any of the Collateral together with
loss payable clauses which comply with the terms of Section 8.7
hereof;
(6) a certificate of the President or a Financial Officer of each
Borrower in the form attached hereto as Exhibit K hereto;
(7) a Borrowing Base Certificate and a Schedule of Receivables,
prepared as of the Effective Date;
(8) an original Power of Attorney, substantially in the form of
Exhibit H hereto, as executed by the Borrowers in favor of the Agent;
(9) Agency Account Agreements, each duly executed by a Borrower and
the Clearing Bank party thereto, or such other agreements with the
Agent regarding each of the Borrowers' Lockboxes, Lockbox Accounts and
other cash and deposit accounts, as requested by the Agent, which
agreements give full cash dominion to the Agent;
(10) all necessary or appropriate estoppel certificates and/or waivers
from landlords, mortgagees or bailees of any Borrower with respect to
any Collateral or the location thereof;
(11) an initial Notice of Proposed Advance, in the form of Exhibit B
hereto, from the Borrowers to the Agent requesting the initial
Revolving Credit Loan and specifying the method of disbursement;
(12) copies of all of the most recent existing reports from a
qualified environmental engineering firm or other qualified consultant
acceptable to the Agent with respect to investigations and audits of
all Real Estate;
(13) copies of all of the most recent appraisals, in form and
substance acceptable to the Agent in its sole discretion, reflecting
the respective relevant orderly liquidation values of the Trailers and
the Mortgaged Real Estate, which appraisals have been performed by
appraisers retained by the Borrowers and acceptable to the Agent in
its sole discretion;
(14) copies of each of the other Loan Documents duly executed by the
parties thereto, together with evidence satisfactory to the Agent of
the due authorization and binding effect of each such Loan Document on
such party,
(15) a twelve (12) month consolidated cash budget projection prepared
by the Borrowers in the form provided by the Agent; and
(16) such other documents and instruments as the Agent or any Lender
may reasonably request.
(4) Guarantor Documents. The Agent shall have received each of the
following documents, all of which shall be satisfactory in form and
substance to the Agent and its counsel and to the Lenders:
(1) a certificate of the Secretary or Assistant Secretary of each of
the Guarantors, in the form of Exhibit L hereto;
(2) a certificate of the President or Financial Officer of each
Guarantor, in the form of Exhibit K hereto;
(3) a certificate evidencing the good standing of each Guarantor in
the jurisdiction of its incorporation and in each jurisdiction where
such Guarantor is qualified to do business;
(4) the Guaranty Agreement, duly executed and delivered by each
Guarantor;
(5) an original Power of Attorney, substantially in the form of
Exhibit H hereto, as executed by the Guarantors in favor of the Agent;
and
(6) such other documents and instruments as the Agent or any Lender
may reasonably request.
(5) Notes. Each Lender shall have received a Revolving Credit Note
duly executed and delivered by the Borrowers, complying with the terms
of Sections 2.4.
(6) Other Security Documents. The Agent shall have received each
Security Document, duly executed and delivered by the Borrowers.
(7) Availability. The Agent shall be provided with evidence
satisfactory to it, confirmed by a certificate of a Financial Officer
of Trism, that as of the Effective Date, after giving effect to the
initial Advances and the issuance of any Letters of Credit on the
Effective Date, Borrowing Base Availability is not less than
$5,000,000.
(8) Implementation of Plan of Reorganization. No amendment or
modification to the Plan of Reorganization or the Confirmation Order
shall have occurred and the Agent shall have received or otherwise
have been satisfied with, in its sole discretion, the form and
substance of: (i) any and all documents or orders related to the Plan
of Reorganization or the implementation thereof that could in any
material way affect the Borrowers, this Agreement, or the rights
provided to the Agent under this Agreement in any respect; (ii) any
and all other orders of the Bankruptcy Court in the joint Chapter 11
proceeding, other than the Confirmation Order, approving,
implementing, affecting or relating to the Plan of Reorganization, or
the implementation thereof, that could in any material way affect the
Borrowers, this Agreement, or the rights provided to the Agent under
this Agreement in any respect; (iii) any and all debt instruments and
indentures of the Borrowers (including, without limitation, the
Subordinated Indenture); and (iv) the governing documents of each
Borrower and each of their respective Affiliates.
(9) Conditions to Plan of Reorganization. All conditions precedent
to the occurrence of the POR Effective Date, other than the closing of
the Revolving Credit Facility contemplated by this Agreement, shall
have occurred, been satisfied or waived (and, if waived by a Person
other than the Agent, in a manner and on terms acceptable to the Agent
in its sole discretion) pursuant to the Plan of Reorganization.
(10) No Defaults Under DIP Facility. There shall not be a default or
an event of default pursuant to the terms of the DIP Facility which
has occurred and is continuing, or an event or condition which, with
the passage of time, the giving of notice or both, would give rise to
or constitute a default or an event of default under the DIP Facility.
(11) Satisfaction of DIP Facility. As of the Effective Date and upon
the closing and initial funding of the Revolving Credit Facility
pursuant to the terms and conditions of this Agreement, the DIP
Facility shall have been terminated and all obligations shall have
been satisfied and paid in full, unless waived, and provision shall
have been made with respect to the related liens and security
interests thereunder, each upon terms and conditions satisfactory to
the Agent in its sole discretion.
(1)
(12) Rights of Inspection. The Agent and the Lenders shall have been
provided rights of inspection and access to facilities, management and
auditors of the Borrowers, satisfactory to the Agent and the Lenders
in their sole discretion.
(13) No Injunctions, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or
proposed before any court, governmental agency or legislative body to
enjoin, restrain, or prohibit, or to obtain damages in respect of, or
which is related to or arises out of this Agreement or the
consummation of the transactions contemplated hereby or which, in the
Agent's reasonable discretion, would have a Materially Adverse Effect,
or would otherwise make it inadvisable to consummate the transactions
contemplated by this Agreement.
(14) Material Adverse Change. As of Effective Date, there shall not
have occurred any changes which are materially adverse individually or
in the aggregate, in the Lenders' sole discretion, to the assets,
liabilities, businesses, operations, condition (financial or
otherwise), industry in which any Borrower operates, Collateral
subject to the Security Interest of the Agent, on behalf of the
Lenders, or the prospects or projected financial performance of any
Borrower from those presented by the unaudited "pro forma" financial
statements delivered in connection with the Disclosure Statement from
the Borrowers to the Agent.
(15) [Intentionally Omitted.]
(16) Commitment Letter. The Agent shall have received evidence
satisfactory to it that the Borrowers have complied fully with the
terms of the Commitment Letter.
(17) Due Diligence. The Agent shall have completed, with results
satisfactory to it in its sole discretion, its legal credit and
business due diligence in respect of the Borrowers and the Guarantors
and their respective Subsidiaries and Affiliates, including, without
limitation, review of the Subordinated Indenture and background
reviews with respect to Trism, Mr. Edward McCormick and Mr. James
Overley.
(18) Cash Account. The Borrowers shall have established a system of
lockbox accounts and other bank accounts with respect to the
collection of Receivables as shall be acceptable to the Agent, in its
sole discretion.
SECTION 1.26 All Loans; Letters of Credit. At the time of making of
each Loan, including the initial Revolving Credit Loan and all
subsequent Loans, and the issuance of each Letter of Credit:
(1) all of the representations and warranties made or deemed to be
made under this Agreement shall be true and correct at such time both
with and without giving effect to the Loan to be made at such time and
the application of the proceeds thereof,
(1)
(2) the corporate actions of each of the Borrowers and the
Guarantors, including shareholder approval if necessary, to authorize
the execution, delivery and performance of this Agreement, the other
Loan Documents and the Advances hereunder shall remain in full force
and effect and the incumbency of officers shall be as stated in the
certificates of incumbency delivered pursuant to Section 5.1(c)(i) or
as subsequently modified and reflected in a certificate of incumbency
delivered to the Agent, and
(3) each request and deemed request for any Advance hereunder shall
be deemed to be a certification by the Borrowers to the Agent and the
Lenders as to the matters set forth in Section 5.2(a) and (b) and the
Agent may, without waiving either condition, consider the conditions
specified in Sections 5.2(a) and (b) fulfilled and a representation by
the Borrowers to such effect made, if no written notice to the
contrary is received by the Agent prior to the making of the Loan then
to be made.
SECTION 1.27 Financial Statements. No later than March 31, 2000,
the Borrowers and the Guarantors shall deliver to the Agent copies of
the Fresh Start Financial Statements, which shall be satisfactory in
form and substance to the Agent and to the Lenders.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BORROWERS AND GUARANTORS
SECTION 1.28 Representations and Warranties. The Borrowers and the
Guarantors, jointly and severally, represent and warrant to the Agent
and to the Lenders as follows:
(1) Organization; Power; Qualification; FEIN. Each of the Borrowers
and each of the Guarantors is a corporation, duly organized, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its
properties and to carry on its business as now being and hereafter
proposed to be conducted and is duly qualified and authorized to do
business in each jurisdiction in which failure to be so qualified and
authorized would have a Materially Adverse Effect. The jurisdictions
in which each Borrower and Guarantor is qualified to do business as a
foreign corporation are listed on Schedule 6.1(a). Schedule 6.1(a)
lists the federal employer identification number of each Borrower and
each Guarantor.
(2) Subsidiaries and Ownership of the Borrowers and Guarantors.
Except for as disclosed on Schedule 6.1(b), the Borrowers and
Guarantors have no Subsidiaries. The outstanding stock of each
Borrower and each Guarantor has been duly and validly issued and is
fully paid and nonassessable by such Borrower or Guarantor and the
number and owners of such shares of capital stock of such Borrower or
Guarantor are set forth on Schedule 6.1(b). Except as set forth on
Schedule 6.1(b), there are no outstanding rights to purchase, options,
warrants or similar rights or agreements pursuant to which any
Borrower may be required to issue, sell, repurchase or redeem any of
its stock or other equity securities or any stock or other equity
securities of its Subsidiaries.
(3) Authorization of Agreement, Notes, Loan Documents and Borrowing.
Each of the Borrowers and each of the Guarantors has the right and
power and has taken all necessary action to authorize it to execute,
deliver and perform each of the Loan Documents to which it is a party
in accordance with their respective terms. Each of the Loan Documents
to which it is a party have been duly executed and delivered by the
duly authorized officers of each Borrower or each Guarantor, as the
case may be, and each is, or when executed and delivered in accordance
with this Agreement will be, a legal, valid and binding obligation of
each Borrower or each Guarantor, as the case may be, enforceable in
accordance with its terms.
(4) Compliance of Agreement, Notes, Loan Documents and Borrowing with
Laws, Etc. The execution, delivery and performance of each of the
Loan Documents to which each Borrower or each Guarantor, as the case
may be, is a party in accordance with their respective terms and the
Advances hereunder do not and will not, by the passage of time, the
giving of notice or otherwise,
(1) require any Governmental Approval or violate any Applicable Law
relating to any Borrower, any Guarantor or any of their respective
Subsidiaries or Affiliates,
(2) conflict with, result in a breach of or constitute a default
under (A) the articles or certificate of incorporation or by-laws of
any Borrower or any Guarantor, (B) any indenture, agreement or other
instrument to which any Borrower or any Guarantor is a party or by
which any of their property may be bound or (C) any Governmental
Approval relating to any Borrower or any Guarantor, or,
(3) result in or require the creation or imposition of any Lien upon
or with respect to any property now owned or hereafter acquired by any
Borrower or any Guarantor other than the Security Interest.
(5) Business. Each Borrower and each Guarantor is engaged
principally in the business described on Schedule 6.1(e).
(6) Compliance with Law, Governmental Approvals.
(1) Except as set forth in Schedule 6.1(f), each Borrower and each
Guarantor
(A) has all material Governmental Approvals, including
permits relating to federal, state and local Environmental
Laws, ordinances and regulations, required by any Applicable
Law for it to conduct its business, each of which is in full
force and effect, is final and not subject to review on
appeal and is not the subject of any pending or, to the
knowledge of such Borrower, threatened attack by direct or
collateral proceeding, and
(B) is in compliance with each material Governmental
Approval applicable to it and in compliance with all other
material Applicable Laws relating to it, including, without
being limited to, all material Environmental Laws and all
material occupational health and safety laws applicable to
such Borrower, any of its Subsidiaries or their respective
properties,
except for instances of noncompliance which would not, singly or
in the aggregate, cause a Default or Event of Default or have a
Materially Adverse Effect on such Borrower and its Subsidiaries
as a whole and in respect of which reserves in respect of such
Borrower's or such Subsidiary's reasonably anticipated liability
therefor have been established on the books of such Borrower or
such Subsidiary, as applicable.
(2) Without limiting the generality of the above, except as disclosed
on a report delivered pursuant to Section 5.1(c)(xii) or (xiii) or
with respect to matters which could not reasonably be expected to
have, singly or in the aggregate, a Materially Adverse Effect on any
Borrower, any Guarantor and their respective Subsidiaries as a whole:
(A) the operations of such Borrower, such Guarantor
and each of their respective Subsidiaries comply in all
material respects with all applicable environmental, health
and safety requirements of Applicable Law;
(B) such Borrower, such Guarantor and each of their
respective Subsidiaries has obtained all environmental,
health and safety permits necessary for its operation, and
all such permits are in good standing and such Borrower,
such Guarantor and each of their respective Subsidiaries is
in compliance in all material respects with all terms and
conditions of such permits;
(C) neither such Borrower, such Guarantor nor any of
their respective Subsidiaries nor any of their respective
present or past property or operations are subject to any
order from or agreement with any public authority or private
party respecting (x) any environmental, health or safety
requirements of Applicable Law, (y) any Remedial Action, or
(z) any liabilities and costs arising from the Release or
threatened Release of a Contaminant into the environment;
(D) none of the operations of such Borrower, such
Guarantor or of any of their respective Subsidiaries is
subject to any judicial or administrative proceeding
alleging a violation of any environmental, health or safety
requirement of Applicable Law;
(E) to the knowledge of such Borrower or such
Guarantor, none of the present nor past operations of such
Borrower, such Guarantor or any of their respective
Subsidiaries is the subject of any investigation by any
public authority evaluating whether any Remedial Action is
needed to respond to a Release or threatened Release of a
Contaminant into the environment;
(F) neither such Borrower, such Guarantor nor any of
their respective Subsidiaries has filed any notice under any
requirement of Applicable Law indicating past or present
treatment, storage or disposal of a hazardous waste, as that
term is defined under 40 CFR Part 261 or any state
equivalent;
(G) neither such Borrower, such Guarantor nor any of
their respective Subsidiaries has filed any notice under any
requirement of Applicable Law reporting a Release of a
Contaminant into the environment;
(H) except in compliance in all material respects with
applicable Environmental Laws, during the course of such
Borrower's, such Guarantor's or any of their respective
Subsidiaries' ownership of or operations on the Real Estate,
to the best of such Borrower's or such Guarantor's
knowledge, there have been no generation, treatment,
recycling, storage or disposal of hazardous waste, as that
term is defined under 40 CFR Part 261 or any state
equivalent, use of underground storage tanks or surface
impoundments, use of asbestos-containing materials, or use
of polychlorinated biphenyls (PCB) used in hydraulic oils,
electrical transformers or other equipment;
(I) neither such Borrower, such Guarantor nor any of
their respective Subsidiaries has entered into any
negotiations or agreements with any Person (including,
without limitation, any prior owner of any of the Real
Estate or other property of such Borrower, such Guarantor or
any of their respective Subsidiaries) relating to any
Remedial Action or environmental related claim;
(J) neither such Borrower, such Guarantor nor any of
their respective Subsidiaries has received any notice or
claim to the effect that it is or may be liable to any
Person as a result of the Release or threatened Release of a
Contaminant into the environment;
(K) neither such Borrower, such Guarantor nor any of
their respective Subsidiaries has any material contingent
liability in connection with any Release or threatened
Release of any Contaminant into the environment;
(L) no Environmental Lien has attached to any of the
Real Estate or other property of such Borrower, such
Guarantor or of any of their respective Subsidiaries;
(M) the presence and condition of all asbestos-
containing material which is on or part of the Real Estate
(excluding any raw materials used in the manufacture of
products or products themselves) do not violate in any
material respect any currently applicable requirement of
Applicable Law; and
(N) neither such Borrower, such Guarantor nor any of
their respective Subsidiaries manufactures, distributes or
sells, and has not, in the past twenty (20) years,
manufactured, distributed or sold, products which contain
asbestos-containing material.
(O) Such Borrower and such Guarantor each hereby
acknowledges and agrees that the Agent (1) is not now, and
has not ever been, in control of any of the Real Estate or
any of such Borrower's or such Guarantor's affairs, and (2)
does not have the capacity through the provisions of the
Loan Documents or otherwise to influence such Borrower's or
such Guarantor's conduct with respect to the ownership,
operation or management of any of its Real Estate or
compliance with Environmental Laws or Environmental Permits.
(3) Schedule 6.1(f) sets forth each notice of a material violation of
any Environmental Laws and occupational health and safety laws
applicable to any Borrower, any Guarantors, any of their respective
Subsidiaries or any of their respective properties.
(7) Titles to Properties. Except as set forth in Schedule 6.1(g),
each Borrower, each Guarantor and each of their respective
Subsidiaries is the sole owner of and has good and marketable title to
or a valid leasehold interest in all its owned Real Estate, is the
sole owner of and has valid and legal title to or a valid leasehold
interest in all personal property and assets used in or necessary to
the conduct of its business, including, without limitation, the
Trailers. Each Borrower and each Guarantor has received all deeds,
assignments, waivers, consents, non-disturbance and recognition or
similar agreements, bills of sale and other documents, and has duly
effected all recordings, filings and other actions necessary to
establish, protect and perfect such Borrower's or such Guarantor's
respective right, title and interest in and to all such Real Estate
and other properties and assets. Schedule 6.1(g) sets forth all
Trailers owned by the Borrowers and Guarantors and pledged as
Collateral hereunder. Schedule 6.1(g) also describes any purchase
options, rights of first refusal or other similar contractual rights
pertaining to any Real Estate. As of the Effective Date, no portion
of any Borrower's or any Guarantor's Real Estate has suffered any
material damage by fire or other casualty loss which has not
heretofore been repaired and restored in all material respects to its
original condition or otherwise remedied. As of the Effective Date,
all material permits required to have been issued or appropriate to
enable the Real Estate to be lawfully occupied and used for all of the
purposes for which they are currently occupied and used have been
lawfully issued and are in full force and effect.
(8) Liens. Except as set forth in Schedule 6.1(h), none of the
properties and assets of any Borrower, any Guarantor or any respective
Subsidiary, including, without limitation, the Collateral, is subject
to any Lien, except Permitted Liens. Other than the Financing
Statements, no financing statement under the Uniform Commercial Code
of any state which names any Borrower, any Guarantor or any respective
Subsidiary as debtor and which has not been terminated has been filed
in any state or other jurisdiction, and no Borrower, no Guarantor nor
any respective Subsidiary has signed any such financing statement or
any security agreement authorizing any secured party thereunder to
file any such financing statement, except to perfect those Liens
listed in Schedule 6.1(h) and Permitted Liens.
(9) Indebtedness and Guaranties. Set forth on Schedule 6.1(i) is a
complete and correct listing of all of each and every Borrower's,
every Guarantor's and their respective Subsidiaries' (i) Indebtedness
for Money Borrowed and (ii) Guaranties of obligations of Persons and
entities other than the obligations of other Borrowers or the
Guarantors. There is no Indebtedness owing by any Borrower or any
Guarantor to any Affiliate of any Borrower or any Guarantor. Other
than as previously disclosed to the Agent, no Borrower, nor Guarantor
nor any respective Subsidiary is in default of any material provision
of any agreement evidencing or relating to any such Indebtedness or
Guaranty.
(10) Litigation. Except as set forth on Schedule 6.1(j), there are no
actions, suits or proceedings pending (nor, to the knowledge of any of
the Borrowers or the Guarantors, are there any actions, suits or
proceedings threatened, nor is there any basis therefor) against or in
any other way relating adversely to or affecting any Borrower, any
Guarantors or any respective Subsidiary or any of their property, or
which challenge any Borrower's or any Guarantor's right or power to
enter into or perform any of its obligations under the Loan Documents
to which it is a party, or the validity or enforceability of any Loan
Document or any action taken thereunder, in any court or before any
arbitrator of any kind or before or by any governmental body, which,
individually or in the aggregate, could reasonably be expected to have
a Materially Adverse Effect on any Borrower, any Guarantor and their
respective Subsidiaries, as a whole.
(11) Tax Returns and Payments. Except as set forth on Schedule
6.1(k), all United States federal, state and local as well as foreign
national, provincial and local and other tax returns of each Borrower,
each Guarantor and each of their respective Subsidiaries required by
Applicable Law to be filed have been duly filed, and all United States
federal, state and local and foreign national, provincial and local
and other taxes, assessments and other governmental charges or levies
upon such Borrower, such Guarantor and each of their respective
Subsidiaries and such Borrower's, such Guarantor's and any of their
respective Subsidiaries' property, income, profits and assets which
are due and payable have been paid, except any such nonpayment which
is at the time permitted under Section 9.6. The charges, accruals and
reserves on the books of each Borrower, each Guarantor and each of
their respective Subsidiaries in respect of United States federal,
state and local and foreign national, provincial and local taxes for
all fiscal years and portions thereof since the organization of such
Borrower or such Guarantor are in the judgment of such Borrower or
such Guarantor adequate, and such Borrower or such Guarantor knows of
no reason to anticipate any additional assessments for any of such
years which, singly or in the aggregate, could reasonably be expected
to have a Materially Adverse Effect on such Borrower or such
Guarantor. Proper and accurate amounts have been withheld by each
Borrower and each Guarantor from its respective employees for all
periods in full and complete compliance with all applicable federal,
state, local and foreign law and such withholdings have been timely
paid to the respective Governmental Authorities. Schedule 6.1(k) sets
forth as of the Effective Date those taxable years for which any
Borrower's or any Guarantor's tax returns are currently being audited
by the IRS or any other applicable Governmental Authority and any
assessments or threatened assessments in connection with such audit,
or otherwise currently outstanding. Except as described on Schedule
6.1(k) as of the Effective Date, no Borrower or Guarantor has executed
or filed with the IRS or any other Governmental Authority any
agreement or other document extending, or having the effect of
extending, the period for assessment or collection of any Charges. No
Borrower, no Guarantor and none of their respective predecessors are
liable for any Charges: (a) under any agreement (including any tax
sharing agreements) or (b) to such Borrower's or such Guarantor's
knowledge, as a transferee. As of the Effective Date, no Borrower or
Guarantor has agreed or been requested to make any adjustment under
Code Section 481(a), by reason of a change in accounting method or
otherwise, which would have a Materially Adverse Effect.
(12) Burdensome Provisions. No Borrower, no Guarantor or any of their
respective Subsidiaries is a party to any indenture, agreement, lease
or other instrument, or subject to any charter or corporate
restriction, Governmental Approval or Applicable Law compliance with
the terms of which could reasonably be expected to have a Materially
Adverse Effect on such Borrower or such Guarantor and their respective
Subsidiaries, taken as a whole.
(13) Financial Statements. The Borrowers and the Guarantors shall
furnish to the Agent and the Lenders, no later than March 31, 2000, a
copy of the Consolidated Balance Sheet as at December 31, 1999, and
the Consolidating Balance Sheet as at December 31, 1999, along with
accounting footnotes regarding "fresh start accounting" in connection
therewith, and the related statements of income, cash flow and
retained earnings for the twelve-month period then ended
(collectively, the "Fresh Start Financial Statements"). Such
financial statements shall (i) be complete and correct and present
fairly and in all material respects in accordance with GAAP, the
financial position of the Borrowers and the Guarantors as at the dates
thereof and the results of operations of the Borrowers and the
Guarantors for the periods then ended, and (ii) be reported on,
without qualification, by independent certified public accountants
selected by the Borrowers and the Guarantors and acceptable to the
Agent. Except as disclosed or reflected in such financial statements,
neither Borrowers nor the Guarantors shall have any material
liabilities, contingent or otherwise, and there shall be no material
unrealized or anticipated losses of the Borrowers or the Guarantors.
(14) Adverse Change. Since the date of the financial statements
described in clause (i) of Section 6.1(m), (i) no change in the
business, assets, liabilities, condition (financial or otherwise),
results of operations or business prospects of the Borrowers or the
Guarantors has occurred that has had, or may have, a Materially
Adverse Effect, and (ii) no event has occurred or failed to occur
which has had, or may have, a Materially Adverse Effect.
(15) ERISA. No Borrower, no Guarantor or any respective Related
Company maintains or contributes to (x) any Benefit Plan other than
those listed on Schedule 6.1(o) as of the Effective Date or (y)
thereafter, any Title IV Plan other than those listed in Schedule
6.1(o). Each Benefit Plan is in substantial compliance with ERISA to
the extent that ERISA is applicable, and no Borrower, no Guarantors or
any respective Related Company has received any notice asserting that
a Benefit Plan is not in compliance with ERISA. No material liability
to the PBGC or to a Multiemployer Plan has been, or is expected by any
Borrower or any Guarantor to be, incurred by such Borrower, such
Guarantor or any respective Related Company. Copies of all such
listed Plans, together with a copy of the latest form 5500 for each
such Plan, have been delivered to the Agent. No Borrower, no
Guarantor or any respective ERISA Affiliate has failed to make any
contribution or pay any amount due as required by either Section 412
of the Code or Section 302 of ERISA or the terms of any such Plan. No
Borrower, no Guarantor or any respective ERISA Affiliate has engaged
in a prohibited transaction, as defined in Section 4975 of the Code,
in connection with any Plan, which would subject such Borrower or such
Guarantor to a material tax on prohibited transactions imposed by
Section 4975 of the Code. Except as set forth in Schedule 6.1(o):
(i) no Title IV Plan has any Unfunded Vested Accrued Benefits in
excess of $0; (ii) no ERISA Event or event described in Section
4062(e) of ERISA with respect to any Title IV Plan has occurred or is
reasonably expected to occur; (iii) there are no pending, or to the
knowledge of any Borrower or any Guarantor, threatened claims (other
than claims for benefits in the normal course), sanctions, actions or
lawsuits, asserted or instituted against any Plan or any Person as
fiduciary or sponsor of any Plan; (iv) no Borrower, no Guarantors or
any respective ERISA Affiliate has incurred or reasonably expects to
incur any liability as a result of a complete or partial withdrawal
from a Multiemployer Plan; (v) within the last five (5) years, no
Title IV Plan with Unfunded Pension Liabilities has been transferred
outside of the "controlled group" (within the meaning of Section
4001(a)(14) of ERISA) of any Borrower, any Guarantor or any ERISA
Affiliate; and (vi) no liability under any Title IV Plan has been
satisfied with the purchase of a contract from an insurance company
that is not rated AAA by the Standard & Poor's Corporation or the
equivalent by another nationally recognized rating agency.
(16) Absence of Defaults. No Borrower, no Guarantor or any of their
respective Subsidiaries is in default under its articles or
certificate of incorporation or by-laws and no event has occurred,
which has not been remedied, cured or waived, which constitutes a
Default or an Event of Default, or which constitutes, or which with
the passage of time or giving of notice or both would constitute, a
default or event of default by such Borrower, such Guarantor or any of
their respective Subsidiaries under any material agreement (other than
this Agreement) or judgment, decree or order to which such Borrower,
such Guarantor or any of their respective Subsidiaries is a party or
by which such Borrower, such Guarantor, any of their respective
Subsidiaries or any of such Borrower's, such Guarantor's or any of
their respective Subsidiaries' properties may be bound or which would
require such Borrower, such Guarantor or any of their respective
Subsidiaries to make any payment under any thereof prior to the
scheduled maturity date therefor.
(17) Accuracy and Completeness of Information. All Schedules hereto
and all material written information, reports and other papers and
data produced by or on behalf of the Borrowers or the Guarantors and
furnished to the Agent or any Lender were, at the time the same were
so furnished, complete and correct in all material respects, to the
extent necessary to give the recipient a true and accurate knowledge
of the subject matter. No fact is known to any Borrower or any
Guarantor which has had, or may in the future have (so far as such
Borrower or such Guarantor can foresee), a Materially Adverse Effect
upon any Borrower, any Guarantor or any of their respective
Subsidiaries which has not been set forth in the financial statements
or disclosure delivered prior to the Effective Date, in each case
referred to in Section 6.1(m), or in such written information, reports
or other papers or data or otherwise disclosed in writing to the Agent
and the Lenders prior to the Agreement Date. No document furnished or
written statement made to the Agent or any Lender by any Borrower or
any Guarantor in connection with the negotiation, preparation or
execution of this Agreement or any of the Loan Documents contains or
will contain any untrue statement of a fact material to the
creditworthiness of any Borrower or any Guarantor, or omits or will
omit to state a material fact necessary in order to make the
statements contained therein not misleading.
(18) Solvency. In each case after giving effect to the Indebtedness
represented by the Revolving Credit Loans outstanding and to be
incurred, the transactions contemplated by this Agreement, each
Borrower, each Guarantor and each of their respective Subsidiaries is
solvent, having assets of a fair salable value which exceeds the
amount required to pay its debts as they become absolute and matured
(including contingent, subordinated, unmatured and unliquidated
liabilities), and each Borrower, each Guarantor and each of their
respective Subsidiaries is able to and anticipates that it will be
able to meet its debts as they mature and has adequate capital to
conduct the business in which it is or proposes to be engaged.
(19) Receivables.
(1) Status. Each Receivable reflected in the computations included
in any Borrowing Base Certificate meets the criteria enumerated in
clauses (a) through (o) of the definition of Eligible Receivables,
except as disclosed in such Borrowing Base Certificate or as disclosed
in a timely manner in a subsequent Borrowing Base Certificate or
otherwise in writing to the Agent.
(2) Chief Executive Office. The chief executive office and principal
place of business of each Borrower and each Guarantor, and the books
and records relating to the Receivables and other Collateral is
located at the address or addresses set forth (A) on Schedule 6.1(s)
or (B) in a written notice which complies with the applicable
provisions of Section 8.8 hereunder; no Borrower or Guarantor has
maintained its chief executive office or books and records relating to
the Collateral at any other address at any time during the five (5)
years immediately preceding the Agreement Date.
(20) Real Property. No Borrower or Guarantors owns Real Estate or
leases Real Estate other than that Real Estate described on Schedule
6.1(t).
(21) Corporate and Fictitious Names. Except as otherwise disclosed on
Schedule 6.1(u), during the five (5) year period preceding the
Agreement Date, no Borrower, no Guarantor or any respective
predecessor thereof has been known as or used any corporate or
fictitious name other than the corporate names of the Borrowers and
the Guarantors on the Effective Date.
(22) Federal Reserve Regulations. No Borrower, Guarantor or any of
their respective Subsidiaries is engaged and none will engage,
principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any
"margin stock" (as each of the quoted terms is defined or used in
Regulations G and U of the Board of Governors of the Federal Reserve
System). No Borrower or Guarantor owns any Margin Stock and no part
of the proceeds of any of the Advances will be used for so purchasing
or carrying margin stock or, in any event, for any purpose which
violates, or which would be inconsistent with, the provisions of
Regulation G, T, U or X of such Board of Governors. If requested by
the Agent or any Lender, the Borrowers and/or the Guarantors, as the
case may be, will furnish to the Agent and the Lenders a statement or
statements in conformity with the requirements of said Regulation G,
T, U or X to the foregoing effect.
(23) Government Regulation. No Borrower or Guarantor is an
"investment company" or a company "controlled" by an "investment
company" (as each of the quoted terms is defined or used in the
Investment Company Act of 1940, as amended). No Borrower or Guarantor
is subject to regulation under the Public Utility Holding Company Act
of 1935, the Federal Power Act, or any other federal or state statute
that restricts or limits its ability to incur Indebtedness or to
perform its obligations hereunder. Assuming the accuracy of the
representations set forth in Section 13.2 hereunder, the making of the
Revolving Credit Loans by Lenders to Borrowers, the incurrence of the
Letter of Credit Obligations on behalf of Borrowers, the application
of the proceeds thereof and repayment thereof and the consummation of
the related transactions will not violate any provision of any such
statute or any rule, regulation or order issued by the Securities and
Exchange Commission.
(24) Employee Relations. Each Borrower, each Guarantor and each of
their respective Subsidiaries has a stable work force in place and is
not, except as set forth on Schedule 6.1(x), party to any collective
bargaining agreement nor has any labor union been recognized as the
representative of any Borrower's, any Guarantor's or any of their
respective Subsidiaries' employees, and no Borrower or Guarantor knows
of pending, threatened or contemplated strikes, work stoppage or other
labor disputes involving any Borrower's, any Guarantor's or any of
their respective Subsidiaries' employees.
(25) Intellectual Property. Each Borrower and each Guarantor owns or
possesses all Intellectual Property required to conduct its business
as now and presently planned to be conducted without, to its
knowledge, conflict with the rights of others except as otherwise
disclosed on Schedule 6.1(y), and Schedule 6.1(y) lists all
Intellectual Property owned by any Borrower or Guarantor, or which any
Borrower or Guarantor has the right to use.
(26) Trade Names. All trade names or styles under which any Borrower
or Guarantor creates Receivables, or to which instruments in payment
of Receivables are made payable, are listed on Schedule 6.1(z).
(27) Brokers. No broker or finder acting on behalf of any Borrower or
Guarantor brought about the obtaining, making or closing of the
Revolving Credit Loans or the related transactions, and no Borrower or
Guarantor has obligation to any Person in respect of any finder's or
brokerage fees in connection therewith.
(28) Insurance. Schedule 6.1(bb) lists all insurance policies of any
nature maintained, as of the Effective Date, for current occurrences
by any Borrower or Guarantor, as well as a summary of the terms of
each such policy.
(29) Deposit and Controlled Disbursement Accounts. Schedule 6.1(cc)
lists all banks and other financial institutions at which any Borrower
or Guarantor maintains deposits and/or other accounts as of the
Effective Date, including any Controlled Disbursement Accounts, and
such Schedule correctly identifies the name, address and telephone
number of each depository, the name in which the account is held, a
description of the purpose of the account, and the complete account
number.
(30) Government Contracts. Except as set forth in Schedule 6.1(dd),
as of the Effective Date, no Borrower or Guarantor is a party to any
contract or agreement with the federal government or any state or
municipal government and the Receivables are not subject to the
Federal Assignment of Claims Act, as amended (31 U.S.C. Section 3727)
or any similar state or local law.
(31) Customer and Trade Relations. As of the Effective Date, there
exists no actual or, to the knowledge of any Borrower or Guarantor,
threatened termination or cancellation of, or any material adverse
modification or change in: (i) the business relationship of any
Borrower or Guarantor with any customer or group of customers whose
purchases during the preceding twelve (12) months caused them to be
ranked among the ten (10) largest customers of any Borrower or
Guarantor; or (ii) the business relationship of any Borrower or
Guarantor with any supplier material to its operations.
(32) Agreements and Other Documents.
(1) As of the Effective Date, the Borrowers and the Guarantors have
made available to the Agent or its counsel, on behalf of the Lenders,
for their review, accurate and complete copies (or summaries) of all
of the following agreements or documents to which any it is subject
and each of which are listed on Schedule 6.1(ff): supply agreements
and purchase agreements not terminable by a Borrower or Guarantor
within sixty (60) days following written notice issued by such
Borrower or Guarantor and involving transactions in excess of
$1,000,000 per annum; and any lease of equipment having a remaining
term of one (1) year or longer and requiring aggregate rental and
other payments in excess of $500,000 per annum; and
(2) as of the Effective Date, the Borrowers and the Guarantors have
provided to the Agent or its counsel, on behalf of the Lenders,
accurate and complete copies of (A) licenses and permits (other than
state, municipal and other local licenses and permits in which case
summaries thereof are acceptable to the Agent) held by a Borrower or
Guarantor, the absence of which could be reasonably likely to have a
Materially Adverse Effect; (B) instruments or documents evidencing
Indebtedness of a Borrower or Guarantor and any security interest
granted by such Borrower or Guarantor with respect thereto; and (C)
instruments and agreements evidencing the issuance of any equity
securities, warrants, rights or options to purchase equity securities
of a Borrower or Guarantor.
SECTION 1.29 Survival of Representation and Warranties, Etc. All
representations and warranties set forth in this Article 6 and all
statements contained in any certificate, financial statement, or other
instrument, delivered by or on behalf of the Borrowers pursuant to or
in connection with this Agreement or any of the Loan Documents
(including, but not limited to, any such representation, warranty or
statement made in or in connection with any amendment thereto) shall
constitute representations and warranties made under this Agreement.
All representations and warranties made under this Agreement shall be
made or deemed to be made at and as of the Agreement Date, at and as
of the Effective Date and at and as of the date of each Loan, except
that (a) representations and warranties which, by their terms are
applicable only to one such date shall be deemed to be made only at
and as of such date, and (b) representations and warranties (i) which
are applicable after, as well as on, the Effective Date and (ii) which
are also the subject of an express affirmative or negative covenant
which is further conditioned or qualified, shall be deemed conditioned
or qualified, as to dates or times after the Effective Date, in a
manner equivalent to the conditions and qualifications set forth in
such related affirmative or negative covenant. All representations
and warranties made or deemed to be made under this Agreement shall
survive and not be waived by the execution and delivery of this
Agreement, any investigation made by or on behalf of the Lenders or
any Advance hereunder.
ARTICLE 7
SECURITY INTEREST
SECTION 1.30 Security Interest.
(1) To secure the payment, observance and performance of the Secured
Obligations, including, without limitation, any future Advances, the
Borrowers and the Guarantors hereby, jointly and severally, mortgage,
pledge and assign all of the Collateral to the Agent, for the benefit
of itself as the Agent and the Lenders, and grants to the Agent, for
the benefit of itself as the Agent and the Lenders, a continuing
security interest in, and a continuing Lien upon, all of the
Collateral.
(2) As additional security for all of the Secured Obligations, the
Borrowers and the Guarantors, jointly and severally, grant to the
Agent, for the benefit of itself as the Agent and the Lenders, a
security interest in, and assigns to the Agent, for the benefit of
itself as the Agent and the Lenders, all of each and every Borrower's
and each and every Guarantor's right, title and interest in and to,
any deposits or other sums at any time credited by or due from each
Lender and each Affiliate of a Lender to a Borrower or Guarantor, or
credited by or due from any participant of any Lender to a Borrower or
Guarantor, with the same rights therein as if the deposits or other
sums were credited by or due from such Lender. Each Borrower and each
Guarantor hereby authorizes each Lender and each Affiliate of such
Lender and each participant to pay or deliver to the Agent, for the
account of the Lenders, without any necessity on the Agent's or any
Lender's part to resort to other security or sources of reimbursement
for the Secured Obligations, at any time during the continuation of
any Event of Default or in the event that the Agent, on behalf of the
Lenders, should make demand for payment hereunder and without further
notice to the Borrowers or the Guarantors (such notice being expressly
waived), any of the aforesaid deposits (general or special, time or
demand, provisional or final) or other sums for application to any
Secured Obligation, irrespective of whether any demand has been made
or whether such Secured Obligation is mature, and the rights given the
Agent, the Lenders, their Affiliates and participants hereunder are
cumulative with such Person's other rights and remedies, including
other rights of set-off. The Agent will promptly notify the Borrowers
and the Guarantors of its receipt of any such funds for application to
the Secured Obligations, but failure to do so will not affect the
validity or enforceability thereof. The Agent may give notice of the
above grant of a security interest in and assignment of the aforesaid
deposits and other sums, and authorization, to, and make any suitable
arrangements with, any Lender, any such Affiliate of any Lender or
participant for effectuation thereof, and the Borrowers and the
Guarantors each hereby irrevocably appoint the Agent as its attorney
to collect any and all such deposits or other sums to the extent any
such payment is not made to the Agent or any Lender by such Lender,
Affiliate or participant.
SECTION 1.31 Continued Priority of Security Interest.
(1) The Security Interest granted by the Borrowers and the Guarantors
shall at all times be valid, perfected and enforceable against each
and every Borrower and Guarantor and all third parties in accordance
with the terms of this Agreement, as security for the Secured
Obligations, and the Collateral shall not at any time be subject to
any Liens that are prior to, on a parity with or junior to the
Security Interest, other than Permitted Liens.
(2) The Borrowers and the Guarantors shall, at their cost and
expense, take all action that may be necessary or desirable, or that
the Agent may reasonably request, so as at all times to maintain the
validity, perfection, enforceability and rank of the Security Interest
in the Collateral in conformity with the requirements of Section
7.2(a), or to enable the Agent and the Lenders to exercise or enforce
their rights hereunder, including, but not limited to:
(1) paying all taxes, assessments and other claims lawfully levied or
assessed on any of the Collateral, except to the extent that such
taxes, assessments and other claims constitute Permitted Liens,
(2) obtaining, after the Effective Date, any additional or new
landlords' and mortgagees' releases, subordinations or waivers, and
using all reasonable efforts to obtain mechanics' releases,
subordinations or waivers,
(1)
(3) delivering to the Agent, for the benefit of the Lenders, endorsed
or accompanied by such instruments of assignment as the Agent may
specify, and stamping or marking, in such manner as the Agent may
specify, any and all chattel paper, instruments, letters and advices
of guaranty and documents evidencing or forming a part of the
Collateral, and
(4) executing and delivering financing statements, pledges,
designations, hypothecations, notices and assignments in each case in
form and substance satisfactory to the Agent relating to the creation,
validity, perfection, maintenance or continuation of the Security
Interest under the Uniform Commercial Code or other Applicable Law.
(3) The Agent is hereby authorized to file one or more financing or
continuation statements or amendments thereto without the signature of
or in the name of any Borrower or Guarantor for any purpose described
in Section 7.2(c) hereof. The Agent will give the Borrowers and the
Guarantors notice of the filing of any such statements or amendments,
which notice shall specify the locations where such statements or
amendments were filed. A carbon, photographic, xerographic or other
reproduction of this Agreement or of any of the Security Documents or
of any financing statement filed in connection with this Agreement is
sufficient as a financing statement.
(4) Each Borrower and each Guarantor shall mark its respective books
and records as directed by the Agent and as may be necessary or
appropriate to evidence, protect and perfect the Security Interest and
shall cause its financial statements to reflect the Security Interest.
ARTICLE 8
COLLATERAL COVENANTS
Until the Revolving Credit Facility has been terminated and
all the Secured Obligations have been paid in full, unless the
Required Lenders shall otherwise consent in the manner provided in
Section 15.9:
SECTION 1.32 Collection of Receivables.
(1) At the request of the Agent, each Borrower will cause all monies,
checks, notes, drafts and other payments relating to or constituting
proceeds of trade accounts receivable to be forwarded to a Lockbox for
deposit in an Agency Account in accordance with the procedures set out
in the corresponding Agency Account Agreement. Each Borrower will
promptly cause all monies, checks, notes, drafts and other payments
relating to or constituting proceeds of other Receivables, of any
other Collateral and of any trade accounts receivable that are not
forwarded to a Lockbox, to be transferred to or deposited in an Agency
Account. In particular, each Borrower will:
(1) advise each Account Debtor on trade accounts receivable to
address all remittances with respect to amounts payable on account
thereof to a specified Lockbox,
(2) advise each other Account Debtor that makes payment to such
Borrower by wire transfer, automated clearinghouse transfer or similar
means to make payment directly to an Agency Account, and
(3) stamp all invoices relating to trade accounts receivable with a
legend satisfactory to the Agent indicating that payment is to be made
to such Borrower via a specified Lockbox.
(2) The Borrowers and the Agent shall cause all collected balances in
each Agency Account to be transmitted daily by wire transfer,
depository transfer check or other means in accordance with the
procedures set forth in the corresponding Agency Account Agreement, to
the Collection Account:
(1) for application, on account of the Secured Obligations, as
provided in Sections 2.3(c), 12.2, and 12.3, such credits to be
entered as of the Business Day following receipt and to be conditioned
upon final payment in cash or solvent credits of the items giving rise
to them, and
(2) with respect to the balance, so long as no Default or Event of
Default has occurred and is continuing, for transfer by wire transfer
or depository transfer check to a Controlled Disbursement Account.
(3) Any monies, checks, notes, drafts or other payments referred to
in subsection (a) of this Section 8.1 which, notwithstanding the terms
of such subsection, are received by or on behalf of the Borrowers will
be held in trust for the Agent and will be delivered to the Agent or a
Clearing Bank, as promptly as possible, in the exact form received,
together with any necessary endorsements for application by the Agent
directly to the Secured Obligations or, if applicable, for deposit in
the Agency Account maintained with a Clearing Bank and processing in
accordance with the terms of the corresponding Agency Account
Agreement.
(4) It is expressly agreed by the Borrowers that, anything herein to
the contrary notwithstanding, each Borrower shall remain liable under
each of its Contracts, licenses and other agreements, documents and
instruments evidencing Receivables to observe and perform all the
conditions and obligations to be observed and performed by it
thereunder. Neither the Agent nor any Lender shall have any
obligation or liability under any such Contract, license or agreement
by reason of or arising out of this Agreement or the granting herein
of a security interest therein or the receipt by the Agent or any
Lender of any payment relating to any such Contract, license or
agreement pursuant hereto. Neither the Agent nor any Lender shall be
required or obligated in any manner to perform or fulfill any of the
obligations of any Borrower under or pursuant to any such Contract,
license or agreement, or to make any payment, or to make any inquiry
as to the nature or the sufficiency of any payment received by it or
the sufficiency of any performance by any party under any such
Contract, license or agreement, or to present or file any claims, or
to take any action to collect or enforce any performance or the
payment of any amounts which may have been assigned to it or to which
it may be entitled at any time or times.
(5) All chattel paper shall be marked with the following legend:
"This writing and the obligations evidenced or secured hereby are
subject to the security interest of The CIT Group/Business Credit,
Inc., as the Agent, for the benefit of itself as a Lender and certain
other Lenders." For the Agent's further security, Borrowers agree
that the Agent shall have a special property right and security
interest in all of each Borrower's books and records pertaining to the
Collateral and, upon the occurrence and during the continuance of any
Event of Default, each Borrower shall deliver and turn over any such
books and records to the Agent or to its representatives at any time
on demand of the Agent. Prior to the occurrence of a Default or Event
of Default and upon notice from the Agent, each Borrower shall permit
any representative of the Agent to inspect such books and records and
shall provide photocopies thereof to the Agent, for the benefit of the
Agent and Lenders, as more specifically set forth in this Agreement.
SECTION 1.33 Verification and Notification. The Agent shall have
the right (a) at any time and from time to time, in the name of the
Agent, the Lenders or in the name of any Borrower, to verify the
validity, amount or any other matter relating to any Receivables or
other Collateral by mail, telephone, telegraph or otherwise, and to
review, audit and make extracts from all records and files related to
any such Collateral, and (b) after an Event of Default, to (i) notify
the Account Debtors or obligors under any Receivables, of the
assignment of such Collateral to the Agent, for the benefit of the
Lenders, and to direct such Account Debtor or obligors to make payment
of all amounts due or to become due thereunder directly to the Agent,
for the account of the Lenders, and, upon such notification and at the
expense of the Borrowers, to enforce collection of any such Collateral
and to adjust, settle or compromise the amount or payment thereof, in
the same manner and to the same extent as a Borrower might have done
and (ii) cause the certified independent public accountants then
engaged by any Borrower to prepare and deliver to the Agent and each
Lender at the Borrowers' expense at any time and from time to time
promptly upon the Agent's request the following reports with respect
to Borrowers: (a) a reconciliation of all Receivables; (b) an aging of
all Receivables; (c) trial balances; and (d) a test verification of
such Receivables as the Agent may request.
SECTION 1.34 Disputes, Returns and Adjustments.
(1) In the event any amounts due and owing under any Receivable for
an amount in excess of $100,000 are in dispute between the Account
Debtor and a Borrower, such Borrower shall provide the Agent with
prompt written notice thereof.
(2) Each Borrower shall notify the Agent promptly of all returns and
credits in excess of $100,000 in respect of any Receivable, which
notice shall specify the Receivable affected.
(3) Each Borrower may, in the ordinary course of business unless a
Default or an Event of Default has occurred and is continuing, grant
any extension of time for payment of any Receivable or compromise,
compound or settle the same for less than the full amount thereof, or
release wholly or partly any Person liable for the payment thereof, or
allow any credit or discount whatsoever therein; provided that (i) no
such action results in the reduction of more than $100,000 in the
amount payable with respect to any one Receivable or of more than
$500,000 per Fiscal Quarter, not to exceed $1,000,000 in any Fiscal
Year, with respect to all Receivables of the Borrowers (in each case,
excluding the allowance of credits or discounts generally available to
Account Debtors in the ordinary course of the Borrowers' businesses
and appropriate adjustments to the accounts of Account Debtors in the
ordinary course of business), and (ii) the Agent is promptly notified
of the amount of such adjustments and the Receivable(s) affected
thereby.
SECTION 1.35 Invoices.
(1) No Borrower will use any invoices other than invoices in the form
delivered to the Agent prior to the Agreement Date and shall not make
any change in the names, addresses, or substantive terms, conditions
or provisions of the invoice without giving the Agent forty-five (45)
days prior notice of the intended use of a different form of invoice
together with a copy of such different form.
(2) Upon the reasonable request of the Agent, each Borrower shall
deliver to the Agent, at such Borrower's expense, copies of customers'
invoices or the equivalent, original shipping and delivery receipts or
other proof of delivery, customers' statements, customer address
lists, the original copy of all documents, including, without
limitation, repayment histories and present status reports, relating
to Receivables and such other documents and information relating to
the Receivables as the Agent shall specify.
SECTION 1.36 Delivery of Instruments. In the event any Receivable
in an amount in excess of $100,000 is, or Receivables in excess of
$500,000 in the aggregate are at any time evidenced by a promissory
note, trade acceptance or any other instrument for the payment of
money, each Borrower will immediately thereafter deliver such
instrument to the Agent, appropriately endorsed to the Agent, for the
benefit of the Lenders.
SECTION 1.37 Ownership and Defense of Title.
(1) Except for Permitted Liens, the Borrowers shall at all times be
the sole owner or lessee of each and every item of Collateral and
shall not create any lien on, or sell, lease, exchange, assign,
transfer, pledge, hypothecate, grant a security interest or security
title in or otherwise dispose of, any of the Collateral or any
interest therein, except for cash or on open account or on terms of
payment ordinarily extended to its customers, and except for
dispositions that are otherwise expressly permitted under this
Agreement. The inclusion of "proceeds" of the Collateral under the
Security Interest shall not be deemed a consent by the Agent or the
Lenders to any other sale or other disposition of any part or all of
the Collateral.
(1)
(2) Each and every Borrower shall defend its title or leasehold
interest in and to, and the Security Interest in, the Collateral
against the claims and demands of all Persons.
SECTION 1.38 Insurance.
(1) Each Borrower and each Guarantor shall at all times maintain
insurance on the Collateral and its equipment customary and
appropriate to the nature of such Collateral and equipment, taking
into consideration, among other matters, such Borrower's industry,
size, and risk and protection of the Agent's Security Interest (for
the benefit of the Lenders) in such Collateral and equipment,
including, without limitation, coverage against loss or damage by
fire, theft (excluding theft by employees), burglary, pilferage, loss
in transit and such other hazards as the Agent shall reasonably
specify, in amounts not to exceed those obtainable at commercially
reasonable rates and under policies issued by insurers acceptable to
the Agent in the exercise of its reasonable judgment. All premiums on
such insurance shall be paid by such Borrower or such Guarantor and
copies of the policies delivered to the Agent.
(2) All insurance policies in respect of the Collateral required
under Section 8.7(a) shall name the Agent, for the benefit of the
Lenders, as an additional insured (in respect of liability insurance
policies), and shall contain loss payable clauses in the form
submitted to the Borrowers and the Guarantors by the Agent, or
otherwise in form and substance as to terms, underwriter, scope, and
coverage satisfactory to the Required Lenders, naming the Agent, for
the benefit of the Lenders, as loss payee (in respect of property and
casualty insurance policies), as its interests may appear, and
providing that
(1) except to the extent otherwise provided in a Permitted Insurance
Premium Financing Agreement, all proceeds thereunder shall be payable
to the Agent, for the benefit of the Lenders (provided, however, if no
Default or Event of Default exists, proceeds from any loss not
exceeding $250,000 may be paid to the Borrowers or the Guarantors, as
the case may be, for replacement of the damaged or destroyed
property),
(2) no such insurance shall be affected by any act or neglect of the
insurer or owner of the property described in such policy, and
(3) such policy and loss payable clauses may be canceled, amended or
not renewed only upon at least thirty (30) days prior written notice
given to the Agent.
(3) Any proceeds of insurance referred to in this Section 8.7 which
are paid to the Agent, for the account of the Lenders, shall be, at
the option of the Required Lenders in their sole discretion, either
(i) applied to replace the damaged or destroyed property, or (ii)
applied to the payment or prepayment of the Secured Obligations.
(4) Each Borrower and each Guarantor irrevocably makes, constitutes
and appoints the Agent (and all officers, employees or agents
designated by the Agent), so long as any Event of Default shall have
occurred and be continuing, as such Borrower's or such Guarantor's
true and lawful agent and attorney-in-fact for the purpose of making,
settling and adjusting claims under such Borrower's or Guarantor's
"All Risk" policies of insurance, endorsing the name of such Borrower
or Guarantor on any check or other item of payment for the proceeds of
such Borrower's or such Guarantor's "All Risk" policies of insurance
and for making all determinations and decisions with respect to such
"All Risk" policies of insurance; provided, however, that in the event
that any claim which is or could be made under any of such insurance
policies exceeds $1,000,000 no such claim shall be settled,
compromised or finally determined, except with the prior written
consent of the Agent. The Agent shall have no duty to exercise any
rights or powers granted to it pursuant to the foregoing power-of-
attorney. Each Borrower and each Guarantor shall promptly notify the
Agent of any loss, damage, or destruction to the Collateral in the
amount of $200,000 or more, whether or not covered by insurance.
After deducting from such proceeds the expenses, if any, incurred by
the Agent in the collection or handling thereof, the Agent may, at its
option, apply such proceeds to the reduction of the Secured
Obligations, or permit or require such Borrower or such Guarantor to
use such money, or any part thereof, to replace, repair, restore or
rebuild the Collateral in a diligent and expeditious manner with
materials and workmanship of substantially the same quality as existed
before the loss, damage or destruction. Notwithstanding the
foregoing, if the casualty giving rise to such insurance proceeds
would not reasonably be expected to have a Materially Adverse Effect
and such insurance proceeds do not exceed $2,500,000 in the aggregate,
the Agent shall permit such Borrower or such Guarantor to replace,
restore, repair or rebuild the property; provided that if such
Borrower or such Guarantor has not completed or entered into binding
agreements to complete such replacement, restoration, repair or
rebuilding within one hundred eighty (180) days of such casualty, the
Agent may apply such insurance proceeds to the reduction of the
Secured Obligations. All insurance proceeds which are to be made
available to a Borrower or a Guarantor to replace, repair, restore or
rebuild the Collateral shall be applied by the Agent to reduce the
outstanding principal balance of the Revolving Credit Loans (which
application shall not result in a permanent reduction of the Revolving
Credit Loans Commitment) and upon such application, the Agent shall
establish a Reserve against the Borrowing Base in an amount equal to
the amount of such proceeds so applied. Thereafter, such funds shall
be made available to the Borrowers or the Guarantors, as the case may
be, to provide funds to replace, repair, restore or rebuild the
Collateral as follows: (i) Borrowers shall request an Advance in the
amount requested to be released; (ii) so long as the conditions set
forth in Article 2 have been met, the Lenders shall make such Advance;
and (iii) the Reserve established with respect to such insurance
proceeds shall be reduced by the amount of such Advance. To the
extent not used to replace, repair, restore or rebuild the Collateral,
such insurance proceeds shall be applied to the reduction of the
Secured Obligations.
SECTION 1.39 Location of Offices and Collateral.
(1) No Borrower or Guarantor will change the location of its
respective chief executive office, the location of the Collateral, or
the place where it keeps its books and records relating to the
Collateral or change its name, its identity or corporate structure in
any manner which might make any Financing Statement or other Uniform
Commercial Code amendment, assignment or continuation statement filed
in connection herewith seriously misleading within the meaning of
Section 9-402(7) of the Uniform Commercial Code or any other then
applicable provision of the Uniform Commercial Code without giving the
Agent thirty (30) days' prior written notice thereof and complying
with the requirements and conditions of Section 8.8(b).
(2) After the Agent's written acknowledgment that any reasonable
action requested by the Agent in connection with any changes covered
by Section 8.8(a), including continuation of the perfection of any
Liens in favor of the Agent, on behalf of the Lenders, in any
Collateral, has been completed or taken, a Borrower or Guarantor may
change the location of its Collateral or the location where it keeps
its books and records relating to the Collateral, provided that any
such new location shall be in the continental United States, or change
its name, its identity or its corporate structure. No Borrower or
Guarantor shall change its fiscal year to a year ending in any day
other than December 31.
(3) At no time during the effectiveness of this Agreement shall (i)
any more than ten percent (10%) of the aggregate number of Trailers
(including, without limitation, any Substitution Trailers) be located
outside of the continental United States or Canada, and (ii) any more
than five percent (5%) of the aggregate number of Trailers (including,
without limitation, any Substitution Trailers) be located within
Mexico.
SECTION 1.40 Records Relating to Collateral. Each Borrower will at
all times keep complete and accurate records of all Collateral on a
basis consistent with past practices of such Borrower.
SECTION 1.41 Inspection. The Agent and each Lender (by any of their
officers, employees or agents) shall have the right, to the extent
that the exercise of such right shall be within the control of a
Borrower, at any time or times to: (a) visit the properties of any
Borrower and its Subsidiaries, inspect the Collateral and the other
assets of such Borrower and its Subsidiaries and inspect and make
extracts from the books and records of such Borrower and its
Subsidiaries, including but not limited to management letters prepared
by independent accountants, all during customary business hours at
such premises; (b) discuss such Borrower's and its Subsidiaries'
business, assets, liabilities, financial condition, results of
operations and business prospects, insofar as the same are reasonably
related to the rights of the Agent or the Lenders hereunder or under
any of the Loan Documents, with such Borrower's and its Subsidiaries'
(i) principal officers, (ii) independent accountants, and (iii) any
other Person (except that any such discussion with any third parties
shall be conducted only in accordance with the Agent's or such
Lender's standard operating procedures relating to the maintenance of
the confidentiality of confidential information of borrowers); and (c)
verify the amount, quantity, value and condition of, or any other
matter relating to, any of the Collateral and in this connection to
review, audit and make extracts from all records and files related to
any of the Collateral.
The Borrowers shall deliver to the Agent, for the benefit of the
Lenders, any instrument necessary for it to obtain records from any
service bureau maintaining records on behalf of the Borrowers.
SECTION 1.42 Information and Reports.
(1) Schedule of Receivables. The Borrowers shall deliver to the
Agent (i) on or before the Effective Date, a Schedule of Receivables
as of a date not more than three (3) Business Days prior to the
Effective Date which schedule shall be reconciled to the balance of
the accounts receivable as set forth in a Consolidated Balance Sheet
as of such date, and (ii) no later than ten (10) days after the end of
each Fiscal Month of the Borrowers, a Schedule of Receivables as of
the last Business Day of the Borrowers' immediately preceding Fiscal
Month which schedule shall be reconciled to (A) the balance of the
accounts receivable as set forth in the Consolidated Balance Sheet as
of the end of such Fiscal Month and (B) the Schedule of Receivables
delivered in respect of the next preceding Fiscal Month.
(2) Borrowing Base Certificate. Borrowers shall deliver to the Agent
not later than three (3) Business Days after the last day of each
accounting week of the Borrowers a Borrowing Base Certificate prepared
as of the close of business on the last Business Day of such
accounting week, and upon the Agent's request on each Business Day a
Borrowing Base Certificate as of the third (3rd) preceding Business
Day.
(3) Notice of Diminution of Value. Each Borrower shall give prompt
notice to the Agent of any matter or event which has resulted in, or
may result in, the diminution in excess of $100,000 in the value of
any of its Collateral, except for any such diminution (i) in the value
of any Receivables in the ordinary course of business or (ii) which
has been appropriately reserved against, as reflected in financial
statements previously delivered to the Agent and the Lenders pursuant
to Article 10.
(4) Additional Information. The Agent may in its discretion from time
to time request that the Borrowers deliver the schedules, certificates
described in Sections 8.11(a), (b) and (c) more or less often and on
different schedules than specified in such Sections and the Borrowers
will comply with such requests. The Borrowers will also furnish to
the Agent and each Lender such other information with respect to the
Collateral as the Agent or such Lender may from time to time
reasonably request.
(5) Trailers. Borrowers shall deliver to the Agent not later than
five (5) Business Days after the last Business Day of each Fiscal
Month, a report indicating the exact location of each and every
Trailer located outside of the continental United States as of the
last day of such Fiscal Month. Such reports shall be provided more
frequently by Borrowers to the Agent upon the request of the Agent.
SECTION 1.43 Assignment of Claims Act. Upon the request of the
Agent, the Borrowers shall execute any documents or instruments and
shall take such steps or actions reasonably required by the Agent so
that all monies due or to become due under any contract with the
United States of America, the District of Columbia or any state,
county, municipality or other domestic or foreign governmental entity,
or any department, agency or instrumentality thereof, will be assigned
to the Agent, for the benefit of itself and the Lenders, and notice
given thereof in accordance with the requirements of the Assignment of
Claims Act of 1940, as amended, or any other laws, rules or
regulations relating to the assignment of any such contract and monies
due or to become due.
SECTION 1.44 Covenants Regarding Intellectual Property Collateral.
(1) Each Borrower and each Guarantor shall notify the Agent
immediately if it knows that any application or registration relating
to any Intellectual Property (now or hereafter existing) may become
abandoned or dedicated, or of any adverse determination or development
(including the institution of, or any such determination or
development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court)
regarding such Borrower's or such Guarantor's ownership of any
Intellectual Property, its right to register the same, or to keep, use
and maintain the same.
(2) Promptly after the date on which a Borrower or Guarantor acquires
any Intellectual Property, such Borrower or such Guarantor shall
execute and deliver any and all Intellectual Property security
agreements as the Agent may request to evidence the Agent's security
interest in such Intellectual Property, and the General Intangibles of
such Borrower or such Guarantor relating thereto or represented
thereby.
(3) Each Borrower and each Guarantor shall take all actions necessary
or requested by the Agent to maintain and pursue each application, to
obtain the relevant registration and to maintain the registration with
respect to all of its Intellectual Property (now or hereafter
existing), including the filing of applications for renewal,
affidavits of use, affidavits of noncontestability and opposition and
interference and cancellation proceedings.
(4) In the event that any of the Intellectual Property Collateral is
infringed upon, or misappropriated or diluted by a third party, the
Borrowers and the Guarantors shall notify the Agent promptly after a
Borrower or a Guarantor learns thereof. Each Borrower and each
Guarantor shall promptly sue for infringement, misappropriation or
dilution and to recover any and all damages for such infringement,
misappropriation or dilution, and shall take such other actions as the
Agent shall deem appropriate under the circumstances to protect such
Intellectual Property Collateral.
SECTION 1.45 Covenants Regarding Trailers.
(1) The Borrowers and the Guarantors shall maintain the Trailers in
good order and repair, except for ordinary wear and tear in the
ordinary course of business. The Trailers shall be insured in
accordance with Section 8.7 hereof. Except as otherwise permitted
hereunder, the Borrowers and the Guarantors agree not to sell, lease
or otherwise dispose of any Trailer or Trailers without the prior
written consent of the Agent.
(2) The Borrowers and the Guarantors may, upon not less than ten (10)
days' prior written notice to the Agent, sell any Trailers in the
ordinary course of their respective businesses; provided that, (i) at
the time of any such sale, there exists no Default or Event of Default
hereunder or an event which, with notice or the passage of time or
both, would constitute a Default or Event of Default hereunder, and
(ii) to the extent that immediately after any such sale, the
Collateral Valuation is less than $500,000 (it being expressly
understood and agreed that the following provisions are not applicable
if, immediately after any such sale, the Collateral Valuation is at
least equal to $500,000), either (A) the Borrowers shall promptly (but
in no event later than five (5) days after any such sale) pledge to
the Agent, for the benefit of the Lenders, Substitution Trailers the
aggregate value of which shall be such that, upon such pledge of
Substitution Trailers, the Collateral Valuation shall be at least
equal to $500,000, or (B) if no Substitution Trailers are so timely
pledged by the Borrowers, (I) the Borrowers shall pay to the Lenders
an amount equal to the most recent appraised value of the Trailers so
sold, and (II) that portion of Borrowing Base Availability
attributable to subsection (a) of the definition of Borrowing Base B
shall be correspondingly reduced by an equal amount. For purposes of
this Section 8.14(b), upon substitution, the value attributed to each
Substitution Trailer shall be based upon the average value, by
reference to the most recent appraised value, for the given
manufacture and model year of such trailers, until such time as the
next appraisal of all Trailers occurs.
SECTION 1.46 Appraisals of Trailers. Borrowers hereby agree that
the Agent may, at Borrowers' cost and expense, undertake or have
undertaken (whether in-house or through an appraiser satisfactory to
the Agent in its sole discretion) an appraisal of the Trailers, which
appraisal shall be in form and substance satisfactory to the Agent in
its sole discretion. Such appraisals shall be conducted at least once
every six (6) calendar months and more frequently if the Agent so
requests.
SECTION 1.47 Appraisals of Mortgaged Real Estate. Borrowers hereby
agree that the Agent may, at Borrowers' cost and expense, undertake or
have undertaken (whether in-house or through an appraiser satisfactory
to the Agent in its sole discretion) an appraisal of the Mortgaged
Real Estate, which appraisal shall be in form and substance
satisfactory to the Agent in its sole discretion. Such appraisals
shall be conducted at least once every six (6) calendar months and
more frequently if the Agent so requests.
ARTICLE 9
AFFIRMATIVE COVENANTS
Until the Revolving Credit Facility has been terminated and
all the Secured Obligations have been paid in full, unless the
Required Lenders shall otherwise consent in the manner provided for in
Section 15.9, each Borrower and each Guarantor shall, and shall cause
each of its respective Subsidiaries to:
SECTION 1.48 Preservation of Corporate Existence and Similar
Matters. Preserve and maintain its corporate existence, rights,
franchises, licenses and privileges in the jurisdiction of its
incorporation and qualify and remain qualified as a foreign
corporation and authorized to do business in each jurisdiction in
which the character of its properties or the nature of its business
requires such qualification or authorization, except where the failure
to obtain or maintain such qualification or authorization would not
have a Materially Adverse Effect; provided, that (a) within one (1)
year after the Effective Date, each of the Guarantors listed on
Schedule 9.1 hereto shall be dissolved, and (b) the Borrowers or
Guarantors may be merged with and into other Borrowers at any time,
provided that, as a result of such a merger, (i) only a Borrower
remains as the surviving entity from such a merger, and (ii) in any
such merger involving Trism, Trism remains as the surviving entity.
SECTION 1.49 Compliance with Applicable Law and Material Contracts.
Comply with all material Applicable Law relating to such Borrower,
such Guarantor or such Subsidiary, and all material agreements to
which such Borrower, such Guarantor or such Subsidiary is a party.
SECTION 1.50 Maintenance of Property. In addition to, and not in
derogation of, the requirements of the Security Documents,
(1) protect and preserve all properties material to its business,
including copyrights, patents, trade names and trademarks, and
maintain in good repair, working order and condition in all material
respects, with reasonable allowance for wear and tear, all tangible
properties, and
(2) from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements and additions to such
properties necessary for the conduct of its business, so that the
business carried on in connection therewith may be properly and
advantageously conducted at all times.
SECTION 1.51 Conduct of Business. At all times carry on its
business in an efficient manner and engage only in the business
described in Section 6.1(e).
SECTION 1.52 Insurance. Maintain, in addition to the coverage
required by Section 8.7 and the Security Documents, insurance with
responsible insurance companies against such risks and in such amounts
as is customarily maintained by similar businesses or as may be
required by Applicable Law, and from time to time deliver to the Agent
or any Lender upon its request a detailed list of the insurance then
in effect, stating the names of the insurance companies, the amounts
and rates of the insurance, the dates of the expiration thereof and
the properties and risks covered thereby.
SECTION 1.53 Payment of Taxes and Claims. Pay or discharge when due
(a) all taxes, assessments and governmental charges or levies imposed
upon it or upon its income or profits or upon any properties belonging
to it, except that real property ad valorem taxes shall be deemed to
have been so paid or discharged if the same are paid before they
become delinquent, and (b) all lawful claims of materialmen,
mechanics, carriers, warehousemen and landlords for labor, materials,
supplies and rentals which, if unpaid, might become a Lien on any
properties of such Borrower or such Guarantor; except that this
Section 9.6 shall not require the payment or discharge of any such
tax, assessment, charge, levy or claim which is being contested in
good faith by appropriate proceedings and for which reserves in
respect of the reasonably anticipated liability therefor have been
appropriately established.
SECTION 1.54 Accounting Methods and Financial Records. Maintain a
system of accounting, and keep such books, records and accounts (which
shall be true and complete), as may be required or as may be necessary
to permit the preparation of financial statements in accordance with
GAAP consistently applied.
SECTION 1.55 Use of Proceeds.
(1) Use the proceeds of the initial Advance to (i) first, satisfy in
full all of the outstanding and unsatisfied obligations under the DIP
Facility as of the Effective Date, after taking into account the
assumption by the Borrowers, as Letter of Credit Obligations
hereunder, of all Letter of Credit Obligations under the DIP Facility
(as provided hereinabove in the definition of Letter of Credit
Obligations), and otherwise fulfill the requirements of the Plan of
Reorganization, and (ii) all subsequent Advances only for working
capital purposes with respect to the ordinary course of business
operations of each Borrower, or as is otherwise expressly authorized
herein, and
(2) not use any part of such proceeds to purchase or, to carry or
reduce or retire or refinance any credit incurred to purchase or
carry, any margin stock (within the meaning of Regulation G or U of
the Board of Governors of the Federal Reserve System) or, in any
event, for any purpose which would involve a violation of such
Regulation G or U or of Regulation T or X of such Board of Governors,
or for any purpose prohibited by law or by the terms and conditions of
this Agreement.
SECTION 1.56 Hazardous Waste and Substances: Environmental Requirements.
(1) In addition to, and not in derogation of, the requirements of
Section 9.2 and of the Security Documents, substantially comply with
all Environmental Laws and all Applicable Law relating to occupational
health and safety (except for instances of noncompliance that are
being contested in good faith by appropriate proceedings if reserves
in respect of such Borrower's, such Guarantor's or such Subsidiary's
reasonably anticipated liability therefor have been appropriately
established), promptly notify the Agent of its receipt of any notice
of a violation of any such Environmental Laws or other such Applicable
Law and indemnify and hold the Agent and the Lenders harmless from all
Environmental Liabilities incurred by or imposed upon the Agent or any
Lender on account of such Borrower's or such Guarantor's failure to
perform its obligations under this Section 9.9.
(2) Such Borrower or such Guarantor shall not cause or permit a
Release of any Contaminant on, at, in, under, above, to, from or about
any of the Real Estate where such Release would (a) violate in any
respect, or form the basis for any Environmental Liabilities under,
any Environmental Laws or Environmental Permits or (b) otherwise
adversely impact the value or marketability of any of the Real Estate
or any of the Collateral, other than such violations or impacts which
could not reasonably be expected to have a Materially Adverse Effect
on such Borrower or such Guarantor and their respective Subsidiaries
as a whole.
(3) Whenever such Borrower or such Guarantor gives notice to the
Agent pursuant to this Section 9.9 with respect to a matter that
reasonably could be expected to result in an Environmental Liability
to such Borrower or such Guarantor in excess of $500,000 in the
aggregate, such Borrower or Guarantor shall, at the Agent's request
and such Borrower's or Guarantor's expense, (i) cause an independent
environmental engineer acceptable to the Agent to conduct an
assessment, including tests where necessary, of the site where the
noncompliance or alleged noncompliance with Environmental Laws has
occurred and prepare and deliver to the Agent a report setting forth
the results of such assessment, a proposed plan to bring such Borrower
into compliance with such Environmental Laws (if such assessment
indicates noncompliance) and an estimate of the costs thereof, and
(ii) provide to the Agent a supplemental report of such engineer
whenever the scope of the noncompliance, or the response thereto or
the estimated costs thereof, shall materially adversely change.
SECTION 1.57 Landlords' Agreements, Mortgagee Agreements and Bailee
Letters. Such Borrower or Guarantor shall use its reasonable best
efforts to obtain a landlord's agreement, mortgagee agreement or
bailee letter, as applicable, from the lessor of each leased property
or mortgagee of owned property or with respect to any warehouse,
processor or converter facility or other location where Collateral is
located, which agreement or letter shall contain a waiver or
subordination of all Liens or claims that the landlord, mortgagee or
bailee may assert against the Collateral at that location, and shall
otherwise be satisfactory in form and substance to the Agent. After
the Effective Date, no real property or warehouse space where
Collateral may be stored or located shall be leased or acquired by
such Borrower or Guarantor, unless and until a satisfactory landlord
or mortgagee agreement, as the case may be, shall first have been
obtained with respect to such location. Such Borrower or Guarantor
shall timely and fully pay and perform its obligations under all
leases and other agreements with respect to each leased location or
public warehouse where any Collateral is or may be located. Nothing
contained in this Section 9.10 shall impair or otherwise modify any of
the Agent's rights under this Agreement, including, without
limitation, Lender's rights pursuant to the respective definitions of
"Eligible Receivables" and "Borrowing Base."
SECTION 1.58 Further Assurances. Each Borrower and Guarantor agrees
that it shall, at its expense and upon request of the Agent, duly
execute and deliver, or cause to be duly executed and delivered, to
the Agent such further instruments and do and cause to be done such
further acts as may be necessary in the reasonable opinion of the
Agent to carry out the express provisions of this Agreement or any
other Loan Document.
ARTICLE 10
INFORMATION
Until the Revolving Credit Loans Facility has been
terminated and all the Secured Obligations have been paid in full,
unless the Required Lenders shall otherwise consent in the manner set
forth in Section 15.9, each Borrower will furnish to the Agent and to
each Lender at the offices then designated for such notices pursuant
to Section 15.1:
SECTION 1.59 Financial Statements.
(1) Audited Year-End-Statements. As soon as available, but in any
event within ninety (90) days after the end of each Fiscal Year of the
Borrowers and the Guarantors, copies of the Consolidated Balance Sheet
and the Consolidating Balance Sheets as at the end of such Fiscal Year
and the related statements of income, shareholders' equity and cash
flow for such Fiscal Year, together with consolidating statements for
the Borrowers and the Guarantors, in each case setting forth in
comparative form the figures for the previous Fiscal Year of the
Borrowers and the Guarantors and reported on, without qualification,
by independent certified public accountants selected by the Borrowers
and the Guarantors and acceptable to the Agent (the "Audited Financial
Statements").
(2) Quarterly Financial Statements. As soon as available, but in any
event within forty-five (45) days after the end of each Fiscal Quarter
of the Borrowers, copies of the Consolidated Balance Sheet and the
Consolidating Balance Sheets, as of the end of such Fiscal Quarter,
and the related statements of income, shareholders, equity, and cash
flow for such Fiscal Quarter, together with consolidating statements
for the Borrowers and the Guarantors, in each case setting forth in
comparative form the figures for the previous Fiscal Year of the
Borrowers and Guarantors (including, without limitation, a comparison
to the projected budgeted figures), certified by a Financial Officer
of the Borrowers and the Guarantors, to the best of his knowledge, as
presenting fairly the financial condition and results of operations of
a Borrower and the Guarantors as of the date thereof and for the
periods ended on such date, subject to normal year-end adjustments.
(3) Monthly Financial Statements. As soon as available, but in any
event within thirty (30) days after the end of each Fiscal Month of
the Borrowers, copies of the Consolidated Balance Sheet and
Consolidating Balance Sheets of the Borrowers and the Guarantors as at
the end of such Fiscal Month and the related unaudited income
statement for the Borrowers and the Guarantors for such Fiscal Month
and for the portion of the Fiscal Year through such Fiscal Month,
together with consolidating statements for the Borrowers and the
Guarantors, in each case setting forth in comparative form the figures
for the previous Fiscal Year (including, without limitation, a
comparison to the projected budget figures for the previous Fiscal
Year), certified by a Financial Officer of the Borrowers and the
Guarantors to the best of his knowledge as presenting fairly the
financial condition and results of operations of the Borrowers and the
Guarantors as at the date thereof and for the periods ended on such
date, subject to normal year end adjustments.
(4) Projected Financial Statements. As soon as available, but in any
event prior to the last Business Day of each Fiscal Year during the
term hereof, forecasted financial statements prepared by the Borrowers
on a consolidated basis and approved by Trism's Board of Directors,
consisting of monthly consolidated balance sheets, cash flow
statements and income statements of the Borrowers, reflecting
projected Advances hereunder and setting forth the assumptions on
which such forecasted financial statements were prepared, covering the
one-year period commencing on the first day of the next succeeding
fiscal year.
All such financial statements referred to in clauses (a) and (b) shall
be complete and correct in all material respects and prepared in
accordance with GAAP (except, with respect to interim financial
statements, for the omission of footnotes and normal year-end
adjustments) applied consistently throughout the periods reflected
therein.
SECTION 1.60 Accountants' Management Letter. Together with the
Audited Financial Statements referred to in Section 10.1(a), each
Borrower shall deliver to the Agent a copy of the most recent
management letter to such Borrower from its respective independent
certified public accountants,
(1) stating that in making the examination necessary for the
preparation of such management letter, nothing has come to their
attention to lead them to believe that any Default or Event of Default
exists and, in particular, they have no knowledge of any Default or
Event of Default or, if such is not the case, specifying such Default
or Event of Default and its nature, and
(2) having attached the calculations, prepared by each Borrower and
reviewed by such accountants, required to establish whether or not
each Borrower is in compliance with the covenants contained in
Sections 11.1, 11.2, 11.5, 11.6 , 11.10 and 11.12, as of the date of
such financial statements.
SECTION 1.61 Officer's Certificate. Together with each delivery of
financial statements required by Section 10.1 (a), (b) and (c), a
certificate of each Borrower's President or Financial Officer (a)
stating that, based on an examination sufficient to enable him to make
an informed statement, no Default or Event of Default exists or, if
such is not the case, specifying such Default or Event of Default and
its nature, when it occurred, whether it is continuing and the steps
being taken by each Borrower with respect to such Default or Event of
Default, and (b) setting forth the calculations necessary to establish
whether or not each Borrower was in compliance with the covenants
contained in Sections 11.1, 11.2, 11.5, 11.6, 11.10 and 11.12, as of
the date of such statements.
SECTION 1.62 Copies of Other Reports.
(1) Promptly upon receipt thereof, copies of all reports, if any,
submitted to each Borrower or its Board of Directors by its
independent public accountants.
(2) As soon as practicable, copies of all financial statements and
reports that each Borrower shall send to its shareholders generally
and of all registration statements and all regular or periodic reports
which each Borrower shall file with the Securities and Exchange
Commission or any successor commission.
(3) From time to time and as soon as reasonably practicable following
each request, such forecasts, data, certificates, reports, statements,
opinions of counsel, documents or further information regarding the
business, assets, liabilities, financial condition, results of
operations or business prospects of each Borrower or any of its
Subsidiaries as the Agent or any Lender may reasonably request and
that each Borrower has or (except in the case of legal opinions
relating to the perfection or priority of the Security Interest)
without unreasonable expense can obtain; provided, however, that the
Lenders shall, to the extent reasonably practicable, coordinate
examinations of each Borrower's records by their respective internal
auditors. The rights of the Agent and the Lenders under this Section
10.4 are in addition to and not in derogation of their rights under
any other provision of this Agreement or of any other Loan Document.
(4) If requested by the Agent or any Lender, each Borrower will
furnish to the Agent and the Lenders statements in conformity with the
requirements of Federal Reserve Form G-3 or U-1 referred to in
Regulation G and U, respectively, of the Board of Governors of the
Federal Reserve System.
SECTION 1.63 Notice of Litigation and Other Matters. Prompt notice
of:
(1) the commencement, to the extent each Borrower is aware of the
same, of all proceedings and investigations by or before any
governmental or nongovernmental body and all actions and proceedings
in any court or before any arbitrator against or in any other way
relating to or affecting any Borrower, any of its Subsidiaries or any
of any Borrower's or any of its Subsidiaries' properties, assets or
businesses, which might, singly or in the aggregate, result in the
occurrence of a Default or an Event of Default, or have a Materially
Adverse Effect on any Borrower and its Subsidiaries, taken as a whole,
(2) any amendment of the articles of incorporation or by-laws of any
Borrower or any of its Subsidiaries,
(3) any change in the business, assets, liabilities, financial
condition, results of operations or business prospects of any Borrower
or any of its Subsidiaries which has had or may have, singly or in the
aggregate, a Materially Adverse Effect on any Borrower or its
Subsidiaries, taken as a whole, and any change in the Chief Executive
Officer, President or Chief Financial Officer of such Borrower, and
(4) any Default or Event of Default or any event which constitutes or
which with the passage of time or giving of notice or both would
constitute a default or event of default by any Borrower or any of its
Subsidiaries under any material agreement (other than this Agreement)
to which any Borrower or any of its Subsidiaries is a party or by
which any Borrower, any of its Subsidiaries or any of any Borrower's
or any of its Subsidiaries' properties may be bound.
SECTION 1.64 ERISA. As soon as possible and in any event within
thirty (30) days after any Borrower knows, or has reason to know,
that:
(1) any Termination Event with respect to a Plan has occurred or will
occur, or
(2) the aggregate present value of the Unfunded Vested Accrued
Benefits under all Plans is equal to an amount in excess of $0.00, or
(3) any Borrower or any of its Subsidiaries is in "default" (as
defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan required by reason of such Borrower's or such
Subsidiary's complete or partial withdrawal (as described in Section
4203 or 4205 of ERISA) from such Multiemployer Plan,
a certificate of the President or a Financial Officer of such Borrower
setting forth the details of such event and the action which is
proposed to be taken with respect thereto, together with any notice or
filing which may be required by the PBGC or other agency of the United
States government with respect to such event.
SECTION 1.65 Accuracy of Information. All written information,
reports, statements and other papers and data furnished to the Agent
or any Lender, whether pursuant to this Article 10 or any other
provision of this Agreement or of any other Loan Document, shall be,
at the time the same is so furnished, complete and correct in all
material respects to the extent necessary to give the Agent and the
Lenders true and accurate knowledge of the subject matter.
SECTION 1.66 Revisions or Updates to Schedules. Should any of the
information or disclosures provided on any of the Schedules originally
attached hereto become outdated or incorrect in any material respect,
the Borrowers shall deliver to the Agent and the Lenders as part of
the officer's certificate required pursuant to Section 10.3 such
revisions or updates to such Schedule(s) as may be necessary or
appropriate to update or correct such Schedule(s), provided that no
such revisions or updates to any Schedule(s) shall be deemed to have
amended, modified or superseded such Schedule(s) as originally
attached hereto, or to have cured any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any
such Schedule(s), unless and until the Required Lenders in the
exercise of their reasonable credit judgment, shall have accepted in
writing such revisions or updates to such Schedule(s).
ARTICLE 11
NEGATIVE COVENANTS
Until the Revolving Credit Facility has been terminated and
all the Secured Obligations have been paid in full, unless the
Required Lenders shall otherwise consent in the manner set forth in
Section 15.9, no Borrower will directly or indirectly and will not
permit its Affiliates to:
SECTION 1.67 Financial Ratios. Breach any of the financial
covenants set forth in this Section 11.1:
(1) Minimum Net Worth. Upon and after the event of an Availability
Shortfall, the Net Worth of the Borrowers thereafter shall not, at any
time during the then remaining term hereof, be less than (i)
$16,500,000.00 at any time on or before the earlier of (A) the date on
which the Fresh Start Financial Statements are delivered to Lender or
(B) March 30, 2000, and thereafter (ii) an amount equal to eighty
percent (80%) of the Net Worth of Borrowers reflected in the Fresh
Start Financial Statements.
(2) Minimum Fixed Charge Coverage Ratio. Upon and after the event of
an Availability Shortfall, the Borrowers shall have a Fixed Charge
Coverage Ratio for each of the following respective periods of not
less than the ratio set forth opposite such periods, as follows:
Period Minimum Ratio
Fiscal Quarter ended March 31, 2000 .85 to 1
Two-Fiscal-Quarter Period ended June 30, 2000 .90 to 1
Three-Fiscal-Quarter Period ended September 30, 2000 .95 to 1
Each Four-Fiscal-Quarter Period ended December 31, 2000,
and March 31, 2001, respectively 1.00 to 1
Each Four-Fiscal-Quarter Period ended on the last day of the
Fiscal Quarter ended June 30, 2001 and on the last
day of each succeeding Fiscal Quarter thereafter 1.15 to 1
(3) Maximum Leverage Ratio. Upon and after the event of an
Availability Shortfall, the Borrowers shall not permit the Leverage
Ratio at any time thereafter to exceed the respective ratios set forth
below as of the last day(s) of the respective period(s) set forth
opposite such ratios:
Period Maximum Ratio
Each of the Fiscal Quarters ended March 31, 2000 and
June 30, 2000, respectively 9.00 to 1
Fiscal Quarter ended September 30, 2000 8.50 to 1
Each of the Fiscal Quarters ended December 31, 2000,
and March 31, 2001, respectively 8.00 to 1
Each of the Fiscal Quarters thereafter 1.15 to 1
SECTION 1.68 Indebtedness for Money Borrowed. Create, assume, or
otherwise become or remain obligated in respect of, or permit or
suffer to exist or to be created, assumed or incurred or to be
outstanding any Indebtedness for Money Borrowed, except for (a)
Indebtedness to the Lenders arising under this Agreement, (b)
Permitted Existing Indebtedness, (c) Capitalized Lease Obligations and
Operating Lease Obligations relating to sale/leaseback transactions
which meet the requirements of Section 11.12, in an aggregate amount
up to $15,000,000 for each of the Fiscal Years during the term hereof,
and (d) Permitted Incremental Obligations.
SECTION 1.69 Guaranties. Become or remain liable with respect to
any Guaranty of any obligation of any other Person, except for
Permitted Guaranties.
SECTION 1.70 Investments. Acquire, after the Agreement Date, any
Business Unit or Investment or, after such date, maintain any
Investment other than Permitted Investments.
SECTION 1.71 Unfunded Capital Expenditures. Make any Unfunded
Capital Expenditures, except that the Borrowers may make aggregate
Unfunded Capital Expenditures in each Fiscal Year during the term
hereof in an amount not to exceed, (a) $50,000,000 less (b) the sum of
(i) all payments made or scheduled to be made by any Borrower during
such Fiscal Year on or with respect to Purchase Money Indebtedness,
Operating Lease Obligations and (without duplication) Indebtedness for
Money Borrowed which, in each case, was incurred by a Borrower prior
to the commencement of such Fiscal Year, and (ii) the aggregate amount
of all Purchase Money Indebtedness and Operating Lease Obligations
incurred by any of the Borrowers during such Fiscal Year.
SECTION 1.72 Restricted Dividend Payments and Purchases, Etc.
Declare or make any Restricted Distribution or Restricted Payment,
except that in each Fiscal Year during the term hereof, the Borrowers
may (a) buy or sell Trailers in the ordinary course of their
respective businesses, as provided for under Section 8.14(b) hereof,
and (b) prepay, in the ordinary course of business, obligations
arising under Operating Leases, Capitalized Leases and Purchase Money
Indebtedness; provided, however notwithstanding anything to the
contrary contained in this Section 11.6, no Restricted Payment shall
be made in the event an Availability Shortfall exists.
SECTION 1.73 Merger, Consolidation and Sale of Assets. Merge or
consolidate with any other Person or sell, lease or transfer or
otherwise dispose of all or a substantial portion of its assets to any
Person, including its capital stock or the capital stock of any of its
Subsidiaries, other than sales of Inventory in the ordinary course of
business and except as permitted pursuant to Section 9.1 hereof.
SECTION 1.74 Transactions with Affiliates. Effect any transaction,
including, without limitation, entering into any management agreement
or service agreement, with any Affiliate without the express prior
written consent of the Agent, except (a) in the ordinary course of the
Borrower's business and (b) loans to Affiliates of any of the
Borrowers in the aggregate during the term hereof, not to exceed
$100,000.
SECTION 1.75 Liens. Create, assume or permit or suffer to exist or
to be created or assumed any Lien on any of the Collateral or its
other assets, other than Permitted Liens.
SECTION 1.76 Operating Leases. Enter into any lease other than a
Capitalized Lease (an "Operating Lease") that would cause the
Borrowers to exceed the Permitted Incremental Obligations.
SECTION 1.77 Plans. Permit any condition to exist in connection
with any Plan which might constitute grounds for the PBGC to institute
proceedings to have such Plan terminated or a trustee appointed to
administer such Plan, and any other condition, event or transaction
with respect to any Plan which could result in the incurrence by such
Borrower of any material liability, fine or penalty.
SECTION 1.78 Sales and Leasebacks. Except as set forth in Schedule
11.12, enter into any synthetic lease or any arrangement with any
Person providing for such Borrower's leasing from such Person any real
or personal property which has been or is to be sold or transferred,
directly or indirectly, by such Borrower to such Person provided that
the Borrowers may enter into sale/leaseback transactions with
aggregate Net Proceeds in an amount for all Borrowers not to exceed
$15,000,000 per Fiscal Year.
SECTION 1.79 Capital Structure and Business. (a) Make any material
changes in any of its business objectives, purposes or operations
which could reasonably be expected to materially and adversely affect
the repayment of the Loans or any of the other Secured Obligations or
could reasonably be expected to result in a Materially Adverse Effect
on such Borrower and its Subsidiaries as a whole, (b) make any change
in its capital structure as described on Schedule 11.13, including the
issuance of any shares of stock, warrants or other securities
convertible into Stock or any revision of the terms of its outstanding
stock, except for options issued pursuant to the terms of the employee
and/or management stock option plan in effect as of the Effective Date
and the shares of stock issued in connection therewith, or (c) amend
its charter or bylaws in a manner which would adversely affect the
Agent or the Lenders or such Borrower's duty or ability to repay the
Secured Obligations.
SECTION 1.80 Change of Control; Change In Management.
(1) Without the express prior written consent of the Agent, directly
or indirectly effect a Change of Control.
(2) Without the express prior written consent of the Agent, which
consent shall not be unreasonably withheld, directly or indirectly
effect a Change in Management.
SECTION 1.81 No Impairment of Intercompany Transfers. Directly or
indirectly enter into or become bound by any agreement, instrument,
indenture or other obligation (other than this Agreement and the other
Loan Documents) which could directly or indirectly restrict, prohibit
or require the consent of any Person with respect to the payment of
dividends or distributions or the making or repayment of intercompany
loans by a Subsidiary of such Borrower to such Borrower.
SECTION 1.82 No Speculative Transactions. Engage in any transaction
involving commodity options, futures contracts or similar
transactions, except solely to hedge against fluctuations in the
prices of commodities owned or purchased by it and the values of
foreign currencies receivable or payable by it and interest swaps,
caps or collars.
SECTION 1.83 Pledge of Real Estate. Create any lien on, or sell,
lease, exchange, assign, transfer, pledge, hypothecate, grant a
security interest or security title in or otherwise dispose of, any
Real Estate owned by any Borrower or any Guarantor, without the prior
written consent of the Agent.
ARTICLE 12
DEFAULT
SECTION 1.84 Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event and
whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment or order of any court or
any order, rule or regulation of any governmental or nongovernmental
body:
(1) Default in Payment. Any Borrower shall default in any payment of
principal of or interest on any Loan or any Note when and as due
(whether at maturity, by reason of acceleration or otherwise).
(2) Other Payment Default. Any Borrower shall default in the
payment, as and when due, of principal of or interest on, any other
Secured Obligation, and such default shall continue for a period of
five (5) days after written notice thereof has been given to such
Borrower by the Agent.
(3) Misrepresentation. Any representation or warranty made or deemed
to be made by any Borrower or any Guarantor under this Agreement or
any Loan Document, or any amendment hereto or thereto, shall at any
time prove to have been incorrect or misleading in any material
respect when made or deemed made.
(4) Default in Performance. Any Borrower or any Guarantor shall
default in the performance or observance of any term, covenant,
condition or agreement to be performed by such Borrower or Guarantor,
contained in
(1) Articles 7, 8, 10 or 11, or Section 9.1 (insofar as it requires
the preservation of the corporate existence of such Borrower or
Guarantor), or Section 9.8, and the Agent shall have delivered to such
Borrower or Guarantor written notice of such default; or
(2) any other provision of this Agreement (other than as specifically
provided for otherwise in this Section 12.1) and such default shall
continue for a period of thirty (30) days after written notice thereof
has been given to such Borrower or Guarantor by the Agent.
(5) Indebtedness Cross Default. With respect to Indebtedness for
Money Borrowed,
(1) the maturity of any such Indebtedness, individually or in the
aggregate with other such Indebtedness, in a principal amount
exceeding $5,000,000 shall have (A) been accelerated in accordance
with the provisions of any indenture, contract or instrument providing
for the creation of or concerning such Indebtedness, or (B) been
required to be prepaid prior to the stated maturity thereof, or
(ii) any event shall have occurred and be continuing which
would permit any holder or holders of such Indebtedness, any
trustee or agent acting on behalf of such holder or holders or
any other Person so to accelerate such maturity, and such
Borrower or such Subsidiary shall have failed to cure such
default prior to the expiration of any applicable cure or grace
period.
(6) Other Cross-Defaults. Any Borrower, any Guarantor or any of
their respective Subsidiaries shall default in the payment when due,
or in the performance or observance, of any obligation or condition of
any agreement, contract or lease (other than this Agreement, the
Security Documents or any such agreement, contract or lease relating
to Indebtedness for Money Borrowed) if the existence of any such
defaults, singly or in the aggregate, could in the reasonable judgment
of the Agent have a Materially Adverse Effect on one or more Borrowers
or Guarantors.
(7) Voluntary Bankruptcy Proceeding. Any Borrower, any Guarantor or
any of their respective Subsidiaries shall (i) commence a voluntary
case under the federal bankruptcy laws (as now or hereafter in
effect), (ii) file a petition seeking to take advantage of any other
laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts,
(iii) consent to or fail to contest in a timely and appropriate manner
any petition filed against it in an involuntary case under such
bankruptcy laws or other laws, (iv) apply for or consent to, or fail
to contest in a timely and appropriate manner, the appointment of, or
the taking of possession by, a receiver, custodian, trustee, or
liquidator of itself or of a substantial part of its property,
domestic or foreign, (v) admit in writing its inability to pay its
debts as they become due, (vi) make a general assignment for the
benefit of creditors, or (vii) take any corporate action for the
purpose of authorizing any of the foregoing.
(8) Involuntary Bankruptcy Proceeding. A case or other proceeding
shall be commenced against any Borrower, any Guarantor or any of their
Subsidiaries in any court of competent jurisdiction seeking (i) relief
under the federal bankruptcy laws (as now or hereafter in effect) or
under any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding up or adjustment of debts, (ii)
the appointment of a trustee, receiver, custodian, liquidator or the
like of any Borrower, any Guarantor, any of their Subsidiaries or of
all or any substantial part of the assets, domestic or foreign, of
such Borrower, such Guarantor, or any of their respective
Subsidiaries, and such case or proceeding shall continue undismissed
or unstayed for a period of sixty (60) consecutive calendar days, or
an order granting the relief requested in such case or proceeding
against such Borrower, such Guarantor or any of their respective
Subsidiaries (including, but not limited to, an order for relief under
such federal bankruptcy laws) shall be entered.
(9) Loan Documents. Any event of default or Event of Default under
any other Loan Document shall occur or any Borrower or any Guarantor
shall default in the performance or observance of any material term,
covenant, condition or agreement contained in, or the payment of any
other sum covenanted to be paid by such Borrower or any Guarantor
under, any such Loan Document or any provision of this Agreement, or
of any other Loan Document after delivery thereof hereunder, shall for
any reason cease to be valid, binding and enforceable, other than a
nonmaterial provision rendered unenforceable by operation of law, or
such Borrower, such Guarantor or other party thereto (other than the
Agent or a Lender) shall so state in writing, or this Agreement or any
other Loan Document, after delivery thereof hereunder, shall for any
reason (other than any action taken independently by the Agent or a
Lender and except to the extent permitted by the terms thereof) cease
to create a valid, perfected and, except as otherwise expressly
permitted herein, first priority Lien on, or security interest in, any
of the Collateral purported to be covered thereby.
(10) Judgment. (i) An uninsured judgment or order for the payment of
money warrant, writ of attachment, execution or similar process which
exceeds in amount or value $500,000 individually or $1,000,000 in the
aggregate, or (ii) any non-monetary judgment or order which could
reasonably be expected to have a Materially Adverse Effect, shall be
entered against any Borrower or any Guarantor by any court and such
judgment, order, warrant, writ of attachment, execution or similar
process as set forth in clause (i) or (ii) shall continue undischarged
or unstayed for thirty (30) days.
(11) ERISA. (i) Any Termination Event with respect to a Plan shall
occur that, after taking into account the excess, if any, of (A) the
fair market value of the assets of any other Plan with respect to
which a Termination Event occurs on the same day (but only to the
extent that such excess is the property of any Borrower or any
Guarantor) over (B) the present value on such day of all vested
nonforfeitable benefits under such other Plan, results in an Unfunded
Vested Accrued Benefit in excess of $100,000, or (ii) any Plan shall
incur an "accumulated funding deficiency" (as defined in Section 412
of the Code or Section 302 of ERISA) for which a waiver has not been
obtained in accordance with the applicable provisions of the Code and
ERISA, or (iii) any Borrower or any Guarantor is in "default" (as
defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan resulting from the Borrower's complete or partial
withdrawal (as described in Section 4203 or 4205 of ERISA) from such
Multiemployer Plan.
(12) Qualified Audits. The independent certified public accountants
retained by any Borrower or any Guarantor shall refuse to deliver an
opinion in accordance with Section 10.1(a) with respect to the annual
financial statements of such Borrower or Guarantor.
(13) Material Adverse Change. There occurs any act, omission, event,
undertaking or circumstance or series of acts, omissions, events,
undertakings or circumstances which have, or would have, either
individually or in the aggregate, a Materially Adverse Effect.
(14) Change of Control. There occurs any Change of Control of any
Borrower or Guarantor without the express prior written consent of the
Agent.
(15) Change in Management. There occurs any Change in Management of
any Borrower or Guarantor without the express prior written consent of
the Agent, which consent shall not be unreasonably withheld.
SECTION 1.85 Remedies.
(1) Automatic Acceleration and Termination of Facilities. Upon the
occurrence of an Event of Default specified in Section 12.1(g) or (h),
(i) the principal of and the interest on the Loans and any Note at the
time outstanding, and all other amounts owed to the Agent or the
Lenders under this Agreement or any of the Loan Documents and all
other Secured Obligations, shall thereupon become due and payable
without presentment, demand, protest, or other notice of any kind, all
of which are expressly waived, anything in this Agreement or any of
the Loan Documents to the contrary notwithstanding, and (ii) the
Revolving Credit Loans and the right of any and all Borrowers to
request Advances under this Agreement shall immediately terminate.
(2) Other Remedies. If any Event of Default shall have occurred, and
during the continuance of any such Event of Default, the Agent may
without notice, and at the direction of the Required Lenders in their
sole and absolute discretion shall, do any of the following:
(1) declare the principal of and interest on the Loans and any Note
at the time outstanding, and all other amounts owed to the Agent or
the Lenders under this Agreement or any of the Loan Documents and all
other Secured Obligations, to be forthwith due and payable, whereupon
the same shall immediately become due and payable without presentment,
demand, protest or other notice of any kind, all of which are
expressly waived, anything in this Agreement or the Loan Documents to
the contrary notwithstanding;
(2) terminate the Revolving Credit Loans and any other right of the
Borrowers to request Advances hereunder;
(3) notify, or request each Borrower to notify, in writing or
otherwise, any Account Debtor or obligor with respect to any one or
more of the Receivables to make payment to the Agent, for the benefit
of the Lenders, or any agent or designee of the Agent, at such address
as may be specified by the Agent and if, notwithstanding the giving of
any notice, any Account Debtor or other such obligor shall make
payments to such Borrower, such Borrower shall hold all such payments
it receives in trust for the Agent, for the account of the Lenders,
without commingling the same with other funds or property of, or held
by, such Borrower, and shall deliver the same to the Agent or any such
agent or designee of the Agent immediately upon receipt by such
Borrower in the identical form received, together with any necessary
endorsements;
(4) settle or adjust disputes and claims directly with Account
Debtors and other obligors on Receivables for amounts and on terms
which the Agent reasonably considers advisable and in all such cases
only the net amounts received by the Agent, for the account of the
Lenders, in payment of such amounts, after deductions of costs and
reasonable attorneys' fees, shall constitute Collateral and each
Borrower shall have no further right to make any such settlements or
adjustments or to accept any returns of merchandise;
(5) through self-help, without notice, demand or judicial or other
process, enter upon any premises in which Collateral may be located
and, without resistance or interference by any Borrower, take physical
possession of any or all thereof and maintain such possession on such
premises or move the same or any part thereof to such other place or
places as the Agent shall choose, without being liable to any Borrower
on account of any loss, damage or depreciation that may occur as a
result thereof, so long as the Agent shall act reasonably;
(6) require each Borrower to and each Borrower shall, without charge
to the Agent or any Lender, assemble the Collateral and maintain or
deliver it into the possession of the Agent or any agent or
representative of the Agent at such place or places as the Agent may
designate and as are reasonably convenient to both the Agent and such
Borrower;
(7) at the expense of Borrowers, cause any of the Collateral to be
placed in a public or field warehouse, and the Agent shall not be
liable to any Borrower on account of any loss, damage or depreciation
that may occur as a result thereof, so long as the Agent shall act
reasonably and in its reasonable credit judgment;
(8) through self-help and without notice, demand or judicial or other
process, and without payment of any rent or any other charge, enter
any of any Borrower's premises and, without breach of the peace, until
the Agent, on behalf of the Lenders, completes the enforcement of its
rights in the Collateral, take possession of such premises or place
custodians in exclusive control thereof, remain on such premises and
use the same and any of any Borrower's Collateral, for the purpose of
(A) completing any work in process, and (B) collecting any Receivable,
and the Agent for the benefit of the Lenders is hereby granted a
license or sublicense and all other rights as may be necessary,
appropriate or desirable to use the Intellectual Property in
connection with the foregoing, and the rights of each and every
Borrower under all licenses, sublicenses and franchise agreements
shall inure to the Agent for the benefit of the Lenders (provided,
however, that any use of any federally registered trademarks as to any
goods shall be subject to the control as to the quality of such goods
of the owner of such trademarks and the goodwill of the business
symbolized thereby);
(9) exercise any and all of its rights under any and all of the
Security Documents;
(10) apply any Collateral consisting of cash to the payment of the
Secured Obligations in any order in which the Agent, on behalf of the
Lenders, may elect or use such cash in connection with the exercise of
any of its other rights hereunder or under any of the Security
Documents;
(11) establish or cause to be established one or more Lockboxes or
other arrangement for the deposit of proceeds of Receivables, and, in
such case, each Borrower shall cause to be forwarded to the Agent at
the Agent's Office, on a daily basis, copies of all checks and other
items of payment and deposit slips related thereto deposited in such
Lockboxes, together with collection reports in form and substance
satisfactory to the Agent; and
(12) exercise all of the rights and remedies of a secured party under
the Uniform Commercial Code and under any other Applicable Law,
including, without limitation, the right, without notice except as
specified below and with or without taking the possession thereof, to
sell the Collateral or any part thereof in one or more parcels at
public or private sale, at any location chosen by the Agent, for cash,
on credit or for future delivery, and at such price or prices and upon
such other terms as are commercially reasonable. Each Borrower agrees
that, to the extent notice of sale shall be required by law, at least
ten (10) days' notice to such Borrower of the time and place of any
public sale or the time after which any private sale is to be made
shall constitute reasonable notification, but notice given in any
other reasonable manner or at any other reasonable time shall
constitute reasonable notification. The Agent shall not be obligated
to make any sale of Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place
to which it was so adjourned.
SECTION 1.86 Application of Proceeds. All proceeds from each sale
of, or other realization upon, all or any part of the Collateral
following an Event of Default shall be applied or paid over as
follows:
(1) First: to the payment of all costs and expenses incurred in
connection with such sale or other realization, including attorneys'
fees and expenses actually incurred (including, without limitation,
the expenses and other allocated costs of internal counsel);
(2) Second: to the payment of the Secured Obligations and, with
respect to such Secured Obligations constituting the aggregate Letter
of Credit Amount for Letters of Credit that the Agent determines have
been authorized for issuance by the Agent and the Issuing Lender
pursuant to Section 3.1 hereof but have not yet been issued, the
creation of a Cash Collateral Account (with each and every Borrower
and Guarantor remaining liable for any deficiency); and
(3) Third: the balance (if any) of such proceeds shall be paid to the
Borrowers, subject to any duty imposed by law, or otherwise to
whomsoever shall be entitled thereto.
The Borrowers and Guarantors shall remain liable, jointly and
severally, and will pay, on demand, any deficiency remaining in
respect of the Secured Obligations, together with interest thereon at
a rate per annum equal to the highest rate then payable hereunder on
such Secured Obligations, which interest shall constitute part of the
Secured Obligations.
SECTION 1.87 Miscellaneous Provision Concerning Remedies.
(1) Rights Cumulative. The rights and remedies of the Agent and the
Lenders under this Agreement, the Notes and each of the Loan Documents
shall be cumulative and not exclusive of any rights or remedies which
it or they would otherwise have. In exercising such rights and
remedies the Agent and the Lenders may be selective and no failure or
delay by the Agent or any Lender in exercising any right shall operate
as a waiver of it, nor shall any single or partial exercise of any
power or right preclude its other or further exercise or the exercise
of any other power or right.
(2) Waiver of Marshaling. Each Borrower hereby waives any right to
require any marshaling of assets and any similar right.
(3) Limitation of Liability. Nothing contained in this Article 12 or
elsewhere in this Agreement or in any of the Loan Documents shall be
construed as requiring or obligating the Agent, any Lender or any
agent or designee of the Agent or any Lender to make any demand, or to
make any inquiry as to the nature or sufficiency of any payment
received by it, or to present or file any claim or notice or take any
action, with respect to any Receivable or any other Collateral or the
monies due or to become due thereunder or in connection therewith, or
to take any steps necessary to preserve any rights against prior
parties, and the Agent, the Lenders and their agents or designees
shall have no liability to any Borrower for actions taken pursuant to
this Article 12, any other provision of this Agreement or any of the
Loan Documents so long as the Agent or such Lender shall act
reasonably and in its reasonable credit judgment.
(4) Appointment of Receiver. In any action under this Article 12,
the Agent shall be entitled during the continuance of an Event of
Default to the appointment of a receiver, without notice of any kind
whatsoever, to take possession of all or any portion of the Collateral
and to exercise such power as the court shall confer upon such
receiver.
SECTION 1.88 Trademark License. Each Borrower hereby grants to the
Agent, for the benefit of the Lenders, to the extent of such
Borrower's rights therein and to the extent permitted by the various
license agreements relating thereto, the nonexclusive right and
license to use the trademarks set forth on Schedule 6.1(y) and any
other trademark then used by any Borrower, for the purposes set forth
in Section 12.2(b)(viii) and for the purpose of enabling the Agent to
realize on the Collateral and to permit any purchaser of any portion
of the Collateral through a foreclosure sale or any other exercise of
the Agent's rights and remedies under the Loan Documents to use, sell
or otherwise dispose of the Collateral bearing any such trademark.
Such right and license is granted free of charge, without the
requirement that any monetary payment whatsoever be made to any
Borrower or any other Person by the Agent. Each Borrower hereby
represents, warrants, covenants and agrees that, except as set forth
in the license agreements, it presently has, and shall continue to
have, the right, without the approval or consent of others, to grant
the license set forth in this Section 12.5.
ARTICLE 13
ASSIGNMENTS
SECTION 1.89 Successors and Assigns; Participations.
(1) This Agreement shall be binding upon and inure to the benefit of
each Borrower, the Lenders, the Agent, all future holders of the
Notes, and their respective successors and assigns, except that no
Borrower may assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of each Lender, and
any such attempted assignment or transfer by any Borrower except in
strict compliance with the provisions hereof shall be null and void,
and of no force or effect.
(2) Each Lender may assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement
(including, without limitation, all or a portion of the Loans at the
time owing to it and the Notes held by it); provided, however, that
(i) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Lender's rights and obligations under
this Agreement, (ii) the amount of the Commitment of the assigning
Lender that is subject to each such assignment (determined as of the
date the Assignment and Transfer with respect to such assignment is
delivered to the Agent) shall in no event be less than $5,000,000 (the
"Minimum Commitment"), (iii) in the case of a partial assignment, the
amount of the Commitment that is retained by the assigning Lender
(determined as of the date the Assignment and Transfer with respect to
such assignment is delivered to the Agent) shall in no event be less
than the Minimum Commitment, (iv) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance and
recording in the Register (as hereinafter defined) an Assignment and
Transfer, together with any Note or Notes subject to such assignment
and such assignee's commitment percentage of the Agent's syndication
expenses, (v) such assignment shall not, without the consent of the
Borrowers, require a Borrower to file a registration statement with
the Securities and Exchange Commission or apply to or qualify the
Loans or the Notes under the blue sky laws of any state, (vi) the
representation contained in Section 13.2 hereof shall be true with
respect to any such proposed assignee, and (vii) such Lender provides
notice to the Borrowers of the identity of the Eligible Assignee.
Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Transfer,
which effective date shall be at least five (5) Business Days after
the execution thereof, (x) the assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Transfer,
have the rights and obligations of a Lender hereunder, and (y) the
Lender assignor thereunder shall, to the extent provided in such
assignment, be released from its obligations under this Agreement.
Notwithstanding anything to the contrary in this Section 13.1(b) or
elsewhere in this Agreement, The CIT Group/Business Credit, Inc.
("CITBC") agrees that, except after the occurrence of an Event of
Default, the principal amount of the Commitment of CITBC during the
term hereof shall in no event be less than the highest Commitment of
any other Lender party to this Agreement.
(3) By executing and delivering an Assignment and Transfer, the
Lender assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i)
other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, such Lender assignor makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; (ii) such Lender
assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower
or the performance or observance by any Borrower of any of its
obligations under this Agreement or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the
financial statements refereed to in Section 6.1(m) and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Transfer; (iv) such assignee will, independently and without reliance
upon the Agent, such Lender assignor or any other Lender, and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Agreement; (v) such assignee confirms that it
is an Eligible Assignee; (vi) such assignee appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof and thereof, together with
such powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(4) The Agent shall maintain a copy of each Assignment and Transfer
delivered to it and a register for the recordation of the names and
addresses of the Lenders and the Commitment Percentage of, and
principal amount of the Loans owing to, each Lender from time to time
(the "Register"). The entries in the Register shall be conclusive, in
the absence of manifest error, and each Borrower, the Agent and the
Lenders may treat each person whose name is recorded in the Register
as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by any Borrower or any
Lender at any reasonable time and from time to time upon reasonable
prior notice.
(5) Upon its receipt of an Assignment and Transfer executed by an
assigning Lender and an Eligible Assignee together with any Note or
Notes subject to such assignment and the written consent to such
assignment, the Agent shall, if such Assignment and Transfer has been
completed and is in the form of Exhibit J, (i) accept such Assignment
and Transfer, (ii) record the information contained therein in the
Register, (iii) give prompt notice thereof to the Lenders and each
Borrower, and (iv) promptly deliver a copy of such Assignment and
Transfer to each Borrower. Within five (5) Business Days after
receipt of notice, each Borrower shall execute and deliver to the
Agent in exchange for the surrendered Note or Notes a new Note or
Notes to the order of such Eligible Assignee in amounts equal to the
Commitment Percentage assumed by such Eligible Assignee pursuant to
such Assignment and Transfer and a new Note or Notes to the order of
the assigning Lender in an amount equal to the Commitment retained by
it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such
Assignment and Transfer and shall otherwise be in substantially the
form of the assigned Notes delivered to the assignor Lender. Each
surrendered Note or Notes shall be canceled and returned to Trism.
(6) Each Lender may, without the consent of any Borrower, sell
participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its commitments hereunder and
the Loans owing to it and the Notes held by it); provided, however,
that (i) each such participation shall be in an amount not less than
the Minimum Commitment, (ii) such Lender's obligations under this
Agreement (including, without limitation, its commitments hereunder)
shall remain unchanged, (iii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iv) such Lender shall remain the holder of the Notes
held by it for all purposes of this Agreement, (v) each Borrower, the
Agent and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and
obligations under this Agreement; provided, that such Lender may agree
with any participant that such Lender will not, without such
participant's consent, agree to or approve any waivers or amendments
which would reduce the principal of or the interest rate on any Loans,
extend the term or increase the amount of the commitments of such
participant, reduce the amount of any fees to which such participant
is entitled, extend any scheduled payment date for principal or
release Collateral securing the Loans (other than Collateral disposed
of pursuant to the terms of this Agreement or the Security Documents),
(vi) any such disposition shall not, without the consent of the
Borrowers, require any Borrower to file a registration statement with
the Securities and Exchange Commission to apply to qualify the Loans
or the Notes under the blue sky law of any state and (vii) such Lender
provides notice to a Borrower of the identity of the potential
participant. The Lender selling a participation to any bank or other
entity that is not an Affiliate of such Lender shall give prompt
notice thereof to each Borrower.
(7) Any Lender may, in connection with any assignment, proposed
assignment, participation or proposed participation pursuant to this
Section 13.1, disclose to the assignee, participant, proposed assignee
or proposed participant, any information relating to any Borrower
furnished to such Lender by or on behalf of such Borrower; provided
that, prior to any such disclosure, each such-assignee, proposed
assignee, participant or proposed participant shall agree with such
Borrower or such Lender (which in the case of an agreement with only
such Lender, such Borrower shall be recognized as a third party
beneficiary thereof) to preserve the confidentiality of any
confidential information relating to such Borrower received from such
Lender.
(8) Each Borrower shall assist any Lender permitted to sell
assignments or participations under this Section 13.1 as reasonably
required to enable the assigning or selling Lender to effect any such
assignment or participation, including, without limitation, (i) prompt
assistance in the preparation of an information memorandum and the
verification of the completeness and accuracy of the information
contained therein; (ii) preparation of offering materials and
projections by any Borrower and its advisors; (iii) providing the
Agent with all information reasonably deemed necessary by the Agent to
successfully complete the syndication; (iv) confirmation as to the
accuracy and completeness of such offering materials, information and
projections; (v) participation of any Borrower's senior management in
meetings and conference calls with potential lenders at such times and
places as the Agent may reasonable request; and (vi) the execution
and delivery of any and all agreements, notes and other documents and
instruments as shall be requested.
(9) In the event that (i) an Event of Default has occurred hereunder
and (ii) CITBC intends to assign, whether through absolute assignment,
participation or otherwise, all or a portion of its interest, rights
and obligations under this Agreement to an Eligible Assignee pursuant
to the terms of this Section 13.1 (the "Proposed Assignment"), CITBC
shall, within fifteen (15) days prior to the closing of such Proposed
Assignment, deliver to each other Lender notice (the "Assignment
Notice") specifying (A) the amount of the Proposed Assignment and (B)
outlining the terms under which such Lender can participate in the
Proposed Assignment and simultaneously with the closing thereof assign
a portion of such Lender's Commitment in an amount equal to (x) such
Lender's Commitment Percentage multiplied by (y) the amount of the
Proposed Assignment (each, a "Pro-rata Assignment Right"). Each
Lender shall then have ten (10) days, from the date of the Assignment
Notice, to notify CITBC of its desire to exercise its Pro-rata
Assignment Right. In the event any Lender notifies CITBC (within the
time frame set forth above) of its desire to exercise its Pro-rata
Assignment Right, CITBC and such Lender shall enter into such
documents as CITBC deems necessary and appropriate in its sole
discretion to evidence and effect such an assignment.
SECTION 1.90 Representation of Lenders. Each Lender hereby
represents that it will make each Loan hereunder as a commercial loan
for its own account in the ordinary course of its business; provided,
however, that subject to Section 13.1 hereof, the disposition of the
Notes or other evidence of the Secured Obligations held by any Lender
shall at all times be within its exclusive control.
ARTICLE 14
AGENT
SECTION 1.91 Appointment of Agent. Each of the Lenders hereby
irrevocably designates and appoints The CIT Group/Business Credit,
Inc. as the Agent of such Lender under this Agreement and the other
Loan Documents, and each such Lender irrevocably authorizes the Agent,
as the Agent for such Lender to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Agreement and such other
Loan Documents, including, without limitation, to make determinations
as to the eligibility of Receivables and to adjust the advance ratios
contained in the definition of "Borrowing Base" (so long as such
advance ratios, as adjusted, do not exceed those set forth in the
definition of "Borrowing Base"), together with such other powers as
are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement or such other Loan Documents,
the Agent shall not have any duties or responsibilities, except those
expressly set forth herein and therein, or any fiduciary relationship
with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read
into this Agreement or the other Loan Documents or otherwise exist
against the Agent.
SECTION 1.92 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not
be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
SECTION 1.93 Exculpatory Provisions. Neither the Agent nor any of
its trustees, officers, directors, employees, agents, attorneys-in-
fact or Affiliates shall be (i) liable to any Lender (or any Lender's
participants) for any action lawfully taken or omitted to be taken by
it or such Person under or in connection with this Agreement or the
other Loan Documents (except for its or such Person's own gross
negligence or willful misconduct), or (ii) responsible in any manner
to any Lender (or any Lender's participants) for any recitals,
statements, representations or warranties made by any Borrower or any
officer thereof contained in this Agreement or the other Loan
Documents or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or the other Loan Documents or for the
value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or the other Loan Documents or for any
failure of any Borrower to perform its obligations hereunder or
thereunder. The Agent shall not be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or conditions of, this Agreement, or
to inspect the properties, books or records of any Borrower.
SECTION 1.94 Reliance by Agent. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to any Borrower), independent accountants
and other experts selected by the Agent. The Agent may deem and treat
the payee of any Note as the owner thereof for all purposes unless
such Note shall have been transferred in accordance with Section 13.1.
The Agent shall be fully justified in failing or refusing to take any
action under this Agreement and the other Loan Documents unless it
shall first receive such advice or concurrence of the Required Lenders
(or the unanimous consent of the Lenders with respect to the matters
set forth in Section 15.9(b)) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any
and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting,
under this Agreement and the Notes in accordance with a request of the
Required Lenders, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
SECTION 1.95 Notice of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Agent has received notice from a Lender
or a Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of
default". In the event that the Agent receives such a notice, the
Agent shall promptly give notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders;
provided that unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) continue
making Revolving Credit Loans to the Borrowers on behalf of the
Lenders in reliance on the provisions of Section 4.6 and take such
other action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
SECTION 1.96 Non-Reliance on Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made
any representations or warranties to it and that no act by the Agent
hereinafter taken, including any review of the affairs of any
Borrower, shall be deemed to constitute any representation or warranty
by the Agent to any Lender. Each Lender represents to the Agent that
it has, independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of any Borrower and made its own decision to make its
Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Agent or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of each Borrower. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by
the Agent hereunder or by the other Loan Documents, the Agent shall
not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of any
Borrower which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
SECTION 1.97 Indemnification. The Lenders agree to indemnify the
Agent in its capacity as such (to the extent not reimbursed by a
Borrower and without limiting the obligation of the Borrowers to do
so), ratably according to their respective Commitment Percentages,
from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including,
without limitation, at any time following the payment of the Notes) be
imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement or the other Loan
Documents, or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Agent under or in connection with any
of the foregoing; provided that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the Agent's gross negligence or
willful misconduct or resulting solely from transactions or
occurrences that occur at a time after such Lender has assigned all of
its interests, rights and obligations under this Agreement pursuant to
Section 13.1 or, in the case of a Lender to which an assignment is
made hereunder pursuant to Section 13.1, at a time before such
assignment. The agreements in this subsection shall survive the
payment of the Notes, the Secured Obligations and all other amounts
payable hereunder and the termination of this Agreement.
SECTION 1.98 Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with any Borrower and any Guarantor and
their respective Subsidiaries as if the Agent were not the Agent
hereunder. With respect to its Commitment, the Loans made or renewed
by it and any Note issued to it and any Letter of Credit issued by it,
the Agent shall have and may exercise the same rights and powers under
this Agreement and the other Loan Documents and is subject to the same
obligations and liabilities as and to the extent set forth herein and
in the other Loan Documents for any other Lender. The terms "Lenders"
or "Required Lenders" or any other term shall, unless the context
clearly otherwise indicates, include the Agent in its individual
capacity as a Lender or one of the Required Lenders.
SECTION 1.99 Successor Agent. The Agent may resign as the Agent
upon an Event of Default by providing thirty (30) days' written notice
to the Lenders. The Agent may be removed by the Required Lenders if
the Agent is grossly negligent or engages in willful misconduct in the
performance of its duties under this Agreement. If the Agent shall
resign or be removed as the Agent under this Agreement, then the
Required Lenders shall appoint from among the Lenders a successor
agent for the Lenders which successor agent shall be approved by the
Borrowers (which approval shall not be unreasonably withheld),
whereupon such successor agent shall succeed to the rights, powers and
duties of the Agent, and the term "Agent" shall mean such successor
agent effective upon its appointment, and the former Agent's rights,
powers and duties as the Agent shall be terminated, without any other
or further act or deed on the part of such former Agent or any of the
parties to this Agreement or any holders of the Notes. After any
Agent's resignation or removal hereunder as the Agent, the provisions
of Section 14.7 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Agent under this Agreement.
Notwithstanding anything to the contrary contained herein, the Agent's
right to resign as the Agent, or to assign its status as the Agent,
pursuant to the terms of this Section 14.9 shall be expressly
conditioned upon a successor Agent being appointed simultaneously
therewith.
SECTION 1.100 Notices from Agent to Lenders. The Agent shall
promptly, upon receipt thereof, forward to each Lender copies of any
written notices, reports or other information supplied to it by the
Borrowers (but which the Borrowers are not required to supply directly
to the Lenders).
SECTION 1.101 Direction from Lenders. Notwithstanding anything
contained in this Agreement or any other Loan Document to the
contrary, the Agent shall not exercise any of the remedies set forth
in Section 12.2 (or in any other provision of any Loan Document) with
respect to any of the Mortgaged Real Estate or Pledged Collateral (as
defined in the Pledged Agreement) without the prior written consent of
any combination of Lenders whose Commitment Percentages at such time
aggregate fifty percent (50)% or more. The foregoing sentence shall
not, as between the Borrowers, the Guarantors and the Agent, limit or
restrict the Agent's right to pursue any remedy against the
Collateral, including the Mortgaged Real Estate and the Pledged
Collateral.
ARTICLE 15
MISCELLANEOUS
SECTION 1.102 Notices.
(1) Method of Communication. Except as specifically provided in this
Agreement or in any of the Loan Documents, all notices and the
communications hereunder and thereunder shall be in writing or by
telephone, subsequently confirmed in writing. Notices in writing
shall be delivered personally or sent by certified or registered mail,
postage pre-paid, or by overnight courier, telex or facsimile
transmission and shall be deemed received in the case of personal
delivery, when delivered, in the case of mailing, when receipted for,
in the case of overnight delivery, on the next Business Day after
delivery to the courier, and in the case of telex and facsimile
transmission, upon transmittal, provided that in the case of notices
to the Agent, notice shall be deemed to have been given only when such
notice is actually received by the Agent. A telephonic notice to the
Agent, as understood by the Agent, will be deemed to be the
controlling and proper notice in the event of a discrepancy with or
failure to receive a confirming written notice.
(2) Addresses for Notices. Notices to any party shall be sent to it
at the following addresses, or any other address of which all the
other parties are notified in writing
If to the Borrowers
and/or the Guarantors: c/o TRISM, Inc.
4174 Jiles Road
Kennesaw, Georgia 30144
Attn: Mr. James G. Overley, Chief Financial
Officer
Facsimile No.: (770) 795-4619
With a copy to: Proskauer Rose, LLP
1585 Broadway
New York, New York 10036
Attn: Stephen Kuhn, Esq.
Facsimile No.: (212) 969-2900
If to the Agent: The CIT Group/Business Credit, Inc.
1200 Ashwood Parkway, Suite 150
Atlanta, Georgia 30338
Attn: Mr. Jerrold K. Brown, Vice President
Facsimile No.: (770) 522-7673
With a copy to: Smith, Gambrell & Russell, LLP
1230 Peachtree Street, N.E.
Suite 3100
Atlanta, Georgia 30309
Attn: Bruce W. Moorhead, Jr., Esq.
Facsimile: (404) 815-3509
If to a Lender: At the address of such Lender set forth
on the signature page hereof.
(3) Agent's Office. The Agent hereby designates its office located
at 1200 Ashwood Parkway, Suite 150, Atlanta, Georgia 30338, or any
subsequent office which shall have been specified for such purpose by
written notice to the Borrowers, as the office to which payments due
are to be made and at which Loans will be disbursed.
SECTION 1.103 Expenses. The Borrowers agree, jointly and severally,
to pay or reimburse on demand all costs and expenses incurred by the
Agent or, following an Event of Default, any Lender, including,
without limitation, the reasonable fees and disbursements of counsel,
in connection with (a) the negotiation, preparation, execution,
delivery, administration, enforcement and termination of the DIP
Facility, the Letter of Interest, the Commitment Letter, this
Agreement and each of the other Loan Documents, whenever the same
shall be executed and delivered, including, without limitation (i) the
out-of-pocket costs and expenses incurred in connection with the
administration and interpretation of this Agreement and the other Loan
Documents; (ii) the costs and expenses of appraisals of the
Collateral; (iii) the costs and expenses of lien and title searches
and title insurance; (iv) the costs and expenses of environmental
reports with respect to the Real Estate; (v) taxes, fees and other
charges for recording the Mortgages, filing the Financing Statements
and continuations and the costs and expenses of taking other actions
to perfect, protect, and continue the Security Interests; provided,
however, that the Borrowers shall not be required to pay the expenses
of any Person which becomes a Lender more than ninety (90) days after
the Effective Date incurred in connection with such Person's so
becoming a Lender; (b) the preparation, execution and delivery of any
waiver, amendment, supplement or consent by the Agent and the Lenders
relating to this Agreement or any of the Loan Documents; (c) sums paid
or incurred to pay any amount or take any action required of the
Borrowers under the Loan Documents that the Borrowers fail to pay or
take; (d) out-of-pocket costs of field audits, inspections and
verifications of the Collateral by the Agent and the Lenders,
including, without limitation, standard per diem fees charged by the
Agent and the Lenders in the amount of $650 per diem per auditor and
travel, lodging, and meals in connection therewith, at or prior to the
date on which a Person becomes a Lender and up to two (2) times per
year and whenever an Event of Default exists provided, however, that
unless and until a Default or an Event of Default shall have occurred
and be continuing under this Agreement or any of the other Loan
Documents, (i) no field audit charges or expenses of any Lender other
than the Agent shall be charged to or reimbursable by Borrowers,
except for field audit charges incurred for a single field audit by a
prospective Lender, with a commitment of at least $5,000,000,
conducted in connection with an prospective assignment or
participation hereunder, and (ii) no Lender whose aggregate commitment
with respect to the Financing is less than $5,000,000 shall conduct,
or require Borrowers to pay for, any separate field audit by such
Lender; (e) costs and expenses of forwarding loan proceeds, collecting
checks and other items of payment, and establishing and maintaining
each Controlled Disbursement Account, Agency Account and Lockbox; (f)
costs and expenses of preserving and protecting the Collateral; (g)
consulting, after the occurrence of a Default, with one or more
Persons, including appraisers, accountants and lawyers, concerning the
value of any Collateral for the Secured Obligations or related to the
nature, scope or value of any right or remedy of the Agent or any
Lender hereunder or under any of the Loan Documents, including any
review of factual matters in connection therewith, which expenses
shall include the fees and disbursements of such Persons; and (h)
reasonable costs and expenses paid or incurred to obtain payment of
the Secured Obligations, enforce the Security Interests, sell or
otherwise realize upon the Collateral, and otherwise enforce the
provisions of the Loan Documents, or to prosecute or defend any claim
in any way arising out of, related to or connected with, this
Agreement or any of the Loan Documents, which expenses shall include
the reasonable fees and disbursements of counsel and of experts and
other consultants retained by the Agent or any Lender.
The foregoing shall not be construed to limit any other provisions of
the Loan Documents regarding costs and expenses to be paid by the
Borrowers. The Borrowers hereby authorize the Agent and the Lenders
to debit the Borrowers' Loan Accounts (by increasing the principal
amount of the Revolving Credit Loan) in the amount of any such costs
and expenses owed by the Borrowers when due.
SECTION 1.104 Stamp and Other Taxes. The Borrowers will pay any and
all stamp, registration, recordation and similar taxes, fees or
charges and shall indemnify the Agent and the Lenders against any and
all liabilities with respect to or resulting from any delay in the
payment or omission to pay any such taxes, fees or charges, which may
be payable or determined to be payable in connection with the
execution, delivery, performance or enforcement of this Agreement and
any of the Loan Documents or the perfection of any rights or security
interest thereunder, including, without limitation, the Security
Interest.
SECTION 1.105 Setoff.
(1) In addition to any rights now or hereafter granted under
Applicable Law and not by way of limitation of any such rights, during
the continuance of any Event of Default, each Lender, any participant
with such Lender in the Loans and each Affiliate of each Lender are
hereby authorized by the Borrowers at any time or from time to time,
without notice to any Borrower or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to
apply any and all deposits (general or special, including, but not
limited to, indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness at any time held or
owing by any Lender or any Affiliate of any Lender or any participant
to or for the credit or the account of any Borrower against and on
account of the Secured Obligations irrespective or whether or not the
Agent or such Lender shall have made any demand under this Agreement
or any of the Loan Documents, or the Agent or such Lender shall have
declared any or all of the Secured Obligations to be due and payable
as permitted by Section 12.2 and although such Secured Obligations
shall be contingent or unmatured.
(2) If any Lender shall obtain payment of any principal of or
interest on any Loan made by it or on any other Secured Obligation
owing to such Lender through the exercise of any right of set-off,
banker's lien or counterclaim or similar right or otherwise, it shall
promptly so notify the Agent (which shall promptly notify the other
Lenders). If, as a result of such payment, such Lender shall have
received a greater percentage of the principal of or interest on any
Revolving Credit Loan to such Lender than the percentage received by
any other Lender or Lenders in respect of the principal of or interest
on any Revolving Credit Loan owing to such other Lender or Lenders, it
shall, at the request of such other Lender or Lenders, promptly
purchase from such other Lender or Lenders participations in (or, if
and to the extent specified by such first Lender, direct interests in)
the principal of or interest on Revolving Credit Loans owing to such
other Lenders in such amounts, and make such other adjustments from
time to time as shall be equitable, to the end that such first Lender
and such other Lender or Lenders (such first Lender and such other
Lender or Lenders being collectively referred to as the "Sharing
Lenders") shall share the benefit of such excess payment (net of any
expenses which may be incurred by such first Lender in obtaining or
preserving such excess payment) pro rata in accordance with the unpaid
amounts of such obligations owing to each of the Sharing Lenders. To
such end all the Sharing Lenders shall make appropriate adjustments
among themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored.
(3) The Borrowers agree that any Lender so purchasing a participation
in obligations hereunder of the Borrowers to another Lender or other
Lenders may exercise any and all rights of set-off, bankers' lien,
counterclaim or similar rights with respect to such participation as
fully as if such first Lender were a direct holder of obligations of
the Borrowers in the amount of such participation. Nothing contained
herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or
obligation of the Borrowers.
(4) If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a set-off to which
Section 15.4(b) hereof applies, such Lender shall to the extent
practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights of the Lenders entitled under this
Section 15.4 to share in the benefits of any recovery on such secured
claim.
SECTION 1.106 Litigation. THE BORROWERS, THE AGENT AND EACH LENDER
HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY WAIVE TRIAL BY JURY IN
ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT IN WHICH
AN ACTION MAY BE COMMENCED BY OR AGAINST THE BORROWERS, THE AGENT AND
SUCH LENDER ARISING OUT OF THIS AGREEMENT, THE COLLATERAL OR ANY
ASSIGNMENT THEREOF OR BY REASON OF ANY OTHER CAUSE OR DISPUTE
WHATSOEVER BETWEEN THE BORROWERS AND THE AGENT OR ANY LENDER OF ANY
KIND OR NATURE. THE BORROWERS, THE AGENT AND THE LENDERS HEREBY AGREE
THAT THE FEDERAL COURT OF THE NORTHERN DISTRICT OF GEORGIA SHALL HAVE
NONEXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN THE BORROWERS AND THE AGENT OR SUCH LENDER, PERTAINING
DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR THE LOAN DOCUMENTS OR TO
ANY MATTER ARISING THEREFROM. THE BORROWERS EXPRESSLY SUBMIT AND
CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED IN SUCH COURTS, HEREBY WAIVING PERSONAL SERVICE OF THE
SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN AND
AGREEING THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS
OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE
BORROWERS AT THE ADDRESS OF THE BORROWERS SET FORTH IN SECTION 15.1.
SHOULD ANY OF THE BORROWERS FAIL TO APPEAR OR ANSWER ANY SUMMONS,
COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THIRTY (30) DAYS AFTER
THE MAILING THEREOF, IT SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR
JUDGMENT MAY BE RENDERED AGAINST IT AS DEMANDED OR PRAYED FOR IN SUCH
SUMMONS, COMPLAINT, PROCESS OR PAPERS. THE NONEXCLUSIVE CHOICE OF
FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE
ENFORCEMENT OF ANY JUDGMENT OBTAINED IN SUCH FORUM OR THE TAKING OF
ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY APPROPRIATE
JURISDICTION.
SECTION 1.107 Reversal of Payments. The Agent and each Lender shall
have the continuing and exclusive right to apply, reverse and re-apply
any and all payments to any portion of the Secured Obligations in a
manner consistent with the terms of this Agreement. To the extent the
Borrowers make a payment or payments to the Agent, for the account of
the Lenders, or any Lender receives any payment or proceeds of the
Collateral for the Borrowers' benefit, which payment(s) or proceeds or
any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to
a trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then, to the extent of
such payment or proceeds received, the Secured Obligations or part
thereof intended to be satisfied shall be revived and continued in
full force and effect, as if such payment or proceeds had not been
received by the Agent or such Lender, and shall constitute a Prime
Option Loan.
SECTION 1.108 Injunctive Relief. The Borrowers recognize that, in
the event the Borrowers fail to perform, observe or discharge any of
its obligations or liabilities under this Agreement, any remedy at law
may prove to be inadequate relief to the Agent and the Lenders;
therefore, the Borrowers agree that if any Event of Default shall have
occurred and be continuing, the Agent and the Lenders, if the Agent or
any Lender so requests, shall be entitled to temporary and permanent
injunctive relief without the necessity of proving actual damages.
SECTION 1.109 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose
relating to this Agreement, including, without limitation, all
computations utilized by the Borrowers to determine whether it is in
compliance with any covenant contained herein, shall, unless this
Agreement otherwise provides or unless Required Lenders shall
otherwise consent in writing, be performed in accordance with GAAP.
SECTION 1.110 Amendments.
(1) Except as set forth in subsection (b) below, any term, covenant,
agreement or condition of this Agreement or any of the Loan Documents
may be amended or waived, and any departure therefrom may be consented
to by the Required Lenders, if, but only if, such amendment, waiver or
consent is in writing signed by the Required Lenders and, in the case
of an amendment (other than an amendment described in Section
15.9(d)), by the Borrowers, and in any such event, the failure to
observe, perform or discharge any such term, covenant, agreement or
condition (whether such amendment is executed or such waiver or
consent is given before or after such failure) shall not be construed
as a breach of such term, covenant, agreement or condition or as a
Default or an Event of Default. Unless otherwise specified in such
waiver or consent, a waiver or consent given hereunder shall be
effective only in the specific instance and for the specific purpose
for which given. In the event that any such waiver or amendment is
requested by the Borrowers, the Agent and the Lenders may require and
charge a fee in connection therewith and consideration thereof in such
amount as shall be determined by the Agent and the Required Lenders in
their discretion.
(2) Except as otherwise set forth in this Agreement, without the
prior unanimous written consent of the Lenders,
(1) no amendment, consent or waiver shall affect the amount or extend
the time of the obligation of the Lenders to make Loans or extend the
originally scheduled time or times of payment of the principal of any
loan or alter the time or times of payment of interest on any Loan or
the amount of the principal thereof or the rate of interest thereon or
the amount of any commitment fee payable hereunder or permit any
subordination of the principal or interest on such Loan, permit the
subordination of the Security Interests in any material Collateral or
amend the provisions of Article 12 or of this Section 15.9(b),
(2) no Collateral shall be released by the Agent other than as
specifically permitted in this Agreement,
(3) except to the extent expressly provided herein, the definition
"Borrowing Base" shall not be amended, and
(4) neither the Agent nor any Lender shall consent to any amendment
to or waiver of the amortization, deferral or subordination provisions
of any instrument or agreement evidencing or relating to obligations
of the Borrowers that are expressly subordinate to any of the Secured
Obligations if such amendment or waiver would be adverse to the
Lenders in their capacities as Lenders hereunder;
provided, however, that anything herein to the contrary
notwithstanding, Required Lenders shall have the right to waive
any Default or Event of Default and the consequences hereunder of
such Default or Event of Default and shall have the right to
enter into an agreement with the Borrowers or the Guarantors
providing for the forbearance from the exercise of any remedies
provided hereunder or under the other Loan Documents without
waiving any Default or Event of Default.
(3) The making of Loans hereunder by the Lenders during the existence
of a Default or Event of Default shall not be deemed to constitute a
waiver of such Default or Event of Default.
(4) Notwithstanding any provision of this Agreement or the other loan
documents to the contrary, no consent, written or otherwise, of the
Borrowers shall be necessary or required in connection with any
amendment to Article 14 or Section 4.6.
SECTION 1.111 Assignment. All the provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, except that no Borrower may
assign or transfer any of its rights under this Agreement.
SECTION 1.112 Performance of Borrowers' Duties. The Borrowers'
obligations under this Agreement and each of the Loan Documents shall
be performed by the Borrowers at their joint and several cost and
expense. Upon the occurrence of a Default or Event of Default (as
those terms are defined herein and in any of the other Loan Documents)
under any of the Loan Documents, if the Borrowers shall fail to do any
act or thing which they have covenanted to do under this Agreement or
any of the Loan Documents, the Agent, on behalf of the Lenders, may
(but shall not be obligated to) do the same or cause it to be done, at
the Borrowers' joint and several cost and expense, either in the name
of the Agent or the Lenders or in the name and on behalf of the
Borrowers, and the Borrowers hereby irrevocably authorize the Agent so
to act.
SECTION 1.113 Indemnification. The Borrowers agree, jointly and
severally, to reimburse the Agent and the Lenders for all costs and
expenses, including reasonable counsel fees and disbursements,
incurred, and to indemnify and hold the Agent and the Lenders harmless
from and against all losses suffered by, the Agent or any Lender in
connection with (a) the exercise by the Agent or any Lender of any
right or remedy granted to it under this Agreement or any of the Loan
Documents, (b) any claim, and the prosecution or defense thereof,
arising out of or in any way connected with this Agreement or any of
the Loan Documents, the Pre-Petition Loan Agreement, the DIP Facility,
the Letter of Interest or the Commitment Letter, and (c) the
collection or enforcement of the Secured Obligations or any of them,
other than such costs, expenses and liabilities arising out of the
Agent's or any Lender's gross negligence or willful misconduct.
SECTION 1.114 All Powers Coupled with Interest. All powers of
attorney and other authorizations granted to the Agent and the Lenders
and any Persons designated by the Agent or the Lenders pursuant to any
provisions of this Agreement or any of the Loan Documents shall be
deemed coupled with an interest and shall be irrevocable so long as
any of the Secured Obligations remain unpaid or unsatisfied.
SECTION 1.115 Survival. Notwithstanding any termination of this
Agreement, until all Secured Obligations have been irrevocably paid in
full or otherwise satisfied, the Agent, for the benefit of the
Lenders, shall retain its Security Interest and shall retain all
rights under this Agreement and each of the Security Documents with
respect to such Collateral as fully as though this Agreement had not
been terminated, the indemnities to which the Agent and the Lenders
are entitled under the provisions of this Article 15 and any other
provision of this Agreement and the Loan Documents shall continue in
full force and effect and shall protect the Agent and the Lenders
against events arising after such termination as well as before, and
in connection with the termination of this Agreement and the release
and termination of the Security Interests, the Agent, on behalf of
itself as agent and the Lenders, may require such assurances and
indemnities as it shall reasonably deem necessary or appropriate to
protect the Agent and the Lenders against loss on account of such
release and termination, including, without limitation, with respect
to credits previously applied to the Secured Obligations that may
subsequently be reversed or revoked.
SECTION 1.116 Severability of Provisions. Any provision of this
Agreement or any Loan Document which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective only
to the extent of such prohibition or unenforceability without
invalidating the remainder of such provision or the remaining
provisions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 1.117 Governing Law. This Agreement and the Notes (except
with respect to certain matters regarding local lien perfection and
enforcement) shall be construed, interpreted and enforced in
accordance with and governed by the internal laws of the State of New
York, but without giving effect to choice of law principles thereof.
SECTION 1.118 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and shall be binding upon all parties, their successors and
assigns, and all of which taken together shall constitute one and the
same agreement.
SECTION 1.119 Reproduction of Documents. This Agreement, each of the
Loan Documents and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter
be executed, (b) documents received by the Agent or any Lender, and
(c) financial statements, certificates and other information
previously or hereafter furnished to the Agent or any Lender, may be
reproduced by the Agent or such Lender by any photographic,
photostatic, microfilm, microcard, miniature photographic or other
similar process and such Person may destroy any original document so
produced. Each party hereto stipulates that, to the extent permitted
by Applicable Law, any such reproduction shall be as admissible in
evidence as the original itself in any judicial or administrative
proceeding (whether or not the original shall be in existence and
whether or not such reproduction was made by the Agent or such Lender
in the regular course of business), and any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible
in evidence.
SECTION 1.120 Term of Agreement. This Agreement shall remain in
effect from the Agreement Date through the Termination Date and
thereafter until all Secured Obligations shall have been irrevocably
paid and satisfied in full. No termination of this Agreement shall
affect the rights and obligations of the parties hereto arising prior
to such termination.
* * * * * * * * * *
[Remainder of Page Intentionally Left Blank - Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized officers in several
counterparts all as of the day and year first written above.
BORROWERS:
TRISM, INC.
By_______________________________________
Name:___________________________________
Title:__________________________________
TRISM SECURED TRANSPORTATION, INC.
By_______________________________________
Name:___________________________________
Title:__________________________________
TRI-STATE MOTOR TRANSIT CO.
By_______________________________________
Name:___________________________________
Title:__________________________________
DIABLO SYSTEMS INCORPORATED, d/b/a
DIABLO TRANSPORTATION, INC.
By_______________________________________
Name:___________________________________
Title:__________________________________
TRISM EASTERN, INC., d/b/a C. I. WHITTEN
TRANSFER
By_______________________________________
Name:___________________________________
Title:__________________________________
TRISM HEAVY HAUL, INC.
By_______________________________________
Name:___________________________________
Title:__________________________________
TRISM SPECIALIZED CARRIERS, INC.
By_______________________________________
Name:___________________________________
Title:__________________________________
TRISM SPECIAL SERVICES, INC.
By_______________________________________
Name:___________________________________
Title:__________________________________
TRISM LOGISTICS, INC.
By_______________________________________
Name:___________________________________
Title:__________________________________
TRISM EQUIPMENT, INC.
By_______________________________________
Name:___________________________________
Title:__________________________________
[SIGNATURES CONTINUE NEXT PAGE]
GUARANTORS:
AERO BODY AND TRUCK EQUIPMENT, INC.
By_______________________________________
Name:___________________________________
Title:__________________________________
E.L. POWELL & SONS TRUCKING CO., INC.
By_______________________________________
Name:___________________________________
Title:__________________________________
TRISM TRANSPORT, INC.
By_______________________________________
Name:___________________________________
Title:__________________________________
TRISM TRANSPORT SERVICES, INC.
By_______________________________________
Name:___________________________________
Title:__________________________________
LENDERS:
Commitment Percentage: 60% THE CIT GROUP/BUSINESS CREDIT, INC.
By_______________________________________
Name:___________________________________
Title:__________________________________
Commitment Percentage: 40% FLEET CAPITAL CORPORATION
By_______________________________________
Name:___________________________________
Title:__________________________________
AGENT:
THE CIT GROUP/BUSINESS CREDIT, INC.
By_______________________________________
Name:___________________________________
Title:__________________________________