EXHIBIT 10.1
CREDIT AGREEMENT
AMONG
COMERICA BANK - TEXAS,
as Administrative Agent for itself and other Banks,
LASALLE BANK NATIONAL ASSOCIATION,
as Collateral Agent and Syndication Agent for itself and other Banks,
and
FFE TRANSPORTATION SERVICES, INC.,
as Borrower,
and certain of its affiliates
As of May 30, 2002
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS..............................................1
Section 1.1 Definitions............................................1
Section 1.2 UCC Changes...........................................15
ARTICLE II AMOUNTS AND TERMS OF CREDIT COMMITMENTS.................16
Section 2.1 Commitments...........................................16
Section 2.2 The Notes.............................................16
Section 2.3 Repayment of Loans....................................17
Section 2.4 Interest and Fees.....................................17
Section 2.5 Borrowing Procedure...................................19
Section 2.6 Optional Prepayments, Conversions and
Continuations of Loans................................19
Section 2.7 Mandatory Prepayments.................................19
Section 2.8 Minimum Amounts.......................................20
Section 2.9 Certain Notices.......................................20
Section 2.10 Use of Proceeds.......................................21
Section 2.11 Fees..................................................21
Section 2.12 Computations..........................................22
Section 2.13 Termination or Reduction of Commitments...............22
Section 2.14 Letters of Credit.....................................22
Section 2.15 Method of Payment.....................................25
Section 2.16 Pro Rata Treatment....................................26
Section 2.17 Sharing of Payments, Etc..............................26
Section 2.18 Non-Receipt of Funds by Administrative Agent..........26
Section 2.19 Withholding Taxes.....................................27
Section 2.20 Withholding Tax Exemption.............................28
Section 2.21 Reinstatement of Obligations..........................28
Section 2.22 Additional Costs......................................29
Section 2.23 Limitation on Types of Loans..........................30
Section 2.24 Illegality............................................30
Section 2.25 Treatment of Affected Loans...........................31
Section 2.26 Compensation..........................................31
Section 2.27 Capital Adequacy......................................32
ARTICLE III CONDITIONS PRECEDENT....................................32
Section 3.1 Conditions Precedent to Initial Loans and Letters
of Credit.............................................32
Section 3.2 Conditions of Subsequent Advances.....................35
Section 3.3 Effect of Request for any Subsequent Advance or
Conversion or Continuation, or Request for Letter
of Credit.............................................36
Section 3.4 Landlord Lien Waivers.................................36
Section 3.5 Title Reports.........................................36
ARTICLE IV CERTAIN REPRESENTATIONS AND WARRANTIES..................36
Section 4.1 Corporate Existence and Authority; Names..............36
Section 4.2 Financial Statements..................................37
Section 4.3 Compliance with Laws and Documents; Existing
Defaults..............................................37
Section 4.4 Enforceability........................................37
Section 4.5 Payment of Taxes......................................37
Section 4.6 Plan Obligations......................................38
Section 4.7 Purpose of Advances and Letters of Credit.............38
Section 4.8 Ownership of the Companies............................38
Section 4.9 Existing Indebtedness.................................38
Section 4.10 Rights in Properties; Existing Liens..................38
Section 4.11 Material Agreements...................................39
Section 4.12 Environmental Matters.................................39
Section 4.13 Common Enterprise.....................................39
Section 4.14 Workers' Compensation.................................39
Section 4.15 Solvency..............................................39
ARTICLE V CERTAIN COVENANTS OF THE COMPANIES......................40
Section 5.1 Affirmative Covenants.................................40
Section 5.2 Negative Covenants....................................47
ARTICLE VI DEFAULT.................................................50
Section 6.1 Payment of Obligations................................50
Section 6.2 Covenants.............................................50
Section 6.3 Misrepresentation.....................................50
Section 6.4 Voluntary Debtor Relief...............................51
Section 6.5 Involuntary Debtor Relief.............................51
Section 6.6 Judgments.............................................51
Section 6.7 Attachment............................................51
Section 6.8 Default of Other Debt.................................51
Section 6.9 Other Agreements......................................51
Section 6.10 Change in Control.....................................51
ARTICLE VII REMEDIES................................................52
Section 7.1 Acceleration..........................................52
Section 7.2 Loans and Letters of Credit...........................52
Section 7.3 Judgment..............................................52
Section 7.4 Rights................................................52
Section 7.5 Default with Respect to Base Rate Loans...............52
Section 7.6 Default with Respect to LIBOR Loans...................52
Section 7.7 Default with Respect to Letters of Credit.............52
Section 7.8 Automatic Acceleration Due to Certain Defaults........53
ARTICLE VIII AGENTS..................................................53
Section 8.1 Administrative Agent Appointment and
Authorization; Administration; Duties.................53
Section 8.2 Collateral Agent Appointment and Authorization;
Administration; Duties................................54
Section 8.3 Advances and Payments.................................55
Section 8.4 Sharing of Setoffs....................................55
Section 8.5 Liability of Agents...................................56
Section 8.6 Reimbursement and Indemnification.....................57
Section 8.7 Rights of Administrative Agent and Collateral
Agent.................................................57
Section 8.8 Independent Investigation and Credit Decision by
Banks.................................................57
Section 8.9 Successor Agents......................................58
Section 8.10 Syndication Agent.....................................58
ARTICLE IX MISCELLANEOUS...........................................58
Section 9.1 Performance by Agents and the Banks...................58
Section 9.2 Waivers...............................................59
Section 9.3 Cumulative Rights.....................................59
Section 9.4 Other Rights and Remedies.............................59
Section 9.5 Expenditures of Administrative Agent and Banks........59
Section 9.6 Form and Number of Documents..........................59
Section 9.7 Accounting Terms......................................60
Section 9.8 Money.................................................60
Section 9.9 Headings..............................................60
Section 9.10 Articles, Sections, Exhibits and Schedules............60
Section 9.11 Number and Gender of Words............................60
Section 9.12 Business Day..........................................60
Section 9.13 Notices...............................................60
Section 9.14 Parties Bound.........................................60
Section 9.15 Exceptions to Covenants...............................61
Section 9.16 Successors and Assigns................................61
Section 9.17 Effect of Investigations..............................63
Section 9.18 GOVERNING LAW; VENUE; SERVICE OF PROCESS..............63
Section 9.19 Maximum Interest Rate.................................64
Section 9.20 Invalid Provisions....................................65
Section 9.21 Entirety and Amendments...............................65
Section 9.22 Survival..............................................66
Section 9.23 Setoff................................................66
Section 9.24 Multiple Counterparts.................................66
Section 9.25 Term of Agreement.....................................66
Section 9.26 Limitation of Liability...............................66
Section 9.27 No Fiduciary Relationship.............................66
Section 9.28 Construction..........................................67
Section 9.29 Waiver and Release....................................67
Section 9.30 NO ORAL AGREEMENTS....................................67
Section 9.31 Joint and Several Obligations.........................67
Section 9.32 WAIVER OF JURY TRIAL..................................67
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of May 30, 2002, among FFE
TRANSPORTATION SERVICES, INC., a Delaware corporation ("Borrower"), FROZEN
FOOD EXPRESS INDUSTRIES, INC., a Texas corporation ("Parent"), FFE, INC., a
Delaware corporation ("FFE"), CONWELL CORPORATION, a Delaware corporation
("Conwell"), AIRPRO HOLDINGS, INC. (formerly known as W&B Refrigeration
Service Company), a Delaware corporation ("AirPro"), LISA MOTOR LINES, INC.,
a Delaware corporation ("LML"), FROZEN FOOD EXPRESS, INC., a Texas
corporation ("Express"), CONWELL CARTAGE, INC., a Texas corporation
("Cartage"), MIDDLETON TRANSPORTATION COMPANY, a Texas corporation
("Middleton"), COMPRESSORS PLUS, INC., a Texas corporation ("CPI"), FFE
LOGISTICS, INC. (formerly known as AEL Transports, Inc.), a Delaware
corporation ("Logistics"), LASALLE BANK NATIONAL ASSOCIATION, a national
banking association ("LaSalle"), COMERICA BANK-TEXAS, a Texas banking
association ("Comerica"), each other entity which may from time to time
become party hereto as a lender hereunder or any successor or assignee
thereof (such lenders and the Issuing Bank, collectively, the "Banks"),
Comerica as Administrative Agent and as Issuing Bank, and LaSalle as
Syndication Agent and as Collateral Agent.
For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used herein, meanings indicated the
following terms shall have the meanings indicated:
"Additional Costs" shall have the meaning set forth in Section 2.22(a).
"Adjustment Date" shall have the meaning set forth in Section 2.4(b).
"Administrative Agent" means Comerica Bank-Texas in its capacity as
administrative agent for the Banks under this Agreement, and its successors
and assigns in such capacity.
"Advance" means the disbursement of an amount or amounts loaned or to
be loaned by any Bank to Borrower hereunder.
"Affiliate" means, as to any Person, any other Person (a) that directly
or indirectly, through one or more intermediaries, Controls or is Controlled
by, or is under common Control with, such first Person, (b) that directly or
indirectly beneficially owns or holds five percent or more of any class of
voting capital stock of such first Person, or (c) five percent or more of the
voting capital stock of which is directly or indirectly beneficially owned or
held by such first Person; provided, however, in no event shall any Agent or
any Bank be deemed an Affiliate of Borrower, Parent or any Subsidiaries.
"Agents" means collectively, Administrative Agent, Collateral Agent and
Syndication Agent, and "Agent" shall mean any one of them.
"Agreement" means this Credit Agreement, as it may be amended, renewed,
extended, or restated from time to time.
"Applicable Lending Office" means for each Bank and each Type of Loan,
the lending office of such Bank (or of an Affiliate of such Bank) designated
for such Type of Loan below its name on the signature pages hereof (or, with
respect to a Bank that becomes a party to this Agreement pursuant to an
assignment made in accordance with Section 9.16, in the Assignment and
Acceptance executed by it) or such other office of such Bank (or an Affiliate
of such Bank) as such Bank may from time to time specify to Administrative
Agent as the office by which its Loans of such Type are to be made and
maintained.
"Applicable Rate" shall have the meaning set forth in Section 2.4(a).
"Article(s)" shall have the meaning set forth in Section 9.10.
"Assignee" shall have the meaning set forth in Section 9.16(b).
"Assigning Bank" shall have the meaning set forth in Section 9.16(b).
"Assignment and Acceptance" means an Assignment and Acceptance in
substantially the form of Exhibit F.
"Banks" means as defined in the introductory paragraph.
"Base Rate" means the higher of (i) the rate of interest per annum then
most recently established by Comerica as its prime or base rate of interest
(which rate may not be the lowest rate of interest charged by Comerica) or
(ii) the Federal Funds Rate plus 0.5%, with each change in the Base Rate to
become effective, without notice to Borrower, as of the opening of business
on the effective date of each change in the Base Rate; provided, however,
that, in the event Comerica is no longer Administrative Agent hereunder for
whatever reason, the aforesaid reference in this definition to Comerica shall
instead be deemed to mean and refer to such Bank as may from time to time be
Administrative Agent hereunder, in such Bank's capacity as a Bank hereunder,
or such other Bank as may from time to time be specified by the Banks in
their discretion, which Base Rate shall be established by such Bank in
accordance with its internal policies and procedures applicable from time to
time.
"Base Rate Loan" means a Loan that bears interest at the Base Rate.
"Base Rate Margin" shall have the meaning set forth in Section
2.4(b)(i).
"Borrower" means FFE Transportation Services, Inc., a Delaware
corporation.
"Borrowing Base" means the sum of:
(a) an amount equal to (i) eighty-five percent (85%) of the aggregate
Eligible Accounts; plus
(b) so long as any Vehicles are included in the Borrowing Base, an
amount equal to the lesser of (i) $15,000,000, or (ii) sixty-five percent
(65%) of the Orderly Liquidation Value of Vehicle Collateral in which the
Collateral Agent, for the benefit of the Banks, has a valid, perfected Lien
and which is not subject to any Lien other than Liens in favor of Collateral
Agent and the Banks;
all calculated in accordance with GAAP based upon consolidated financial
information of Parent and the Subsidiaries. The Borrowing Base shall be
determined by Administrative Agent from time to time in its good faith
judgment.
"Borrowing Base Availability" means (a) the Borrowing Base, minus
(b) the Outstanding Revolving Credit.
"Borrowing Base Report" means a report prepared and executed by
Borrower, substantially in the form of Exhibit A attached hereto
appropriately completed, in form and substance satisfactory to Administrative
Agent evidencing the calculation of the Borrowing Base.
"Business Day" means (a) any day on which commercial banks are not
authorized or required to close in Dallas, Texas, or Chicago, Illinois, and
(b) with respect to all Advances, payments, Conversions, Continuations,
Interest Periods and notices in connection with LIBOR Loans, any day which is
a Business Day described in clause (a) above and which is also a day on which
dealings in Dollar deposits are carried out in the London interbank market.
"Calculation Period" shall have the meaning set forth in Section
2.4(b)(i).
"Capital Expenditure" means any and all expenditures by a Person for
(i) an asset which will be used in a year or years subsequent to the year in
which the expenditure is made and which asset is properly classified in
relevant financial statements of such Person as equipment, real property or
improvements, fixed assets or a similar type of capitalized asset in
accordance with GAAP, (ii) an asset relating to or acquired in connection
with an acquired business, and (iii) any and all acquisition costs related to
(i) and (ii) above.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, as the same may be amended from time to time.
Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date
hereof), of shares representing more than 30% of either the aggregate
ordinary voting power or the aggregate equity value represented by the issued
and outstanding capital stock of the Parent; (b) occupation of a majority of
the seats (other than vacant seats) on the board of directors of the Parent
by Persons who were neither (i) nominated by the board of directors of the
Parent nor (ii) appointed by directors so nominated; or (c) the acquisition
of direct or indirect Control of the Parent by any Person or group.
"Closing Date" means May 30, 2002.
"Code" means the Uniform Commercial Code of Texas.
"Collateral" means any and all property or assets in which a security
interest, pledge or other such interest has been or from time to time may be
granted to Administrative Agent, Collateral Agent and the Banks to secure the
Obligations.
"Collateral Agent" means LaSalle Bank National Association in its
capacity as collateral agent for the Banks under this Agreement, and its
successors and assigns in such capacity.
"Commitment" means, with respect to each Bank, the obligation of such
Bank, in accordance with this Agreement, to make or continue Loans and to
make or participate in Letter of Credit Liabilities in an aggregate principal
amount at any one time outstanding up to but not exceeding the amount set
forth opposite the name of such Bank on Schedule 1.1 or, if such Bank is
party to an Assignment and Acceptance, as set forth in the most recent
Assignment and Acceptance of such Bank, and as the same may be increased or
decreased pursuant to this Agreement or as otherwise set forth in this
Agreement.
"Commitment Fee Rate" shall have the meaning set forth in Section
2.4(b)(iii).
"Companies" means Parent, Borrower and the Other Subsidiaries, and a
"Company" means any of Parent, Borrower or an Other Subsidiary.
"Compliance Certificate" means a certificate in the form of Exhibit D
hereto with the blanks completed accurately and signed by the Chief Financial
Officer or Treasurer of Parent and the Chief Financial Officer or Vice
President of Finance of Borrower.
"Compliance Income" shall have the meaning set forth in Section 5.1(m).
"Consolidated Tangible Net Worth" means, at any time, all amounts which
in conformity with GAAP would be included as stockholders' equity or owners'
equity on a consolidated balance sheet of the Companies; provided, however,
there shall be excluded therefrom (a) any amount at which shares of capital
stock of any Person appear as an asset on the balance sheet of such Person,
(b) goodwill, including any amounts, however designated, that represent the
excess of the purchase price paid for assets or stock over the value assigned
thereto, (c) patents, trademarks, trade names and copyrights, (d) deferred
expenses, (e) loans and advances to any stockholder, director, officer,
partner, or employee of any Company or any Affiliate of any Company, (f) the
W&B Note, (g) all equity interests in W&B Newco, L.P., (h) Operating Rights,
and (i) all other assets which are properly classified as intangible assets.
"Consolidated Total Liabilities" means, at any time, all liabilities
that, in accordance with GAAP, should be classified as such on a consolidated
balance sheet of the Companies.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.6 of any LIBOR Loan as a LIBOR Loan from
one Interest Period to the next Interest Period.
"Contract Rate" shall have the meaning set forth in Section 9.19(a).
"Control" means the possession, directly or indirectly, of the power to
direct or cause direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, or otherwise.
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.1(b), Section 2.6, Section 2.22, or Section 2.24 of one
Type of Loan into another Type of Loan.
"Current Financials" shall have the meaning set forth in Section 4.2.
"Debtor Relief Laws" means any applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, reorganization, or similar
debtor relief laws affecting the rights of creditors generally from time to
time in effect.
"Default" shall have the meaning set forth in Article VI.
"Default Rate" shall have the meaning set forth in Section 2.4(a).
"Demo Vehicles" shall have the meaning specified in the definition of
"Permitted Liens".
"Deposit" shall have the meaning set forth in Section 7.7.
"Dollars" or "$" have the meaning set forth in Section 9.8.
"EBITDAR" shall have the meaning set forth in Section 5.1(f).
"Eligible Accounts" means, as of any date, an amount equal to the
aggregate net invoice or ledger amount owing on all trade accounts receivable
of the Companies, on a consolidated basis, for goods sold or leased (provided
such goods have been shipped) or services rendered, after deducting (without
duplication): (i) each such account that is unpaid 90 days after the original
invoice date thereof, (ii) all such accounts in which a Person (other than
the Banks specifically as security for the Obligations) has a Lien, (iii) the
amount of all discounts, allowances, rebates, credits and adjustments to such
accounts, (iv) all contra accounts, setoffs, defenses or counterclaims
asserted by or available to the Persons obligated on such accounts, provided,
however, that with respect to freight claims which constitute a part of
accrued claims liability, only the current or short-term portion thereof
shall be so deducted, (v) all accounts with respect to which goods are placed
on consignment, guaranteed sale or other terms by reason of which the payment
by the account debtor may be conditional, (vi) the amount billed for or
representing retainage, if any, until all prerequisites to the immediate
payment of retainage have been satisfied, (vii) the amount of freight in
transit (i.e., billed but not delivered), (viii) all such accounts owed by
account debtors which are known to any officer of any Company, Administrative
Agent or any Bank to be insolvent, (ix) all such accounts owing by Affiliates
of a Company, (x) all accounts in which the account debtor is not a resident
of the United States unless such accounts are supported by a letter of credit
issued by a bank acceptable to Administrative Agent or by foreign credit
insurance issued by a Person acceptable to Administrative Agent (xi) all
accounts in which the account debtor is the United States or any department,
agency or instrumentality of the United States, except to the extent
acknowledgment of assignment to the Banks, specifically as security for the
Obligations, of such account in compliance with the Federal Assignment of
Claims Act and other applicable Law has been received by Administrative
Agent, (xii) all accounts not evidenced by evidence of billing acceptable to
the Required Banks, (xiii) all accounts evidenced by any note, trade
acceptance, draft or other instrument or chattel paper, (xiv) any account
which is not a valid, legally enforceable obligation of the account debtor
thereunder, (xv) all accounts in which Administrative Agent does not have a
first priority, perfected Lien, and (xvi) all accounts otherwise unacceptable
to the Required Banks in their respective sole reasonable discretion.
"ERISA" shall have the meaning set forth in Section 4.6.
"Exhibits" shall have the meaning set forth in Section 9.10.
"Federal Funds Rate" means, for any day, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers ("Overnight Transactions")
transacted on the immediately preceding Business Day, as published by the
Federal Reserve Bank of New York, or, if such interest rate is not so
published for any Business Day, the average of the per annum interest rate
quotations for Overnight Transactions received by Comerica (or other
applicable Bank referred to in the definition of "Base Rate" for such
Business Day from three Federal funds brokers of recognized standing selected
by Comerica (or such other applicable Bank).
"Financial Statements" includes, but is not necessarily limited to,
balance sheets, profit and loss statements, reconciliations of capital and
surplus, statements of cash flows prepared on a consolidated basis, and the
footnotes thereto.
"Financing Lease" means any lease of property which shall, in
accordance with GAAP, be capitalized on a balance sheet of a Company.
"Fixed Charge Coverage Ratio" shall have the meaning set forth in
Section 5.1(f).
"Fixed Charges" shall have the meaning set forth in Section 5.1(f).
"Funded Debt" shall have the meaning set forth in Section 5.1(k).
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, set forth in authoritative pronouncements issued by the
American Institute of Certified Public Accounts, the Financial Accounting
Standards Board, the Securities and Exchange Commission, the International
Accounting Standards Committee, and any other comparable governing body,
which are applicable in the circumstances as of the date in question, and the
requisite that such principles are applied on a consistent basis means that
the accounting principles observed in a current period are comparable in all
material respects to those applied in a preceding period.
"Governmental Requirement" means any Law, statute, code, ordinance,
order, rule, regulation, judgment, decree, injunction, franchise, permit,
certificate, license, authorization or other directive or requirement of any
federal, state, county, municipal, parish, or other Tribunal or any
department, commission, board, court, agency or any other instrumentality of
any of them.
"Group Member" means any Person which is a member with any Company in
an "affiliated service group" as defined in Section 414(m) of the IRC, a
"controlled group of corporations" as defined in Section 1563 of the IRC, or
any "trades or businesses . . . which are under common control" as defined by
Section 414(c) of the IRC.
"Guaranty Agreement" means a guaranty agreement, in form and substance
satisfactory to the Banks, pursuant to which a Company (other than Borrower)
guarantees prompt payment and performance of the Obligations, and "Guaranty
Agreements" means all of such agreements.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other
Person (the "primary obligor") in any manner, whether directly or indirectly,
and including any obligation of the guarantor, direct or indirect, (a) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation or to purchase (or to advance or supply
funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of the payment
thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or
(d) as an account party in respect of any letter of credit or letter of
guaranty issued to support such Indebtedness or obligation; provided, that
the term Guarantee shall not include endorsements for collection or deposit
in the ordinary course of business.
"Hazardous Materials" means "hazardous substances," "hazardous waste"
or "hazardous constituents" in CERCLA, RCRA or any other federal, state or
local environmental statute or regulation.
"Hedge Agreement" means, with respect to Borrower or any other Company,
any and all transactions, agreements, documents, or arrangements between
Borrower or any other Company and one or more Banks, now existing or
hereafter entered into, which provide for an interest rate, credit,
commodity, or equity swap, cap, floor, collar, forward foreign exchange
transaction, currency swap, cross currency rate swap, currency option, or any
combination of, or option with respect to, these or other similar
transactions, for the purpose of hedging exposure to fluctuations in interest
or exchange rates, loan, credit exchange, security, or currency valuations,
or commodity prices or other similar risks.
"Highest Lawful Rate" means, with respect to any Bank, the maximum non-
usurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received with respect to the
particular Obligations as to which such rate is to be determined, payable to
such Bank pursuant to this Agreement or any other Loan Paper, under Laws
applicable to such Bank which are presently in effect or, to the extent
allowed by law, under such applicable Laws which may hereafter be in effect
and which allow a higher maximum non-usurious interest rate than applicable
Laws now allow. The Highest Lawful Rate shall be calculated in a manner that
takes into account any and all fees, payments and other charges in respect of
the Loan Papers that constitute interest under applicable Law. Each change
in any interest rate provided for herein based upon the Highest Lawful Rate
resulting from a change in the Highest Lawful Rate shall take effect without
notice to Borrower or any other Person at the time of such change in the
Highest Lawful Rate. For purposes of determining the Highest Lawful Rate
under Texas law, the applicable rate ceiling shall be the weekly rate ceiling
described in, and computed in accordance with, Sections 303.003 and 303.009
of the Texas Finance Code, as amended and in effect from time to time, or any
successor or replacement statute; provided, however, that, to the extent
permitted by applicable Law, Administrative Agent shall have the right to
change the applicable rate ceiling from time to time in accordance with
applicable Law.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding
trade accounts payable incurred in the ordinary course of business which are
not more than 90 days past due), (f) all obligations secured by (or for which
the holder of such obligations has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed, (g)
all Guarantees by such Person of Indebtedness of others, (h) all obligations
of such Person under Financing Leases, (i) all obligations, contingent or
otherwise, of such Person in respect of letters of credit, letters of
guaranty, bankers' acceptances, surety or other bonds and similar
instruments, (j) all liabilities of such Person in respect of unfunded vested
benefits under any Plan, and (k) payment obligations with respect to Hedge
Agreements, provided that for purposes of this definition, the amount of the
obligation of any Person under any Hedge Agreement shall be the amount
determined, in respect thereof as of the end of the most recently ended
fiscal quarter of such Person, based on the assumption that such Hedge
Agreement has terminated at the end of such fiscal quarter, and in making
such determination, if such Hedge Agreement provides for the netting of
amounts payable by and to each party thereto or if any Hedge Agreement
provides for the simultaneous payment of amounts by and to each party, then
in each such case, the amount of such obligation shall be the net amount so
determined; provided, however, that notwithstanding the foregoing,
Indebtedness shall not include deposits, escrows or bonds of such Person
pursuant to an independent contractor agreement not to exceed $1,000,000 in
the aggregate at any time. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as
a result of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor.
"Interest Period" means, with respect to any LIBOR Loan, a period
commencing: (i) on any date upon which, pursuant to a Notice of Activity or
otherwise pursuant to the provisions of this Agreement, the principal amount
of such LIBOR Loan begins to accrue interest at the LIBOR Rate, or (ii) on
the last day of the immediately preceding Interest Period, in the case of a
Continuation to a successive Interest Period, and ending one (1), two (2),
three (3) or six (6) months thereafter as Borrower shall elect in accordance
with the provisions of Section 2.9; provided, that: (A) any Interest Period
which would otherwise end on a day which is not a LIBOR Business Day shall be
extended to the next succeeding LIBOR Business Day, unless such LIBOR
Business Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding LIBOR Business Day; (B) any Interest
Period which begins on the last LIBOR Business Day of a calendar month (or a
day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall, subject to clause (A) above, end
on the last LIBOR Business Day of the appropriate subsequent calendar month,
and (C) any Interest Period that would otherwise end after the Termination
Date shall end on the Termination Date.
"IRC" shall mean the Internal Revenue Code of 1986, as amended.
"Issuing Bank" means Comerica, in its capacity as the issuer of Letters
of Credit hereunder, and its successors in such capacity as provided in
Section 2.14(g).
"Laws" means any and all applicable laws, statutes, ordinances, rules,
regulations, orders, writs, injunctions, and/or decrees of the United States,
any state or commonwealth, any territory or possession, any foreign country,
or any Tribunal.
"Letter of Credit" shall have the meaning assigned to such term in
Section 2.14.
"Letter of Credit Liabilities" means, at any time, the aggregate
undrawn face amounts of all outstanding Letters of Credit and all
Reimbursement Obligations.
"Leverage Ratio" shall have the meaning set forth in Subsection 5.1(k).
"LIBOR Business Day" shall mean a day on which dealings in Dollars are
carried out in the London Inter-Bank Eurocurrency market.
"LIBOR Loan" means a Loan that bears interest at the LIBOR Rate.
"LIBOR Rate" as applied to any LIBOR Loan made by any Bank hereunder,
shall mean the quotient of (i) the rate per annum (rounded upwards, if
necessary, to the nearest 1/16th of 1%) determined by Administrative Agent, by
reference to Telerate page 3750 (or any successor page) or otherwise, to be
the rate offered to Comerica at approximately 11:00 a.m. London time (or as
soon thereafter as practicable) two Business Days prior to the first day of
such Interest Period by leading banks in the London interbank market of U.S.
Dollar deposits in immediately available funds having a term comparable to
such Interest Period and in an amount comparable to the principal amount of
the LIBOR Loan applicable to Comerica to which such Interest Period relates
divided by (ii) the remainder of (A) 1.00 minus (B) the LIBOR Reserve
Percentage applicable to such LIBOR Loan. The determination by Administrative
Agent of the LIBOR Rate shall, in the absence of manifest error, be
conclusive.
"LIBOR Rate Margin" shall have the meaning as set forth in Section
2.4(b)(ii).
"LIBOR Reserve Percentage" shall mean, with respect to each Interest
Period, a percentage (expressed as a decimal) equal to the daily average
during such Interest Period of the percentages in effect on each day of such
Interest Period, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor), for determining reserve requirements
applicable to "eurocurrency liabilities" pursuant to Regulation D or any
other then applicable regulation of the Board of Governors (or any successor)
which prescribes reserve requirements applicable to "eurocurrency
liabilities," as presently defined in Regulation D, or any eurocurrency
funding. Without limiting the effect of the foregoing, the LIBOR Reserve
Percentage shall reflect any other reserves required to be maintained by such
member banks by reason of any change in laws against any category of
liabilities which includes deposits by reference to which the LIBOR Rate is
to be determined or any category of extensions of credit or other assets
which include LIBOR Loans.
"Lien" means any security interest, mortgage, pledge, lien, claim,
charge, encumbrance, title retention agreement, lessor's interest under a
Financing Lease or analogous instrument, in, of or on any of the Companies'
property (or any other Person's property if the context so requires).
"Litigation" means any proceeding, claim, lawsuit and/or investigation
conducted or threatened by or before any Tribunal, including, but not limited
to, proceedings, claims, lawsuits and/or investigations under or pursuant to
any environmental, occupational safety and health, antitrust, unfair
competition, securities, taxation or other Law, or under or pursuant to any
contract, agreement or other instrument.
"Loans" shall have the meaning assigned to such term in Section 2.1.
"Loan Papers" means this Agreement, the Notes, the Guaranty Agreements
and any and all certificates, mortgages, deeds of trust, security agreements
and other documents and agreements executed and/or delivered in connection
with the making of Loans or the issuing of Letters of Credit or otherwise
pursuant to the terms of this Agreement and any future amendments and
supplements thereto and restatements thereof.
"Margin Regulations" means Regulations T, U and X of the Board of
Governors of the Federal Reserve System, as in effect from time to time.
"Margin Stock" means "margin stock" as defined in Regulation U of the
Board of Governors of the Federal Reserve System, as in effect from time to
time.
"Material Adverse Effect" means any effect which might reasonably be
expected to be material and adverse to the financial condition or business
operations of the Companies as a whole on a consolidated basis.
"Net Income" means, for any period and any Person, the sum of the
following calculated without duplication: (a) such Person's consolidated net
income (or loss) determined in conformity with GAAP; minus (b) nonrecurring,
extraordinary gains, including, without limitation, any nonrecurring death
benefits under life insurance policies.
"New Entity" shall have the meaning set forth in Section 9.14.
"Notes" means the Revolving Credit Notes.
"Notice of Activity" means the written notice given by Borrower to
Administrative Agent of a Advance, Conversion, Continuation or issuance of a
Letter of Credit, which shall be substantially in the form of Exhibit B
attached.
"Obligations" means all present and future obligations and liabilities,
and all renewals and extensions thereof, or any part thereof, of Borrower or
any other Company to any one or more of the Agents and/or any one or more of
the Banks and created or evidenced by or existing or arising out of or
pursuant to this Agreement, the Revolving Credit Notes or any one or more of
the other Loan Papers (including, without limitation, the Principal
Obligation, the Reimbursement Obligation arising pursuant to any Letters of
Credit, and all other indebtedness, obligations, fees and liabilities arising
pursuant to this Agreement, or otherwise) and pursuant to or under any Hedge
Agreement that Borrower or any other Company may enter into with the express
written consent of Administrative Agent and the Required Banks, and all
interest accruing thereon and costs, expenses and attorneys' fees incurred in
the enforcement or collection thereof, regardless of whether such obligations
and liabilities are direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, including, but not
limited to, the obligations and liabilities arising pursuant to any of the
Loan Papers, and all renewals and extensions thereof, or any part thereof,
and all present and future amendments thereto.
"Operating Rights" means the operating rights, franchises,
certificates, authorizations, permits and licenses of Borrower and the other
Companies.
"Orderly Liquidation Value" with respect to each Vehicle, means (a)
with respect to any Vehicle acquired after the Closing Date, the Purchase
Price of such Vehicle, which amount shall be reduced each month by an amount
equal to 1% of the Purchase Price of such Vehicle as previously so reduced,
to reflect depreciation, until such time as a Vehicle Appraisal for such
Vehicle shall have been delivered to Collateral Agent or Administrative
Agent, and thereafter the orderly liquidation value attributed to such
Vehicle in the most recent Vehicle Appraisal for such Vehicle; and (b) with
respect to any other Vehicle, the orderly liquidation value attributed to
such Vehicle in the most recent Vehicle Appraisal. Notwithstanding the
foregoing, the term "Orderly Liquidation Value" shall not include the value
of any Vehicle which is no longer owned by a Company or which has been (i)
destroyed, confiscated by a governmental authority, stolen, or lost, or (ii)
restricted from use, attached by legal process, or immobilized due to lack of
repair for a period of forty-five (45) consecutive calendar days.
"Other Subsidiary" means any Person of which an aggregate of 50% or
more of the issued and outstanding voting stock, or 50% or more of the equity
interests, at the time at which any determination is being made, is owned of
record or beneficially, directly or indirectly, by any Company.
"Outstanding Revolving Credit" means, at any particular time, the sum
of (a) the aggregate outstanding principal amount of the Loans, plus (b) all
Letter of Credit Liabilities.
"Parent" means Frozen Food Express Industries, Inc., a Texas
corporation.
"Permitted Investments" means investments in (i) indebtedness,
evidenced by notes maturing not more than one hundred eighty (180) days after
the date of issue, issued or guaranteed by the federal government of the
United States of America, or any agency thereof, (ii) certificates of
deposit, maturing not more than one hundred eighty (180) days after the date
of issue, issued by commercial banking institutions, each of which is a
member of the Federal Reserve System and which has combined capital and
surplus and undivided profits of not less than $100,000,000.00, or any other
financial institution if the amount on deposit is fully insured by The
Federal Deposit Insurance Corporation, (iii) commercial paper, maturing not
more than one hundred eighty (180) days after the date of issue, issued by a
corporation (other than an Affiliate of the Companies) with a rating of "P-1"
(or its then equivalent) according to Moody's Investors Service, Inc., "A-l"
(or its then equivalent) according to Standard & Poor's Corporation or "F-l"
(or its then equivalent) according to Fitch's Investors Service, Inc., or
issued by any Bank with a rating of "P-3" (or its then equivalent) according
to Moody's Investors Service Inc., or "A-3" (or its then equivalent)
according to Standard & Poor's Corporation, (iv) money market funds that
invest only in securities which mature within one (1) year after the date of
purchase and which have ratings meeting the standard of (iii) above, or (v)
securities issued or guaranteed by an agency of the United States of America.
"Permitted Liens" means with respect to any asset or property (or any
interest therein),
a. Liens (if any) securing the Notes in favor of
Administrative Agent, Collateral Agent and/or the Banks;
b. The following, if the validity and amount thereof are being
contested in good faith and by appropriate legal proceedings and so
long as (i) levy and execution thereon have been stayed and continue to
be stayed, (ii) they do not in the aggregate materially detract from or
threaten the value of the asset or property, or materially impair the
use thereof in the operation of any Company's business, and (iii) a
reserve therefor, if appropriate, has been established in accordance
with GAAP: claims and Liens for taxes due and payable; claims and Liens
upon and defects of title to real and personal property, including any
attachment of personal or real property or other legal process prior to
adjudication of a dispute on the merits; claims and Liens of mechanics,
materialmen, warehousemen, landlords or carriers, or similar Liens; and
adverse judgments on appeal;
c. Liens for taxes not past due;
d. Mechanics', materialmen's, warehousemen's, landlords' or
carriers' Liens for services or materials for which payment is not past
due;
e. Liens in favor of the lessor on the assets being leased
under any operating lease or Financing Lease;
f. Encumbrances consisting of minor easements, zoning
restrictions, or other restrictions on the use of real property that do
not (individually or in the aggregate) materially affect the value of
the assets encumbered thereby or materially impair the ability of
Borrower or the other Companies to use such assets in their respective
businesses, and none of which is violated in any material respect by
existing or proposed structures or land use;
g. Liens resulting from good faith deposits to secure payments
of workmen's compensation or other social security programs or to
secure the performance of tenders, statutory obligations, surety and
appeal bonds, bids, and contracts (other than for payment of borrowed
money); and
h. Liens at any time existing on up to fifty (50) tractors and
fifty (50) trailers that are purchased for a nominal amount from
vehicle vendors and that are required to be sold by the owner back to
such vendors for a nominal amount (collectively, "Demo Vehicles").
"Person" means any individual, firm, corporation, association,
partnership, joint venture, trust, other entity or Tribunal.
"Plan" means all (present, prior (including terminated and transferred)
and future) plans, programs agreements, arrangements and methods of
contribution or compensation providing any remuneration or benefits other
than current cash compensation to any current or former employee of any
Company or any other Group Member or to any other Person who provides
services to any Company or any other Group Member whether or not subject to
ERISA; and includes, but is not limited to, pension, retirement, profit
sharing, stock bonus, nonqualified deferred compensation, disability,
medical, dental, workers compensation, health insurance, life insurance,
incentive plans, vacation benefits and fringe benefits.
"Potential Default" means the occurrence of an event or condition that
with notice or lapse of time would become a Default.
"Principal Obligation" means, as of the date of any determination
thereof, the aggregate unpaid principal balance of all Loans and
Reimbursement Obligations made by any Bank up to the time in question.
"Pro Rata Share" means, with respect to each Bank and from time to
time, an amount equal to the quotient obtained by dividing such Bank's
Commitment by the aggregate amount of the Commitments or, if all the
Commitments are terminated, the quotient obtained by dividing such Bank's
outstanding Loans by the aggregate outstanding Loans of all Banks.
"Purchase Price" means, in the case of a Vehicle, the bona fide price
which the purchaser actually pays to the seller for such Vehicle, including
(i) trade-in allowance, (ii) seller's delivery and handling charges;
(iii) excise tax on the Vehicle; (iv) any sale and use taxes; (v) freight
charges; and (vi) other expenses required to effect delivery of the Vehicle
to the purchaser.
"Quarterly Payment Date" means the last Business Day of each March,
June, September and December.
"RCRA" means the Resource Conservation and Recovery Act of 1976, as
amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act
Amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984, as
the same may be amended from time to time.
"Regulatory Change" means, with respect to any Bank, any change after
the Closing Date in any U.S. federal or state, or any foreign, Laws or
regulations or the adoption or making after such date of any interpretations,
directives or requests applying to a class of lenders including such Bank of
or under any U.S. federal or state, or any foreign, Laws or regulations
(whether or not having the force of law) by any Tribunal charged with the
interpretation or administration thereof.
"Reimbursement Obligation" shall have the meaning assigned to such term
in Section 2.14(d).
"Reportable Event" has the meaning assigned to that term in Title IV of
ERISA.
"Required Banks" means, as of the date of any determination thereof,
any two or more of the Banks, that hold, in the aggregate, sixty-six and two-
thirds of one percent (66-2/3%) or more of the sum of the Principal
Obligation then outstanding plus the aggregate face amount of the Letters of
Credit then outstanding, or, if no Principal Obligation or Letter of Credit
is then outstanding, any two or more of the Banks, that hold, in the
aggregate, sixty-six and two-thirds of one percent (66-2/3%) or more of the
Commitments. For purposes of this definition, the effects of rounding to the
nearest cent shall not be taken into account.
"Revolving Credit Notes" shall have the meaning set forth in Section
2.2, and "Revolving Credit Note" shall mean any of such promissory notes.
"Schedules" shall have the same meaning set forth in Section 9.10.
"Section(s)" shall have the meaning set forth in Section 9.10.
"Security Agreements" means (a) security agreements, pledge agreements
and other agreements, documents or instruments executed by the Borrower,
Parent or any Subsidiary dated the Closing Date (or such other date as any
such Person may execute such Security Agreement), (b) any such agreement,
document or instrument at any time executed pursuant to Section 3.1(a)
hereof, evidencing or creating a Lien as security for the Obligations and in
form and substance reasonably satisfactory to Administrative Agent and
Collateral Agent, and (c) any and all amendments, modifications, supplements,
renewals, extensions, restatements or replacements thereof.
"Solvent" means, as to any Person, that (a) the aggregate fair market
value of its assets exceeds its liabilities, (b) it has sufficient cash flow
to enable it to pay its Indebtedness as such Indebtedness matures, and (c) it
does not have unreasonably small capital to conduct its business.
"Subsidiaries" means FFE, Borrower, Conwell, AirPro, LML, Express,
Cartage, Middleton, Logistics and CPI, and shall also mean and include any
New Entity which has executed and delivered a Guaranty Agreement and letter
as provided in Section 9.14 and has not been released or otherwise discharged
from its obligations thereunder.
"Syndication Agent" means LaSalle Bank National Association in its
capacity as syndication agent for the Banks under this Agreement, and its
successors and assigns in such capacity.
"Taxes" means any and all present and future taxes, levies, imposts,
deductions, withholdings, assessments, fees or other charges from time to
time or at any time imposed by any Laws or by any Tribunal (excluding
taxation of the income of the Banks).
"Termination Date" shall mean June 1, 2005, or such earlier date upon
which the obligation of the Banks to make Loans is terminated pursuant to the
terms of this Agreement.
"Tribunal" means any state, commonwealth, federal, foreign,
territorial, or other court or governmental department, commission, board,
bureau, agency or instrumentality.
"Type" means any type of Loan (i.e., Base Rate Loan or LIBOR Loan).
"Vehicle Appraisal" means an appraisal of any or all of the Vehicles,
performed on behalf of the Administrative Agent or the Collateral Agent and
the Banks, by an appraisal firm reasonably satisfactory to the Administrative
Agent and the Collateral Agent, dated a recent date satisfactory to the
Administrative Agent and the Collateral Agent and in all respects
satisfactory to the Administrative Agent and the Collateral Agent in their
respective sole and absolute discretion.
"Vehicles" means any and all of the following, whether now owned or
hereafter acquired by Parent, Borrower, or any Subsidiary: (a) all tractors
and trailers registered in accordance with any Law for public roadway use in
the operation of Parent's, Borrower's or any Subsidiary's motor carrier
business, and (b) all equipment and accessories permanently attached to any
such Vehicles, including without limitation all refrigeration units, tires
and tubes; provided, that (i) "Vehicles" shall include such equipment and
accessories only so long as they are so permanently attached and shall not
include any spare parts inventory; (ii) Vehicles shall not include any such
property described in the foregoing clauses (a) and (b) that (1) is leased to
any Company by any Person other than another Company, (2) is a vehicle which
is intended for use, and is in fact used, solely on location at Parent's,
Borrower's or any Subsidiary's place of business (commonly known as "yard
hosses"), (3) constitutes "inventory" as such term is defined in Chapter 9 of
the Code, or (4) is a Demo Vehicle.
"Vehicle Collateral" means, collectively, all of the Vehicles which are
included in the Collateral.
"W&B Note" means that certain Subordinated Term Note dated as of
December 26, 2001, made by W&B Newco, L.P., payable to the order of AirPro in
the original principal amount of $4,134,785.00, and all renewals, extensions,
amendments, modifications, replacements, substitutions and rearrangements
thereof.
Section 1.2 UCC Changes. All terms used herein which are defined in
the UCC shall, unless otherwise provided, have the meanings ascribed to them
in the UCC both as in effect on the date of this Agreement and as hereafter
amended. The parties intend that the terms used herein which are defined in
the UCC have, at all times, the broadest and most inclusive meanings
possible. Accordingly, if the UCC shall in the future be amended or held by
a court to define any term used herein more broadly or inclusively than the
UCC in effect on the date of this Agreement, then such term as used herein
shall be given such broadened meaning. If the UCC shall in the future be
amended or held by a court to define any term used herein more narrowly, or
less inclusively, than the UCC in effect on the date of this Agreement, such
amendment or holding shall be disregarded in defining terms used in this
Agreement.
ARTICLE II
AMOUNTS AND TERMS OF CREDIT COMMITMENTS
Section 2.1 Commitments.
(a) Loans. Subject to the terms and conditions of this Agreement
(including, without limitation, Section 2.13), each Bank severally agrees to
make one or more revolving credit loans to Borrower from time to time from
and including the Closing Date to but excluding the Termination Date in an
aggregate principal amount outstanding not to exceed the positive remainder
of (i) the amount of such Bank's Commitment as then in effect, minus
(ii) such Bank's Pro Rata Share of the Letter of Credit Liabilities then
outstanding (such revolving credit loans referred to in this Section 2.1(a)
now or hereafter made by the Banks to Borrower from and including and after
the Closing Date are hereinafter collectively called the "Loans"); provided,
however, that (a) the Outstanding Revolving Credit shall not at any time
exceed the lesser of (i) the Borrowing Base then most recently determined, or
(ii) the aggregate amount of the Commitments, and (b) the amount of Borrowing
Base Availability shall not at any time be less than $5,000,000. If any Loan
would cause Borrowing Base Availability to be less than $5,000,000, no Bank
shall be obligated to make such Loan unless and until the Companies shall
have caused the perfection of the Lien of Collateral Agent, for the benefit
of the Banks, in Vehicles having an aggregate Orderly Liquidation Value such
that Borrowing Base Availability is at all times equal to or greater than
$5,000,000, pursuant to documentation satisfactory to Collateral Agent and
Required Banks as provided in Section 5.1(r). Subject to the foregoing
limitations and the other terms and conditions of this Agreement, Borrower
may borrow, repay and re-borrow the Loans hereunder prior to the Termination
Date. The Borrowing Base shall be determined in good faith by
Administrative Agent in connection with the delivery of the Borrowing Base
Report to be delivered in accordance with Section 5.1(l), subject to
Administrative Agent's right to re-determine the Borrowing Base in accordance
with the immediately succeeding sentence. In addition, the Borrowing Base
may be re-determined at any time and from time to time by Administrative
Agent in good faith upon the occurrence and during the continuation of a
Potential Default.
(b) Continuation and Conversion of Loans. Subject to the terms of
this Agreement, Borrower may borrow the Loans as Base Rate Loans or LIBOR
Loans and Borrower may Continue LIBOR Loans or Convert Loans of one Type into
Loans of the other Type.
(c) Lending Offices. Loans of each Type made by each Bank shall be
made and maintained at such Bank's Applicable Lending Office for Loans of
such Type.
Section 2.2 The Notes. The Loans made by each Bank shall be evidenced
by a single promissory note (each a "Revolving Credit Note") of Borrower in
substantially the form of Exhibit C hereto, dated the Closing Date, payable
to the order of such Bank in a principal amount equal to its Commitment as
originally in effect, and otherwise duly completed. Each Bank is hereby
authorized by Borrower to endorse on the schedule (or a continuation thereof)
attached to each Note of such Bank, to the extent applicable, the date,
amount and Type of and the Interest Period (if applicable) for each Loan made
by such Bank to Borrower and the amount of each payment or prepayment of
principal of such Loan received by such Bank, provided that any failure by
such Bank to make any such endorsement shall not affect the obligations of
Borrower, Parent or any other Subsidiary under such Note or this Agreement in
respect of such Loan.
Section 2.3 Repayment of Loans. Borrower shall pay the outstanding
principal amount on all Loans on the Termination Date. If any payment of
principal becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day and
interest shall be payable at the then applicable rate during such extension.
Section 2.4 Interest and Fees.
(a) Interest Rate. Borrower shall pay to the Administrative Agent
for the account of each Bank interest on the unpaid principal amount of each
Loan made by such Bank for the period commencing on the date of such Loan to
but excluding the date such Loan is due, at a fluctuating rate per annum
equal to the Applicable Rate. The term "Applicable Rate" means (i) with
respect to Base Rate Loans outstanding from day to day, the lesser of (A) the
Highest Lawful Rate or (B) the Base Rate plus the Base Rate Margin and (ii)
with respect to LIBOR Loans outstanding from day to day, the lesser of (A)
the Highest Lawful Rate or (B) the LIBOR Rate plus the LIBOR Rate Margin.
Notwithstanding the foregoing, subject to Section 9.19, (1) all principal
outstanding after the occurrence of a Default which has not been cured to the
satisfaction of the Administrative Agent and the Required Banks or waived in
writing by the Administrative Agent and the Required Banks shall bear
interest at the Default Rate, which shall be due and payable on demand, and
(2) past due principal, interest, fees and other amounts shall bear interest
at the Default Rate, which shall be payable on demand. The term "Default
Rate" means a rate per annum equal to (i) in the case of principal of any
Loan, the lesser of (A) the Highest Lawful Rate, or (B) 2% plus the rate
otherwise applicable to such Loan as provided above, or (ii) in the case of
any other amount, including interest and fees, 2% plus the rate applicable to
Base Rate Loans as provided above.
(b) Determinations of Margins and Fees. The margins identified in
Section 2.4(a) and the fees payable under Section 2.11 shall be defined and
determined as follows:
(i) "Base Rate Margin" shall mean (i) during the period commencing on
the Closing Date and ending on but not including the first Adjustment
Date (as defined below), 1.00% per annum and
(ii) during each period from and including one Adjustment Date to but
excluding the next Adjustment Date (herein a "Calculation Period"), the
percent per annum set forth in the table below under the heading "Base
Rate Margin" and opposite the Leverage Ratio which corresponds to the
Leverage Ratio set forth in, and as calculated in accordance with, the
applicable Compliance Certificate.
(ii) "LIBOR Rate Margin" shall mean (i) during the period commencing on
the Closing Date and ending on but not including the first Adjustment
Date, 2.25% per annum and (ii) during each Calculation Period, the
percent per annum set forth in the table below under the heading "LIBOR
Rate Margin" and opposite the Leverage Ratio which corresponds to the
Leverage Ratio set forth in, and as calculated in accordance with, the
applicable Compliance Certificate.
(iii) "Commitment Fee Rate" shall mean (i) during the period commencing
on the Closing Date and ending on but not including the first
Adjustment Date, 0.25% per annum and (ii) during each Calculation
Period, the percent per annum set forth in the table below under the
heading "Commitment Fee Rate" and opposite the Leverage Ratio which
corresponds to the Leverage Ratio set forth in, and as calculated in
accordance with, the applicable Compliance Certificate.
Leverage Ratio Base Rate LIBOR Rate Commitment
Margin Margin Fee Rate
Greater than or equal to 1.50% 2.75% 0.35%
2.25
Greater than or equal to 1.25% 2.50% 0.25%
1.75 but less than 2.25
Greater than or equal to 1.00% 2.25% 0.25%
1.25 but less than 1.75
Less than 1.25 0.75% 2.00% 0.20%
Upon delivery of each Compliance Certificate pursuant to this Agreement,
commencing with such Compliance Certificate delivered as of the period ending
on June 30, 2002, the LIBOR Rate Margin (for Interest Periods commencing
after the applicable Adjustment Date), the Base Rate Margin and the
Commitment Fee Rate shall automatically be adjusted in accordance with the
Leverage Ratio set forth therein and the table set forth above, such
automatic adjustment to take effect as of the first Business Day after the
receipt by the Administrative Agent of the related Compliance Certificate
(each such Business Day when such margins or fees change pursuant to this
sentence or the next following sentence, herein an "Adjustment Date"). If
Parent fails to deliver such Compliance Certificate which so sets forth the
Leverage Ratio within the period of time required by this Agreement: (i) the
LIBOR Rate Margin (for Interest Periods commencing after the applicable
Adjustment Date) shall automatically be adjusted to two and three-fourths
percent (2.75%) per annum; (ii) the Base Rate Margin shall automatically be
adjusted to one and one-half percent (1.50%); and (iii) the Commitment Fee
Rate shall automatically be adjusted to seven-twentieths of one percent
(0.35%), such automatic adjustments to take effect as of the first Business
Day after the last day on which Parent was required to deliver the applicable
Compliance Certificate in accordance with this Agreement and to remain in
effect until subsequently adjusted in accordance herewith upon the delivery
of such Compliance Certificate.
(c) Computation of Interest and Fees. Interest based on the Base
Rate and, the LIBOR Rate and all fees shall be calculated on the basis of
actual days elapsed, but computed as if each calendar year consisted of 360
days, subject to limitations of the Highest Lawful Rate. Each determination
by Administrative Agent of the Base Rate and/or the LIBOR Rate shall, in the
absence of manifest error, be conclusive and binding.
(d) Recapture of Interest Lost as a Result of Interest Limitations.
If at any time the rate of interest applicable to any Loan exceeds the
Highest Lawful Rate, the rate of interest which such Loan bears shall be
limited to the Highest Lawful Rate, but, notwithstanding any subsequent
reductions in the Applicable Rate, the rate of interest which such Loan bears
shall not thereafter be reduced below the Highest Lawful Rate until such time
as the total amount of interest accrued on such Loan equals the amount of
interest which would have accrued if the Applicable Rate had at all times
been in effect.
(e) Payment Dates. Accrued interest on the Loans shall be due and
payable in arrears on the first Business Day of each calendar month and on
the Termination Date.
Section 2.5 Borrowing Procedure.
Borrower shall give Administrative Agent notice of each borrowing of Loans
hereunder in accordance with Section 2.9. Not later than 12:00 noon
(Dallas, Texas time) on the date specified for each Advance hereunder,
each Bank will make available the amount of the Loan to be made by it on
such date to Administrative Agent, at the Applicable Lending Office of
Administrative Agent, in immediately available funds, for the account of
Borrower. The amount so received by Administrative Agent shall, subject
to the terms and conditions of this Agreement, be made available to Borrower
promptly by wire transfer of immediately available funds to a deposit account
maintained by Borrower and reasonably acceptable to Administrative Agent.
Section 2.6 Optional Prepayments, Conversions and Continuations of
Loans.
Subject to Section 2.7, Borrower shall have the right from time to
time to prepay the principal of the Loans, to Convert all or part of a Loan
of one Type into a Loan of another Type or to Continue LIBOR Loans; provided
that: (a) Borrower shall give Administrative Agent notice of each such
prepayment, Conversion or Continuation as provided in Section 2.9, (b) LIBOR
Loans may only be Converted on the last day of the Interest Period, and (c)
except for Conversions of LIBOR Loans into Base Rate Loans, no Conversions or
Continuations shall be made while a Potential Default or Default has occurred
and is continuing.
Section 2.7 Mandatory Prepayments.
(a) Loans. If at any time the Outstanding Revolving Credit exceeds
an amount equal to the lesser of the Commitments then in effect or the
Borrowing Base then most recently determined or redetermined, Borrower shall
either (i) within one Business Day after the occurrence thereof, pay to
Administrative Agent the amount of such excess as a prepayment of the Loans,
or (ii) within ten (10) Business Days after the occurrence thereof, grant to
the Collateral Agent, for the benefit of the Banks, a valid, perfected First
Priority Lien in Vehicles having an aggregate Orderly Liquidation Value in an
amount necessary to increase the Borrowing Base by the amount of such excess,
subject to any and all limitations specified in the definition of "Borrowing
Base", pursuant to documentation satisfactory to the Collateral Agent and the
Required Banks as provided in Section 5.1(r).
(b) Application of Mandatory Prepayments. Any prepayments hereunder
shall be applied to the remaining Loans as set forth in Section 2.17.
Section 2.8 Minimum Amounts.
Except for Conversions pursuant to Sections 2.22 and 2.24, each Advance and
each Conversion of principal of the Loans shall be in an amount at least equal
to (a) $1,000,000 or an integral multiple of $100,000 in excess thereof with
respect to LIBOR Loans or (b) $100,000 or an integral multiple of $100,000 in
excess thereof with respect to Base Rate Loans (Advances, prepayments or
Conversions of or into Loans of different Types or, in the case of LIBOR Loans,
having different Interest Periods at the same time hereunder shall be deemed
separate Advances, prepayments and Conversions for purposes of the foregoing,
one for each Type or Interest Period). In addition to the foregoing
requirements, there shall not at any time be more than a total of [five (5)]
LIBOR Loans outstanding. Furthermore, all optional prepayments of principal
of the Loans shall be in an amount equal to $500,000 or an integral multiple
of $100,000 in excess thereof.
Section 2.9 Certain Notices.
Notices by Borrower to Administrative Agent of terminations or reductions of
Commitments, of Advances, Conversions, Continuations and prepayments of Loans
and of the duration of Interest Periods shall be irrevocable and shall be
effective only if received by Administrative Agent not later than 12:00 noon
(Dallas, Texas time) on the Business Day prior to the date of the relevant
termination, reduction, Advance, Conversion, Continuation or prepayment or
the first day of such Interest Period specified below:
Notice Number of
Business Days
Prior
Terminations or Reductions of Commitments 5
Borrowings of Loans as Base Rate Loans 1
Borrowings of Loans as LIBOR Loans 2
Conversions or Continuations of Loans 2
Prepayments of Loans which are Base Rate Loans 1
Prepayments of Loans which are LIBOR Loans 2
Each such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Each such notice of Advance,
Conversion, Continuation or prepayment shall specify the Loans to be
borrowed, Converted, Continued or prepaid and the amount (subject to Section
2.8 hereof) and Type of the Loans to be borrowed, Converted, Continued or
prepaid (and, in the case of a Conversion, the Type of Loans to result from
such Conversion) and the date of Advance, Conversion, Continuation or
prepayment (which shall be a Business Day). Notices of Advances,
Conversions, Continuations or prepayments shall be in the form of Exhibit B
hereto, appropriately completed as applicable. Each such notice of the
duration of an Interest Period shall specify the Loans to which such Interest
Period is to relate. Administrative Agent shall promptly notify the Banks of
the contents of each such notice. In the event that Borrower fails to select
the Type of Loan, or the duration of any Interest Period for any LIBOR Loan,
within the time period and otherwise as provided in this Section 2.9, such
Loan (if outstanding as LIBOR Loan) will be automatically Converted into a
Base Rate Loan on the last day of the preceding Interest Period for such Loan
or (if outstanding as a Base Rate Loan) will remain as, or (if not then
outstanding) will be made as, a Base Rate Loan. Borrower may not borrow any
LIBOR Loans, Convert any Loans into LIBOR Loans or Continue any Loans as
LIBOR Loans if the interest rate for such LIBOR Loans would exceed the
Highest Lawful Rate.
Section 2.10 Use of Proceeds.
(a) Borrower agrees with Administrative Agent and the Banks that
(i) the proceeds of the Loans to be made on and after the Closing Date shall
be used by Borrower, Parent and the Subsidiaries for working capital and
general corporate purposes and to refinance existing Indebtedness and
(ii) the Letters of Credit requested to be issued pursuant to this Agreement
shall be used only to support transactions entered into in the ordinary
course of any Company's business.
(b) None of the proceeds of any Loan have been or will be used to
acquire any security in any transaction that is subject to Section 13 or 14
of the Securities Exchange Act of 1934, as amended, or to purchase or carry
any margin stock (within the meaning of Regulations T, U or X of the Board of
Governors of the Federal Reserve System).
Section 2.11 Fees. Borrower agrees to pay the following fees in
connection with the each Bank's commitment to make Loans and Issuing Bank's
commitment to issue Letters of Credit:
(a) A facility fee in the amount of $150,000 is payable on the
Closing Date to the Administrative Agent for the account of the Banks in
accordance with their respective Pro Rata Shares;
(b) A Letter of Credit fee is payable to the Administrative Agent for
the account of the Banks in accordance with their respective Pro Rata Shares,
for the term of each Letter of Credit at (i) the applicable Base Rate Margin
per annum of the aggregate undrawn amount of such Letter of Credit at all
times when Letter of Credit Liabilities are equal to or less than $5,000,000
and (ii) the LIBOR Rate Margin per annum of the aggregate undrawn amount of
such Letter of Credit at all times when Letter of Credit Liabilities exceed
$5,000,000. Letter of Credit fees shall be payable quarterly in arrears on
each Quarterly Payment Date;
(c) An issuance fee is payable to Administrative Agent for the
account of the Issuing Bank for the term of each Letter of Credit in an
amount equal to $150, which fee is payable upon issuance of each Letter of
Credit and on each anniversary of the issuance of such Letter of Credit,
together with such other standard issuance, negotiation, processing and/or
administration fees as may be charged by the Issuing Bank;
(d) Upon any amendment or modification of a Letter of Credit, a
Letter of Credit amendment fee shall be paid to the Issuing Bank, for its own
account, as determined pursuant to the Issuing Bank's customary procedures;
(e) A commitment fee shall be paid to Administrative Agent, for the
account of each Bank, on the daily average of the unused or unfunded amount
of such Bank's Commitment, for the period from and including the Closing Date
to and including the Termination Date, at a rate equal to the applicable
Commitment Fee Rate per annum based on a 360 day year and the actual number
of days elapsed, which accrued commitment fees shall be payable in arrears on
each Quarterly Payment Date and on the Termination Date.
(f) An annual agency fee in the amount of $20,000 shall be paid to
Administrative Agent and Collateral Agent, equally, on the Closing Date and
on each anniversary of the Closing Date thereafter.
Section 2.12 Computations.
Interest and fees payable by Borrower hereunder and under the other Loan Papers
on all Loans shall be computed on the basis of a year of 360 days and the
actual number of days elapsed (including the first day but excluding the last
day)
occurring in the period for which payable unless, in the case of interest, such
calculation would result in a usurious rate, in which case interest shall be
calculated on the basis of a year of 365 or 366 days, as the case may be.
Section 2.13 Termination or Reduction of Commitments.
(a) Notwithstanding anything to the contrary contained in this
Agreement, the Commitments shall automatically terminate at 8:00 a.m.
(Dallas, Texas time) on the Termination Date.
(b) Borrower shall have the right to terminate or reduce in part the
unused portion of the Commitments at any time and from time to time, provided
that (i) it shall give notice of each such termination or reduction as
provided in Section 2.9 and (ii) each partial reduction shall be in an
aggregate amount at least equal to $5,000,000 or an integral multiple of
$100,000 in excess thereof. The Commitments may not be reinstated after they
have been terminated or increased after they have been reduced.
Section 2.14 Letters of Credit.
(a) Subject to the terms and conditions of this Agreement, Borrower
may utilize the Commitments by requesting that the Issuing Bank issue standby
letters of credit (each a "Letter of Credit"); provided, that no Letter of
Credit shall be issued if, after giving effect to the issuance thereof,
(i) the Outstanding Revolving Credit would exceed the Borrowing Base then
most recently determined, (ii) Borrowing Base Availability would be less than
$5,000,000, or (iii) the Letter of Credit Liabilities would exceed
$15,000,000. Upon the date of issue of each Letter of Credit, the Issuing
Bank shall be deemed, without further action by any party hereto, to have
sold to each Bank, and each Bank shall be deemed, without further action by
any party hereto, to have purchased from the Issuing Bank, a participation to
the extent of such Bank's Pro Rata Share of the Commitments.
(b) Borrower shall give the Issuing Bank (with a copy to
Administrative Agent) at least three (3) Business Days prior notice
(effective upon receipt and irrevocable unless appropriately revoked
sufficiently prior to issuance of the Letter of Credit) specifying the date
of each Letter of Credit and the nature of the transactions to be supported
thereby. Upon receipt of such notice and confirmation by the Issuing Bank
with Administrative Agent that such Letter of Credit may be issued in
compliance with this Agreement, the Issuing Bank shall promptly notify
Administrative Agent of the contents thereof and of each such Bank's Pro Rata
Share of the amount of the proposed Letter of Credit, and Administrative
Agent shall promptly thereupon notify the Bank's of such information. In
addition, the Issuing Bank shall promptly deliver to the Administrative Agent
a photocopy of such Letter of Credit. Each Letter of Credit shall have an
expiration date that does not exceed one year from the date of issuance
(unless specifically consented to by Administrative Agent, the Issuing Bank
and the Required Banks) and that does not extend beyond the Termination Date,
shall be payable in Dollars, shall support a transaction entered into in the
ordinary course of business of Borrower, Parent or a Subsidiary, shall be
satisfactory in form and substance to the Issuing Bank, and shall be issued
pursuant to such agreements, documents and instruments as the Issuing Bank
may reasonably require, none of which shall be inconsistent with this
Agreement (and to the extent they irreconcilably conflict with this
Agreement, the terms of this Agreement shall control). Each Letter of Credit
shall (i) provide for the payment of drafts presented for, on or thereunder
by the beneficiary in accordance with the terms thereof, when such drafts are
accompanied by the documents (if any) described in the Letter of Credit and
(ii) to the extent not inconsistent with the terms hereof, be subject to the
Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500 (together with any
subsequent revision thereof approved by a Congress of the International
Chamber of Commerce and adhered to by the Issuing Bank, the "UCP"), and
shall, as to matters not governed by the UCP, be governed by, and construed
and interpreted in accordance with, the Laws of the State of Texas.
(c) Upon receipt from any Letter of Credit beneficiary of any demand
for payment or other drawing under such Letter of Credit, the Issuing Bank
shall promptly notify Borrower and each Bank as to the amount to be paid as a
result of such demand or drawing and the respective payment date. If at any
time the Issuing Bank shall make a payment to a beneficiary of a Letter of
Credit pursuant to a drawing under such Letter of Credit, each Bank will pay
to the Issuing Bank, immediately upon the Issuing Bank's demand at any time
commencing after such payment until reimbursement therefor in full by
Borrower, an amount equal to such Bank's Pro Rata Share of such payment,
together with interest on such amount for each day from the date of such
payment to the date of payment by such Bank of such amount at a rate of
interest per annum equal to the Federal Funds Rate.
(d) Borrower shall be irrevocably and unconditionally obligated to
immediately reimburse the Issuing Bank for any amounts paid by the Issuing
Bank upon any drawing under any Letter of Credit, without presentment,
demand, protest or other formalities of any kind (each such reimbursement
obligation, herein a "Reimbursement Obligation"). The Issuing Bank will pay
to each Bank such Bank's Pro Rata Share of all amounts received from or on
behalf of Borrower for application in payment, in whole or in part, of the
Reimbursement Obligation in respect of any Letter of Credit, but only to the
extent such Bank has made payment to the Issuing Bank in respect of such
Letter of Credit pursuant to Subsection (c) above. Outstanding Reimbursement
Obligations shall bear interest at the Highest Lawful Rate and such interest
shall be payable on demand.
(e) The Reimbursement Obligations of Borrower under this Agreement
and the other Loan Papers shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms of this
Agreement and the other Loan Papers under all circumstances whatsoever,
including, without limitation, the following circumstances:
(i) Any lack of validity or enforceability of any Letter of
Credit or any other Loan Papers;
(ii) Any amendment or waiver of or any consent to departure from
any Loan Papers;
(iii) The existence of any claim, setoff, counterclaim, defense
or other right which Borrower or any other Person may have at any time
against any beneficiary of any Letter of Credit, Administrative Agent,
the Issuing Bank, the Banks or any other Person, whether in connection
with this Agreement or any other Loan Papers or any unrelated
transaction;
(iv) Any statement, draft or 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 whatsoever;
(v) Payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, provided, that such payment
shall not have constituted gross negligence or willful misconduct of
the Issuing Bank; and
(vi) Any other circumstance whatsoever, whether or not similar
to any of the foregoing, provided that such other circumstance or event
shall not have been the result of the gross negligence or willful
misconduct of the Issuing Bank.
(f) Borrower assumes all risks of the acts or omissions of any beneficiary
of any Letter of Credit with respect to its use of such Letter of Credit.
Neither Administrative Agent, the Issuing Bank, the Banks nor any of their
respective officers or directors shall have any responsibility or liability
to Borrower or any other Person for: (a) the failure of any draft to bear any
reference or adequate reference to any Letter of Credit, or the failure of any
documents to accompany any draft at negotiation, or the failure of any Person
to surrender or to take up any Letter of Credit or to send documents apart from
drafts as required by the terms of any Letter of Credit, or the failure of any
Person to note the amount of any instrument on any Letter of Credit, (b) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
(c) the validity, sufficiency or genuineness of any draft or other document, or
any endorsement(s) thereon,even if any such draft, document or endorsement
should in fact prove to be in any and all respects invalid, insufficient,
fraudulent or forged or any statement therein is untrue or inaccurate in any
respect, (d) the payment by the Issuing Bank to the beneficiary of any Letter
of Credit against presentation of any draft or other document that does not
comply with the terms of the Letter of Credit, or (e) any other circumstance
whatsoever in making or failing to make any payment under a Letter of Credit;
provided,however, that, notwithstanding the foregoing,Borrower shall have a
claim against the Issuing Bank, and the Issuing Bank shall be liable to
Borrower, to the extent of any direct, but not indirect or consequential,
damages suffered by Borrower which Borrower proves in a final nonappealable
judgment were caused by (i) the Issuing Bank's willful misconduct or gross
negligence in determining whether documents presented under any Letter of
Credit complied with the terms thereof or (ii) the Issuing Bank's willful
failure to pay under any Letter of Credit after presentation to it of documents
strictly complying with the terms and conditions of such Letter of Credit.
The Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary.
(g) The Issuing Bank may be replaced at any time by written agreemement
among the Borrower, the Administrative Agent, the replaced Issuing Bank and
the successor Issuing Bank. The Administrative Agent shall notify the Banks
of any such replacement of the Issuing Bank. At the time any such replacement
shall become effective, the Borrower shall pay all unpaid fees accrued for the
account of the replaced Issuing Bank pursuant to Section 2.11(c). From and
after the effective date of any such replacement, (i) the successor Issuing
Bank shall have all the rights and obligations of the Issuing Bank under this
Agreement with respect to Letters of Credit to be issued thereafter, and (ii)
references herein to the term "Issuing Bank" shall be deemed to refer to such
successor and all previous Issuing Banks, as the context shall require. After
the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall
remain a party hereto and shall continue to have all the rights and obligations
of an Issuing Bank under this Agreement with respect to Letters of Credit
issued by it prior to such replacement, but shall not be required to issue
additional Letters of Credit.
Section 2.15 Method of Payment.
All payments of principal, interest, fees and other amounts to be made by
Borrower, Parent or any Subsidiary under this Agreement or any other Loan
Paper shall be made via wire transfer of funds to Administrative Agent for
the account of each Bank's Applicable Lending Office in Dollars and in
immediately available funds, without setoff, deduction or counterclaim, not
later than 12:00 noon (Dallas, Texas time) on the date on which such payment
shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day). Borrower or such
other Person shall, at the time of making each such payment, specify to
Administrative Agent the sums payable by such Person under this Agreement or
the other Loan Document to which each such payment is to be applied (and in the
event that such Person fails to so specify, or if an Default has occurred and
is continuing or if a Potential Default would exist after the making of such
payment, Administrative Agent may apply such payment to such Person's Loans,
Reimbursement Obligations and other Obligations in such order and manner as
Administrative Agent may elect, subject to Section 2.16). Upon the occurrence
and during the continuation of a Default, all proceeds of any Collateral and
all other funds of Borrower, Parent or any Subsidiary in the possession of
Administrative Agent or any Bank may be applied by Administrative Agent to the
Obligations in such order and manner as Administrative Agent may elect, subject
to the provisions of Section 2.16. Notwithstanding the foregoing, if a Default
has occurred and is continuing, Administrative Agent and the Banks agree among
themselves that all such payments, proceeds and funds, shall be applied (or,
in the case of Letter of Credit Liabilities consisting of the undrawn face
amount of Letters of Credit, held by Administrative Agent as cash collateral
for application against) pro rata to the Outstanding Revolving Credit. Each
payment received by Administrative Agent under this Agreement or any other
Loan Paper for the account of the Bank shall be paid promptly to such Bank,
in immediately available funds, for the account of such Bank's Applicable
Lending Office. Whenever any payment under this Agreement or any other Loan
Paper shall be stated to be due on a day that is not a Business Day, such
payment may be made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of the payment of
interest and commitment fee, as the case may be.
Section 2.16 Pro Rata Treatment.
Except to the extent otherwise provided in this Agreement: (a) each Loan
shall be made by the Banks under Section 2.1, each payment of commitment
fees under Section 2.11 shall be made for the account of the Banks, and each
termination or reduction of the Commitments under Section 2.13 shall be
applied to the appropriate Commitments of the applicable Banks, pro rata
according to the respective unused Commitments; (b) the making, Conversion
and Continuation of Loans of a particular Type (other than Conversions
provided for by Section 2.25) shall be made pro rata among the Banks holding
Loans of such Type according to the amounts of their respective appropriate
Commitments; (c) each payment and prepayment by Borrower of principal of or
interest on Loans of a particular Type shall be made to Administrative Agent
for the account of the Banks holding Loans of such Type pro rata in accordance
with the respective unpaid principal amounts of such Loans held by such Banks;
(d) Interest Periods for Loans of a particular Type shall be allocated among
the Banks holding Loans of such Type pro rata according to the respective
principal amounts held by such Banks; and (e) the Banks (other than the Issuing
Bank) shall purchase participations in the Letters of Credit pro rata in
accordance with their respective Pro Rata Share.
Section 2.17 Sharing of Payments, Etc.
If a Bank shall obtain payment of any principal of or interest on any of the
Obligations due to such Bank hereunder through the exercise of any right of
setoff, banker's lien,counterclaim or similar right, or otherwise, it shall
promptly purchase from the other Banks participations in the Obligations held
by the other Banks in such amounts, and make such adjustments from time to
time, as shall be equitable to the end that all Banks shall share pro rata in
accordance with the unpaid principal and interest on the Obligations then due
to each of them. To such end, all Banks shall make appropriate adjustments
among themselves (by the resale of participations sold or otherwise) if all or
any portion of such excess payment is thereafter rescinded or must otherwise
be restored. Each of Borrower, Parent and the Subsidiaries agrees, to the
fullest extent it may effectively do so under applicable Law, that any Bank
so purchasing a participation in the Obligations by the other Banks may
exercise all rights of setoff, banker's lien, counterclaim or similar rights
with respect to such participation as fully as if such Bank were a direct
holder of Obligations in the amount of such participation. Nothing contained
herein shall require any Bank to exercise any such right or shall affect the
right of any Bank to exercise, and retain the benefits of exercising, any
such right with respect to any other indebtedness, liability or obligation of
Borrower, Parent or any of the Subsidiaries.
Section 2.18 Non-Receipt of Funds by Administrative Agent.
Unless Administrative Agent shall have been notified by a Bank or Borrower
("Payor") prior to the date on which such Bank is to make payment to
Administrative Agent of the proceeds of a Loan to be made by it hereunder or
Borrower is to make a payment to Administrative Agent for the account of one
or more of Banks, as the case may be (such payment being herein called the
"Required Payment"), which notice shall be effective upon receipt, that Payor
does not intend to make the Required Payment to Administrative Agent,
Administrative
Agent may assume that the Required Payment has been made and may, in reliance
upon such assumption (but shall not be required to), make the amount thereof
available to the intended recipient on such date and, if Payor has not in
fact made the Required Payment to Administrative Agent, the recipient of such
payment shall, on demand, pay to Administrative Agent the amount made
available to it together with interest thereon in respect of the period
commencing on the date such amount was so made available by Administrative
Agent until the date Administrative Agent recovers such amount at a rate per
annum equal to the Federal Funds Rate for such period.
Section 2.19 Withholding Taxes.
(a) All payments by Borrower of principal of and interest on the Loans
and the Letter of Credit Liabilities and of all fees and other amounts payable
under the Loan Papers shall be made free and clear of, and without deduction
by reason of, any present or future taxes, levies, duties, imposts, assessments
or other charges levied or imposed by any Tribunal (other than any taxes
imposed on the taxable income of Administrative Agent or any Bank
or any lending office of Administrative Agent or such Bank by any
jurisdiction in which Administrative Agent or such Bank or any such lending
office is located). If any such taxes, levies, duties, imposts, assessments
or other charges are so levied or imposed, Borrower will (i) make additional
payments in such amounts so that every net payment of principal of and
interest on the Loans and the Letter of Credit Liabilities and of all other
amounts payable by it under the Loan Papers, after withholding or deduction
for or on account of any such present or future taxes, levies, duties,
imposts, assessments or other charges (including any tax imposed on or
measured by taxable income of a Bank attributable to payments made to or on
behalf of a Bank pursuant to this Section 2.19 and any penalties or interest
attributable to such payments), will not be less than the amount provided for
herein or therein absent such withholding or deduction (provided that
Borrower shall not have any obligation to pay such additional amounts to any
Bank to the extent that such taxes, levies, duties, imposts, assessments or
other charges are levied or imposed by reason of the failure of such Bank to
comply with the provisions of Section 2.20), (ii) make such withholding or
deduction and (iii) remit the full amount deducted or withheld to the
relevant Tribunal in accordance with applicable Law. Without limiting the
generality of the foregoing, Borrower will, upon written request of any Bank,
reimburse each such Bank for the amount of (A) such taxes, levies, duties,
imports, assessments or other charges so levied or imposed by any Tribunal
and paid by such Bank as a result of payments made by Borrower under or with
respect to the Loans other than such taxes, levies, duties, imports,
assessments and other charges previously withheld or deducted by Borrower
which have previously resulted in the payment of the required additional
amount to Bank, and (B) such taxes, levies, duties, assessments and other
charges so levied or imposed with respect to any Bank reimbursement under the
foregoing clause (A), so that the net amount received by such Bank (net of
payments made under or with respect to the Loans and the Letter of Credit
Liabilities) after such reimbursement will not be less than the net amount
such Bank would have received if such taxes, levies, duties, assessments and
other charges on such reimbursement had not been levied or imposed. Borrower
shall furnish promptly to Administrative Agent for distribution to each
affected Bank, as the case may be, upon request of such Bank, official
receipts evidencing any such payment, withholding or reduction.
(b) Borrower will indemnify Administrative Agent and each Bank
(without duplication) against, and reimburse Administrative Agent and each
Bank for, all present and future taxes, levies, duties, imposts, assessments
or other charges (including interest and penalties) levied or collected
(whether or not legally or correctly imposed, assessed, levied or collected),
excluding, however, any taxes imposed on the overall taxable income of
Administrative Agent or such Bank or any lending office of Administrative
Agent or such Bank by any jurisdiction in which Administrative Agent or such
Bank or any such lending office is located, on or in respect of this
Agreement, any of the Loan Papers or the Obligations or any portion thereof
("reimbursable taxes"). Any such indemnification shall be on an after-tax
basis, taking into account any such reimbursable taxes imposed on the amounts
paid as indemnity.
(c) If and to the extent actually known by such Bank, each Bank will
use reasonable efforts to notify Borrower and Administrative Agent, in a
reasonably prompt fashion after such assignment is made, of any assignment of
the Commitment or the Loans by such Bank to an Eligible Assignee which is
subject to a withholding tax that will impose any payment obligation upon
Borrower pursuant to this Section 2.19. Each Bank will use reasonable
efforts to notify Borrower and Administrative Agent of any amounts to be paid
by Borrower pursuant to this Section 2.19 in a reasonably prompt fashion
after such Bank becomes aware of the circumstances which require the payment
of such amounts by Borrower.
Section 2.20 Withholding Tax Exemption.
Each Bank that is notincorporated or otherwise formed under the Laws of the
U.S. or a state thereof agrees that it will, prior to or on or about the Closing
Date or the date upon which it becomes a party to this Agreement, deliver to
Borrower and Administrative Agent two duly completed copies of U.S. Internal
Revenue Service Form 1001, 4224 or W-8, as appropriate, certifying in any case
that such Bank is entitled to receive payments from Borrower under any Loan
Paper without deduction or withholding of any U.S. federal income taxes. Each
Bank which so delivers a Form 1001, 4224 or W-8 further undertakes to deliver
to Borrower and Administrative Agent two additional copies of such form (or a
successor form) on or before the date such form expires or becomes obsolete
or after the occurrence of any event requiring a change in the most recent
form so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by Borrower or Administrative
Agent, in each case certifying that such Bank is entitled to receive payments
from Borrower under any Loan Paper without deduction or withholding of any
U.S. federal income taxes, unless an event (including without limitation any
change in treaty, Law or regulation) has occurred prior to the date on which
any such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Bank from duly completing and
delivering any such form with respect to it and such Bank advises Borrower
and Administrative Agent that it is not capable of receiving such payments
without any deduction or withholding of U.S. federal income tax.
Section 2.21 Reinstatement of Obligations.
Notwithstanding anything to the contrary contained in this Agreement or any
other Loan Paper, if the payment of any amount of principal of or interest
with respect to the Loans, the Reimbursement Obligations or any other amount
of the Obligations, or any portion thereof, is rescinded, voided or must
otherwise be refunded by Administrative Agent, any Bank or Issuing Bank upon
the insolvency,bankruptcy or reorganization of Borrower or any of the
Subsidiaries or otherwise for any reason whatsoever, then each of (a) the
Obligations, (b) the Loan Papers (including, without limitation, this
Agreement, the Notes, the Guaranty Agreements and the Security Agreement),
(c) the indebtedness,liabilities and obligations of Borrower, Parent and the
Subsidiaries under the Loan Papers, and (d) all Liens for the benefit of
Administrative Agent and the Banks created under or evidenced by the Loan
Papers, will be automatically reinstated and become automatically effective
and in full force and effect, all to the extent that and as though such
payment so rescinded,voided or otherwise refunded had never been made.
Section 2.22 Additional Costs.
(a) Borrower shall pay directly to each Bank from time to time,
within ten days after the request of such Bank, the costs incurred by such
Bank which such Bank reasonably determines are attributable to its making or
maintaining of any LIBOR Loans or its obligation to make any of such Loans,
or any reduction in any amount receivable by such Bank hereunder in respect
of any such Loans or obligations (such increases in costs and reductions in
amounts receivable being herein called "Additional Costs"), resulting from
any Regulatory Change occurring after the Closing Date which:
(i) changes the basis of taxation of any amounts payable to
such Bank under this Agreement or its Notes in respect of any of
such Loans (other than income taxes and franchise taxes attributable
to net income of such Bank or its Applicable Lending Office for any
of such Loans by the jurisdiction in which such Bank has its
principal office or such Applicable Lending Office);
(ii) imposes or modifies any reserve, special deposit, minimum
capital, capital ratio or similar requirement relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, such Bank (including any of such Loans
or any deposits referred to in the definition of "LIBOR Rate" in
Section 1.1 hereof, but excluding the LIBOR Reserve Percentage to the
extent it is included in the calculation of the LIBOR Rate); or
(iii) imposes any other condition affecting this Agreement or the
Notes or any of such extensions of credit or liabilities or
commitments.
Each applicable Bank will notify Borrower (with a copy to
Administrative Agent) of any event occurring after the Closing Date
which will entitle such Bank to compensation pursuant to this Section
2.22(a) as promptly as practicable after it obtains knowledge thereof
and determines to request such compensation, and (if so requested by
Borrower) will, if and to the extent that it is reasonably feasible for
such Bank to do so given administrative and other considerations,
designate a different Applicable Lending Office for the LIBOR Loans of
such Bank if such designation will avoid the need for, or reduce the
amount of, such compensation and will not, in the reasonable opinion of
such Bank, violate any Law, rule or regulation or be in any way
disadvantageous to such Bank. Each applicable Bank will furnish
Borrower with a certificate setting forth the basis and the amount of
each request of such Bank for compensation under this Section 2.22(a).
If any Bank requests compensation from Borrower under this
Section 2.22(a), Borrower may, by notice to such Bank (with a copy to
Administrative Agent), suspend the obligation of such Bank to make or
Continue making, or Convert Base Rate Loans into, LIBOR Loans until the
Regulatory Change giving rise to such request ceases to be in effect
(in which case the provisions of Section 2.25 hereof shall be
applicable).
(b) Without limiting the effect of the foregoing provisions of this
Section 2.22, in the event that, by reason of any Regulatory Change, any Bank
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities
of such Bank which includes deposits by reference to which the interest rate
on LIBOR Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Bank which includes LIBOR Loans
or (ii) becomes subject to restrictions on the amount of such a category of
liabilities or assets which it may hold, then, if such Bank so elects by
notice to Borrower (with a copy to Administrative Agent), the obligation of
such Bank to make or Continue making, or Convert Base Rate Loans into, LIBOR
Loans hereunder shall be suspended until such Regulatory Change ceases to be
in effect (in which case the provisions of Section 2.25 hereof shall be
applicable).
(c) Determinations and allocations by any Bank for purposes of this
Section 2.22 of the effect of any Regulatory Change on its costs of
maintaining its obligation to make Loans or issue Letters of Credit or of
making or maintaining Loans or issuing Letters of Credit or on amounts
receivable by it in respect of Loans or Letters of Credit, and of the
additional amounts required to compensate such Bank in respect of any
Additional Costs, shall be conclusive in the absence of manifest error,
provided that such determinations and allocations are made on a reasonable
basis.
Section 2.23 Limitation on Types of Loans.
Anything herein to the contrary notwithstanding, if with respect to any LIBOR
Loans for any Interest Period therefor:
(a) Administrative Agent determines (which determination shall be
made reasonably and in good faith and shall be conclusive absent manifest
error) that quotations of interest rates for the relevant deposits referred
to in the definition of "LIBOR Rate" in Section 1.1 hereof are not being
provided in the relative amounts or for the relative maturities for purposes
of determining the rate of interest for such Loans as provided in this
Agreement; or
(b) any Bank determines (which determination shall be in good faith
and shall be conclusive absent manifest error) and notifies Administrative
Agent that the relevant rates of interest referred to in the definition of
"LIBOR Rate" in Section 1.1 hereof on the basis of which the rate of interest
for such Loans for such Interest Period is to be determined do not accurately
reflect the cost to such Bank of making or maintaining such Loans for such
Interest Period;
then Administrative Agent shall give Borrower prompt notice thereof and, so
long as such condition remains in effect, such Bank shall be under no
obligation to make LIBOR Loans or to Convert Base Rate Loans into LIBOR Loans
and Borrower shall, on the last day(s) of the then current Interest Period(s)
for the outstanding LIBOR Loans, either prepay such Loans or Convert such
Loans into Base Rate Loans in accordance with the terms of this Agreement.
Section 2.24 Illegality.
Notwithstanding any other provision of this Agreement, in the event that it
becomes unlawful for any Bank or its Applicable Lending Office to (a) honor
its obligation to make LIBOR Loans or (b) maintain LIBOR Loans, then such
Bank shall promptly notify Borrower thereof (with a copy to Administrative
Agent) and such Bank's obligation to make or maintain LIBOR Loans and to
Convert Base Rate Loans into LIBOR Loans hereunder shall be suspended until
such time as such Bank may again make and maintain LIBOR Loans (in which case
the provisions of Section 2.25 hereof shall be applicable).
Section 2.25 Treatment of Affected Loans.
If the obligation of any Bank to make or Continue, or to Convert Base Rate
Loans into, LIBOR Loans is suspended pursuant to Section 2.22 or 2.24 hereof,
such Bank's LIBOR Loans shall be automatically Converted into Base Rate Loans
on the last day(s) of the then current Interest Period(s) for the LIBOR Loans
or, in the case of a Conversion required by Section 2.22(b) or 2.24 hereof,
on such earlier date as such Bank may specify to Borrower (with a copy to
Administrative Agent) and, unless and until such Bank gives notice as provided
below that the circumstances specified in Section 2.22 or 2.24 hereof which gave
rise to such Conversion no longer exist:
(a) To the extent that such Bank's LIBOR Loans have been so
Converted, all payments and prepayments of principal which would otherwise be
applied to such Bank's LIBOR Loans shall be applied instead to its Base Rate
Loans; and
(b) All Loans which would otherwise be made or Continued by such Bank
as LIBOR Loans shall be made as or Converted into Base Rate Loans and all
Loans of such Bank which would otherwise be Converted into LIBOR Loans shall
be Converted instead into (or shall remain as) Base Rate Loans.
If such Bank gives notice to Borrower (with a copy to Administrative Agent)
that the circumstances specified in Section 2.22 or 2.24 hereof which gave
rise to the Conversion of such Bank's LIBOR Loans pursuant to this Section
2.25 no longer exist (which such Bank agrees to do promptly upon such
circumstances ceasing to exist) at a time when LIBOR Loans are outstanding,
such Bank's Base Rate Loans shall be automatically Converted, on the first
day(s) of the next succeeding Interest Period(s) for such outstanding LIBOR
Loans, to the extent necessary so that, after giving effect thereto, all
Loans held by Banks holding LIBOR Loans and by such Bank are held pro rata
(as to principal amounts, Types and Interest Periods) in accordance with
their respective Commitment.
Section 2.26 Compensation.
Borrower shall pay to Administrative Agent for the account of each Bank,
promptly upon the request of such Bank through Administrative Agent, such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Bank) to compensate it for any loss, cost or expense incurred by it as a
result of:
(a) any payment, prepayment or Conversion of a LIBOR Loan for any
reason (including, without limitation, the acceleration of the outstanding
Loans pursuant to this Agreement) on a date other than the last day of an
Interest Period for such Loan; or
(b) any failure by Borrower for any reason (including, without
limitation, the failure of any conditions precedent specified in Article 3 to
be satisfied) to borrow, Convert or prepay a LIBOR Loan on the date for such
Advance, Conversion or prepayment specified in the relevant notice of
Advance, prepayment or Conversion under this Agreement. The loss (as opposed
to cost or expense) to be compensated under clause (a) of this Section 2.26
shall not exceed an amount equal to the excess, if any,of (i) the amount of
interest which otherwise would have accrued on the principal amount so paid,
prepaid or Converted to the last day of the Interest Period at the applicable
rate for such LIBOR Loan over (ii) the cost to the applicable Bank of the
interest component of such LIBOR Loan which otherwise would have accrued.
Section 2.27 Capital Adequacy.
If, after the Closing Date, any Bank shall have determined that the adoption
or implementation of any applicable Law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any central bank or other Tribunal charged with the
interpretation or administration thereof, or compliance by such Bank (or its
parent) with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of any central bank or other
Tribunal, has or would have the effect of reducing the rate of return on such
Bank's (or its parent's) capital as a consequence of its obligations hereunder
or the transactions contemplated hereby to a level below that which such Bank
(or its parent) could have achieved but for such adoption, implementation,
change or compliance (taking into consideration such Bank's policies with
respect to capital adequacy) by an amount deemed by such Bank to be material,
then from time to time, within ten Business Days after demand by such Bank
(with a copy to Administrative Agent), Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank (or its parent) for
such reduction. A certificate of such Bank claiming compensation under this
Section 2.27 and setting forth the additional amount or amounts to be paid to
it hereunder shall be conclusive absent manifest error, provided that the
determination thereof is made on a reasonable basis. In determining such
amount or amounts, such Bank may use any reasonable averaging and attribution
methods.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to Initial Loans and Letters of
Credit.
The obligation of the Banks to make the initial Loans and to issue
the initial Letter of Credit shall be subject to the fulfillment of the
following conditions precedent on or before the Closing Date in a manner
satisfactory to the Banks:
(a) Each Bank shall have received the following:
(i) A copy of resolutions approving this Agreement and
authorizing the transactions contemplated in this Agreement and the
other Loan Papers, duly adopted by the Board of Directors of each of
the Companies, accompanied by a certificate of the Secretary or
Assistant Secretary of the respective Company, dated the date hereof,
that such copy is a true and correct copy of resolutions duly adopted
at a meeting (which may be held if permitted by applicable Law and, if
required by such Law, by the Bylaws of the respective Company, by
conference telephone or similar communications equipment by means of
which all persons participating in a meeting can hear each other) of,
or by the unanimous written consent of (if permitted by applicable Law
and, if required by such Law, by the Bylaws of the respective
Company),the Board of Directors of the respective Company, and that
such resolutions have not been amended, modified, repealed, or revoked
in any respect, and are in full force and effect as of the date hereof.
(ii) A certificate of incumbency of all officers of Borrower and
each Company who will be authorized to execute or attest this Agreement
or any document delivered pursuant hereto on behalf of Borrower or such
Company, dated the date hereof, executed by the Secretary or Assistant
Secretary of Borrower or such Company.
(iii) The articles of incorporation of Borrower and each Company
certified by the Secretary of State of the state of its incorporation
and dated a current date.
(iv) The bylaws of Borrower and each Company certified by its
Secretary or Assistant Secretary.
(v) Certificates of the appropriate government officials of the
state of incorporation of Borrower and each Company as to its existence
and, to the extent applicable, good standing and certificates of the
appropriate government officials of each state in which Borrower and
each Company is required to qualify to do business and where failure to
so qualify could reasonably be expected to have a Material Adverse
Effect, as to such Person's qualification to do business and good
standing in such state, all dated a current date.
(vi) Its Revolving Credit Note duly executed by Borrower.
(vii) A Guaranty Agreement (or ratification thereof, if
applicable), in form and substance satisfactory to the Required Banks,
appropriately executed and delivered by each of the Companies other
than Borrower.
(viii) (A) The Security Agreement in substantially the form of
Exhibit G and executed by the Borrower and each Company, granting to
the Administrative Agent, for the benefit of the Banks, a security
interest in all accounts, instruments, chattel paper, deposit accounts,
documents, contracts, and inventory of the Companies; (B) The Vehicles
Security Agreement in substantially the form of Exhibit H and executed
by the Borrower and each Company, granting to the Collateral Agent, for
the benefit of the Banks, a security interest in all Vehicles of the
Company; (C) Code, tax and judgment Lien search reports listing all
documentation on file against Borrower and each Company in such
jurisdictions as the Administrative Agent shall require; and
(D) authorized and executed documentation as the Administrative Agent
may deem necessary to perfect or protect its Liens under its Security
Agreement, including, without limitation: (1) financing statements
under the Code and other applicable documentation under the Laws of any
jurisdiction with respect to the perfection of Liens; and
(2) endorsement and delivery of (y) the W&B Note, and (z) all
promissory notes and other chattel paper and instruments payable to the
Companies, or any of them, in an aggregate principal amount greater
than $1,000,000, to the Administrative Agent pursuant to an endorsement
in form and substance satisfactory to the Administrative Agent and the
Required Banks.
(ix) Duly authorized and executed (where required) UCC-3
termination statements, mortgage releases and such other documentation
as shall be necessary to terminate or release all existing Liens on the
assets of Borrower or the Companies other than the Permitted Liens.
(x) One or more Memorandum of Negative Pledge Agreement in form
and substance satisfactory to the Administrative Agent and the Required
Banks, executed by the respective owners of any and all real property
owned by any Company, for recording in the appropriate real property
records of the respective counties where such real property is located.
(xi) A Contribution and Indemnification Agreement in form and
substance satisfactory to the Administrative Agent and the Required
Banks, executed by the Companies.
(xii) A certificate or certificates in form and substance
satisfactory to the Administrative Agent and the Banks, dated the
Closing Date and signed by the Chief Financial Officer of Parent and an
authorized officer of each other Company, certifying as to the solvency
of each Company as of the Closing Date and after giving effect to the
transactions contemplated by the Loan Papers.
(xiii) Evidence that the credit agreement being refinanced by this
Agreement has been terminated, all obligations and indebtedness
thereunder have been paid and satisfied in full, all Liens securing
such indebtedness have been released, and all letters of credit
thereunder have been returned and cancelled, or the foregoing shall
occur concurrently with the closing of this Agreement, or provision for
the foregoing shall have been made to the satisfaction of the
Administrative Agent and the Required Banks.
(xiv) Certificates of insurance summarizing the insurance
policies of the Borrower and the Companies required by this Agreement
and reflecting Administrative Agent as additional insured under such
policies and as loss payee with respect to all policies covering
Collateral.
(xv) An opinion of counsel for Borrower and the Companies,
substantially in form and substance acceptable to the Required Banks
and their counsel, covering favorably such matters relating or incident
to the transactions contemplated by this Agreement and the other Loan
Papers as the Required Banks may request.
(xvi) The fees due on the Closing Date in accordance with this
Agreement.
(xvii) Such other documents as Administrative Agent or any Bank
may reasonably request.
(b) The representations and warranties contained in Article IV of
this Agreement shall be true and correct in all material respects on and as
of such date with the same effect as if made on and as of such date.
(c) No Default or Potential Default, shall be in existence on such
date or after giving effect to such initial Loans or Letter of Credit.
(d) All corporate and legal proceedings and all documents required to
be completed and executed by the provisions of, and all instruments to be
executed in connection with the transactions contemplated by, this Agreement
and any related agreements shall be satisfactory in form and substance to
Administrative Agent and the Required Banks, and Administrative Agent and the
Banks shall have received all information and copies of all documents,
including records of corporate proceedings, required by this Agreement and
any related agreements to be executed or which Administrative Agent or any
Bank may reasonably have requested in connection therewith, such documents,
where appropriate, to be certified by proper corporate or governmental
authorities.
(e) No legal proceeding shall be pending or threatened against
Borrower or any other Company by or before any, Tribunal which could
reasonably be expected to have a Material Adverse Effect.
(f) The consummation of such Loans or issuance of such Letter of
Credit shall not violate any applicable provision of any Law.
Section 3.2 Conditions of Subsequent Advances.
The obligation of the Banks to make any Advance or Continuation or Conversion
requested to be made by it prior to the Termination Date, or issue any Letter
of Credit, shall be subject to the fulfillment of each of each following
conditions precedent on or before the date of such Advance, Continuation,
Conversion or issuance of Letter of Credit in a manner satisfactory to
Administrative Agent, the Issuing Bank and the Banks, as applicable:
(a) Administrative Agent and such Bank shall have received the notice
regarding such Advance in compliance with this Agreement or, in the case of
any Conversion or Continuation, Administrative Agent and such Bank shall
either have received the notice regarding such activity in compliance with
this Agreement or Administrative Agent and such Bank shall have received
notice regarding such Letter of Credit pursuant to this Agreement.
(b) The representations and warranties contained in Article IV of
this Agreement shall be true and correct in all material respects when made
and as of the date of such Advance, Continuation, Conversion or Letter of
Credit, as the case may be, with the same effect as if made on and as of such
date.
(c) No Default or Potential Default, shall be in existence on the
date of any Advance, Conversion, Continuation or Letter of Credit, or after
giving effect to such Advance, Conversion, Continuation or Letter of Credit.
(d) With regard to a Letter of Credit (i) the Issuing Bank shall have
received an application and agreement for issuance of letter of credit,
promissory note and/or reimbursement agreement relating to such Letter of
Credit duly executed by Borrower with respect thereto, on the Issuing Bank's
standard form; and (ii) the form and substance of the Letter of Credit shall
be reasonably satisfactory to the Issuing Bank.
(e) All corporate and legal proceedings and all documents required to
be completed and executed by the provisions of, and all instruments to be
executed in connection with the transactions contemplated by, this Agreement
and any other Loan Paper shall be satisfactory in form and substance to
Administrative Agent and the Banks and shall remain valid and effective and
shall not have been revoked or attempted to be revoked and Administrative
Agent and the Banks shall have received all information and copies of all
documents, including records of corporate proceedings, required by this
Agreement and any related agreements to be executed or which Administrative
Agent or any Bank may reasonably have requested in connection therewith, such
documents, where appropriate, to be certified by proper corporate or
governmental authorities.
(f) No legal proceeding shall be pending or threatened against
Borrower or any other Company by or before any Tribunal which could
reasonably be expected to have a Material Adverse Effect.
(g) The consummation of such Advance, Conversion or Continuation or
issuance of such Letter of Credit shall not violate any applicable provisions
of any Law.
(h) Any Bank's obligations to make any Advance or issue any Letter of
Credit hereunder shall not have been terminated pursuant to any provision of
this Agreement.
(i) There shall not have occurred any event or series of events that
has had or is likely to have a Material Adverse Effect on the financial
performance or business activities of Parent or any Subsidiary.
Section 3.3 Effect of Request for any Subsequent Advance or Conversion
or Continuation, or Request for Letter of Credit.
Each notice requesting an Advance, each notice requesting a Conversion or
Continuation, and each request for issuance of a Letter of Credit, shall be
deemed to be a representation and warranty that the matters set forth in
Subsections 3.2(b) and (c) and in Article IV are true and correct as of the
date of the requested Advance, Conversion, Continuation or Letter of Credit.
Section 3.4 Landlord Lien Waivers.
Borrower and each Company covenants that it will use its best efforts to
obtain lien waivers from each of the landlords of the property where any
Collateral is located within sixty (60) days after the Closing Date.
Section 3.5 Title Reports.
Borrower and each Company will cooperate with the Administrative Agent and its
counsel to obtain title reports on all real property owned by the Companies,
or any of them, as soon as practical after the Closing Date, and shall correct
any title defects as the Administrative Agent may reasonably request and obtain
any Lien releases as
the Administrative Agent may require.
ARTICLE IV
CERTAIN REPRESENTATIONS AND WARRANTIES
Borrower and each other Company jointly and severally represent and
warrant to Administrative Agent and the Banks that:
Section 4.1 Corporate Existence and Authority; Names.
Each Company (i) is a corporation duly organized, validly existing, and in good
standing under the Laws of its State of incorporation (ii) is duly qualified to
transactbusiness as a foreign corporation in each jurisdiction where the
nature and extent of its business and properties require the same, and (iii)
possesses all requisite authority, power, licenses, permits, and franchises
to conduct its business and execute, deliver, and comply with the terms of the
Loan Papers, which have been duly authorized and approved by all necessary
corporate action and for which no approval or consent of any Tribunal is
required.
Section 4.2 Financial Statements.
The consolidated Financial Statements of Parent as of December 31, 2001 and
as of March 31, 2002 (collectively the "Current Financials") were prepared in
accordance with GAAP and fairly present the consolidated financial conditions
and the results of operations of the Companies as of, and for the portion of
the fiscal year ending on, such dates. There were no material liabilities,
direct or indirect, fixed or contingent, of the Companies as of the date of
the Current Financials which are not reflected therein or in the notes
thereto. Except for transactions directly related to, or specifically
contemplated by, this Agreement and transactions heretofore disclosed in
writing to the Banks, there have been no material adverse changes in the
respective financial conditions of the Companies from those shown in the
Current Financials between such date and the date hereof, nor has any Company
incurred any material liability, direct or indirect, fixed, or contingent,
except for the Existing Indebtedness.
Section 4.3 Compliance with Laws and Documents; Existing Defaults.
None of the Companies is, nor will the execution, delivery and the
performance of and compliance with the terms of the Loan Papers cause any of
the Companies to be: (i) in violation of any Laws or the Certificates or
Articles of Incorporation or Bylaws of any of the Companies in any respect
which could have any effect whatsoever upon the validity, performance or
enforceability of any of the terms of the Loan Papers or which could
reasonably be expected to have a Material Adverse Effect; or (ii) in default
(nor has any event occurred which, with notice or lapse of time or both,
could constitute a default) under any material agreement or instrument to
which any Company is a party or under which any Company or any of its
property is bound. Except as set forth on Schedule 4.3 attached hereto
("Existing Litigation Schedule"), none of the Companies is involved in, nor
is any Company aware of the threat of, any Litigation where the maximum
aggregate potential loss to the Borrower, the Parent and the Companies is
greater than $250,000; none of the Litigation described on the Existing
Litigation Schedule could reasonably be expected to have a Material Adverse
Effect; and, except as set forth on the Existing Litigation Schedule, there
are no outstanding or unpaid judgments against any of the Companies.
Section 4.4 Enforceability.
The execution, delivery and performance of the Loan Papers to which each of
the Companies is a party have been duly authorized by resolutions of the board
of directors of such Company. The Loan Papers have been duly and validly
executed and delivered by each of the Companies that is a party thereto and
constitute the legal, valid and binding obligations of the Companies,
enforceable against the Companies in accordance with their respective terms,
except as limited by bankruptcy, insolvency or other Laws of general
application relating to the enforcement of creditors'rights and general
principles of equity.
Section 4.5 Payment of Taxes.
Borrower and the other Companies have filed all federal, state and other tax
returns and reports required to be filed, and have paid all Taxes required by
them to the extent that such Taxes have become due (except to the extent that
the same are being contested in good faith by appropriate proceedings
diligently prosecuted and as to which adequate reserves have been set aside
in conformity with GAAP).
Section 4.6 Plan Obligations.
Schedule 4.6 lists each Plan which is currently maintained, established or
contributed to by any Company or any other Group Member. Without limiting the
generality of the foregoing, no Company or other Group Member has maintained,
established or contributed to (i) an "employee pension benefit plan" as
defined in Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended, and the regulations and rulings thereunder ("ERISA") which is
subject to the provisions of Title IV of ERISA, or (ii) a "multiemployer plan"
as such term is defined in Section 4001 of ERISA. No Company has provided, or
agreed to provide, benefits under any health Plan to any former employee or
dependent of such employee for periods subsequent to the severance of such
employee's employment, other than as specifically required under Section 4980B
of the IRC. There has been no Reportable Event or prohibited transaction
(within the meaning of Section 486 of ERISA and Section 4975 of the IRC) with
respect to any Plan, all contributions to any Plan have been made in cash or
stock and, there have been no loans or other extensions of credit, except loans
to participants in Plans, which loans are and have been in compliance with
Section 408 of ERISA.
Conwell, AirPro, Cartage, Borrower and LML have adopted, and all
participating employees are covered by, the Injury Benefit Plan identified on
Schedule 4.6. The Injury Benefit Plan is an "Employee Welfare Benefit Plan"
as defined in Section 3(l) of ERISA. All provisions of the Injury Benefit
Plan are governed by ERISA.
Section 4.7 Purpose of Advances and Letters of Credit.
The proceeds of the Advances hereunder will be used for working capital
purposes of the Companies, to pay Reimbursement Obligations, for Capital
Expenditures permitted by Section 5.2(h) and for other general corporate
purposes. None of the proceeds of the Loans will be used, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate,
of purchasing or carrying any Margin Stock and none of such proceeds will be
used in violation of applicable Law (including, without limitation, the Margin
Regulations). The Letters of Credit will be issued in the ordinary course of
the Companies' businesses, primarily in connection with insurance claims made.
Section 4.8 Ownership of the Companies.
(i) Parent owns all of the issued and outstanding capital stock of FFE,
Express, Cartage and Middleton (ii) FFE owns all of the issued and outstanding
stock of Borrower, Conwell, AirPro, Logistics and Lisa, (iii) AirPro owns all
of the issued and outstanding capital stock of CPI, and (iv) except as
provided in this Section 4.8, none of the Companies has any Other Subsidiary.
Section 4.9 Existing Indebtedness.
Except as fully described in Schedule 4.9 attached hereto (the "Existing
Indebtedness"), none of the Companies is directly, indirectly or contingently
obligated with respect to any Indebtedness.
Section 4.10 Rights in Properties; Existing Liens.
Each of the Companies has good indefeasible title to or valid leasehold
interests in its properties and assets, real and personal, including the
properties, assets and leasehold interests reflected in the Financial
Statements described in Section 4.2, and none of such properties or assets is
subject to a Lien other than Permitted Liens.
Section 4.11 Material Agreements.
Attached hereto as Schedule 4.11 is a description of all material agreements to
which any Company is a party or its assets may be bound or affected.
Section 4.12 Environmental Matters.
(a) Each of the Companies is in compliance in all material respects
with all federal, state and local Laws and regulations now applicable to its
business and operations or which (to its knowledge) will be applicable
thereto relating to pollution control and environmental contamination,
including, but not limited to, all Laws and regulations governing the
generation, use, collection, treatment, storage, transportation, recovery,
removal, discharge or disposal of Hazardous Materials.
(b) To the best of each Company's knowledge, there are no presently
outstanding allegations that any Company is now or at any time prior hereto
was in material violation of such Laws and regulations; there are no material
administrative or judicial proceedings presently pending against any Company
pursuant to such Laws or regulations; and there is no material claim
presently outstanding against any Company which was asserted pursuant to such
Laws or regulations.
(c) There are no facts or circumstances known to any Company that
could form the basis for the assertion of any material claim against any
Company relating to environmental matters, including, but not limited to, any
claim arising from past or present environmental practices asserted under
CERCLA, RCRA or any other federal, state or local environmental statute.
Section 4.13 Common Enterprise.
Each Company expects to derive benefit from this Agreement, both on its
separate capacity and as a member of an affiliated and integrated corporate
group.
Section 4.14 Workers' Compensation.
Neither Borrower nor any of the other Companies are subscribers to the Texas
Workers' Compensation Act. Borrower and each other Company has taken all
reasonable precautions that may be necessary or appropriate to minimize the
risk of loss associated with claims that would otherwise be covered by the
Texas Workers' Compensation Act. Such precautions include, as appropriate and
in consideration of the nature of each employee's duties, without limitation,
(i) the implementation of safety programs, employee training programs, drug
screening of employees and pre-employment physicals, and (ii) the purchasing of
insurance with substantial and reasonable adequate coverage available for such
risks.
Section 4.15 Solvency.
On the Closing Date and on the date of each Loan and the date of issuance of
each Letter of Credit, each of the Companies is, and after giving effect to the
transactions contemplated hereby and the requested Loan or Letter of Credit,
will be, Solvent.
ARTICLE V
CERTAIN COVENANTS OF THE COMPANIES
Section 5.1 Affirmative Covenants.
Until the Obligations have been paid and performed in full and the obligation
of the Banks to make Loans or issue Letters of Credit have been irrevocably
terminated, the Companies shall:
(a) Compliance Certificate. On or before forty-five (45) days after
the end of the first, second and third quarters of each fiscal year of
Parent, and on or before ninety (90) days after the fourth quarter of each
fiscal year of Parent, deliver to each Bank a Compliance Certificate.
(b) Financial Statements. Deliver to each Bank, as soon as
practicable, (i) and in any event within ninety (90) days after the end of
each fiscal year of Parent, complete and detailed Financial Statements
(prepared on a consolidated basis), including balance sheet, operating
statement, reconciliation of earned surplus and such supporting schedules as
any Bank may request, accompanied by the certificate of a firm of independent
public accountants acceptable to the Banks that such statements have been
prepared in accordance with GAAP and fairly present the consolidated
financial condition of the Companies during the fiscal year just ended, and
that during the course of their audit of the Companies, nothing came to their
attention that caused them to believe the Companies were not in compliance
with the terms of Subsections 5.1(f), 5.1(k), 5.1(m), 5.2(a) and 5.2(f), (ii)
and in any event within forty-five (45) days after the end of such calendar
quarter, consolidated balance sheets of the Companies as of the close of such
quarter, and consolidated operating statements of the Companies for the part
of the fiscal year ended at the close of such quarter, accompanied by the
certificate of the Chief Financial Officer or Treasurer of Parent that such
statements are true and correct, were prepared in accordance with GAAP and
fairly present the consolidated financial conditions and results of
operations of the Companies, and (iii) after a request by any Bank, such
other information pertaining to the Companies and their affairs as such Bank
shall from time to time request in writing.
(c) Insurance. (i) Maintain, and cause each other Company to
maintain, insurance with such insurance companies, in such amounts, and
covering such risks as shall be satisfactory to the Administrative Agent and
the Collateral Agent, with loss payable to the Administrative Agent and the
Collateral Agent; provided that the Companies shall be permitted to be self-
insured for up to $5,000,000 per occurrence but shall not self-insure for
amounts in excess of $5,000,000 per occurrence without the prior written
consent of Required Banks; (ii) deliver to the Administrative Agent
certificates evidencing such insurance and, within ninety (90) days after the
close of each fiscal year of Borrower, a report certified by the Chief
Financial Officer or Vice President of Finance of Borrower describing all
insurance of the Companies in force as of the close of the fiscal year just
ended; and (iii) cause all fire and casualty insurance policies on Vehicles,
to which Liens in favor of the Collateral Agent, for the benefit of the Banks
have attached, to be made payable to the Companies, the Collateral Agent and
the Administrative Agent, as their interests may appear, and in such event
deliver certificates evidencing such insurance to the Administrative Agent.
(d) Taxes. Pay and discharge, and cause each other Company to pay
and discharge, before delinquent, all Taxes assessed upon any Company or any
of the assets of any Company, or any part thereof; provided, however, that
any Company may defer the payment of any Taxes (i) which are being diligently
contested in good faith by appropriate proceedings, and (ii) for which
reserves deemed adequate by the Banks have been set aside to the satisfaction
of the Banks for the payment thereof; and further provided, that, if and to
the extent any such contested Taxes are finally adjudicated to be valid,
Borrower or a Company will promptly discharge them and for such purpose may
use the reserve related thereto.
(e) Operating Rights, etc. Maintain and preserve, and cause each
other Company to maintain and preserve, its Operating Rights, licenses,
franchises, certificates, corporate qualification and good standing in all
appropriate states and other appropriate authorities necessary to carry on
its businesses, as an interstate and intrastate motor carrier or otherwise,
in all states in which it does business.
(f) Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage
Ratio at all times equal to or greater than 1.20 to 1.00. "Fixed Charge
Coverage Ratio" shall mean, as of the date of any determination thereof for
the twelve (12) month period ending as of the date of any determination, the
ratio of (i) the amount of the Companies' consolidated EBITDAR to (ii) the
amount of the Companies' consolidated Fixed Charges; all as determined in
conformity with GAAP. "EBITDAR" means, for any period and any Person the
total of the following, each calculated without duplication, for such Person
on a consolidated basis for such period: (a) Net Income; plus (b) any
provision for (or less any benefit from) income or franchise taxes included
in determining Net Income; plus (c) interest expense deducted in determining
Net Income; plus (d) amortization and depreciation expense deducted in
determining Net Income; plus (e) lease and rental expenses paid under
operating leases or rental agreements intended to produce income and deducted
in determining Net Income; minus (f) any dividends or redemptions of capital
stock paid in cash during such period. "Fixed Charges" means all interest
expenses, the amount of lease and rental expenses associated with all
operating leases and rental agreements that are not cancelable within the
immediately subsequent 12-month period, taxes actually paid, the portion of
long-term debt actually paid or due but not paid and lease expenses under
capitalized leases.
(g) Information and Other Documents, New Entities. Except as
otherwise may be provided in Section 9.14, cause each New Entity to execute
and deliver to Administrative Agent (i) a Guaranty Agreement, (ii) an
agreement in the form of Exhibit E attached hereto with the blanks completed
accurately, (iii) a Security Agreement in substantially the form of Exhibit G
hereto, and (iv) a Vehicles Security Agreement in substantially the form of
Exhibit H hereto and deliver, and cause each Company to deliver, to the Banks
such information (not otherwise required to be furnished herein) respecting
the business affairs, assets, and liabilities of any of the Companies, and
such opinions, certifications and documents, in addition to those herein
mentioned, as any Bank may reasonably request, and allow, and cause each
other Company to allow, the Banks or their agents to inspect any of the
records and properties of any Company, from time to time, during reasonable
business hours.
(h) Payment of Debts. Pay and discharge, and cause each other Company
to pay and discharge, when due all debts, liabilities and obligations of
Borrower and each other Company; provided that the covenant contained in this
Subsection is solely for the benefit of the Banks and their successors and
assigns; and provided further that neither Borrower nor any other Company
shall be required to pay any such debt, liability or obligation if the
validity thereof is being diligently contested in good faith and reserves
deemed adequate by the Banks have been recorded therefor in accordance with
GAAP.
(i) Maintenance of Existence, Assets. Maintain, and cause each other
Company to maintain, its corporate and legal existence, and keep, and cause
each other Company to keep, all assets in good repair, working order and
condition, and from time to time make all necessary and proper repairs,
renewals, replacements, additions, betterments and improvements thereto, to
the end that the business of Borrower and each other Company may be properly,
efficiently and advantageously conducted at all times in accordance with
sound and prudent standards of business management.
(j) Expenses.
(i) Pay (A) all reasonable expenses incurred by the
Administrative Agent, the Collateral Agent and their respective
Affiliates, including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent and the Collateral Agent, in
connection with the syndication of the credit facilities provided for
herein, the preparation and administration of this Agreement, the other
Loan Papers or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (B) all
reasonable expenses incurred by the Issuing Bank in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder, (C) all expenses incurred by the
Administrative Agent, the Collateral Agent, the Issuing Bank, and,
after a Default, any Bank, including the fees, charges and
disbursements of any counsel for the Administrative Agent, the
Collateral Agent, the Issuing Bank or any Bank in connection with the
enforcement or protection of its rights in connection with this
Agreement and the other Loan Papers, including its rights under this
Section, or in connection with the Loans made or Letters of Credit
issued hereunder, including all such expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or
Letters of Credit, and including all costs and expenses in connection
with the repossession, storage, or sale of Vehicles or other Collateral
and the collection of accounts, (D) all transfer, stamp, documentary,
or other similar taxes, assessments or charges levied by any Tribunal
in respect of this Agreement or any of the other Loan Papers, (v) all
costs, expenses, assessments and other charges incurred in connection
with any filing, registration, recording, or perfection of any security
interest or Lien contemplated by this Agreement or any other Loan
Paper, and (vi) all other costs and expenses incurred by the
Administrative Agent or the Collateral Agent in connection with this
Agreement, any other Loan Paper or the Collateral, including without
limitation costs, fees, expenses and other charges incurred in
connection with performing or obtaining any audit or appraisal in
respect of the Collateral or for any title searches, filing fees,
recording costs and lien searches.
(ii) WHETHER OR NOT ANY LOAN IS EVER FUNDED, INDEMNIFY
ADMINISTRATIVE AGENT, COLLATERAL AGENT AND THE BANKS AND HOLD
ADMINISTRATIVE AGENT, COLLATERAL AGENT AND THE BANKS HARMLESS FROM AND
AGAINST ANY AND ALL LIABILITIES, LOSSES, DAMAGES, COSTS AND EXPENSES OF
ANY KIND (INCLUDING, WITHOUT LIMITATION, EXPENSES OF LITIGATION, COURT
COSTS AND THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL FOR
ADMINISTRATIVE AGENT, COLLATERAL AGENT AND THE BANKS (OR OF ANY OTHER
PERSON ENGAGED BY ADMINISTRATIVE AGENT, COLLATERAL AGENT OR ANY BANK)
IN CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL
PROCEEDING, WHETHER OR NOT ADMINISTRATIVE AGENT, COLLATERAL AGENT OR
ANY BANK SHALL BE DESIGNATED A PARTY THERETO) WHICH MAY BE INCURRED BY
ADMINISTRATIVE AGENT, COLLATERAL AGENT OR ANY BANK, RELATING TO OR
ARISING OUT OF THIS AGREEMENT OR THE OTHER LOAN PAPERS OR ANY ACTUAL OR
PROPOSED USE OF PROCEEDS OF THE LOANS HEREUNDER; PROVIDED, THAT,
ADMINISTRATIVE AGENT, COLLATERAL AGENT AND THE BANKS SHALL NOT HAVE THE
RIGHT TO BE INDEMNIFIED HEREUNDER FOR THEIR OWN OR THEIR
REPRESENTATIVE'S OR ADMINISTRATIVE AGENT'S OR COLLATERAL AGENT'S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY A COURT OF COMPETENT
JURISDICTION. IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT
THE INDEMNITY PROVIDED FOR HEREIN IS INTENDED TO AND SHALL INDEMNIFY
AND PROTECT ADMINISTRATIVE AGENT, COLLATERAL AGENT AND THE BANKS FROM
THE CONSEQUENCES OF THEIR OWN NEGLIGENCE (AS OPPOSED TO GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT), WHETHER OR NOT THAT NEGLIGENCE IS
THE SOLE OR CONCURRING CAUSE OF ANY LIABILITY, LOSS, DAMAGE, COST OR
EXPENSE OF ANY KIND.
(iii) Any amount to be paid under this Subsection to
Administrative Agent, Collateral Agent or any Bank shall be a demand
obligation owing by Borrower and if not paid within fifteen (15) days
of demand by Administrative Agent, Collateral Agent or such Bank
thereof shall bear interest from the date of expenditure by
Administrative Agent, Collateral Agent or such Bank until paid at the
Highest Lawful Rate.
(iv) The obligations of Borrower under this Subsection shall
survive payment of the Obligations and assignment of any right
hereunder.
(k) Leverage Ratio. Maintain a Leverage Ratio equal to or less than
2.50 to 1.00. The term "Leverage Ratio" means, as of the date of any
determination thereof, the ratio of (i) Funded Debt of the Companies on a
consolidated basis as of such measurement date to (ii) EBITDAR of the
Companies on a consolidated basis for the twelve (12) month period then
ending, all as determined in conformity with GAAP. "Funded Debt" means as to
any Person at any time (without duplication) (a) all obligations of such
Person for borrowed money, including without limitation any notes payable to
the seller in connection with any acquisition and the Loans; (b) all
obligations of such Person evidenced by bonds, notes, debentures, or other
similar instruments; (c) the aggregate minimum amount of all lease or rental
payments to be paid under operating leases or rental agreements that are not
cancelable; (d) all capitalized lease obligations of such Person; (e) all
obligations of others, which such Person has Guaranteed or given surety for
or for which such Person has otherwise personally secured or indemnified such
others; (f) all obligations secured by a Lien existing on property owned by
such Person, whether or not the obligations secured thereby have been assumed
by such Person or are non-recourse to the credit of such Person; (g) all
reimbursement obligations of such Person (whether contingent or otherwise) in
respect of letters of credit, bankers' acceptances, surety or other bonds and
similar instruments (including the Reimbursement Obligations).
(l) Borrowing Base Reports. Deliver to each Bank, as soon as
possible, and in any event within thirty (30) days after and as of the end of
each calendar month, a Borrowing Base Report dated as of the end of the
immediately preceding calendar month; provided, however, that if Borrowing
Base Availability is at any time less than $10,000,000, such Borrowing Base
Reports shall be furnished weekly within five (5) days after the end of each
week.
(m) Compliance Income. Maintain a positive Compliance Income. The
term "Compliance Income" means (a) Net Income of the Companies on a
consolidated basis for each fiscal year, plus (b) any provision for (or less
any benefit from) income or franchise taxes included in determining Net
Income for such period, plus (c) any nonrecurring, extraordinary expenses
deducted in determining Net Income for such period.
(n) ERISA. Immediately upon becoming aware of the occurrence of any
event or condition which has the result that any of the representations or
warranties contained in Section 4.6, if made on and again as of any date on
or after the date of this Agreement, cease to be true, Borrower shall give
the Banks a written notice specifying (i) the nature of such events or
condition, (ii) what action Borrower and the other Companies are taking or
propose to take with respect thereto, and (iii) when known, any action taken
by the Internal Revenue Service or the Department of Labor with respect
thereto. With respect to any Plan maintained or adopted by any Company, such
Company will at all times make prompt payments of contributions required to
be made to meet the minimum funding standards of ERISA.
(o) Laws. Each Company will comply with the provisions of any and
all Laws, and with the provisions of all agreements, documents and
instruments material to its business and operations, and maintain its ability
to perform its obligations under all such agreements, documents and
instruments.
(p) Workers' Compensation. Any Company that is or becomes a
nonsubscriber to the Texas Workers' Compensation Act shall take all
reasonable precautions that may be necessary or appropriate from time to time
to minimize the risk of loss to Borrower and the other Companies associated
with claims that would otherwise be covered by the Texas Workers'
Compensation Act if such, Company had continued to Subscribe to such Act.
Such precautions shall include, without limitation, (i) the implementation of
safety programs, employee training programs, drug screening of employee and
pre-employment physical (unless prohibits by law), (ii) the purchasing of
insurance with substantial and reasonably adequate coverage available for
such risks and (iii) the maintenance of a welfare benefit plan, identical or
similar to the Injury Benefit Plan, that is governed by ERISA in all
respects.
(q) Projections. As soon as available and in any event before
December 1 of each fiscal year of Parent, Borrower will deliver (i) a
forecasted consolidated balance sheet and statements of income and cash flow
of Parent and the Subsidiaries on a quarterly basis, including the
assumptions utilized in the preparation of such projections (in narrative
form) for the two (2) forthcoming fiscal years and a proforma projection of
Parent's compliance with the financial covenants in this Agreement for the
same period.
(r) Further Assurances and Collateral Matters. (i) The Parent will,
and will cause each other Company to execute and deliver such further
documentation and take such further action as may be requested by the
Administrative Agent or the Collateral Agent to carry out the provisions and
purposes of the Loan Papers and to create, preserve, protect and perfect the
Liens of Administrative Agent and Collateral Agent, respectively, for the
benefit of itself and the Banks in the Collateral. (ii) In the event the
amount of Borrowing Base Availability is less than $5,000,000 or any
requested Loan or Letter of Credit would cause Borrowing Base Availability to
be less than $5,000,000, Parent shall and shall cause each of the
Subsidiaries to cause the perfection of the Lien of the Collateral Agent, for
the benefit of the Banks, in Vehicles having an aggregate Orderly Liquidation
Value such that Borrowing Base Availability is at all times greater than or
equal to $5,000,000. In such event or in the event Borrower otherwise elects
to include any of the Vehicles in the Borrowing Base, Parent will cause such
Lien in such Vehicles to be so perfected pursuant to documentation acceptable
to the Required Banks, and will execute and deliver, and will cause the
Subsidiaries to execute and deliver, to Collateral Agent and the Banks such
documents, in form and substance satisfactory to Collateral Agent and its
counsel and the Required Banks, as may be necessary or appropriate to
evidence and provide for the same, including without limitation the original
certificates of title for such Vehicles, applications for notation of Lien,
and any and all other documentation and action necessary to cause the Lien of
the Collateral Agent in each such Vehicle to be recorded and noted (in
accordance with the applicable recording and notation requirements and other
Governmental Requirements of each appropriate state and other jurisdiction)
on the certificate of title of each such Vehicle. Parent and the
Subsidiaries shall pay all fees, costs, expenses and taxes relating to the
foregoing. (iii) Upon written request from Borrower, Collateral Agent shall,
from time to time, take all steps necessary to release the Lien in favor of
Collateral Agent and the Banks against any one or more Vehicles; provided,
Collateral Agent shall not be obligated to release any such Lien unless
(A) the Vehicle being released from the Lien is being sold or otherwise
disposed in the ordinary course of business and for fair market value; (B)
after giving effect to the Lien release, (i) the outstanding amount of the
Obligations will not be greater than the Borrowing Base, and (ii) the
Borrowing Base Availability will not be less than $5,000,000; and (C) no
Default or Potential Default exists or would result therefrom.
(s) Accounts Receivable Report. As soon as available, and in any
event within thirty (30) days after the end of each calendar month a summary
accounts receivable aging report for Borrower showing all accounts receivable
of Borrower that are 1-30, 31-60, 61-90, and over 90 days past the invoice
date; provided, however, that if Borrowing Base Availability is at any time
less than $10,000,000, such reports shall be furnished weekly within five (5)
days after the end of each week.
(t) Inspections; Collateral Audits; Appraisals. Upon reasonable
notice (which may be telephonic notice), at all reasonable times and as often
as the Administrative Agent or the Collateral Agent may request, permit any
authorized representative designated by the Administrative Agent or the
Collateral Agent, including without limitation any consultant engaged by the
Administrative Agent or the Collateral Agent, together with any authorized
representatives of any Bank desiring to accompany the Administrative Agent or
the Collateral Agent, to visit and inspect the properties and financial
records of the Companies and to make extracts from such financial records and
permit any authorized representative designated by the Administrative Agent
or the Collateral Agent (together with any accompanying representatives of
any Bank) to discuss the affairs, finances and condition of the Companies
with the appropriate financial officer and such other officers as the Parent
or other Company shall deem appropriate; and the Companies will cooperate
with the Administrative Agent and the Collateral Agent and exert its best
efforts to arrange for the Administrative Agent or the Collateral Agent,
their respective authorized representatives (including consultants) and any
accompanying authorized representative of any Bank to meet with the
Companies' independent public accountants and each Company agrees to permit
such accountants to discuss the affairs, finances and condition of the
Companies with the Administrative Agent, the Collateral Agent and such
representatives. The Administrative Agent agrees that it shall schedule any
meeting with any such independent public accountant through the Parent, and
an officer of the Parent shall have the right to be present at any such
meeting. The Administrative Agent, the Collateral Agent and any consultant
of the Administrative Agent or the Collateral Agent shall each have the right
to examine (and any authorized representatives of any Bank shall have the
right to accompany the Administrative Agent or the Collateral Agent during
any such examination), as often as the Administrative Agent or the Collateral
Agent may request, the existence and condition of the Collateral, books and
records of the Companies and to review their compliance with the terms and
conditions of this Agreement and the other Loan Papers, subject to
governmental confidentiality requirements. The Administrative Agent and the
Collateral Agent shall each also have the right to verify with any and all
customers of the Companies the existence and condition of the accounts
receivable of the Companies, as often as the Administrative Agent or the
Collateral Agent may require, without prior notice to or consent of any of
the Companies. Without in any way limiting the foregoing, (a) the
Administrative Agent and the Collateral Agent shall each have the right to
conduct accounts receivable audits at the Companies' expense as often as the
Administrative Agent, the Collateral Agent or any Bank may request (but
initially scheduled for once per year prior to the occurrence of a Default or
Potential Default), and (b) the Administrative Agent or the Collateral Agent
shall have the right to order and obtain Vehicle Appraisals, at the
Companies' expense, not to exceed eight (8) Vehicle Appraisals during the
three (3) year period following the Closing Date, prior to the occurrence of
a Default or Potential Default, and as often as the Administrative Agent or
Collateral Agent may request at any time after such period or after the
occurrence of a Default or Potential Default. Without in any way limiting
the foregoing, each Company agrees to cooperate in all respects with the
Administrative Agent, the Collateral Agent and their respective
representatives and consultants in connection with any and all inspections,
examinations and other actions taken by the Administrative Agent, the
Collateral Agent or any of their respective representatives or consultants
pursuant to this Section. The Companies hereby jointly and severally agree
to promptly pay, upon demand by the Administrative Agent, the Collateral
Agent or the applicable Bank, any and all fees and expenses incurred by the
Administrative Agent, the Collateral Agent or any Bank in connection with any
inspection, examination or review permitted by the terms of this Section.
(u) Notices of Material Events. Furnish to the Administrative Agent
and each Bank prompt written notice of the following:
(i) the occurrence of any Default or Potential Default;
(ii) the filing or commencement of any action, suit or
proceeding by or before any Tribunal or arbitrator against or affecting
any Company or any Affiliate thereof that, if adversely determined,
could reasonably be expected to result in a Material Adverse Effect;
and
(iii) any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement
of a financial officer or other executive officer of the Parent setting forth
the details of the event or development requiring such notice and any action
taken or proposed to be taken with respect thereto.
Section 5.2 Negative Covenants.
Until the Obligations have been paid and performed in full and the obligation
of the Banks to make Loans and to issue Letters of Credit have been irrevocably
terminated, none of the Companies shall, directly or indirectly, without the
prior written consent of the Banks:
(a) Minimum Tangible Net Worth. Permit, as of the last day of any
fiscal quarter, Parent's Consolidated Tangible Net Worth to be less than the
sum of (i) $66,000,000, plus (ii) seventy-five percent (75%) of the positive,
consolidated net income of the Companies for each fiscal quarter ending after
the Closing Date (i.e., any negative net income for a fiscal quarter shall
not reduce the minimum Consolidated Tangible Net Worth), plus (iii) one
hundred percent (100%) of the net cash proceeds from any issuances of equity
securities by Parent or any other Company or other contributions to the
capital or equity of Parent or any other Company.
(b) Transfer of Operating Rights. Create, incur, grant, assume or
suffer to exist any Lien on, nor sell, transfer or otherwise dispose of, any
present or future Operating Rights of any Company, including but not limited
to franchises, certificates, authorizations, permits and licenses.
(c) Loans, Investments, and Mergers. Make any loan to or investment
in, nor purchase stock or other securities of, nor merge or consolidate with,
nor purchase all or substantially all of the assets of, any Person other than
Borrower or another Company, except (i) mergers and consolidations of two or
more Companies or acquisitions of a Company by another Company, provided no
Default or Potential Default exists, (ii) secured loans to owner-operators
who have independent contractor service agreements with Borrower or any other
Company not to exceed $1,000,000 in the aggregate outstanding at any time,
(iii) the W&B Note, (iv) indebtedness of purchasers to the Companies for the
purchase price of Vehicles sold by the Companies to such purchasers, provided
that such Indebtedness together with loans made pursuant to clause (v) of
this Subsection (c) shall not exceed $1,000,000 in the aggregate outstanding
at any time, (v) loans, other than the foregoing, provided that such loans
together with indebtedness pursuant to clause (iv) of this Subsection (c)
shall not exceed $1,000,000 in the aggregate outstanding at any time,
(vi) Permitted Investments, and (vii) other investments from time to time in
an amount outstanding at any time less than or equal to $100,000.
(d) Contingent Liabilities. Assume, Guarantee, purchase, agree to
purchase or suffer to exist any other liability, direct or indirect, for the
payment of any Indebtedness, except to the Banks, of any Person, other than
Borrower or another Company, in an aggregate amount in excess of $5,000,000
at any time outstanding.
(e) Dividends and Distributions. Declare, order, pay, make or set
apart any sum for (a) any dividend or other distribution, direct or indirect,
on account of any shares of any class of stock of Parent or any other Company
now or hereafter outstanding; (b) any redemption, conversion, exchange,
retirement, sinking fund or similar payment, purchase or other acquisition
for value, direct or indirect, of any shares of any class of stock of Parent
or any other Company now or hereafter outstanding; or (c) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of stock of Parent or any other
Company now or hereafter outstanding except:
(i) The Parent and each other Company may from time to time
redeem its stock that was issued pursuant to the terms of employee
stock option plans offered by each such Company, respectively, on or
before the Closing Date; provided that the maximum amount of such
redeemed stock shall be an amount equal to or less than 1% of the
capital stock of the Parent or such Subsidiary, as applicable, as of
the Closing Date.
(ii) In addition to the redemptions permitted under clause (i)
above, the Parent may from time to time redeem its stock, provided that
the aggregate maximum amount of the redemption price for such stock
shall not be greater than the proceeds of death benefits received by
Parent under life insurance policies.
(iii) If no Default or Potential Default exists, Parent may
declare and pay cash dividends from time to time if on the date each
such dividend is declared Borrower delivers to Administrative Agent
computations showing (A) that the Leverage Ratio of Parent and its
consolidated subsidiaries as of the date such dividends are declared
is, after giving effect to such dividends, equal to or less than 2.5 to
1.00; (B) that the Leverage Ratio of Parent and its consolidated
Subsidiaries determined pro forma as of the date of the most recently
delivered Quarterly Report as if such dividend had already been
declared and paid is equal to or less than 2.5 to 1.00; and (C) that
Parent and each other Company would otherwise be in compliance with all
other financial covenants contained in this Agreement if such financial
covenants were measured as of the date such dividend is paid and after
giving effect to such dividend.
(iv) The Companies may make, declare or pay dividends and make
other distributions with respect to their capital stock to the extent
necessary to permit the Borrower to pay the Obligations and to pay
expenses and taxes incurred in the ordinary course of business.
(v) Borrower and any other Company may declare and pay
dividends on their common stock payable solely in shares of common
stock (provided that fractional shares may be paid in cash).
(f) Indebtedness. Assume, create or suffer to exist any Indebtedness
except (i) Indebtedness owed to the Banks pursuant to this Agreement, (ii)
additional Indebtedness not for borrowed money incurred in the ordinary
course of business constituting trade payables not more than 90 days past due
and accrued liabilities, including, without limitation, accrued Taxes and
payroll obligations, (iii) Existing Indebtedness, (iv) Indebtedness under
Hedge Agreements, and (v) additional Indebtedness for borrowed money incurred
in the ordinary course of business not to exceed $1,000,000 in the aggregate
outstanding at any time with respect to all Companies.
(g) Sales of Assets. Be a party to any sale, transfer, or other
disposition of all or any part of Borrower's or any other Company's property,
assets or business, except sales of Vehicles and other equipment in the
ordinary course of business and for fair market vale so long as (i) after
giving effect to such sale, (1) the outstanding amount of the Obligations
will not be greater than the Borrowing Base, and (2) the Borrowing Base
Availability will not be less than $5,000,000, and (ii) no Default or
Potential Default exists or would result therefrom, and in any event will not
sell, transfer or otherwise dispose of any of Parent's or any other Company's
interest in the Subsidiaries (including, without limitation, any of the stock
of the Subsidiaries).
(h) Capital Expenditures. Permit the aggregate amount of all Capital
Expenditures made by the Companies, during any, twelve (12) month period (net
of the proceeds of the sale or exchange of any fixed assets), to exceed
$17,500,000.
(i) Negative Pledge. Borrower and each of the other Companies will
not create, assume or suffer to exist any Lien on any asset or property (or
any interest therein) now owned or hereafter acquired by Borrower or any
other Company, except: (i) any Lien existing pursuant to any order of
attachment, distraint or similar legal process arising in connection with
court proceedings so long as the execution or other enforcement thereof is
effectively stayed and the claims secured thereby are being contested in good
faith by appropriate proceedings, and (ii) Permitted Liens.
(j) Transactions with Affiliates. The Companies will not enter into
any transaction with any Affiliate except in the ordinary course and pursuant
to the reasonable requirements of their businesses and upon fair and
reasonable terms no less favorable to the Companies than would result in a
comparable arm's length transaction with a Person who is not an Affiliate;
provided, however, that the Companies may enter into lease agreements, as
lessee, with Affiliates for tractors or trailers with lease payments less
than or equal to the aggregate amount of $200,000 per month.
(k) ERISA. No Company or other Group Member will (i) establish,
maintain or participate in any way in a Plan that is subject to the
provisions of Title IV of ERISA, or (ii) provide benefits under any health
plan to former employees in excess of those provided on the date hereof,
without the prior written consent of the Banks.
(l) Restrictive Agreements. Enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (i) the ability of any Company to create, incur or permit to
exist any Lien upon any of its property or assets, or (ii) the ability of any
Company to pay dividends or other distributions with respect to any shares of
its capital stock or to make or repay loans or advances to any other Company
or to guarantee Indebtedness of any other Company; provided that (A) the
foregoing shall not apply to restrictions and conditions imposed by law or by
any of the Loan Papers, (B) clause (i) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, and
(C) clause (i) of the foregoing shall not apply to customary provisions in
leases and other contracts restricting the assignment thereof.
(m) Nature of Business. Engage to any material extent in any
business other than businesses of the type conducted by the Companies on the
Closing Date and businesses reasonably related thereto.
ARTICLE VI
DEFAULT
As used herein, the term "Default" means the occurrence of any one or
more of the following events:
Section 6.1 Payment of Obligations.
The failure of Borrower to pay to any Agent or any Bank, as required, when due
the Principal Obligation, or interest thereon, or any part thereof, or any
Reimbursement Obligation or other amount owing under this Agreement or any of
the Loan Papers (including without limitation Subsections 2,4, 2.7(a), 2.11,
2.14(d) and 5.1(j)), and such failure continues for a period of five (5)
Business Days after the due date.
Section 6.2 Covenants.
(a) A breach of any of the covenants in Subsections 5.1(a), 5.1(b),
5.1(e), 5.1(f), 5.1(i), 5.1(k), 5.1(l), 5.1(m), 5.1(n), 5.1(q), 5.1(s),
5.1(t), 5.1(u) or Section 5.2.
(b) The failure of Borrower or any other Company to punctually and
properly observe, keep and perform each of its covenants and agreements in
Subsections 5.1(c), 5.1(d), 5.1(g), 5.1(h), or 5.1(r) and such failure
continues for a period of ten (10) days after the discovery of the breach by
a Company or after notice from Administrative Agent or any Bank.
(c) The failure of Borrower or any other Company punctually and
properly to observe, keep and perform each of its covenants and agreements
(other than the covenants to pay the Principal Obligation, and interest
thereon, the commitment fee, the Reimbursement Obligations and other amounts,
and the covenants specified in Subsections 6.2(a) and 6.2(b) contained herein
or in any of the other Loan Papers, and such failure continues for a period
of thirty (30) days after the discovery of the breach by a Company or after
Administrative Agent notifies Borrower of the breach.
Section 6.3 Misrepresentation.
The discovery by Administrative Agent or any Bank that any statement,
representation or warranty in this Agreement, any other Loan Paper or in any
writing ever delivered to Administrative Agent or any Bank pursuant to the
provisions hereof, is false, misleading, or erroneous in any material respect,
and the reason giving rise to such situation is not corrected to the
satisfaction of the Banks within thirty (30) days after notice thereof has been
given by Administrative Agent to Borrower.
Section 6.4 Voluntary Debtor Relief.
Borrower or any other Company shall (i) have entered voluntarily against it an
order for relief under any Debtor Relief Laws, (ii) execute an assignment for
the benefit of creditors, or (iii) not pay, or admit in writing its inability
to pay, its debts generally as they become due, or (iv) apply for or consent to
the appointment of a receiver, trustee, custodian or liquidator of it, or of
all or a substantial part of its assets, or (v) file a voluntary petition in
bankruptcy or a petition or answer seeking reorganization or an arrangement
with creditors or seeking to take advantage of, or any other relief under,
any Debtor Relief Laws, or (vi) file an answer admitting the material
allegations of, or consenting to, or default in, a petition filed against it
in any Debtor Relief Laws proceeding, or (vii) institute or voluntarily be or
become a party to any other judicial proceedings intended to effect a
discharge of its debts, in whole or in part, or a postponement of the
maturity or the collection thereof, or a suspension of any of the remedial
rights of Bank granted in this Agreement or under any Law.
Section 6.5 Involuntary Debtor Relief.
An order, judgment or decree shall be entered by any court of competent
jurisdiction approving a petition seeking reorganization of Borrower or any
other Company, or appointing a receiver, trustee, custodian or liquidator of
Borrower or any other Company, or of all or any substantial part of the assets
of Borrower or any other Company, and such order, judgment or decree is not
appealed from within the time allowed by Law, with a stay of proceedings or
supersedes, or, if appealed from in the manner aforesaid, when such order,
judgment or decree becomes final, and in any event, if and when such
reorganization, receivership, trusteeship, custodianship or liquidation
proceedings shall have been in force for sixty (60) days.
Section 6.6 Judgments.
Any of the Companies fails to pay any money judgment or judgments against it
in an amount greater than $100,000 in the aggregate at least ten (10) days
prior to the date on which any of the assets of any of the Companies may be
lawfully sold to satisfy such judgment.
Section 6.7 Attachment.
The failure to have discharged within a period of thirty (30) days after the
commencement thereof any attachment, sequestration or similar proceedings
against any of the assets of Borrower or any other Company having an aggregate
fair market value of $100,000 or more.
Section 6.8 Default of Other Debt.
The default under any promissory note or other evidence of Indebtedness in an
amount equal to or greater than $500,000 executed by Borrower or any other
Company, or the default by any obligee under any Indebtedness or any other
obligation in an amount equal to or greater than $500,000 under any credit or
other agreement under which Borrower or any other Company is an obligor.
Section 6.9 Other Agreements.
The occurrence of any event which would constitute, or with notice or lapse of
time or both could constitute, a default under any chattel mortgage,
assignment, security agreement, deed of trust, mortgage or other agreement
delivered to Administrative Agent, Collateral Agent or any Bank or under any
Loan Paper.
Section 6.10 Change in Control.
The occurrence of any Change in Control.
ARTICLE VII
REMEDIES
If a Default occurs and is continuing, Administrative Agent may, at its
election, and, at the request of the Required Banks, Administrative Agent
shall do any one or more of the following:
Section 7.1 Acceleration.
Declare the entire unpaid balance of the Obligations and all other Indebtedness
of any one or more of Borrower or the other Companies to the Banks and the
Agents, or any of them, or any part thereof, immediately due and payable,
whereupon it shall be due and payable.
Section 7.2 Loans and Letters of Credit.
Refuse to make additional Loans or issue additional Letters of Credit, and
thereafter the Banks shall have no obligation whatsoever to make additional
Loans or issue additional Letters of Credit. If any Bank or the Issuing Bank
refuses to make additional Loans or issue additional Letters of Credit, all
duties and obligations of Borrower and the other Companies, and all rights
and powers of Administrative Agent and the Banks, under this Agreement shall
continue in full force and effect until the full and final payment and
performance of the Obligations.
Section 7.3 Judgment.
Reduce any claim to judgment.
Section 7.4 Rights.
Exercise any and all rights and remedies which Administrative Agent, the
Issuing Bank or any Bank may have under any Loan Paper, at Law, or in equity,
or otherwise.
Section 7.5 Default with Respect to Base Rate Loans.
If a Default under the Agreement shall occur and the same shall have been
declared by Administrative Agent, then Borrower shall immediately prepay
the outstanding Base Rate Loans and all interest accrued thereon if and to
the extent the same is then due and payable.
Section 7.6 Default with Respect to LIBOR Loans.
If a Default under this Agreement shall occur and the same shall have been
declared by Administrative Agent, then Borrower shall immediately prepay the
outstanding LIBOR Loans and all interest accrued thereon and all losses and
expenses in connection with such prepayment pursuant to Section 2.26 if and
to the extent the same is then due and payable.
Section 7.7 Default with Respect to Letters of Credit.
If a Default under the Agreement shall occur and the same shall have been
declared by Administrative Agent, then, upon the request of Administrative
Agent, Borrower shall be required to deposit immediately with Administrative
Agent, in immediately available funds, an amount equal to (i) the aggregate
amount of all then outstanding Letters of Credit; plus (ii) the aggregate
amount of all other sums due and payable under any of the Loan Papers
regarding the Letters of Credit (the "Deposit"), Borrower's obligation to pay
the Deposit to be absolute and unconditional, the Deposit to be deposited in
a special interest bearing account with Administrative Agent to ensure
reimbursement of any drawings under such Letters of Credit and payment of
all other amounts due and payable under any of the Loan Papers regarding the
Letters of Credit.
Section 7.8 Automatic Acceleration Due to Certain Defaults.
Notwithstanding anything to the contrary contained herein, if a Default
referred to in Section 6.4 or Section 6.5 occurs and is continuing, then the
entire unpaid balance of the Obligations and all other Indebtedness of any
one or more of Borrower or the other Companies to the Banks and the Agents,
or any of them, shall immediately, and concurrently with the occurrence of
such Default, become due and payable in full without any further action or
notification of any kind required of any of the Agents or any of the Banks,
including, without limitation, presentment, demand, protest or notice of
protest, dishonor, intention to accelerate or acceleration, all of which are
expressly hereby waived by Borrower and the other Companies.
ARTICLE VIII
AGENTS
Section 8.1 Administrative Agent Appointment and Authorization;
Administration; Duties.
(a) The general administration of the Loan Papers and any other
documents contemplated by this Agreement shall be by Comerica or its
designees, and each Bank hereby appoints Comerica as its agent hereunder and
under the other Loan Papers with such powers as are specifically delegated to
the Administrative Agent by the terms of the Loan Papers, together with such
other powers as are reasonably incidental thereto. Administrative Agent
shall not be required to take any action with respect to any Default except
as directed by the Required Banks. In the event the Required Banks so direct
Administrative Agent to take any action hereunder, Administrative Agent
agrees to commence taking such action within a reasonable period of time and
to diligently pursue such action or to submit its resignation pursuant to
Section 8.9. Except as otherwise provided herein or otherwise agreed to by
the Banks and Administrative Agent, each of the Banks hereby irrevocably
authorizes Administrative Agent, at its discretion, to take or refrain from
taking such actions as Administrative Agent on its behalf and to exercise or
refrain from exercising such powers under the Loan Papers and any other
documents contemplated by this Agreement as are delegated by the terms hereof
or thereof, as appropriate, together with all powers reasonably incidental
thereto. Notwithstanding the foregoing or any term or provision of this
Agreement, Administrative Agent shall have no duties or responsibilities
except as expressly set forth in this Agreement or the other Loan Papers.
(b) Each Bank irrevocably appoints and authorizes Administrative
Agent to hold the Collateral, other than the Vehicle Collateral, and enforce
the Liens granted to the Banks as security for the Obligations and to take
such action as Administrative Agent on its behalf and to exercise such powers
under this Agreement and the other Loan Papers as are delegated to
Administrative Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto, provided, however, that, as
between and among the Banks, Administrative Agent will not prosecute, settle
or compromise any claim against Borrower or any other Company or release or
institute enforcement or foreclosure proceedings against any Collateral or
guaranty securing the Obligations, except with the consent of the Required
Banks. Without limiting the generality of the foregoing, each Bank authorizes
Administrative Agent to (i) enter into any Loan Papers securing payment of
the Obligations in the capacity of agent for and on behalf of the Banks and
(ii) to administer all of the Collateral (other than the Vehicle Collateral)
and to enforce the interests of the Banks therein in accordance with the Loan
Papers. Any action for enforcement of the interests of the Banks under the
Loan Papers shall be taken either as Administrative Agent for the Banks or
directly in the respective names of the Banks, as counsel to Administrative
Agent may at the time advise. Subject to Section 9.21, the Banks consent and
agree that any action taken by Administrative Agent or with the consent or at
the direction of the Required Banks as provided herein shall be taken for and
on behalf of all Banks, including those who may not have so consented or
directed, in order to protect or enforce the Liens securing the Obligations;
provided that any Bank may direct Administrative Agent not to act for or on
its behalf in any such proceeding if such Bank executes in favor of
Administrative Agent a release of its rights to share in the benefits of any
such action and a release of its legal and beneficial interest in the Lien
created by the Loan Papers on the Collateral (other than the Vehicle
Collateral) which is the subject of such action. Each Bank, Borrower and the
other Companies agree that Administrative Agent is not a fiduciary for the
Banks or for Borrower or any other Company but simply is acting in the
capacity described herein to alleviate administrative burdens for all parties
hereto and that Administrative Agent has no duties or responsibilities to the
Banks, Borrower or any other Company except those expressly set forth herein.
Section 8.2 Collateral Agent Appointment and Authorization;
Administration; Duties.
(a) If Vehicles are pledged as Collateral from time to time, the
general administration of the Vehicle Collateral, the notation of Liens on
applicable certificates of title and any other documents contemplated by that
pledge shall be by LaSalle, and each Bank hereby appoints LaSalle as its
agent with respect to the Vehicle Collateral hereunder and under the other
Loan Papers with such powers as are specifically delegated to the Collateral
Agent by the terms of the Loan Papers, together with such other powers as are
reasonably incidental thereto. Collateral Agent shall not be required to
take any action with respect to any Default except as directed by the
Required Banks. In the event the Required Banks so direct Collateral Agent to
take any action hereunder, Collateral Agent agrees to commence taking such
action within a reasonable period of time and to diligently pursue such
action or to submit its resignation pursuant to Section 8.9. Except as
otherwise provided herein or otherwise agreed to by the Banks and Collateral
Agent, each of the Banks hereby irrevocably authorizes Collateral Agent, at
its discretion, to take or refrain from taking such actions with respect to
the Vehicle Collateral as Collateral Agent on its behalf and to exercise or
refrain from exercising such powers under the Loan Papers and any other
documents contemplated by this Agreement as are delegated by the terms hereof
or thereof, as appropriate, together with all powers reasonably incidental
thereto with respect to the Vehicle Collateral. Notwithstanding the foregoing
or any term or provision of this Agreement, Collateral Agent shall have no
duties or responsibilities except as expressly set forth in this Agreement or
the other Loan Papers.
(b) Each Bank irrevocably appoints and authorizes Collateral Agent to
hold the Vehicle Collateral (if any) and enforce the Liens (if any) granted
to the Banks as security for the Obligations and to take such action as
Collateral Agent on its behalf and to exercise such powers under this
Agreement and the other Loan Papers as are delegated to Collateral Agent by
the terms hereof or thereof, together with all such powers as are reasonably
incidental thereto, provided, however, that, as between and among the Banks,
Collateral Agent will not prosecute, settle or compromise any claim against
Borrower or any other Company or release or institute enforcement or
foreclosure proceedings against any Vehicle Collateral, except with the
consent of the Required Banks. Without limiting the generality of the
foregoing, each Bank authorizes Collateral Agent to (i) enter into any Loan
Papers concerning the Vehicle Collateral securing payment of the Obligations
in the capacity of agent for and on behalf of the Banks and (ii) to
administer all of the Vehicle Collateral and to enforce the interests of the
Banks therein in accordance with the Loan Papers. Any action for enforcement
of the interests of the Banks under the Loan Papers shall be taken either as
Collateral Agent for the Banks or directly in the respective names of the
Banks, as counsel to Collateral Agent may at the time advise. Subject to
Section 9.21, the Banks consent and agree that any action taken by Collateral
Agent or with the consent or at the direction of the Required Banks as
provided herein shall be taken for and on behalf of all Banks, including
those who may not have so consented or directed, in order to protect or
enforce the Liens securing the Obligations; provided that any Bank may direct
Collateral Agent not to act for or on its behalf in any such proceeding if
such Bank executes in favor of Collateral Agent a release of its rights to
share in the benefits of any such action and a release of its legal and
beneficial interest in the Lien created by the Loan Papers on the Vehicle
Collateral which is the subject of such action. Each Bank, Borrower and the
other Companies agree that Collateral Agent is not a fiduciary for the Banks
or for Borrower or any other Company but simply is acting in the capacity
described herein to alleviate administrative burdens for all parties hereto
and that Collateral Agent has no duties or responsibilities to the Banks,
Borrower or any other Company except those expressly set forth herein.
Section 8.3 Advances and Payments.
On the date of each Advance, Administrative Agent shall be authorized, but
not obligated, to advance, for the account of each of the Banks making such
Advance, the amount of the Advance to be made by it in accordance with its
Commitment hereunder if and to the extent that such Bank does not make such
amount timely available to Administrative Agent for advance to Borrower
pursuant to this Agreement. Each of the Banks agrees to immediately reimburse
Administrative Agent in immediately available funds for any amount so advanced
on its behalf by Administrative Agent. If any such reimbursement is not made in
immediately available funds on the same day on which Administrative Agent
shall have made any such amount available on behalf of any Bank, such Bank
shall pay interest to Administrative Agent at a rate per annum equal to
Administrative Agent's cost of obtaining overnight funds in the Dallas Federal
Funds market. All amounts to be paid to any of the Banks by Administrative
Agent shall be credited to the Banks, forthwith after collection by
Administrative Agent, in immediately available funds either by wire transfer
or deposit in such Bank's account with Administrative Agent, or as such Bank
and the Administrative Agent shall from time to time agree.
Section 8.4 Sharing of Setoffs.
Each of the Banks agrees that if it shall, through the exercise of a right of
banker's lien, setoff or counterclaim against Borrower or any other Company,
including, but not limited to, a secured claim under the Bankruptcy Code or
other security interest arising with respect to or in lieu of such secured
claim and received by such Bank under any applicable bankruptcy, insolvency
or other similar Law, or otherwise obtain payment in respect of any obligation
owing to such Bank as a result of which the unpaid portion of its Loans is
proportionately less than the unpaid portion of the Loans of other Banks
(based upon the respective Commitment of the Banks), (i) it shall promptly
purchase at par (and shall be deemed to have thereupon purchased) from such
other Banks a participation in the Loans of such other Banks, so that the
aggregate unpaid principal amount of each of the Banks' Loans shall be in the
same proportion to the aggregate unpaid principal amount of all Loans then
outstanding as the principal of its Loans prior to the obtaining of such
payment was to the principal amount of all Loans outstanding prior to the
obtaining of such payment, (ii) it shall pay interest calculated at the
Federal Funds Rate to such other Banks on the amount purchased from the date
it received such payment until the date of the purchase of such
participation; and (iii) such other adjustments shall be made from time to
time as shall be equitable to ensure that the Banks share such payment pro
rata. Notwithstanding anything to the contrary contained herein, if a Bank
shall obtain payment under any circumstances contemplated herein while any
Obligations shall remain outstanding, such Bank shall promptly turn over such
payment to Administrative Agent for distribution to the Banks on account of
the Obligations as provided herein. Borrower and the Companies expressly
consent to the foregoing arrangements and agree that any Bank or Banks
holding (or deemed to be holding) a participation in any of the Loans or
other Obligations may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all monies owing by Borrower or any
other Company to such Bank.
Section 8.5 Liability of Agents.
(a) Each Agent, when acting on behalf of the Banks, may execute any
of its duties under this Agreement by or through its officers, directors,
employees, attorneys or agents. All such officers, directors, employees,
attorneys and agents, when exercising the rights or performing the duties of
such Agent, shall be deemed to be included in the term "Agent." Neither
Administrative Agent nor Collateral Agent nor their respective officers,
directors, employees, attorneys or agents shall be liable to the Banks or any
of them for any action taken or omitted to be taken in good faith, or be
responsible to the Banks or to any of them for the consequences of any
oversight or error of judgment, or for any loss, unless the same shall happen
through its gross negligence or willful misconduct. Each Agent and its
officers, directors, employees, attorneys and agents shall in no event be
liable to any Bank for any action taken or omitted to be taken by it pursuant
to instructions received by it from such Bank or from the Required Banks or
in reliance upon the advice of counsel selected by it. Without limiting the
foregoing, neither Administrative Agent nor Collateral Agent nor any of their
respective officers, directors, employees, attorneys or agents shall be
responsible to any of the Banks for the due execution, validity, genuineness,
effectiveness, sufficiency or enforceability of, or for any statement,
warranty or representation in, or for the perfection of any Lien contemplated
by, this Agreement or any other Loan Paper, or shall be required to ascertain
or to make any inquiry concerning the performance or observance by Borrower
or any Company of any of the terms, conditions, covenants or agreements of
this Agreement or any other Loan Paper.
(b) Neither Administrative Agent nor Collateral Agent nor any of
their respective officers, directors, employees, attorneys or agents shall
have any responsibility to Borrower or any other Company on account of the
failure or delay in performance or breach by any of the Banks, Borrower or
any other Company of any of their respective obligations under this Agreement
or any other Loan Paper.
(c) Each Agent, as an agent hereunder, shall be entitled to rely on
any communication, instrument or document reasonably believed by it to be
genuine or correct and to have been signed or sent by a person or persons
believed by it to the proper person or persons, and it shall be entitled to
rely on advice of legal counsel, independent public accountants and other
professional advisers and experts selected by it.
Section 8.6 Reimbursement and Indemnification.
EACH OF THE BANKS AGREES (I) TO REIMBURSE ADMINISTRATIVE AGENT AND COLLATERAL
AGENT, IN ACCORDANCE WITH SUCH BANK'S PRO RATA SHARE, FOR (A) EXPENSES, (B)
INTERNAL CHARGES APPROVED BY THE REQUIRED BANKS OR (C) FEES INCURRED FOR THE
BENEFIT OF THE BANKS UNDER THE LOAN PAPERS, INCLUDING COUNSEL FEES AND
COMPENSATION OF REPRESENTATIVES AND EMPLOYEES PAID FOR SERVICES RENDERED ON
BEHALF OF THE BANKS, AND ANY OTHER EXPENSE INCURRED IN CONNECTION WITH THE
PREPARATION, EXECUTION, ADMINISTRATION, MONITORING OR ENFORCEMENT THEREOF,
(II) TO INDEMNIFY AND HOLD HARMLESS ADMINISTRATIVE AGENT AND COLLATERAL AGENT
AND ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS OR
ADMINISTRATIVE AGENTS, ON DEMAND, FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES OR DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE
IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY OF THEM IN ANY WAY RELATING
TO OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN PAPER OR ANY ACTION
TAKEN OR OMITTED BY IT OR ANY OF THEM UNDER THIS AGREEMENT OR ANY OTHER LOAN
PAPER (EXCEPT SUCH AS SHALL RESULT FROM SUCH INDEMNITEE'S OWN GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT) TO THE EXTENT NOT REIMBURSED BY BORROWER OR
THE OTHER COMPANIES AND (III) THAT ADMINISTRATIVE AGENT AND COLLATERAL AGENT
MAY OFFSET DISTRIBUTIONS OF PRINCIPAL, INTEREST AND FEES DUE TO A BANK BY THE
AMOUNT OF UNREIMBURSED AMOUNTS DUE AND OWING IN ACCORDANCE WITH THE
PROVISIONS OF THIS SECTION 8.6 IF SUCH BANK HAS NOT REIMBURSED OR INDEMNIFIED
ADMINISTRATIVE AGENT AND/OR COLLATERAL AGENT UPON A WRITTEN REQUEST BY SAID
AGENT FOR SUCH REIMBURSEMENT OR INDEMNIFICATION.
Section 8.7 Rights of Administrative Agent and Collateral Agent.
It is understood and agreed that Administrative Agent and Collateral Agent
shall each have the same rights, powers and obligations hereunder (including
the right to give such instructions) as the other Banks and may exercise such
rights and powers, as well as its rights and powers under other agreements
and instruments to which it is or may be party, and engage in other
transactions with Borrower or any other Company, as though it were not the
Administrative Agent or the Collateral Agent under this Agreement.
Section 8.8 Independent Investigation and Credit Decision by Banks.
Each Bank acknowledges and agrees that it has decided to enter into this
Agreement and to make extensions of credit hereunder based on its own
analysis of (i) the transactions contemplated hereby, (ii) the
creditworthiness of Borrower and the other Companies, (iii) this Agreement
and the other Loan Papers and (iv) the business, legal and other issues
relating thereto, and further acknowledges and agrees that Administrative
Agent and Collateral Agent shall bear no responsibility therefor. Each Bank
acknowledges and agrees that it will, independently and without reliance upon
Administrative Agent or Collateral Agent or any other Bank, continue to make
its own credit decisions and other decisions regarding the taking or not
taking of any action under this Agreement or the other Loan Papers.
Section 8.9 Successor Agents.
Subject to the appointment and acceptance of a successor Agent as provided in
this Section, any Agent may resign at any time by giving notice thereof to the
Banks and Borrower. Upon any such resignation, the Required Banks shall have
the right to appoint a successor Agent from among the Banks. If no successor
Agent shall have been so appointed by the Required Banks and shall have
accepted such appointment within sixty (60) days after the retiring Agent's
giving of notice of resignation, the retiring Agent may, on behalf of the Banks
but with the consent of the Required Banks, which consent shall not be
unreasonably withheld, appoint a successor Agent, which shall be either a
Bank, or a commercial bank reasonably acceptable to Borrower (provided that
Borrower's approval shall not be required if any Default or Potential Default
exists) organized under the Laws of the United States of America or of any
State thereof. If no such successor Agent is appointed due to a proposed
successor Agent's reasonable unacceptability to Borrower or due to the failure
of the Required Banks to consent to such proposed successor Agent, then said
Agent may appoint a successor Agent from among the Banks after consulting with
Borrower and the Banks. Upon the acceptance of any appointment as an Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring Agent's
resignation hereunder as Agent, the applicable provisions of this Article
VIII and Section 5.1(l) shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was an Agent under this Agreement.
Section 8.10 Syndication Agent.
The Syndication Agent shall have no duties or responsibilities under this
Agreement or the other Loan Papers or otherwise except in its role as a Bank;
provided, however, that in the event that the Syndication Agent is also the
Collateral Agent and/or the Administrative Agent, the provisions of this
Section 8.10 shall not affect or limit in any way said Bank's duties and
responsibilities as Collateral Agent and/or Administrative Agent hereunder.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Performance by Agents and the Banks.
Should any covenant, duty or agreement of Borrower or any other Company fail
to be performed in accordance with the terms of the Loan Papers, Administrative
Agent, Collateral Agent or any Bank may, at its option, perform, or attempt to
perform, such covenant, duty or agreement on behalf of any of the Companies.
In such event, Borrower shall, at the request of Administrative Agent,
promptly pay any amount expended by Administrative Agent, Collateral Agent or
any such Bank in such performance or attempted performance to Administrative
Agent, at Administrative Agent's principal office, together with interest
thereon at the Highest Lawful Rate from the date of such expenditure by
Administrative Agent, Collateral Agent or any such Bank until paid; provided
that neither Administrative Agent nor Collateral Agent nor any Bank assumes
or shall ever, except by its express written consent, have any liability for
the performance of any duties or obligations of Borrower or any of the
Companies hereunder, or under or in connection with all or any part of the
Collateral. Also in such event, Administrative Agent shall use its reasonable
efforts to promptly notify Borrower of Borrower's or any other Company's
failure to so perform, but Administrative Agent's failure to do so shall not
result in any liability to it hereunder or affect the rights of
Administrative Agent, Collateral Agent or any Bank under this Section 9.1.
Section 9.2 Waivers.
The acceptance by Administrative Agent or any Bank at any time and from time to
time of part payment on the Obligations shall not be deemed to be a waiver of
any Default then existing. No waiver by Administrative Agent or any Bank of
any Default shall be deemed to be a waiver of any other then existing or
subsequent Default. No delay or omission by Administrative Agent or any Bank
in exercising any Right under the Loan Papers shall impair such Right, or be
construed as a waiver thereof or any acquiescence therein, nor shall any single
or partial exercise thereof, or the exercise of any other Right, preclude
other or further exercise thereof, or the exercise of any other Right under
the Loan Papers or otherwise.
Section 9.3 Cumulative Rights.
All rights hereunder shall be cumulative and in addition to all other rights
granted to Administrative Agent or any Bank at Law, or in equity, or otherwise,
and may be exercised from time to time, and as often as may be deemed
expedient by Administrative Agent or any Bank, whether or not the Obligations
are due and payable and whether or not Administrative Agent or any Bank has
taken other action in connection with the Loan Papers.
Section 9.4 Other Rights and Remedies.
Administrative Agent and any Bank may, as between or among it and Borrower or
any other Company, at any time and from time to time, at its discretion and
with or without valuable consideration, allow substitution or withdrawal of
Collateral without impairing or diminishing the obligations of Borrower and
the other Companies under the Loan Papers. The exercise by Administrative
Agent or any Bank of any right or remedy conferred on it by any collateral
agreement, mortgage, deed of trust, chattel mortgage, assignment or other
security instrument shall be wholly discretionary with it, and the exercise
or failure to exercise any such right or remedy shall in no way impair or
diminish the obligation of Borrower and the other Companies under the Loan
Papers. Neither Administrative Agent nor any Bank shall be liable for failure
to use diligence in the collection of the Obligations or in preserving the
liability of any Person liable on the Obligations, and Borrower and each other
Company hereby waive notice of nonpayment and diligence in bringing suits
against any Person liable on the Obligations, or any part thereof. Borrower
and each other Company agree that Administrative Agent or any Bank, in its
discretion as between or among it and Borrower or any other Company, may:
(i) bring suit against Borrower and the other Companies jointly and severally
or against any one or more of them; (ii) compound or settle with any one or
more of Borrower and the other Companies for such consideration as it may
deem proper; and (iii) release one or more of Borrower and the other
Companies from liability under all or any part of the Obligations, and that
no such action shall impair the rights of Administrative Agent or any Bank to
collect the Obligations (or any part thereof) from Borrower or any other
Company not so sued, compounded or settled with, or released.
Section 9.5 Expenditures of Administrative Agent and Banks.
Any sums spent by Administrative Agent or any Bank pursuant to the exercise of
any right provided herein shall become part of the Obligations and shall bear
interest at the Highest Lawful Rate from the date spent until the date repaid
by Borrower.
Section 9.6 Form and Number of Documents.
Each opinion, certificate, resolution, deed of trust, mortgage, chattel
mortgage, security agreement, assignment, lease, agreement, document,
instrument or other writing or evidence to be furnished Administrative Agent
or any Bank under any provision of this Agreement must be in form and substance
and in such number of counterparts as may be satisfactory to Administrative
Agent and its counsel and the Banks.
Section 9.7 Accounting Terms.
All accounting and financial terms used herein, and the compliance with each
covenant contained herein which relates to accounting or financial matters,
shall be determined in accordance with GAAP, except to the extent that a
deviation therefrom is expressly stated herein.
Section 9.8 Money.
Unless stipulated otherwise, all references herein to "Dollars," "$," "money,"
"payments," or other similar financial or monetary terms, are references to
currency of the United States of America.
Section 9.9 Headings.
The table of contents, headings, captions and arrangements used in any of the
Loan Papers are, unless specified otherwise, for convenience only and shall
not be deemed to limit, amplify or modify the terms of the Loan Papers, nor
affect the meaning thereof.
Section 9.10 Articles, Sections, Exhibits and Schedules.
All references to "Article," "Articles," "Section," "Sections," "Subsection" or
"Subsections" contained herein are, unless specifically indicated otherwise,
references to articles, sections and subsections of this Agreement. All
references to "Exhibits" and "Schedules" contained herein are references to
exhibits or schedules, as the case may be, attached hereto, all of which are
made a part hereof for all purposes, the same as if set forth herein
verbatim, it being understood that if any exhibit or schedule attached
hereto, which is to be executed and delivered, contains blanks, the same
shall be completed correctly and in accordance with the terms and provisions
contained and as contemplated herein prior to or at the time of the execution
and delivery thereof.
Section 9.11 Number and Gender of Words.
Whenever herein the singular number is used, the same shall include the plural
where appropriate, and words of any gender shall include each other gender
where appropriate.
Section 9.12 Business Day.
Except as may otherwise be expressly provided herein to the contrary, where a
payment of principal or interest on the Obligations is due on a day other
than a Business Day, Borrower shall be entitled to delay such payment until
the next succeeding Business Day, but interest shall continue to accrue until
the payment is, in fact, made.
Section 9.13 Notices.
All notices, requests and other communications to any party hereunder and
under the other Loan Papers (except as may be expressly stated to the contrary
therein) shall be in writing and shall be given to such party at its address
set forth on the signature pages hereof or such other address as such party may
hereafter specify for the purpose of notice to the other party. Each such
notice, request or other communication shall be effective (i) if given by
mail, forty-eight (48) hours after such communication is deposited in the mail
with first class postage prepaid, addressed as aforesaid or (ii) if given by
any other means, when delivered at the address specified in this Section;
provided that any communications to any Agent or any Bank shall not be deemed
effective until actually received by it.
Section 9.14 Parties Bound.
This Agreement shall be binding upon, and inure to the benefit of,
Administrative Agent, the Banks, Borrower and the other Companies and their
respective successors and assigns; provided that Borrower and the other
Companies may not assign their rights or obligations under this Agreement
without the prior written consent of Administrative Agent and the Banks. Each
corporation, firm or other entity in which Borrower or any other Company
hereafter acquires or otherwise owns a direct or indirect controlling interest
(a "New Entity") shall automatically (unless otherwise agreed or determined
unilaterally by Administrative Agent and the Banks in writing) be and become
a "subsidiary," as that term is used in this Agreement, for all purposes,
contemporaneously with such acquisition. Borrower shall promptly, and in any
event within ten (10) days, after such acquisition, cause each New Entity to
execute and deliver to Administrative Agent a Guaranty Agreement and an
agreement in the form of Exhibit E (Agreement of New Entity) attached hereto.
Borrower may thereafter request the Administrative Agent to release such New
Entity from this Agreement, but each such release shall be wholly discretionary
with Administrative Agent and the Banks. If Administrative Agent does, however,
grant any such release or does not require such New Entity to execute and
deliver the aforesaid documents, such New Entity shall thereafter, for the
purposes of this Agreement, be treated as though it were not a Subsidiary
hereunder and not affiliated in any manner whatsoever with Borrower or any
other Company (except as may relate to such New Entity's status as an
"Affiliate" hereunder), except to the extent specifically stated in such
release or other agreement of Administrative Agent.
Section 9.15 Exceptions to Covenants.
The Companies shall not be deemed to be permitted to take any action or fail to
take any action which is permitted or not prohibited by any of the covenants
contained herein if such action or omission would result in the breach of
any other covenant contained herein or in the other Loan Papers.
Section 9.16 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Neither
Borrower nor any Company may assign or transfer any of its rights or
obligations hereunder without the prior written consent of the Administrative
Agent and all of the Banks. Any Bank may sell participations to one or more
banks or other institutions in or to all or a portion of its rights and
obligations under the Loan Papers (including, without limitation, all or a
portion of its Commitment, the Loans owing to it and its interest in the
Letters of Credit which it has made or in which it has a participating
interest); provided, however, that (i) such Bank's obligations under the Loan
Papers (including, without limitation, its Commitment) shall remain
unchanged, (ii) such Bank shall remain solely responsible to Borrower for the
performance of such obligations, (iii) such Bank shall remain the holder of
its Notes and owner of its participation or other interests in Letter of
Credit Liabilities for all purposes of any Loan Paper, (iv) Borrower shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under the Loan Papers, (v) prior or concurrent
written consent of Administrative Agent and Collateral Agent shall be
required for any such participation, and (vi) such Bank shall not sell a
participation that conveys to the participant the right to vote or give or
withhold consents under any Loan Papers, other than the right to vote upon or
consent to (1) any increase of such Bank's Commitment, (2) any reduction of
the principal amount of, or interest to be paid on, the Loans or other
Obligations of such Bank, (3) any reduction of any commitment fee, letter of
credit fee, or other amount payable to such Bank under any Loan Paper, or (4)
any postponement of any date for the payment of any amount payable in respect
of the Loans or other Obligations of such Bank.
(b) Any Bank (the "Assigning Bank") may at any time assign to one or
more commercial banks, savings and loan association, savings bank, finance
company, insurance company, pension fund, mutual fund, or other financial
institution (whether a corporation, partnership, or other entity) (herein an
"Eligible Assignee") all, or a proportionate part of all, of its rights and
obligations under the Loan Papers (including, without limitation, its
obligations under Section 2.1 and its Loans and participation interests)
(each an "Assignee"); provided, however, that (i) each such assignment shall
be of a consistent, and not a varying, percentage of all of the Assigning
Bank's rights and obligations under the Loan Papers, (ii) except in the case
of an assignment of all of a Bank's rights and obligations under the Loan
Papers, the amount of the Commitment of the assigning Bank being assigned
pursuant to each assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be less than
Five Million Dollars ($5,000,000), (iii) the parties to each such assignment
shall execute and deliver to the Administrative Agent for its acceptance and
recording in the Register (as defined below), an Assignment and Acceptance,
together with the Notes subject to such assignment, and a processing and
recordation fee of up to $5,000 payable by the assignor or assignee (and not
any Company); (iv) prior or concurrent written consent of Administrative
Agent and Collateral Agent shall be required for any such assignment; and
(v) prior or concurrent written consent of Parent shall be required for any
such assignment, which consent of Parent shall not be unreasonably withheld,
with such consents to be evidenced by the Parent's and, the Administrative
Agent's and the Collateral Agent's execution of the Assignment and
Acceptance, provided that any consent of the Parent otherwise required by
this Subsection shall not be required if a Default or Potential Default has
occurred and is continuing. Upon such execution, delivery, acceptance, and
recording, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five (5) Business Days
after the execution thereof, or, if so specified in such Assignment and
Acceptance, the date of acceptance thereof by Administrative Agent, (x) the
Assignee thereunder shall be a party hereto as a "Bank" and, to the extent
that rights and obligations hereunder have been assigned to it pursuant to
such Assignment and Acceptance, have the rights and obligations of a Bank
hereunder and under the Loan Papers and (y) the Assigning Bank shall, to the
extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Papers (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of a Bank's
rights and obligations under the Loan Papers, such Bank shall cease to be a
party thereto).
(c) Administrative Agent shall maintain a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the recordation
of the names and addresses of the Banks and the Commitments of, and principal
amount of the Loans owing to and Letters of Credit participated in by, each
Bank from time to time (the "Register"). The entries in the Register shall
be conclusive and binding for all purposes, absent manifest error, and
Borrower, Administrative Agent, and the Banks may treat each Person whose
name is recorded in the Register as a Bank hereunder for all purposes under
the Loan Papers. The Register shall be available for inspection by Parent or
any Bank at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
Assigning Bank and Assignee representing that it is an Eligible Assignee,
together with any Notes subject to such assignment, Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit F hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register,
and (iii) give prompt written notice thereof to Parent. Within five (5)
Business Days after its receipt of such notice Borrower, at their expense,
shall execute and deliver to Administrative Agent in exchange for the
surrendered Notes (including (if applicable) new Revolving Credit Notes to
the order of such Eligible Assignee in an amount equal to the Commitment
assumed by it pursuant to such Assignment and Acceptance and, if the
Assigning Bank has retained a Commitment, a Revolving Credit Note to the
order of the Assigning Bank in an amount equal to the Commitment retained by
it hereunder (each such promissory note shall constitute a "Revolving Credit
Note" for purposes of the Loan Papers). Such new Revolving Credit Notes
shall be in an aggregate principal amount of the surrendered Revolving Credit
Note, shall be dated the effective date of such Assignment and Acceptance,
and shall otherwise be in substantially the form of Exhibit C hereto.
(e) Any Bank may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section, disclose to
the assignee or participant or proposed assignee or participant, any
information relating to Borrower and the Companies furnished to such Bank by
or on behalf of such Company.
(f) Any Bank may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations
of such Bank, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment
of a security interest shall release a Bank from any of its obligations
hereunder or substitute any such pledgee or assignee for such Bank as a party
hereto.
Section 9.17 Effect of Investigations.
All covenants, agreements, undertakings, representations and warranties made
in any of the Loan Papers shall survive all closings under the Loan Papers and,
except as otherwise indicated, shall not be affected by any investigation made
by any party.
Section 9.18 GOVERNING LAW; VENUE; SERVICE OF PROCESS.
(a) THE LOAN PAPERS ARE BEING EXECUTED AND DELIVERED, AND ARE
INTENDED TO BE PERFORMED, IN THE STATE OF TEXAS, AND THE LAWS OF SUCH STATE
SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF
THE LOAN PAPERS, EXCEPT TO THE EXTENT OTHERWISE SPECIFIED IN ANY OF THE LOAN
PAPERS.
(b) CHAPTER 346 OF THE TEXAS FINANCE CODE SHALL NOT APPLY TO THE
REVOLVING CREDIT LOANS.
(c) ANY ACTION OR PROCEEDING AGAINST ANY COMPANY UNDER OR IN
CONNECTION WITH ANY OF THE LOAN PAPERS MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT IN DALLAS COUNTY, TEXAS. EACH COMPANY HEREBY IRREVOCABLY (I) SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (II) WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT OR THAT ANY SUCH COURT IS AN
INCONVENIENT FORUM. EACH COMPANY AGREES THAT SERVICE OF PROCESS UPON IT MAY
BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS
ADDRESS SPECIFIED OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 9.13. NOTHING HEREIN OR IN ANY OF THE OTHER LOAN PAPERS SHALL AFFECT
THE RIGHT OF THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE ISSUING BANK
OR ANY BANK TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT, THE COLLATERAL BANK, THE ISSUING
BANK OR ANY BANK TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR
WITH RESPECT TO ANY OF ITS RESPECTIVE PROPERTY IN COURTS IN OTHER
JURISDICTIONS. ANY ACTION OR PROCEEDING BY ANY COMPANY AGAINST THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE ISSUING BANK, OR ANY BANK
SHALL BE BROUGHT ONLY IN A COURT LOCATED IN DALLAS COUNTY, TEXAS.
Section 9.19 Maximum Interest Rate.
(a) No interest rate specified in this Agreement or any other Loan
Paper shall at any time exceed the Highest Lawful Rate. If at any time the
interest rate (the "Contract Rate") for any Obligation shall exceed the
Highest Lawful Rate, thereby causing the interest accruing on such Obligation
to be limited to the Highest Lawful Rate, then any subsequent reduction in
the Contract Rate for such Obligation shall not reduce the rate of interest
on such Obligation below the Highest Lawful Rate until the aggregate amount
of interest accrued on such Obligation equals the aggregate amount of
interest which would have accrued on such Obligation if the Contract Rate for
such Obligation had at all times been in effect.
(b) Notwithstanding anything to the contrary contained in this
Agreement or the other Loan Papers, none of the terms and provisions of this
Agreement or the other Loan Papers shall ever be construed to create a
contract or obligation to pay interest at a rate in excess of the Highest
Lawful Rate; and neither any Agent nor any Bank shall ever charge, receive,
take, collect, reserve or apply, as interest on the Obligations, any amount
in excess of the Highest Lawful Rate. The parties hereto agree that any
interest, charge, fee, expense or other obligation provided for in this
Agreement or in the other Loan Papers which constitutes interest under
applicable Law shall be, ipso facto and under any and all circumstances,
limited or reduced to an amount equal to the lesser of (i) the amount of such
interest, charge, fee, expense or other obligation that would be payable in
the absence of this Section 9.19(b) or (ii) an amount, which when added to
all other interest payable under this Agreement and the other Loan Papers,
equals the Highest Lawful Rate. If, notwithstanding the foregoing, any Agent
or any Bank ever contracts for, charges, receives, takes, collects, reserves
or applies as interest any amount in excess of the Highest Lawful Rate, such
amount which would be deemed excessive interest shall be deemed a partial
payment or prepayment of principal of the Obligations and treated hereunder
as such; and if the Obligations, or applicable portions thereof, are paid in
full, any remaining excess shall promptly be paid to the Borrower, Parent or
Subsidiary (as appropriate). In determining whether the interest paid or
payable, under any specific contingency, exceeds the Highest Lawful Rate, the
parties hereto shall, to the maximum extent permitted by applicable Law, (i)
characterize any nonprincipal payment as an expense, fee or premium rather
than as interest, (ii) exclude voluntary prepayments and the effects thereof,
and (iii) amortize, prorate, allocate and spread in equal or unequal parts
the total amount of interest throughout the entire contemplated term of the
Obligations, or applicable portions thereof, so that the interest rate does
not exceed the Highest Lawful Rate at any time during the term of the
Obligations; provided that, if the unpaid principal balance is paid and
performed in full prior to the end of the full contemplated term thereof, and
if the interest received for the actual period of existence thereof exceeds
the Highest Lawful Rate, the Agents and/or the Banks, as appropriate, shall
refund to the applicable Person the amount of such excess and, in such event,
the Agents and the Banks shall not be subject to any penalties provided by
any Laws for contracting for, charging, receiving, taking, collecting,
reserving or applying interest in excess of the Highest Lawful Rate.
Section 9.20 Invalid Provisions.
If any provision of any of the Loan Papers is held to be illegal, invalid or
unenforceable under present or future Laws effective during the term thereof,
such provision shall be fully severable; the appropriate Loan Papers shall be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part thereof; and the remaining provisions thereof shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance therefrom. Furthermore,
in lieu of such illegal, invalid or unenforceable provision, there shall be
added automatically as a part of such Loan Papers a provision as similar in
terms to such illegal, invalid or unenforceable provision as may be possible
and be legal, valid and enforceable.
Section 9.21 Entirety and Amendments.
This Agreement embodies the entire agreement between or among the parties
relating to the subject matter hereof, supersedes all prior term sheets,
discussions, agreements and understandings, if any, relating to the subject
matter hereof, and, except as provided below, neither this Agreement nor any
provision hereof or of any of the Loan Papers may be waived, amended or
modified except by an agreement in writing executed jointly by any authorized
officer of each Company party thereto and Required Banks, and the same may be
supplemented only by documents delivered or to be delivered in accordance with
the express terms hereof, provided however, that, without the prior written
consent of each of the Banks, no such agreement shall (i) reduce the principal
amount of, or extend the maturity of or any date for the payment of any
principal of or interest on any Loan or Letter of Credit, or waive or excuse
any such payment or any part thereof, or reduce the rate of interest on any
Loan or Letter of Credit (other than any such reduction in the rate of interest
resulting from a change in the Base Rate in accordance with the definition of
such term), (iii) reduce or increase the Commitment of any Bank, (iv) change or
amend the provisions of this Section, or the definition of the
"Required Banks", (v) waive any condition precedent to the making of any Loan
or the issuance of any Letter of Credit, (vi) release any Guaranty Agreement or
any Collateral securing any of the Obligations, except releases expressly
provided for or permitted by this Agreement, or (vii) reduce any fee payable
to any Bank; provided, further, that no such agreement shall amend, modify or
otherwise affect the rights or duties of any Agent hereunder without the
prior written consent of such Agent. Each Bank and each holder of a Note
shall be bound by any waiver, amendment or modification authorized by this
Section regardless of whether its Note shall have been marked to make
reference thereto, and any consent by any Bank or holder of a Note pursuant
to this Section shall bind any person subsequently acquiring a Note from it,
whether or not such Note shall have been so marked.
Section 9.22 Survival.
All representations and warranties of Borrower and the other Companies
contained in this Agreement shall survive the making of the Loans, Advances
and Letters of Credit herein contemplated. The provisions of Sections 2.19,
2.22, 2.26 and 5.1(j) and Article VIII shall survive and remain in full force
and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the
Letters of Credit and the Commitments or the termination of this Agreement or
any provision hereof.
Section 9.23 Setoff.
In addition to, and without limitation of, any rights of Administrative Agent
and the Banks under applicable Law (including other rights of setoff), if
Borrower or any other Company becomes insolvent or any Default occurs,
Administrative Agent and the Banks may apply any and all money or property
held for or owed to any of the Companies (including without limitation any and
all deposits, whether time or demand, provisional or final) against all or any
portion of the Obligations irrespective of whether or not any demand or
acceleration shall have been made under this Agreement.
Section 9.24 Multiple Counterparts.
This Agreement may be executed in a number of identical counterparts, each of
which, for all purposes, is to be deemed an original and all of which
constitute, collectively, one agreement; however, in making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart.
Section 9.25 Term of Agreement.
This Agreement shall continue until the otes and all other Obligations shall
have each been paid and performed in full and until all other liabilities and
obligations of Borrower and the other Companies under this Agreement and the
other Loan Papers shall have been fully satisfied and the Banks shall have no
further obligation to make Loans or issue Letters of Credit hereunder.
Section 9.26 Limitation of Liability.
No Agent, Bank, or any Affiliate, officer, director, employee, attorney, or
agent thereof shall have any liability with respect to, and each Company (by
its execution or ratification of a Guaranty Agreement or an Agreement of New
Entity) hereby waives, releases, and agrees not to sue any of them upon, any
claim for any special, indirect, incidental, or consequential damages suffered
or incurred by any Company in connection with, arising out of, or in any way
related to, this Agreement or any of the other Loan Papers, or any of the
transactions contemplated by this Agreement or any of the other Loan Papers.
Each Company (by its execution or ratification of a Guaranty Agreement or an
Agreement of New Entity) hereby waives, releases, and agrees not to sue any
Agent or any Bank or any of their respective Affiliates, officers, directors,
employees, attorneys, or agents for punitive damages in respect of any claim in
connection with, arising out of, or in any way related to, this Agreement or
any of the other Loan Papers, or any of the transactions contemplated by this
Agreement or any of the other Loan Papers.
Section 9.27 No Fiduciary Relationship.
The relationship between each Company and each Agent and Bank with respect to
the Loan Papers and the transactions contemplated hereby and thereby is solely
that of debtor and creditor, and neither any Agent nor any Bank has any
fiduciary or other special relationship with any Company with respect to the
Loan Papers and such transactions, and no term or condition of any of the Loan
Papers shall be construed so as to deem the relationship between any Company
and any Bank with respect to the Loan Papers and such transactions to be other
than that of debtor and creditor.
Section 9.28 Construction.
Each Company, each Agent and each Bank acknowledge that each of them has had
the benefit of legal counsel of its own choice and has been afforded an
opportunity to review this Agreement and the other Loan Papers with its legal
counsel and that this Agreement and the other Loan Papers shall be construed as
if jointly drafted by the parties hereto.
Section 9.29 Waiver and Release.
Each Company hereby waives and releases all Agents and all Banks from any and
all claims or causes of action which any Company may own, hold or claim in
respect of any of them as of the date hereof.
Section 9.30 NO ORAL AGREEMENTS.
THIS AGREEMENT, TOGETHER WITH THE OTHER LOAN PAPERS AS WRITTEN, REPRESENT THE
FINAL AGREEMENTS AMONG AGENTS, THE BANKS, BORROWER AND THE OTHER COMPANIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
OR AMONG AGENTS AND BORROWER OR ANY OTHER COMPANY, OR BETWEEN OR AMONG ANY BANK
AND BORROWER OR ANY OTHER COMPANY.
Section 9.31 Joint and Several Obligations.
Notwithstanding anything to the contrary contained herein or in any other Loan
Papers, the Companies are jointly and severally responsible for their
respective agreements, covenants, representations, warranties and obligations
contained and set forth in this Agreement or in any other Loan Paper to which
they are a party.
Section 9.32 WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
EXECUTED as of the day and year first herein stated.
COMERICA BANK-TEXAS,
as a Bank, as Issuing Bank
and as Administrative Agent
By: /s/Deorah T. Purvin, Vice President
-----------------------------------
Name: Deborah T. Purvin
Title: Vice President
8828 Stemmons Freeway, Suite 441
Dallas, Texas 75247
Fax: (214) 589-4403
Attention: Deborah T. Purvin
Applicable Lending Office:
8828 Stemmons Freeway, Suite 441
Dallas, Texas 75247
LASALLE BANK NATIONAL ASSOCIATION,
as a Bank, as Collateral Agent and
as Syndication Agent
By: /s/ Craig Schuth
----------------------------------
Name: Craig Schuth
Title: Corporate Banking Officer
135 S. LaSalle Street, Suite 361
Chicago, Illinois 60603
Fax: (312) 904-2903
Attention: Craig Schuth
Applicable Lending Office:
-------------------------
135 S. LaSalle Street, Suite 361
Chicago, Illinois 60603
FFE TRANSPORTATION SERVICES, INC.
By: /s/Thomas G. Yetter
----------------------------------
Name: T. G. Yetter
Title: Vice President
1145 Empire Central Place
Dallas, Texas 75247
Attention: President
FROZEN FOOD EXPRESS INDUSTRIES,
INC.
By: /s/Thomas G. Yetter
-----------------------------------
Name: T. G. Yetter
Title: Treasurer
1145 Empire Central Place
Dallas, Texas 75247
Attention: President
FFE, INC.
By: /s/Thomas G. Yetter
----------------------------------
Name: T. G. Yetter
Title: Vice President
1145 Empire Central Place
Dallas, Texas 75247
Attention: President
CONWELL CORPORATION
By: /s/Thomas G. Yetter
-------------------
Name: T. G. Yetter
Title: Vice President
1145 Empire Central Place
Dallas, Texas 75247
Attention: President
AIRPRO HOLDINGS, INC.
By: /s/F. Dixon McElwee, Jr.
-----------------------------------
Name: F. Dixon McElwee, Jr.
Title: Senior Vice President
1145 Empire Central Place
Dallas, Texas 75247
Attention: President
LISA MOTOR LINES, INC.
By: /s/Leonard W. Bartholomew
-----------------------------------
Name: Leonard W. Bartholomew
Title: Secretary
1145 Empire Central Place
Dallas, Texas 75247
Attention: President
FROZEN FOOD EXPRESS, INC.
By: /s/F. Dixon McElwee, Jr.
----------------------------------
Name: F. Dixon McElwee, Jr.
Title: Senior Vice President
1145 Empire Central Place
Dallas, Texas 75247
Attention: President
CONWELL CARTAGE, INC.
By: /s/Leonard W. Bartholomew
-----------------------------------
Name: Leonard W. Bartholomew
Title: Secretary
1145 Empire Central Place
Dallas, Texas 75247
Attention: President
MIDDLETON TRANSPORTATION COMPANY
By: /s/F. Dixon McElwee, Jr.
----------------------------------
Name: F. Dixon McElwee, Jr.
Title: Senior Vice President
1145 Empire Central Place
Dallas, Texas 75247
Attention: President
COMPRESSORS PLUS, INC.
By: /s/Leonard W. Bartholomew
----------------------------------
Name: Leonard W. Bartholomew
Title: Secretary
1145 Empire Central Place
Dallas, Texas 75247
Attention: President
FFE LOGISTICS, INC.
By: /s/Leonard W. Bartholomew
----------------------------------
Name: Leonard W. Bartholomew
Title: Secretary
1145 Empire Central Place
Dallas, Texas 75247
Attention: President